A N N UA L R E P O R T 2 0 1 6
ANNUAL GENERAL MEETING OF SHAREHOLDERS
To be held at 11.00 am (WST) on 21 November 2016
at the offi ce located at
Level 3, 88 William Street, Perth WA 6000
All dollar amounts referred to in the report are expressed
in Australian dollars unless otherwise noted.
GULF MANGANESE CORPORATION LIMITED (ACN: 059 954 317) ANNUAL REPORT 2016
Gulf (ASX. GMC) is focused on the near-term development
of its low-cost, ferromanganese smelting facility in Kupang,
Indonesia. Gulf’s strategy includes the purchasing of high
grade Indonesian manganese ores at smelter gate, processing
of these ores at the Kupang Smelting Hub and the exporting
of a premium (circa 78%) ferromanganese alloy to growing,
high-demand global markets.
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GULF MANGANESE CORPORATION LIMITED (ACN: 059 954 317) ANNUAL REPORT 2016
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Through the development of the Kupang
Smelting Hub Facility, it is Gulf’s vision to
provide a sustainable pathway for local
Indonesian miners to benefi t from the
growing global manganese alloy market, and
we are proud to be working closely with the
local authorities and decision makers in the
region to deliver this outcome.
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Gulf is committed to working
closely alongside the local
Kupang community to establish
a world-class ferromanganese
smelting hub facility, which
upon completion will deliver a
number of growth opportunities
to the region and its people for
many years to come.
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GULF MANGANESE CORPORATION LIMITED (ACN: 059 954 317) ANNUAL REPORT 2016
Contents
Corporate Directory
Review of Operations
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profi t or Loss and Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Director’s Declaration
Independent Auditor’s Report
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Additional ASX Information
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GULF MANGANESE CORPORATION LIMITED (ACN: 059 954 317) ANNUAL REPORT 2016
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Board of Directors
Craig Munro – Non-Executive Chairman
Hamish Bohannan – Managing Director
Andrew Wilson – Non Executive Director
Leonard Math – CFO & Company Secretary
Registered Offi ce
T2, 152 Great Eastern Highway,
Ascot WA 6104
Telephone: +61 8 9367 9228
Facsimile: +61 8 9367 9229
www.gulfmanganese.com
Australian Securities Exchange
ASX Code: GMC, GMCO
Share Registry
Automic Registry Services
Auditors
Greenwich & Co
Lawyers
Allion Legal
PT Gulf Mangan Grup
Board of Directors
Hamish Bohannan – President Director
John Woodacre – Director
Leonard Math – Commissioner
Registered Offi ce
JL Perintis Kemerdekaan 1,
RT 03 / RW 07,
Kelurahan Kayo Putih,
Kemematan Oebobo,
Koto Kupang, NTT
www.gulfmanganese.com
Lawyers
Christian Teo and Partners
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Section 01
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GULF MANGANESE CORPORATION LIMITED (ACN: 059 954 317) ANNUAL REPORT 2016
Dear valued Shareholder,
We are pleased to be providing you with the Company’s annual report
and fi nancial statement for the fi nancial year 2016, in what has been a
transformative year for Gulf at both a corporate and operational level.
Over the course of fi nancial year, the Board strengthened its focus on
positioning the Company on becoming a leading ferromanganese alloy
producer through the development of our Kupang Smelting Hub in West
Timor. Accompanying this renewed focus and vision, has been the need
to make a number of critical decisions to ensure the foundations for
future growth are fi rmly set for our shareholders.
Whilst the Company has met a number of challenges during the year,
the leadership group’s ability to remain focused and deploy all resources
and eff orts towards creating value for our shareholders has meant the
Company remains in a robust position as it enters an exciting phase in its
evolution.
Strengthening of Board and management positions was a key focus
during the year, with the appointment of new and experienced board
members, including a new Chairman and Managing Director, refl ecting
Gulf’s commitment to delivering shareholder growth.
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GULF MANGANESE CORPORATION LIMITED (ACN: 059 954 317) ANNUAL REPORT 2016
KUPANG SMELTING HUB PROJECT, WEST
TIMOR, INDONESIA
Gulf’s near-term development strategy is to
establish a world-class ferromanganese alloy
processing facility in Kupang, West Timor. The
proposed site for the Kupang Smelting Hub
is approximately 12 kilometres South West of
Kupang, with access to critical infrastructure
including sealed roads, port facilities and
power.
The planned smelter facility will comprise
eight furnaces built in stages over fi ve
years, targeting the production of a
premium quality 78%+ manganese alloy,
largely enabled by the unique qualities of
the Indonesian high-grade, low impurity
manganese ore. Furthermore, Gulf’s strategy
to upgrade locally supplied ore is strongly
supported by the Indonesian Government,
with regulations restricting the export of
Indonesian ore that hasn’t been upgraded.
At full production, the Company will aim
to purchase and process 320,000 tonnes of
manganese ore per annum, producing circa
155,000 tonnes of medium and low carbon
premium quality ferromanganese alloy.
In respect to project development, a number
of signifi cant milestones were achieved
during fi nancial year 2016, highlighted by
the securing of a potential cornerstone
investor to support the development of
the Kupang Smelting Hub. The proposed
US$10 million investment from Indonesian
high net worth Marthen Amtiran, shapes
as a transformational catalyst for Gulf in the
near-term and will allow an accelerated work
program to begin at the Kupang site.
Post year end, Gulf was pleased to advise
that it had received approval from the
Governor of East Nusa Tenggara for the
construction of a Manganese Smelting Hub
in the Bolok Industrial Estate in Kupang,
Indonesia. The securing of a project site is a
key development for the Company and will
enable the near-term commencement of
site works and preparatory activities prior to
construction start-up.
An integral component Gulf’s future
success is the in-country team led by the
experienced John Woodacre in the role
of Production Director. John has worked
tirelessly to cultivate a number of highly
valuable relationships within the local Kupang
community, and through these relationships
Gulf has been able to successfully maintain a
constructive dialogue with the local Kupang
people and key decision makers in Indonesia.
It is Gulf’s vision to build a long-standing
and sustainable business in West Timor that
not only creates value for our shareholders,
but importantly delivers tangible outcomes
for the local Kupang community and
landowners. We understand that this would
not be possible without the backing of
the local people and authorities and we
are thankful for their unwavering support
received to date.
KEY APPOINTMENTS – OUR PEOPLE,
OUR FUTURE
Firstly, the Board and all of Gulf’s employees
would like to extend their condolences
to the family and friends of our former
Chairman Graham Anderson, who passed
away on 19 July 2015. Graham’s experience
and leadership was a signifi cant asset for the
Board and his input will be greatly missed
across all levels of the business.
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GULF MANGANESE CORPORATION LIMITED (ACN: 059 954 317) ANNUAL REPORT 2016
As the Company enters this exciting
As previously reported, Gulf has identifi ed
phase in its development, the
an Indonesian-based cornerstone
strengthening of the Board became a
investor to support the development of
core focus throughout fi nancial year 2016.
the Kupang Smelting Hub facility in West
As part of this strategy, Craig Munro was
Timor. At the time of writing, the Board
appointed as Non-Executive Chairman
was confi dent of securing the initial
and Hamish Bohannan was appointed
US$10 million investment in the very
Managing Director, which followed his
near-term, which upon completion is
appointment as Chief Executive Offi cer
expected to be a signifi cant value catalyst
in October 2015. Both individuals bring
for Gulf.
a wealth of mining industry experience
to Gulf, having established strong track
records building successful resources
companies with assets across the globe.
Finally, we would like to thank you,
our loyal shareholders, for your
ongoing support throughout the 2016
fi nancial year as it has been thoroughly
Furthermore, the Company also
appreciated by the entire Company. The
appointed Andrew Wilson to the Board
Board looks forward to delivering further
as a Non-Executive Director in February
positive outcomes for you this year.
2016. Andrew also brings with him a
deep understanding of the resources
sector and strong Indonesian operating
experience, having previously held the
position of President Director of BHP
Billiton Indonesia. Andrew was also
a director of the Indonesian Mining
Association and maintains a number of
infl uential relationships in the region.
FINANCIAL RESULTS
Over the course of fi nancial year 2016,
the Board implemented a number of
key measures to solidify Gulf’s fi nancial
position ahead of what shapes to be
a highly transformation year for the
Company. In addition, the Company was
very well supported by both new and
existing shareholders during its capital
raising eff orts in FY16, and the Board
would like to take this opportunity to
thank all those involved for their ongoing
support.
Craig Munro, Chairman
Hamish Bohannan, Managing Director
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GULF MANGANESE CORPORATION LIMITED (ACN: 059 954 317) ANNUAL REPORT 2016
It also grants an exemption from import
duties for machinery, goods and materials
used in the business.
Due the nature and size of the project,
Gulf will be granted, under Tax Holiday
Regulations, a 100% tax relief facility for 10
years following which tax reduction of 50%
for a further 2 years.
The granting of the Principle Licence was a
key step towards the development of the
Kupang Smelting Hub, and enabled the
Company to proactively progress discussions
in order to secure the required site approvals
prior to the commencement of construction.
Post year end, the Company advised that it
had received approval from the Governor
of East Nusa Tenggara for the construction
and development of the proposed Kupang
Smelting Hub Facility in the Bolok Industrial
Estate in Kupang, Indonesia.
The Bolok Industrial Estate is the original
site selected by Gulf for the construction of
the Kupang Smelting Hub Project, and the
approvals will enable the commencement
of site works prior to construction. Gulf will
now focus on completing the required site
surveying, site clearance and civil works.
SRK Indonesian Manganese Review
During the year, SRK Geological Consulting
Group conducted a review of manganese
prospects and deposits in Indonesia.
The study was a geological assessment
of manganese deposits in Indonesia that
could supply ore matching the specifi c
requirements of the proposed Kupang
ferromanganese alloy smelter business. It
was undertaken as a desktop review, using
publicly available data, SRK’s in-house project
database and subscription based mineral
industry databases, and covered key criteria
KUPANG SMELTING HUB -
Project Overview
Gulf Manganese Corporation Limited
(“Gulf” or “the Company”) is focused on
developing a ferromanganese smelting and
sales business to produce medium and low
carbon ferromanganese alloy in West Timor,
Indonesia.
The Kupang Smelting Hub facility will
contain eight furnaces built in stages over
fi ve years, targeting the production of a
premium quality 78%+ manganese alloy. At
full production, Gulf will aim to purchase and
process 320,000 tonnes of manganese ore
per annum, producing circa 155,000 tonnes
of medium and low carbon premium quality
ferromanganese alloy.
Manganese Market Overview
Manganese is mined as an oxide ore,
converted to ferromanganese or silico-
manganese in a blast or electric arc furnace,
and then predominantly used as an essential
ingredient in the production of steel.
Manganese is a highly important steel making
ingredient that adds a number of properties
to steel that cannot be replicated by any
other additive, highlighting its importance in
the carbon steel industry.
The demand for manganese is largely driven
by the steel industry which consumes the
majority of manganese ore produced. The
manganese market is highly concentrated
with limited global suppliers providing a
natural pricing fl oor for manganese.
Approvals
During the fi nancial year, the Company
received its Principle Licence for Foreign
Investment from the Indonesian Investment
Coordinating Board (BKPM). This Licence
permits the Company’s wholly-owned
subsidiary, PT Gulf Mangan Grup, to
undertake the following activities:
• Carry out the operational business of
Industrial Manufacture of Metal Alloys;
• Acquire strategic landholdings; and
• Deal with all Indonesian Provincial and
Regency Governments
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GULF MANGANESE CORPORATION LIMITED (ACN: 059 954 317) ANNUAL REPORT 2016
including geology, deposit style and
potential grade and tonnage (although
the work is restricted due to the limited
public domain data in respect to grade
and tonnage information).
SRK concluded that there is a potential
extractable manganese mineralisation of
29 million tonnes for production IUPs and
114 million tonnes for exploration and
production IUPs as shown in the table
below.
The parameters and assumptions for the
estimation referred to in West Timor are
set out in the executive summary of the
SRK Consulting report, and it is important
for the reader to review that summary to
understand the limits of the review and
the sources relied on.
The report also discusses the level
of confi dence attributable to the
deposits (including the parameters and
assumptions for their calculations) and
current nature of the tenements and their
status.
In general terms, some of the information
dates back to 2011, and certain of that
information and more recent information
relates to tenement licences that are
no longer valid (although there is a
signifi cant number of granted exploration
and production concessions current as
at 2015).
It should also be noted that in respect of
the more recent information and location
of prospects, a number of those identifi ed
included possibly planned smelters,
although there is no certainty that any
Total Tonnage of prospective (Mn) stratigraphy (covered by IUPs*), West Timor
PARAMETER
MINE/
PRODUCTION
EXPLORATION
TOTAL
Total Area of IUPs (m2)
374,000,0000
1,140,000,000
1,514,000,000
No. of IUPs Intersecting Formation
47
135
182
Average Area of IUP (m2)
7,960,000
8,440,000
8,320,000
Average Strike length (m)
Total Productive Strike Length (m)
2,116
99,437
2,179
2,163
294,226
393,695
Prospectivity in IUPs (m3)
8,929,288
26,480,311
35,432,550
Total Tonnage (million tonnes)
29
85
114
*IUP (izin usaha pertambangan) mining/exploration licence
planned smelter will proceed and to date
apart from Gulf’s application, there are
no other recent or current applications to
build a smelter.
The full SRK Consulting report – Review
of Manganese Prospects and Deposits
in Indonesia may be found on the Gulf
website www.gulfmanganese.com.
Post Year End Key Developments
On 5 August 2016, the Company
announced that it has entered into a
binding term sheet with Marthen Amtiran
(“Pak Marthen”) for the investment of
US$10 million in Gulf’s Indonesian-
based subsidiary PT Gulf Mangan Grup
(“PT Gulf”), for a 10% interest in PT Gulf
(subject to any regulatory approval).
Pak Marthen paid a non-refundable
deposit of US$0.2 million after the signing
of the Term Sheet. The deposit was
received on 12 August 2016. The balance
of US$9.8M was to be paid within 5
business days of the Bupati providing a
written recommendation of the Kupang
Smelter Project to the Governor of the
Province of NTT.
Following the initial US$10 million
investment, Pak Marthen will have a six
month option to purchase an additional
5% interest in PT Gulf for US$7 million.
Pak Marthen will be entitled to one board
representative on the PT Gulf Mangan
Grup Board.
Following the receipt of approval from
the Governor of East Nusa Tenggara
for the construction of a Manganese
Smelting Hub in the Bolok Industrial
Estate in Kupang, the recommendation
by the Bupati was no longer requisite. The
Company has commenced discussions
with Pak Marthen to make a minor
amendment to the term sheet refl ecting
this change. However the Board remains
confi dent of securing this investment in
the near-term.
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GULF MANGANESE CORPORATION LIMITED (ACN: 059 954 317) ANNUAL REPORT 2016
On 8 August 2016, the Company advised
that it has fi nalised an agreement with
South African-based Transalloys (Pty) Limited
for the acquisition and relocation of two
ferromanganese smelting furnaces.
Under the terms of the agreement, Gulf will
purchase two furnaces (including related
equipment), from Transalloys for the total
cash consideration of US$1 million. Gulf has
also agreed to supply Transalloys with up to
30,000tpa of high grade manganese ore at
the prevailing reported Metal Bulletin’s index
price for manganese lumpy, for a period of
three years (once export licenses have been
granted) and to marketing rights for 60% of
the production from these smelters for three
years under commercial terms.
Specialist engineering fi rm, XRAM
Technologies (Pty) Limited (“XRAM”), has
been engaged to undertake all design
and construction requirements associated
with the refurbishment and relocation of
the furnaces to the Kupang Smelting Hub.
XRAM will also act as EPCM Managers for the
Indonesian construction program utilising
local Indonesian contractors and construction
companies.
Having now received necessary approvals to
start construction in the industrial estate at
Bolok in Kupang, the Company is revising its
construction program but still expects to be
in production in late 2017.
Corporate Overview
In October 2015, the Company raised
$100,000 with the issue of 10 Convertible
Notes with a face value of $10,000 each. The
Company also issued 5,538,667 fully paid
ordinary shares deemed at $0.015 each in
settlement of outstanding Directors’ fees.
During Q2 FY16, the Company raised $1.125
million from the placement of 75,000,000
shares and 37,500,000 options exercisable at
$0.02 expiring on 30 September 2018.
The placement was managed by Perth-
based Triple C Consulting, and provided
the Company with working capital which
deployed towards the development of the
Kupang Smelting Hub.
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In January 2016, the Company issued
10,000,000 shares and 5,000,000 options
exercisable at $0.02 expiring on 30 September
2018 in settlement of a $150,000 debt.
In February 2016, the Company raised
a further $413,277 with the issue of
27,551,833 shares at $0.015 with free
attaching 13,775,917 options exercisable at
$0.02 expiring on 30 September 2018. The
Company also issued 10,000,000 Advisor
Options in consideration for corporate
advisory services provided by Triple C
Consulting Pty Ltd. These options are
exercisable at $0.02 expiring on 21 February
2018.
During Q4, the Company successfully
completed a rights issue, raising $1.8 million
on the basis of four New Shares for every one
Existing Share held at a price of 0.2 cents per
share with free attaching New Options on
the basis of one free attaching New Option
for every two New Shares subscribed for and
issued. The Company issued 918,244,552
shares and 459,122,276 options exercisable at
0.5 cents expiring 21 April 2019.
Furthermore, 15 convertible notes were
redeemed during the year for $150,000 and
8 convertible notes worth $80,000 were
converted to fully paid ordinary shares at
0.255 cents – (31,372,549 shares).
Board Changes
During the fi nancial year, Mr Hamish
Bohannan was appointed as CEO of the
Company and subsequently appointed to the
Board as Managing Director on 1 February
2016. On the same day, Mr Craig Munro
was appointed as Non-executive Chairman,
replacing Mr Graham Anderson, who sadly
passed away on 19 July 2015.
The Board was further strengthened with
the appointment of Mr Andrew Wilson on 17
February 2016.
Dr Peter Williams and Mr Michael Walters
resigned as Directors on 17 February and 1
February 2016 respectively.
Subsequent to year end, Mr Paul
O’Shaughnessy retired as Non-executive
Director on 27 July 2016.
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GULF MANGANESE CORPORATION LIMITED (ACN: 059 954 317) ANNUAL REPORT 2016
From top left: Hamish Bohannan Managing Director & CEO (GMC) and President Director (PT Gulf Mangan Grup)
Craig Munro
Andrew Wilson
Leonard Math
John Woodacre
Donna Whittaker
Nukantini Putri
Louisa Taulo
Chairman (GMC)
Non-executive Director (GMC)
Company Secretary & CFO (GMC) and Commissioner (PT Gulf Mangan Grup)
Production Director & Director (PT Gulf Mangan Grup)
Executive Assistant and Investor Management (GMC)
Corporate Aff airs Indonesia (PT Gulf Mangan Grup)
Manager: Employment and Community Relations (PT Gulf Mangan Grup)
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GULF MANGANESE CORPORATION LIMITED (ACN: 059 954 317) ANNUAL REPORT 2016
D I R E C TO R S’ R E P O R T
Names, qualifi cations, experience and special responsibilities
The Directors present the following report
on the consolidated entity consisting
of Gulf Manganese Corporation Ltd and
the entity it controlled at the end of, or
during, the fi nancial year ended 30 June
2016.
The names of each person who has been
a Director during the year and continues
in offi ce to the date of this report are:
Mr Craig Munro
(Non-executive Chairman)
appointed 1 February 2016
Mr Hamish Bohannan
(Managing Director) appointed 1
February 2016
Mr Andrew Wilson
(Non-executive Director)
appointed 17 February 2016
Mr Paul O’Shaughnessy
(Non-executive Director) retired
on 27 July 2016
Mr Graham Anderson ceased as a Director
on 20 July 2015.
Dr Peter Williams and Mr Michael Walters
resigned as Directors of the Company
on 17 February and 1 February 2016
respectively.
Craig Munro CPA (Non-executive Chairman)
Craig is a Certifi ed Practicing Accountant with over 40 years’ experience in the mining
industry. He has been both an executive director and non-executive director of a number
of listed companies since 1990. Craig brings both strong fi nancial skills to the Board as
well as strong corporate governance.
Other Current Directorships
Former Directorships in the Last Three Years
None
Bathurst Resources Limited (Resigned 31/03/2014)
Hamish Bohannan MBA (Managing Director)
Hamish holds an Honours Degree in Mining Engineering from the Royal School of
Mines UK and a MBA from Deakin University, Victoria. He has extensive corporate and
operational experience in public companies within Australia and overseas in the capacity
of Managing Director or CEO with ASX, TSX and AIM listed groups.
Other Current Directorships
Former Directorships in the Last Three Years
None
Bathurst Resources Limited (Resigned 24/03/2015)
Andrew Wilson, B.Com, FAICD, AusIMM (Non-executive Director)
Andrew has a Bachelor of Commerce (Marketing) and a Masters of Law, with 30 years
of legal experience and 16 years with BHP in various legal, risk and commercial roles. In
addition, Andrew has also been a director of various publicly-listed companies, including:
Herald Resources Ltd, Robust Resources Ltd, PT Resource Alam Indonesia TBK, and
director or chairman of various not for profi t organisations.
From 2000 until 2007, Andrew served as the President Director of BHP Billiton Indonesia,
based in Jakarta. Andrew was also a Director of the Indonesian Mining Association and
has established strong connections in the region and speaks Bahasa Indonesia fl uently.
He is a Fellow of the Australian Institute of Company Directors, a member of the Risk
Management Institution of Australasia and AusIMM.
Other Listed Company Current
Directorships
Former Listed Company Directorships in the Last
Three Years
None
Robust Resources Limited
Paul O’Shaughnessy, BSc(Eng), C Eng (Non-executive Metallurgical Director) –
Retired 27 July 2016
Paul is a metallurgical engineer with some 40 years of industry experience which includes
smelting operations producing both bulk and specialty manganese alloys. He is a
graduate from the Royal School of Mines, Imperial College, University of London with a
Bachelor of Science Metallurgy with Honours. He operates his own consulting business
which includes advising on the manufacturing of ferro alloys. Paul did not hold any other
directorships in the last three years.
Other Current Directorships
Former Directorships in the Last Three Years
None
None
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GULF MANGANESE CORPORATION LIMITED (ACN: 059 954 317) ANNUAL REPORT 2016
Names, qualifi cations, experience and special responsibilities (continued)
Graham Anderson, B.Bus, Dip, Fin Plan, CA, AICD (Non-executive Chairman) – Ceased 20 July 2015
Graham had over 29 years commercial and corporate experience having commenced his
career in 1983 with Ernst & Young before later moving to national chartered accounting fi rms,
Duesburys and Horwath as Partner. Graham’s responsibilities included corporate services
divisions of the Perth practice, including preparation and signing of Independent Experts Reports
and Independent audit reports. He operated his own specialist accounting and management
consultancy practice, providing a range of corporate advisory and audit services to both public
and private companies. From 1990 to 1999 he was an audit partner at Horwath Perth. Graham
sadly passed away on 19 July 2015.
Other Current Directorships
Former Directorships in the Last Three Years
None
Echo Resources Ltd
Dynasty Metals (Australia) Ltd
Tangiers Petroleum Ltd
WAG Ltd
Oakajee Corporation Ltd
Pegasus Metals Ltd
Mako Hydrocarbons Ltd
APA Financial Services Ltd
Kangaroo Resources Ltd
Peter Williams BSc (Hons), PhD, FAICD, FAusIMM (Deputy Chairman & Non-executive Exploration
Director) – Resigned 17 February 2016
Peter holds a PhD in Structural Geology and has been in the exploration industry since the early
1970’s and was, before retirement, Managing Director of SRK Australasia, one of the country’s
largest specialist geological consulting group. He joined the board in September 2013.
Other Current Directorships
Former Directorships in the Last Three Years
None
None
Michael Walters, B.Eng (Non-executive Marketing Director) – Resigned 1 February 2016
Michael holds a Bachelor of Engineering and has 30 years resources marketing experience having
worked with Billiton, Western Mining and was part of the team that built Consolidated Minerals
into the world’s 4th largest high grade manganese supplier. He joined the board in October 2013.
Other Current Directorships
Former Directorships in the Last Three Years
Shaw River Manganese Ltd
None
Leonard Math, BComm, CA (Chief Financial Offi cer & Company Secretary)
Leonard graduated from Edith Cowan University in 2003 with a Bachelor of Business majoring in
Accounting and Information Systems. He is a member of the Institute of Chartered Accountants.
He previously worked as an auditor at Deloitte and is experienced with public company
responsibilities including ASX and ASIC compliance, control and implementation of corporate
governance, statutory fi nancial reporting and shareholder relations.
He is a Director and Company Secretary of ASX listed companies Elemental Minerals Limited, RMA
Energy Limited and Global Gold Holdings Limited.
2222
GULF MANGANESE CORPORATION LIMITED (ACN: 059 954 317) ANNUAL REPORT 2016
In February 2016, the Company raised
a further $413,277 with the issue of
27,551,833 shares at $0.015 with free
attaching 13,775,917 options exercisable
at $0.02 expiring on 30 September 2018.
The Company also issued 10,000,000
Advisor Options in consideration for
corporate advisory services provided by
Triple C Consulting Pty Ltd. These options
are exercisable at $0.02 expiring on 21
February 2018.
During the last quarter of 2016, the
Company successful completed a rights
issue, raising $1.8 million on the basis
of four (4) New Shares for every one
(1) Existing Share held at a price of 0.2
cents per share with free attaching New
Options on the basis of one (1) free
attaching New Option for every two (2)
New Shares subscribed for and issued.
The Company issued 918,244,552 shares
and 459,122,276 options exercisable at 0.5
cents expiring 21 April 2019.
During the year, 15 convertible notes
were redeemed for $150,000 and 8
convertible notes worth $80,000 were
converted to fully paid ordinary shares at
0.255 cents – (31,372,549 shares).
Director’s interests in shares and options
As at the date of this report the relevant interest of each Director in the shares and
options of the Company are:
Directors
Craig Munro
Shares
Direct
Options over ordinary shares
Indirect
Direct
Indirect
-
-
-
10,000,000
Hamish Bohannan
24,000,000
41,000,000
42,000,000
20,500,000
Andrew Wilson
-
7,000,000
-
10,000,000
Principal activity
The principal activity of the Company
is developing an ASEAN focused
manganese alloying enterprise based in
West Timor.
Review of operations and results
Details of the operations of the Company
are set out in the Review of Operations
on page 2.
The Company incurred an after tax
operating loss of $2,903,474 (2015:
$2,594,559).
Dividends
No dividend has been paid or
recommended for the current year.
SIGNIFICANT CHANGES IN STATES OF
AFFAIRS
Board changes
During the fi nancial year ended 30
June 2016, Mr Hamish Bohannan was
appointed as CEO of the Company and
subsequently appointed to the Board as
Managing Director on 1 February 2016.
On the same day, Mr Craig Munro was
appointed as Non-executive Chairman,
replacing Mr Graham Anderson, who
sadly passed away on 19 July 2015.
The Board was further strengthened with
the appointment of Mr Andrew Wilson on
the 17 February 2016.
Dr Peter Williams and Mr Michael Walters
resigned as Directors on 17 February and
1 February 2016 respectively.
Subsequent to year end, Mr Paul
O’Shaughnessy retired as Non-executive
Director on 27 July 2016.
Corporate
In October 2015, the Company raised
$100,000 with the issue of 10 Convertible
Notes with a face value of $10,000 each.
The Company also issued 5,538,667
fully paid ordinary shares deemed at
$0.015 each in settlement of outstanding
Directors’ fees.
During the second quarter of the year
2016, the Company raised $1.125 million
from the placement of 75,000,000 shares
and 37,500,000 options exercisable at
$0.02 expiring on 30 September 2018.
The placement was managed by
Perth-based Triple C Consulting, and
will provide the Company with working
capital which will be deployed towards
the development of Gulf’s premium
manganese alloy facility in Indonesia.
In January 2016, the Company issued
10,000,000 shares and 5,000,000 options
exercisable at $0.02 expiring on 30
September 2018 in settlement of a
$150,000 debt.
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6) 24,000,000 Unlisted Options exercisable
at 2 cents expiring 5 September
2021 were issued to employees and
contractors of the Company under the
Company’s Employee and Contractor
Share Option Plan.
• On 8 September 2016, the Company
completed $1 million raising to provide
additional working capital, as the Company
continues to progress towards the
development of its Kupang Smelting Hub
Project in West Timor, Indonesia.
On 15 September 2016, the Company
raised a further $100,000 through the issue
of 6,666,667 shares at 1.5 cents each.
• On 3 October 2016, Gulf received approval
from the Governor of East Nusa Tenggara
for the construction of a Manganese
Smelting Hub in the Bolok Industrial Estate
in Kupang, Indonesia.
Likely developments and expected results
of operations
Likely developments in the operations of
the Company are set out in the Review of
Operations on page 2.
MATTERS SUBSEQUENT TO THE END OF
THE FINANCIAL YEAR
• Subsequent to year end, Mr Paul
O’Shaughnessy retired as a director on 27
July 2016.
• On 5 August 2016, the Company entered
into a binding term sheet with Marthen
Amtiran (“Pak Marthen”) for the investment
of US$10 million in Gulf’s Indonesian-based
subsidiary PT Gulf Mangan Grup (“PT Gulf”),
for a 10% interest in PT Gulf (subject to any
regulatory approval).
• On 8 August 2016, the Company advised
that it has fi nalised an agreement with
South African-based Transalloys (Pty)
Limited for the acquisition and relocation
of two ferromanganese smelting furnaces.
• On 23 August 2016, 3 convertible notes
with a face value of $10,000 each were
converted to shares in the Company. A
total of 2,941,177 shares were issued at a
price of 1.02 cents each.
• Following shareholders’ approval at the
General Meeting held on 2 September
2016, the following securities were issued:
1) 20,000,000 shares at a price of 0.2
cents per share and 10,000,000 Listed
Options exercisable at 0.5 cents each
were issued to Triple C Consulting Pty
Ltd as a settlement of outstanding fees
of $40,000.
2) 10,000,000 shares were issued to Mrs
Nukantini Putri Parincha allowing the
Company to acquire 100% interest in
PT Gulf Mangan Grup.
3) 4,500,000 shares were issued to Mr
John Woodacre at a price of 0.4 cents
per share in satisfaction of outstanding
consulting fees of $18,000.
4) 10,000,000 Unlisted Options exercisable
at 2 cents expiring 5 September 2021
were issued each to Mr Craig Munro
and Mr Andrew Wilson
5) 30,000,000 Unlisted Options exercisable
at 2 cents expiring 5 September 2021
were issued to Mr Hamish Bohannan.
2424
GULF MANGANESE CORPORATION LIMITED (ACN: 059 954 317) ANNUAL REPORT 2016
Meetings of directors
The numbers of meetings of the Company’s Board of Directors held during the year
ended 30 June 2016, and the numbers of meetings attended by each director were:
NUMBER
ELIGIBLE TO
ATTEND
NUMBER
ATTENDED
5
5
4
13
-
8
6
5
5
4
13
-
8
6
Director’s benefi ts
Since the date of the last Directors’ Report,
no Director of the Company has received,
or become entitled to receive, (other
than a remuneration benefi t included in
Note 17 to the fi nancial statements or
remuneration report), a benefi t because
of a contract that involved:
(a) the Director; or
(b) a fi rm of which the Director is a
member; or
(c) an entity in which the Director has a
substantial fi nancial interest (during
the year ended 30 June 2016, or at
any other time) with the Company; or
(d) an entity that the Company
controlled, or a body corporate that
was related to the Company, when
the contract was made or when the
Director received, or became entitled
to receive, the benefi t (if any).
NAME OF
DIRECTOR
Craig Munro – appointed 1 Feb 2016
Hamish Bohannan – appointed 1 Feb 2016
Andrew Wilson – appointed 17 Feb 2016
Paul O’Shaughnessy – retired 27 July 2016
Graham Anderson – ceased 20 July 2015
Peter Williams – resigned 17 Feb 2016
Michael Walters – resigned 1 Feb 2016
Audit and risk committee
The Company has established an Audit
and Risk Committee that comprises
the whole Board. The Audit and Risk
Committee did not meet during the year.
Remuneration committee
The Company has established a
remuneration committee that comprises
the whole Board due to the size of the
Board. The Remuneration Committee did
not meet during the year.
Environmental regulations
During the year, the Company
successfully divested its key non-core
assets, the Australian mineral tenements,
enabling the company to hone its
focus on the Indonesian manganese
alloying project. The Company’s
current operations in Indonesia have
limited exposure to the environmental
regulation. No breaches of any
environmental restrictions were recorded
during the fi nancial year.
Remuneration report (audited)
The information provided in this
remuneration report has been audited
as required under Section 308 (3C) of
the Corporations Act 2001. During the
fi nancial year the key management
personnel and Directors (see page 5
for details about each Director and key
management personnel) are as follows.
Craig Munro
Non-executive Chairman
(appointed 1 February 2016)
Hamish Bohannan
Managing Director
(appointed 1 February 2016)
Andrew Wilson
Non-executive Director
(appointed 17 February 2016)
Graham Anderson
Non-executive Chairman
(ceased on 20 July 2015)
Peter Williams
Non-executive Director
(resigned 17 February 2016)
Michael Walters
Non-executive Director
(resigned 1 February 2016)
Paul O’Shaughnessy
Non-executive Director
(resigned 27 July 2016)
Leonard Math
CFO & Company Secretary
A) Remuneration policy
The objective of the Company’s policy
is to provide remuneration that is
competitive and appropriate. The Board
ensures that executive reward satisfi es
the following key criteria for good reward
governance practices:
(i)
(ii) acceptability to shareholders;
(iii) transparency; and
(iv) capital management.
competitiveness and reasonableness;
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GULF MANGANESE CORPORATION LIMITED (ACN: 059 954 317) ANNUAL REPORT 2016
A Remuneration policy (continued)
Directors’ and executives’ remuneration
The policy of the Company is to pay
remuneration of Directors in amounts in line
with employment market conditions relevant
in the mining industry.
Fees and payments to non-executive
directors refl ect the demands which are
made on, and the responsibilities of, the
directors. Non-executive Directors’ fees and
payments are reviewed annually by the
Board. The Chairman’s fees are determined
independently to the fees of Non-Executive
Directors based on comparative roles in the
external market.
The Constitution of the Company provides
that non-executive Directors may collectively
be paid as remuneration for their services
a fi xed sum not exceeding the aggregate
maximum sum per annum determined by the
Company in a general meeting. The current
aggregate maximum is $500,000.
The table below sets out summary information about the Consolidated Entity’s earnings and
movements in net asset for the last 5 years:
30-Jun-16
30-Jun-15
30-Jun-14
30-Jun-13
30-Jun-12
$
-
$
150,043
$
-
$
$
100,023
350,925
(2,903,474)
(2,594,559)
(5,622,881)
(530,212)
(1,845,851)
841,174
(836,429)
(227,215)
834,103
611,127
Revenue
Net Profi t /(Loss)
before tax
Net Asset/
(Liability)
Performance based remuneration
There was no performance-based remuneration paid to Directors during the fi nancial year.
Voting and comments made at the Company’s 2015 Annual General Meeting
In 2015 Annual General Meeting, the Company received 99.99% votes in favour of the adoption of
its remuneration report and did not receive any specifi c feedback at the AGM or throughout the
year on its remuneration practices.
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GULF MANGANESE CORPORATION LIMITED (ACN: 059 954 317) ANNUAL REPORT 2016
B Details of remuneration
Amounts of remuneration
Details of the remuneration of the Directors, the Key Management Personnel of the Company (as defi ned in AASB 124 Related Party
Disclosures) and specifi ed executives of the Company are set out in the following tables:
SHORT-TERM
BENEFITS
POST
EMPLOYMENT
BENEFITS
OTHER
SHARE-BASED PAYMENT
TOTAL
Directors
Salary and fees
Super-
annuation
Retirement
Benefi ts
Fees
Shares/
Options
Remuneration
consisting of
Options
$
Craig Munro (appointed 1 Feb 2016)
2016
2015
31,659
-
3,008
-
-
-
Hamish Bohannan (appointed CEO 28 Oct 2015 and Managing Director 1 Feb 2016)
2016
2015
175,623
16,684
-
Andrew Wilson (appointed 17 Feb 2016)
2016
2015
20,000
-
Paul O’Shaughnessy (resigned 27 July 2016)
2016
2015
40,000
31,935
Graham Anderson (ceased 20 July 2015)
2016
2015
Peter Williams (resigned 17 Feb 2016)
2016
2015
Michael Walters (resigned 1 Feb 2016)
2016
2015
Bruce Morrin (retired 2 April 2015)
2016
2015
Total Remuneration Directors
6,200
72,600
44,724
36,000
21,000
36,000
-
55,800
Executives
Leonard Math
2016
2015
339,206
232,335
2016
2015
100,895*
79,500*
Total Remuneration Executives
2016
2015
100,895
79,500
-
-
-
-
-
-
-
-
-
-
-
-
-
19,692
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
34,667
-
1,128,000
85.43%
1,320,307
-
-
-
-
-
-
-
-
38,900
54.92%
-
20,000
-
40,000
70,835
-
-
6,200
77,800
51.73%
150,400
-
-
38,900
51.94%
-
-
38,900
51.94%
44,724
74,900
21,000
74,900
-
-
-
77,800
58.23%
133,600
1,128,000
75.86%
1,486,898
272,300
53.96%
504,635
-
-
-
-
-
-
-
-
100,895
79,500
100,895
79,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
*Fees relates to Chief Financial Offi cer and Company Secretarial services provided through Nexia Perth Pty Ltd (previously GDA Corporate). Mr Leonard
Math does not have benefi cial interest in Nexia and is an employee of Nexia.
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Remuneration report (audited)
(continued)
C Service agreements
The Company has an Executive Service
Agreement with Mr Hamish Bohannan for
his role as Managing Director and Chief
Executive Offi cer. Hamish will be remunerated
at an annual salary of $250,000 inclusive
of statutory superannuation with a three
months’ termination notice period.
D Share-based compensation
Options granted to Directors’ and Offi cers
During the year, Mr Hamish Bohannan was
issued 30,000,000 shares and 15,000,000
options exercisable at $0.05 each expiring
30 September 2018. The options vest
immediately. Refer to Note 21 for the inputs
used for the valuation of these options.
Shares issued on exercise of unlisted
options
There were no unlisted options exercised
during the fi nancial year.
Fair value of options granted
The assessed fair value at grant date of
options granted to individuals is allocated
equally over the period from grant date to
vesting date. Fair values at grant date are
independently determined using a Black
Scholes option pricing model.
E Additional information
Options granted to Directors carry no
dividend or voting rights. Subsequent to year
end, the following options were issued to the
Directors:
Hamish Bohannan 30,000,000 Unlisted
Options exercisable
at 2 cents expiring 5
September 2021
Craig Munro
Andrew Wilson
10,000,000 Unlisted
Options exercisable
at 2 cents expiring 5
September 2021
10,000,000 Unlisted
Options exercisable
at 2 cents expiring 5
September 2021
Non-Executive Directors receive a letter of
appointment which contains key terms to
their appointment. Such terms include the
term in accordance with the Constitution of
the Company, time commitment expected,
role, standards of conduct and cessation of
offi ce. The Non-Executive Directors receive a
remuneration package of $5,000 per month
with the Chairman receiving $8,333 per
month inclusive of statutory superannuation.
The Company has a service agreement
with Nexia Perth Pty Ltd (previously GDA
Corporate) for the provision of services
as Accounting & Company Secretary by
Mr Leonard Math. Mr Leonard Math is an
employee of Nexia Perth. Current details of
the services agreement with Nexia are as
follows:-
Monthly Fees
Accounting: $2,500 plus GST
Company Secretary: $4,000 plus GST
Termination Notice Period – 3 months
Term – Continuing until terminated
There are no other service agreements other
than disclosed above.
Termination benefi ts
The Company is not liable for any termination
benefi ts on termination of the current
executive or non-executive directors or key
management personnel other than payment
of period of notice on termination where
applicable.
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GULF MANGANESE CORPORATION LIMITED (ACN: 059 954 317) ANNUAL REPORT 2016
Remuneration report (audited) (continued)
F Key Management Personnel shareholdings
Directors
Balance at the beginning
of the year
Share issue during the
year
Held at Resignation
Balance at End of Year
-
-
-
-
1,000,000
1,493,533
3,346,667
-
-
65,000,0001
-
-
-
1,200,000
1,200,000
2,500,0002
-
-
-
-
1,000,000
2,693,533
4,546,667
-
-
65,000,000
-
-
-
-
-
2,500,000
Craig Munro
Hamish Bohannan
Andrew Wilson
Paul O’Shaughnessy*
Graham Anderson**
Michael Walters***
Peter Williams****
Leonard Math
*Retired on 27 July 2016
**Ceased on 20 July 2015
***Resigned on 1 February 2016
****Resigned on 17 February 2016
1 Issued 35,000,000 shares through the participation in the rights issue at a price of 0.2 cents each.
2 Participatied in the rights issue at a price of 0.2 cents each.
G Key Management Personnel option holdings
Directors
Balance at the beginning
of the year
Options issue during
the year
Held at Resignation
Balance at End of Year
Craig Munro
Hamish Bohannan
Andrew Wilson
Paul O’Shaughnessy*
Graham Anderson**
Michael Walters***
Peter Williams****
Leonard Math
*Retired on 27 July 2016
**Ceased on 20 July 2015
***Resigned on 1 February 2016
****Resigned on 17 February 2016
-
-
-
1,000,000
2,000,000
1,000,000
1,000,000
-
32,500,0001
-
-
-
-
-
-
1,250,0002
-
-
-
1,000,000
2,000,000
1,000,000
1,000,000
-
-
32,500,000
-
-
-
-
-
1,250,000
1 Issued 17,500,000 options through the participation in the rights issue at a price of 0.2 cents each.
2 Issued through the participation in the rights issue at a price of 0.2 cents each.
There is no other additional information other than the information disclosed above.
This is the end of the audited remuneration report.
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GULF MANGANESE CORPORATION LIMITED (ACN: 059 954 317) ANNUAL REPORT 2016
Shares under option
At the date of this report, unissued ordinary shares of the Company under option are:
Expiry date
Exercise price
Number of options
Vested and
exercisable
21-Apr-19
30-Sep-18
30-Sep-18
21-Feb-18
31-Jul-17
31-Dec-18
5-Sep-21
5-Sep-21
$0.005
$0.0196
$0.0496
$0.0196
$0.3746
$0.2496
$0.02
$0.02
468,361,419
56,275,917
15,000,000
10,000,000
13,900,000
7,500,000
50,000,000
24,000,000
645,037,336
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
When exercisable, each option is convertible into one ordinary share.
Proceedings on behalf of Company
No person has applied for leave of Court under
section 237 of the Corporations Act 2001 to
bring proceedings on behalf of the Company
or 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 any part of those proceedings.
The Company was not a party to any such
proceedings during the year.
Non-audit services
There were no non-audit services provided
for the fi nancial year (2015: nil). The Auditor’s
remuneration is disclosed in Note 25.
Auditor independence declaration
A copy of the Auditor’s independence
declaration as required under section 307C of
the Corporations Act 2001 is set out on page 16.
Signed in accordance with a resolution of the
Directors and on behalf of the board by:
Craig Munro
Non-executive Chairman
Perth, Western Australia
30 September 2016
Convertible notes
At the date of this report, the total number of
outstanding convertible notes is 40. Below are
the terms and conditions of the convertible
notes:
1. Face value - $10,000 per convertible
note.
2. Conversion – Each note may be
converted into Gulf shares at the rate
of 85% of the 30 day VWAP at the
Holders option after 12 months from
issue
Interest – payable quarterly at 10%
per annum.
3.
4. Redemption – Each note may be
redeemed at the Holders option
12 months from issue or any time
thereafter with 3 months notifi cation
and all outstanding notes will be
redeemed in full 36 months from
issue.
5. Term – 3 years from the date of issue.
Indemnifi cation
There are indemnities and insurances for the
Directors in regard to their positions. These
insure and indemnify the Directors including
former Directors against certain liabilities
arising in the course of their duties. The
Directors have not disclosed the amount of the
premiums paid as such disclosure is prohibited
under the terms of the policies.
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(cid:55)(cid:82)(cid:3)(cid:55)(cid:75)(cid:82)(cid:86)(cid:72)(cid:3)(cid:38)(cid:75)(cid:68)(cid:85)(cid:74)(cid:72)(cid:71)(cid:3)(cid:42)(cid:82)(cid:89)(cid:72)(cid:85)(cid:81)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:42)(cid:88)(cid:79)(cid:73)(cid:3)(cid:48)(cid:68)(cid:81)(cid:74)(cid:68)(cid:81)(cid:72)(cid:86)(cid:72)(cid:3)(cid:38)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:47)(cid:76)(cid:80)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)
(cid:3)
(cid:36)(cid:86)(cid:3)(cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:82)(cid:85)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:42)(cid:88)(cid:79)(cid:73)(cid:3)(cid:48)(cid:68)(cid:81)(cid:74)(cid:68)(cid:81)(cid:72)(cid:86)(cid:72)(cid:3)(cid:38)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:47)(cid:76)(cid:80)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:22)(cid:19)(cid:3)(cid:45)(cid:88)(cid:81)(cid:72)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:15)(cid:3)(cid:44)(cid:3)(cid:71)(cid:72)(cid:70)(cid:79)(cid:68)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:15)(cid:3)
(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:69)(cid:72)(cid:86)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:80)(cid:92)(cid:3)(cid:78)(cid:81)(cid:82)(cid:90)(cid:79)(cid:72)(cid:71)(cid:74)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:69)(cid:72)(cid:79)(cid:76)(cid:72)(cid:73)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:85)(cid:72)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:69)(cid:72)(cid:72)(cid:81)(cid:29)(cid:3)
(cid:3)
(cid:16)(cid:3)
(cid:81)(cid:82)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:68)(cid:89)(cid:72)(cid:81)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:76)(cid:81)(cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:36)(cid:70)(cid:87)(cid:3)(cid:21)(cid:19)(cid:19)(cid:20)(cid:3)(cid:76)(cid:81)(cid:3)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:30)(cid:3)
(cid:68)(cid:81)(cid:71)(cid:3)
(cid:3)
(cid:16)(cid:3)
(cid:81)(cid:82)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:68)(cid:89)(cid:72)(cid:81)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:68)(cid:83)(cid:83)(cid:79)(cid:76)(cid:70)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3)(cid:70)(cid:82)(cid:71)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:83)(cid:85)(cid:82)(cid:73)(cid:72)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:70)(cid:82)(cid:81)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:17)(cid:3)
(cid:3)
(cid:3)
(cid:42)(cid:85)(cid:72)(cid:72)(cid:81)(cid:90)(cid:76)(cid:70)(cid:75)(cid:3)(cid:9)(cid:3)(cid:38)(cid:82)(cid:3)(cid:36)(cid:88)(cid:71)(cid:76)(cid:87)(cid:3)(cid:51)(cid:87)(cid:92)(cid:3)(cid:47)(cid:87)(cid:71)(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:49)(cid:76)(cid:70)(cid:75)(cid:82)(cid:79)(cid:68)(cid:86)(cid:3)(cid:43)(cid:82)(cid:79)(cid:79)(cid:72)(cid:81)(cid:86)(cid:3)
(cid:48)(cid:68)(cid:81)(cid:68)(cid:74)(cid:76)(cid:81)(cid:74)(cid:3)(cid:39)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:3)
(cid:3)
(cid:51)(cid:72)(cid:85)(cid:87)(cid:75)(cid:3)
(cid:3)
(cid:22)(cid:19)(cid:3)(cid:54)(cid:72)(cid:83)(cid:87)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
31
GULF MANGANESE CORPORATION LIMITED (ACN: 059 954 317)
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
Revenue
Revenue from JV agreement
Interest income
Expenses
Directors remuneration
Administrative expenses
Exploration and evaluation expenses
Due diligence expenses
Settlement expenses
Impairment of exploration and evaluation
Legal fees
Depreciation
Loss on sale of fi xed assets
Professional fees
Share based payments
Impairment of available-for-sale investment
Interest on fi nance
Loss before income tax
Income tax benefi t/(expense)
Note
2
8
21
6
2
3
2016
$
-
-
-
163,583
880,879
2,252
-
283,064
-
106,519
7,460
4,776
183,989
1,128,000
75,000
67,952
2015
$
150,000
43
150,043
87,215
809,327
14,487
289,464
-
125,000
154,272
10,680
-
286,677
292,480
675,000
-
(2,903,474)
(2,744,602)
(2,903,474)
(2,594,559)
-
-
Net loss after tax
(2,903,474)
(2,594,559)
Other comprehensive loss for the year, net of tax
-
-
Total comprehensive loss for the year
(2,903,474)
(2,594,559)
Basic and diluted loss per share
15
(0.94)
(4.97)
2016
Cents
2015
Cents
The above Consolidated Statement of Profi t or Loss and Other Comprehensive Income should be read in conjunction with
the accompanying notes.
32
FINANCIAL STATEMENTS FOR PERIOD ENDED 30 JUNE 2016
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 30 JUNE 2016
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Financial assets
Plant and equipment
Exploration, evaluation and development
Intangible assets
Non-current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Total current liabilities
Non-current liabilities
Borrowings
Total non-current liabilities
Total liabilities
Net assets / (liabilities)
Equity
Contributed equity
Options reserve
Accumulated losses
Total equity
Note
4
5
6
7
8
9
10
11
11
12
13
14
2016
$
621,747
106,756
728,503
-
21,901
-
955,200
977,101
2015
$
9,638
123,179
132,817
75,000
41,905
-
512,314
629,219
1,705,604
762,036
394,430
470,000
859,660
738,805
864,430
1,598,465
-
-
-
-
864,430
1,598,465
841,174
(836,429)
23,325,358
19,903,222
2,507,213
1,348,272
(24,991,397)
(22,087,923)
841,174
(836,429)
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
33
GULF MANGANESE CORPORATION LIMITED (ACN: 059 954 317)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
Balance at 1 July 2015
Loss for the year
Total comprehensive loss for the year
Transaction with owners in their
capacity as owners
Contributions to equity net of
transactions costs
Contributed
Equity
$
Options
Reserve
$
Accumulated
Losses
$
Notes
Total
Equity
$
19,903,222
1,348,272
(22,087,923)
(836,429)
-
-
-
-
(2,903,474)
(2,903,474)
(2,903,474)
(2,903,474)
12, 13
3,422,136
1,158,941
-
4,581,077
Balance 30 June 2016
23,325,358
2,507,213
(24,991,397)
841,174
Contributed
Equity
$
Options
Reserve
$
Accumulated
Losses
$
Notes
Total
Equity
$
Balance at 1 July 2014
Loss for the year
Total comprehensive loss for the year
18,210,356
1,055,793
(19,493,364)
(227,215)
-
-
-
-
(2,594,559)
(2,594,559)
(2,594,559)
(2,594,559)
Transaction with owners in their
capacity as owners
Contributions to equity net of
transactions costs
12, 13
1,692,866
292,479
-
1,985,345
Balance 30 June 2015
19,903,222
1,348,272
(22,087,923)
(836,429)
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
34
FINANCIAL STATEMENTS FOR PERIOD ENDED 30 JUNE 2016
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
Cash fl ows from operating activities
Other receipts
Payments to suppliers and employees
Interest received
Interest paid
Note
2016
$
2015
$
139,096
150,000
(2,398,494)
(1,427,130)
-
(67,952)
43
-
Net cash fl ows used in operating activities
4
(2,327,350)
(1,277,087)
Cash fl ows from investing activities
Purchase of plant and equipment
Proceeds from sale of plant and equipment
(5,209)
12,977
(3,720)
-
Payments for exploration, evaluation and development expenditure
-
(368,033)
Net cash fl ows generated from / (used in) investing activities
7,768
(371,753)
Cash fl ows from fi nancing activities
Proceeds from issue of securities - net of issue costs
Proceeds from borrowings
Repayment of borrowings
Net cash fl ows from fi nancing activities
3,120,496
1,971,260
-
169,175
(188,805)
(485,759)
2,931,691
1,654,676
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
612,109
9,638
Cash and cash equivalents at the end of the year
4
621,747
5,836
3,802
9,638
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
Corporate Information
(c) Statement of compliance
The fi nancial report of the Company for the year
ended 30 June 2016 was authorised for issue in
accordance with a resolution of the Directors on
30 September 2016. Gulf Manganese Corporation
Limited (previously known as Gulf Minerals
Corporation Limited) is a company limited by
shares incorporated in Australia whose shares are
publicly traded on the Australian stock exchange.
The nature of the operations and principal
activities of the Company are described in the
review of operations.
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
(a) Basis of preparation
These fi nancial statements are general-
purpose fi nancial statements, which have
been prepared in accordance with the
requirements of the Corporations Act 2001,
and Australian Accounting Standards and
Interpretations. These fi nancial statements
have been prepared on a historical cost basis.
Gulf Manganese Corporation Ltd is a for-
profi t entity for the purpose of preparing
the fi nancial statements. These consolidated
fi nancial statements are presented in
Australian dollars and all values are expressed
as whole dollars.
(b) Going concern
The fi nancial report has been prepared on
the going concern basis, which contemplates
the continuity of normal business activity and
the realisation of assets and the settlement of
liabilities in the normal course of business.
The consolidated entity had net current
liabilities of $135,927 at 30 June 2016 (30
June 2015: $1,465,648), incurred a net loss
after tax for the fi nancial year ended 30 June
2016 of $2,903,474 (30 June 2015: $2,594,559)
and experienced net cash outfl ows from
operating activities of $2,327,350 (30 June
2015: $1,277,087).
In September 2016, the Company raised $1m
via the issue of equity instruments, to provide
working capital fi nance for the consolidated
entity. Further, as disclosed in Note 24, the
Company has secured an agreement with
Pak Marthen to invest a further $9.8m in the
Company and its projects; however, receipt
of these monies is conditional on the local
government approvals of the Kupang Smelter
Project in Indonesia, which the directors are
presently working to fi nalise.
The directors have instituted measures to
preserve cash and secure additional fi nance
and are satisfi ed that the Company can
continue as a going concern.
These fi nancial statements comply with
Australian Accounting Standards and
other authoritative pronouncements of
the Australian Accounting Standards Board
and Australian Accounting Interpretations.
Compliance with Australian Accounting
Standards ensures that the fi nancial report,
comprising the fi nancial statements and
notes thereto, complies with the International
Financial Reporting Standards (IFRS).
(d) Critical accounting estimates
Estimates and judgments are continually
evaluated and are based on historical
experience and other factors, including
expectations of future events that may
have a fi nancial impact on the entity and
that are believed to be reasonable under
the circumstances. The Company makes
estimates and assumptions concerning the
future. The resulting accounting estimates
will, by defi nition, seldom equal the related
actual results. The estimates and assumptions
that have a signifi cant risk of causing a
material adjustment to the carrying amounts
and liabilities within the next fi nancial year are
discussed below.
Fair value of share options and assumptions
The fair value of services received in return
for share options granted to consultants,
directors and employees is measured by
reference to the fair value of options granted.
The estimate of the fair value of the services
is measured based on Black-Scholes options
valuation methodology.
Impairment
The carrying amounts of the consolidated
entity’s assets are reviewed at each
reporting date to determine whether there
is any indication of impairment. If any such
indication exists, the asset’s recoverable
amount is estimated.
(i)
Impairment of exploration and evaluation
assets
The future recoverability of capitalised
exploration and evaluation expenditure
is dependent on a number of factors,
including whether the consolidated
entity decides to exploit the related lease
itself or, if not, whether it successfully
recovers the related exploration and
evaluation asset through sale.
Factors that would impact the future
recoverability include the level
of reserves and resources, future
technological changes, which would
impact the cost of mining, future
legal changes (including changes to
environmental restoration obligations)
and changes to commodity prices.
To the extent that capitalised exploration
and evaluation expenditure is
determined not to be recoverable in
the future, profi ts and net assets will
be reduced in the period in which this
determination is made.
36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 (continued)
NOTE 1
Summary of signifi cant accounting policies
(continued)
In addition, exploration and evaluation
expenditure is capitalised if the
activities in the area of interest have
not yet reached a stage that permits
a reasonable assessment of the
existence or otherwise of economically
recoverable reserves. To the extent that
it is determined in the future that this
capitalise expenditure should be written
off or impaired, profi ts and net assets will
be reduced in the period in which this
determination is made.
(ii) Calculation of recoverable amount
The recoverable amount of the
consolidate entity’s receivables carried
at amortised costs is calculated at the
present value of estimated future cash
fl ows, discounted at the original eff ective
interest rate (i.e. the eff ective interest rate
computed at initial recognition of these
fi nancial assets). Receivable with a short
duration are not discounted.
Impairment of receivable is not
recognised until objective evidence is
available that a loss event has occurred.
Signifi cant receivables are individually
assessed for impairment.
The recoverable amount of other assets
is greater of their fair value less costs to
sell and value in use. In assessing value
in use, the estimated future cash fl ows
are discounted to their present value
in using a pre-tax discount rate that
refl ects current market assessments
of the time value of money and risk
specifi c to the asset. For an asset that
does not generate largely independent
cash infl ows, the recoverable amount is
determined for the cash-generating unit
to which the asset belongs.
(iii) Available for sale fi nancial assets
AFS assets are subsequently measured
at fair value. The value applied for fair
value is the value of the most capital
raising price conducted by the Company
and using any other available data
of the market for the asset held. Any
impairment loss is then expensed in the
period identifi ed.
(e) Plant and equipment
Plant and equipment is stated at cost
less accumulated depreciation and any
accumulated impairment losses. Such cost
includes the cost of replacing parts that are
eligible for capitalisation when the cost of
replacing the parts is incurred. Similarly, when
each major inspection is performed, its cost
is recognised in the carrying amount of the
plant and equipment as a replacement only if
it is eligible for capitalisation.
37
Depreciation is calculated on the diminishing
value basis to write off the net cost of each
item of property, plant and equipment over
its expected useful life. Depreciation rates
for motor vehicles are at 22.5% and for other
plant and equipment, the rates range from
15- 40%.
(f ) Cash and cash equivalents
For purposes of the statement of cash fl ows,
cash includes deposits at call which are readily
convertible to cash on hand and which are
used in the cash management function on
a day-to-day basis, net of outstanding bank
overdrafts.
(g) Goods and services tax
Revenues, expenses and assets are recognised
net of the amount of goods and services
tax (GST), except where the amount of
GST incurred is not recoverable from
the Australian Tax Offi ce (ATO). In these
circumstances the GST is recognised as part of
the cost of acquisition of the asset or as part
of an item of the expense. Receivables and
payables are stated with the amount of GST
included. The net amount of GST recoverable
from, or payable to, the ATO is included as a
current asset or liability in the Statement of
Financial Position. Cash fl ows are included in
the Statement of Cash Flows on a gross basis.
The GST components of cash fl ows arising
from investing and fi nancing activities which
are recoverable from, or payable to, the ATO
are classifi ed as operating cash fl ows.
(h)
Investments
Investments in controlled entities are carried
in the Company’s fi nancial statements at the
lower of cost and recoverable amount.
Available-for-sale investments
Available-for-sale investments are non-
derivative fi nancial assets that are either
not capable of being classifi ed into other
categories of fi nancial assets due to their
nature or they are designated as such by
management. They comprise investments
in the equity of other entities where there
is neither a fi xed maturity nor fi xed or
determinable payments.
They are subsequently measured at fair
value with any re-measurements other than
impairment losses and foreign exchange
gains and losses recognised in other
comprehensive income. When the fi nancial
asset is de-recognised, the cumulative gain
or loss pertaining to that asset previously
recognised in other comprehensive income is
reclassifi ed into profi t or loss.
Available-for-sale fi nancial assets are classifi ed
as non-current assets when they are expected
to be sold after 12 months from the end of
the reporting period. All other available-for-
sale fi nancial assets are classifi ed as current
assets.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 (continued)
NOTE 1
Summary of signifi cant accounting policies
(continued)
(i) Trade and other payables
Liabilities are recognised for amounts to
be paid in the future for goods or services
received, whether or not billed to the
Company. Trade accounts payable are
normally settled within 30 days.
(j) Contributed equity
Ordinary shares are classifi ed as equity.
Transaction costs arising on the issue of
equity instruments are recognised directly in
equity as a reduction of the proceeds of the
equity instruments to which the costs relate.
(k) Earnings per share
(i)
Basic earnings per share
Basic earnings per share is determined
by dividing the operating loss after
income tax by the weighted average
number of ordinary shares outstanding
during the fi nancial year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the
fi gures used in the determination of
basic earnings per share by taking into
account amounts unpaid on ordinary
shares and any reduction in earnings per
share that will probably arise from the
exercise of partly paid shares or options
outstanding during the fi nancial year.
(l) Revenue recognition
Revenues are recognised at fair value of the
consideration received net of the amount of
goods and services tax (GST). Exchanges of
goods or services of the same nature without
any cash consideration are not recognised as
revenues.
Interest income
Interest income is recognised as it accrues,
taking into account the eff ective yield on the
fi nancial asset.
Sale of non-current assets
Gains or losses arising on the sale of non-
current assets are included in profi t or loss
at the date control of the asset passes to
the buyer, usually when an unconditional
contract of sale is signed. The gain or loss
on disposal is calculated as the diff erence
between the carrying amount of the asset at
the time of disposal and the net proceeds on
disposal.
(m) Principles of consolidation
The consolidated fi nancial statements
incorporate the assets and liabilities of all
subsidiaries of Gulf Manganese Corporation
Limited (“company” or “parent entity”) as at 30
June 2015 and the results of all subsidiaries
for the year then ended. Gulf Manganese
Corporation Limited and its subsidiary
together are referred to in this fi nancial report
as the Company or the consolidated entity.
Subsidiaries are all those entities (including
special purpose entities) over which the
Company has the power to govern the
fi nancial and operating policies, generally
accompanying a shareholding of more than
one-half of the voting rights. The existence
and eff ect of potential voting rights that
are currently exercisable or convertible are
considered when assessing whether the
Company controls another entity.
Subsidiaries are fully consolidated from the
date on which control is transferred to the
Company. They are de-consolidated from the
date that control ceases.
The acquisition method of accounting is used
to account for the acquisition of subsidiaries
by the Company.
The Company applies a policy of treating
transactions with non-controlling interests
as transactions with parties external to the
Company. Disposals to non-controlling
interests result in gains and losses for the
Company that is recorded in the statement of
comprehensive income. Purchases from non-
controlling interests result in goodwill, being
the diff erence between any consideration
paid and the relevant share acquired of the
carrying value of identifi able net assets of the
subsidiary.
Intercompany transactions, balances and
unrealised gains on transactions between
Company companies are eliminated.
Unrealised losses are also eliminated
unless the transaction provides evidence
of the impairment of the asset transferred.
Accounting policies of subsidiaries have
been changed where necessary to ensure
consistency with the policies adopted by the
Company.
Non-controlling interests in the results
and equity of subsidiaries are shown
separately in the consolidated statement of
comprehensive income and statement of
fi nancial position respectively. Investments
in subsidiaries are accounted for at cost in
the individual fi nancial statements of Gulf
Manganese Corporation Limited.
38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 (continued)
NOTE 1
Summary of signifi cant accounting policies
(continued)
(n) Trade and other receivables
Trade accounts receivable, amounts due
from related parties and other receivables
represent the principal amounts due at
reporting date plus accrued interest and less,
where applicable, any unearned income and
provisions for doubtful accounts.
Collectability of trade receivables is reviewed
on an ongoing basis. Debts which are known
to be uncollectible are written off by reducing
the carrying amount directly. An allowance
account (provision for impairment of trade
receivables) is used when there is objective
evidence that the Company will not be able
to collect all amounts due according to the
original terms of the receivables. Signifi cant
fi nancial diffi culties of the debtor, probability
that the debtor will enter bankruptcy or
fi nancial reorganisation, and default or
delinquency in payments (more than 30 days
overdue) are considered indicators that the
trade receivable is impaired. The amount of
the impairment allowance is the diff erence
between the asset’s carrying amount and
the present value of estimated future cash
fl ows, discounted at the original eff ective
interest rate. Cash fl ows relating to short-term
receivables are not discounted if the eff ect of
discounting is immaterial.
The amount of the impairment loss
is recognised in the statement of
comprehensive income within other
expenses. When a trade receivable for
which an impairment allowance had been
recognised becomes uncollectable in a
subsequent period, it is written off against the
allowance account. Subsequent recoveries of
amounts previously written off are credited
against other expenses in the statement of
comprehensive income.
(o)
Income tax
Deferred income tax is provided on all
temporary diff erences at the reporting date
between the tax bases of assets and liabilities
and their carrying amounts for fi nancial
reporting purposes.
Deferred income tax liabilities are recognised
for all taxable temporary diff erences:
• Except where the deferred income tax
liability arises from the initial recognition
of an asset or liability in a transaction that
is not a business combination and, at the
time of the transaction, aff ects neither the
accounting profi t nor taxable profi t or loss;
and
•
In respect of taxable temporary diff erences
associated with investments in subsidiaries,
associates and interests in joint ventures,
except where the timing of the reversal
of the temporary diff erences can be
controlled and it is probable that the
temporary diff erences will not reverse in
the foreseeable future.
39
(o)
Income tax (continued)
Deferred income tax assets are recognised for
all deductible temporary diff erences, carry-
forward of unused tax assets and unused tax
losses, to the extent that it is probable that
taxable profi t will be available against which
the deductible temporary diff erences, and the
carry-forward of the unused tax assets and
unused tax losses can be utilized:
Except where the deferred income tax
asset relating to the deductible temporary
diff erence arises from the initial recognition of
an asset or liability in a transaction that is not
a business combination and, at the time of
the transaction, aff ects neither the accounting
profi t nor taxable profi t or loss; and
In respect of deductible temporary
diff erences associated with investments
in subsidiaries, associates and interests in
joint ventures, deferred tax assets are only
recognised to the extent that it is probable
that the temporary diff erences will reverse
in the foreseeable future and taxable profi t
will be available against which the temporary
diff erences can be utilized.
The carrying amount of deferred income
tax assets is reviewed at each reporting date
and reduced to the extent that it is no longer
probable that suffi cient taxable profi t will be
available to allow all or part of the deferred
income tax asset to be utilized.
Deferred income tax assets and liabilities are
measured at the tax rates that are expected
to apply to the year when the asset is realised
or the liability is settled, based on tax rates
(and tax laws) that have been enacted or
substantively enacted at the reporting date.
Income taxes relating to items recognised
directly in equity are recognised in equity and
not in profi t or loss.
Tax consolidation legislation
Gulf Manganese Corporation Limited and its
100% owned Australian resident subsidiaries
have implemented the tax consolidation
legislation. Current and deferred tax amounts
are accounted for in each individual entity as
if each entity continued to act as a taxpayer
on its own.
Gulf Manganese Corporation Limited
recognises its own current and deferred tax
amounts and those current tax liabilities,
current tax assets and deferred tax assets
arising from unused tax credits and unused
tax losses which it has assumed from its
controlled entities within the tax consolidated
Company.
Assets or liabilities arising under tax funding
agreements with the tax consolidated
entities are recognised as amounts payable
or receivable from or payable to other entities
in the Company. Any diff erence between
the amounts receivable or payable under
the tax funding agreement are recognised
as a contribution to (or distribution from)
controlled entities in the tax consolidated
Company.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 (continued)
NOTE 1
Summary of signifi cant accounting policies
(continued)
(p) Employee benefi ts
Provision is made for the Company’s liability
for employee benefi ts arising from services
rendered by employees to reporting date.
Employee benefi ts that are expected to be
settled within one year have been measured
at the amounts expected to be paid when
the liability is settled, plus related on-costs.
Employee benefi ts payable later than one
year have been measured at present value
of the estimated future cash outfl ows to be
made for those benefi ts and included in other
payables.
(q) Segment reporting
Operating segments are now reported in a
manner that is consistent with the internal
reporting provided to the chief operating
decision maker, which has been identifi ed by
the Company as the Executive Director and
other members of the Board of Directors.
An assessment is also made at each reporting
date as to whether there is any indication
that previously recognised impairment losses
may no longer exist or may have decreased.
If such an indication exists, the recoverable
amount is estimated. A previously recognised
impairment loss is reversed only if there
has been a change in the estimates used to
determine the asset’s recoverable amount
since the last impairment loss was recognised.
If that is the case, the carrying amount of the
asset is increased to its recoverable amount.
That increased amount cannot exceed the
carrying amount that would have been
determined, net of depreciation, had no
impairment loss been recognised for the asset
in prior years. Such a reversal is recognised in
profi t or loss unless the asset is carried at its
revalued amount, in which case the reversal
is treated as a revaluation increase. After such
a reversal the depreciation charge is adjusted
in future periods to allocate the asset’s revised
carrying amount, less any residual value, on a
systematic basis over its remaining useful life.
(r)
Impairment of assets
(s) Fair value estimation
The Company assesses at each reporting
date whether there is an indication that an
asset may be impaired. If any such indication
exists, or when annual impairment testing for
an asset is required, the Company makes an
estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher
of its fair value less costs to sell and its value
in use and is determined for an individual
asset, unless the asset does not generate cash
infl ows that are largely independent of those
from other assets or groups of assets and
the asset’s value in use cannot be estimated
to be close to its fair value. In such cases the
asset is tested for impairment as part of the
cash-generating unit to which it belongs.
When the carrying amount of an asset or
cash-generating unit exceeds its recoverable
amount, the asset or cash-generating unit is
considered impaired and is written down to
its recoverable amount.
In assessing value in use, the estimated future
cash fl ows are discounted to their present
value using a pre-tax discount rate that
refl ects current market assessments of the
time value of money and the risks specifi c
to the asset. Impairment losses relating to
continuing operations are recognised in
those expense categories consistent with
the function of the impaired asset unless
the asset is carried at revalued amount (in
which case the impairment loss is treated as a
revaluation decrease).
The fair value of fi nancial assets and fi nancial
liabilities must be estimated for recognition
and measurement or for disclosure purposes.
The fair value of fi nancial instruments traded
in active markets (such as publicly traded
derivatives, and trading and available for
sale securities) is based on quoted market
prices at the reporting date. The quoted
market price used for fi nancial assets held
by the Company is the current bid price; the
appropriate quoted market price for fi nancial
liabilities is the current ask price.
The fair value of fi nancial instruments
that are not traded in an active market is
determined using valuation techniques. The
Company uses a variety of methods and
makes assumptions that are based on market
conditions existing at each reporting date.
Quoted market prices or dealer quotes for
similar instruments are used for long-term
debt instruments held. Other techniques,
such as estimated discounted cash fl ows, are
used to determine fair value for the remaining
fi nancial instruments.
The nominal value less estimated credit
adjustments of trade receivables and
payables are assumed to approximate their
fair values. The fair value of fi nancial liabilities
for disclosure purposes is estimated by
discounting the future contractual cash fl ows
at the current market interest rate that is
available to the Company for similar fi nancial
instruments.
40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 (continued)
NOTE 1
Summary of signifi cant accounting policies
(continued)
(t) Exploration and evaluation expenditure
Exploration and evaluation expenditure
incurred is accumulated in respect of each
identifi able area of interest in accordance
with AASB 6: Exploration and Evaluation
Expenditure. These costs are only carried
forward where the rights to the area of
interest are current and to the extent that
they are expected to be recouped through
the successful development or sale of the
area, or where activities in the area have not
yet reached a stage that permits reasonable
assessment of the existence or otherwise of
economically recoverable reserves.
Accumulated costs in relation to an
abandoned area are written off in full against
profi t in the year in which the decision to
abandon the area is made.
(u) Financial instruments
Initial recognition and measurement
Financial assets and fi nancial liabilities
are recognised when the entity becomes
a party to the contractual provisions to
the instrument. For fi nancial assets, this is
equivalent to the date that the company
commits itself to either the purchase or
sale of the asset (ie trade date accounting is
adopted).
Financial instruments are initially measured
at fair value plus transaction costs, except
where the instrument is classifi ed “at fair
value through profi t or loss”, in which case
transaction costs are expensed to profi t or
loss immediately.
Classifi cation and subsequent measurement
Financial instruments are subsequently
measured at fair value, amortised cost using
the eff ective interest method, or cost.
Amortised cost is calculated as the amount
at which the fi nancial asset or fi nancial
liability is measured at initial recognition less
principal repayments and any reduction for
impairment, and adjusted for any cumulative
amortisation of the diff erence between that
initial amount and the maturity amount
calculated using the eff ective interest
method.
The eff ective interest method is used to
allocate interest income or interest expense
over the relevant period and is equivalent
to the rate that discounts estimated future
cash payments or receipts (including fees,
transaction costs and other premiums or
discounts) over the expected life (or when this
cannot be reliably predicted, the contractual
term) of the fi nancial instrument to the net
carrying amount of the fi nancial asset or
fi nancial liability. Revisions to expected future
net cash fl ows will necessitate an adjustment
to the carrying amount with a consequential
recognition of an income or expense item in
profi t or loss.
41
The Group does not designate any interests
in subsidiaries, associates or joint ventures
as being subject to the requirements of
Accounting Standards specifi cally applicable
to fi nancial instruments.
(i)
Financial assets at fair value through profi t
or loss
Financial assets are classifi ed at “fair
value through profi t or loss” when they
are held for trading for the purpose of
short-term profi t taking, derivatives not
held for hedging purposes, or when
they are designated as such to avoid
an accounting mismatch or to enable
performance evaluation where a group
of fi nancial assets is managed by key
management personnel on a fair value
basis in accordance with a documented
risk management or investment strategy.
Such assets are subsequently measured
at fair value with changes in carrying
amount being included in profi t or loss.
(ii)
Loans and receivables
Loans and receivables are non-
derivative fi nancial assets with fi xed or
determinable payments that are not
quoted in an active market and are
subsequently measured at amortised
cost. Gains or losses are recognised in
profi t or loss through the amortisation
process and when the fi nancial asset is
derecognised.
(iii) Available-for-sale investments
Available-for-sale investments are non-
derivative fi nancial assets that are either
not capable of being classifi ed into
other categories of fi nancial assets due
to their nature or they are designated as
such by management. They comprise
investments in the equity of other
entities where there is neither a fi xed
maturity nor fi xed or determinable
payments.
They are subsequently measured at fair
value with any re-measurements other
than impairment losses and foreign
exchange gains and losses recognised
in other comprehensive income. When
the fi nancial asset is de-recognised, the
cumulative gain or loss pertaining to
that asset previously recognised in other
comprehensive income is reclassifi ed
into profi t or loss.
Available-for-sale fi nancial assets are
classifi ed as non-current assets when
they are expected to be sold after 12
months from the end of the reporting
period. All other available-for-sale
fi nancial assets are classifi ed as current
assets.
(iv) Financial liabilities
Non-derivative fi nancial liabilities
other than fi nancial guarantees are
subsequently measured at amortised
cost. Gains or losses are recognised in
profi t or loss through the amortisation
process and when the fi nancial liability is
derecognised.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 (continued)
NOTE 1
Summary of signifi cant accounting policies
(continued)
(v)
Intangible assets
Intangible assets that are acquired or
developed by the Group have fi nite
useful lives are measured at cost less any
accumulated impairment losses.
Subsequent expenditure is capitalised only
when it increases the future economic
benefi ts embodied in the specifi c asset to
which it relates.
Impairment of the intangible assets are
reviewed at each reporting date and adjusted
if appropriate.
(w) New accounting standards and
interpretations
Accounting Standards and Interpretations
issued by the AASB that are not yet
mandatorily applicable to the Group, together
with an assessment of the potential impact
of such pronouncements on the Group when
adopted in future periods, are discussed
below:
AASB 9: Financial Instruments and
associated Amending Standards (applicable
to annual reporting periods beginning on
or after 1 January 2018).
The Standard will be applicable
retrospectively (subject to the provisions
on hedge accounting outlined below)
and includes revised requirements for the
classifi cation and measurement of fi nancial
instruments, revised recognition and
derecognition requirements for fi nancial
instruments and simplifi ed requirements for
hedge accounting.
The key changes that may aff ect the
Group on initial application include certain
simplifi cations to the classifi cation of fi nancial
assets, simplifi cations to the accounting of
embedded derivatives, upfront accounting
for expected credit loss, and the irrevocable
election to recognise gains and losses on
investments in equity instruments that are
not held for trading in other comprehensive
income. AASB 9 also introduces a new
model for hedge accounting that will allow
greater fl exibility in the ability to hedge
risk, particularly with respect to hedges of
non-fi nancial items. Should the entity elect
to change its hedge policies in line with the
new hedge accounting requirements of the
Standard, the application of such accounting
would be largely prospective.
Although the directors anticipate that the
adoption of AASB 9 may have an impact on
the Group’s fi nancial instruments, including
hedging activity, it is impracticable at this
stage to provide a reasonable estimate of
such impact.
AASB 15: Revenue from Contracts with
Customers (applicable to annual reporting
periods commencing on or after 1 January
2017).
When eff ective, this Standard will replace the
current accounting requirements applicable
to revenue with a single, principles-based
model. Except for a limited number of
exceptions, including leases, the new revenue
model in AASB 15 will apply to all contracts
with customers as well as non-monetary
exchanges between entities in the same line
of business to facilitate sales to customers
and potential customers.
The core principle of the Standard is that
an entity will recognise revenue to depict
the transfer of promised goods or services
to customers in an amount that refl ects the
consideration to which the entity expects
to be entitled in exchange for the goods or
services. To achieve this objective, AASB 15
provides the following fi ve-step process:
•
•
identify the contract(s) with a customer;
identify the performance obligations in the
contract(s);
• determine the transaction price;
• allocate the transaction price to the
performance obligations in the contract(s);
and
• recognise revenue when (or as) the
performance obligations are satisfi ed.
This Standard will require retrospective
restatement, as well as enhanced disclosures
regarding revenue.
Although the directors anticipate that the
adoption of AASB 15 may have an impact
on the Group’s fi nancial statements, it is
impracticable at this stage to provide a
reasonable estimate of such impact.
42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 (continued)
NOTE 2
REVENUE AND EXPENSES
(a)
Revenue
Sale of asset*
Bank interest received
Total revenue
2016
$
-
-
-
2015
$
150,000
43
150,043
* During the previous year, Gulf has entered into a Sale Agreement to divest its remaining 51% of the
Northern Territory exploration tenement EL 10335 to 49% joint venture partner Redbank Copper Limited
(ASX:RCP). The sale of Gulf’s 51% together with all Mining information was agreed at $125,000 cash with
a deposit payment of $50,000 with the balance due incrementally over a 9 month period and settlement
following Ministerial consent for the transfer. At 30 June 2015, $100,000 was received from Redbank Copper.
Gulf has also entered a Sale Agreement to divest its 100% of the Northern Territory exploration tenement
EL 29898 to joint venture partner Laramide Resources Limited (ASX:LAM). The sale of Gulf’s 100% interest
together with all mining information was agreed at a $125,000 cash with a deposit payment of $25,000, a
further $25,000 subject to certain conditions and the balance of $75,000 following ministerial consent for
the transfer. At 30 June 2015, $50,000 was received from Laramide.
(b)
Expenses include:
Accounting/secretarial fees
Advertising and promotion
Depreciation expense
Share registry fees
Operating lease rental expense
NOTE 3
INCOME TAX
Loss for the period
Prima facie tax benefi t at Australian tax rate of 30%
Tax eff ect of non-deductible items:
Impairment of available for sale assets
Impairment of receivable
Impairment of exploration expenditure
Settlement of expenses - capital
Section 40-880
Non-deductible expenses
Share based payments
Temporary diff erences not recognised
Income tax expense
2016
$
72,831
38,228
7,460
29,421
161,833
309,773
2016
$
(2,903,474)
(871,490)
21,375
-
-
80,673
(88,328)
21
321,480
462,269
-
2015
$
72,721
139,326
10,680
28,376
75,229
326,332
2015
$
(2,594,559)
(778,368)
202,500
-
37,500
-
(24,399)
523
87,744
474,500
-
No income tax expense has been provided in the accounts because the company has an operating loss
for the year. No future tax benefi t attributable to tax losses has been brought to account as recovery is not
probable. The total of tax losses held within the company is $20,747,996 (2015: $18,410,183).
The benefi t will only be obtained if the company derives future assessable income of a nature and of
an amount suffi cient to enable the benefi t to be realised, continues to comply with the conditions for
deductibility imposed by taxation legislation and there are no changes in tax legislation adversely aff ecting
the company in realising the benefi t.
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 (continued)
NOTE 4
CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Total cash and cash equivalents
2016
$
621,747
621,747
Information about the Company’s exposure to interest rate risk is disclosed in Note 19.
2016
$
2015
$
9,638
9,638
2015
$
(a)
Reconciliation of loss for the year to net cash fl ows
used in operating activities
Loss for the year
(2,903,474)
(2,594,599)
Cash fl ows excluded from loss attributable to
operating activities:
• Exploration costs
Adjustments for non-cash items:
• Depreciation
• Loss on sale of fi xed assets
• Share based payment expense
• Impairment of available-for-sale investment
• Impairment of deferred exploration and evaluation
• Non cash payments – settlement in equity
Net changes in working capital:
• Change in trade and other receivables
• Change in trade and other payables
Net changes in non-current assets classifi ed as
operating cash fl ows:
-
14,487
7,460
4,776
1,128,000
75,000
-
252,581
16,423
(465,230)
10,680
-
292,480
675,000
125,000
201,606
31,039
(32,780)
• Change in intangible assets
(442,886)
-
Net cash fl ows used in operating activities
(2,327,350)
(1,277,087)
Non-cash fi nancing and investing activities
During the fi nancial year, 18,307,867 shares in the Company were issued to settle creditors, to the value of
$274,618.
NOTE 5
TRADE AND OTHER RECEIVABLES
Trade receivables
Other receivables
Total trade and other receivables
2016
$
-
106,756
106,756
2015
$
-
123,179
123,179
As of 30 June 2016, trade receivables that were past due or impaired was nil (2015: nil). Information about the
Company’s exposure to credit risk is provided in Note 19.
44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 (continued)
NOTE 6
NON CURRENT FINANCIAL ASSETS
Available for sale unlisted investments, at fair value
Shares in Asia Mineral Corporation Limited
Total non-current fi nancial assets
2016
$
-
-
2015
$
75,000
75,000
The Company is a registered holder of 15,000,000 shares in Asia Mineral Corporation Limited (AMC) having
acquired and initially recognised the investment at 22 cents per share. During the year, AMC entered into
administrative receivership. As such, the Board decided to impair the value of the Company’s investment in
AMC to nil.
Reconciliation of the fair values at the beginning and end of the current and previous fi nancial year are set
out below:
2016
$
75,000
(75,000)
-
2015
$
750,000
(675,000)
75,000
Motor Vehicles
$
-
-
-
20,024
-
(2,271)
(17,753)
-
Offi ce
Furniture &
Equipment
$
33,981
(12,080)
21,901
21,881
5,209
(5,189)
-
21,901
Motor Vehicles
Offi ce
Furniture &
Equipment
$
$
29,082
(9,058)
20,024
25,837
-
(5,813)
20,024
28,772
(6,891)
21,881
23,029
3,720
(4,868)
21,881
Total
$
33,981
(12,080)
21,901
41,905
5,209
(7,460)
(17,753)
21,901
Total
$
57,854
(15,949)
41,905
48,866
3,720
(10,681)
41,905
Opening fair value
Impairment
Closing value
NOTE 7
PLANT AND EQUIPMENT
Balance at 30 June 2016
At cost
Accumulated depreciation
Total written down amount
Reconciliation
Opening written down value
Additions
Depreciation charge for the year
Disposals
Closing written down value at 30 June 2016
Balance at 30 June 2015
At cost
Accumulated depreciation
Total written down amount
Reconciliation
Opening written down value
Additions
Depreciation charge for the year
Closing written down value at 30 June 2015
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 (continued)
NOTE 8
EXPLORATION AND EVALUATION EXPENDITURE
Expenditure brought forward
Expenditure incurred
Expenditure impaired
Expenditure carried forward
2016
$
-
-
-
-
2015
$
125,000
-
(125,000)
-
The recoupment of capitalised exploration expenditure carried forward is dependent upon the successful
development and commercialisation or sale of the areas of interest being explored and evaluated.
NOTE 9
INTANGIBLE ASSETS
Smelter development costs
Expenditure brought forward
Expenditure incurred
Expenditure impaired
Expenditure carried forward
2016
$
512,314
442,886
-
955,200
2015
$
-
512,314
-
512,314
Smelter development costs relate to expenditures incurred to development the smelter study. The Timor
Smelter Study examines the development of a ferromanganese (FeMn) smelting and alloy sales business to
produce high carbon ferromanganese alloys based in Gulf’s manganese project in Kupang, Timor, Indonesia.
The Timor Smelter Study has been completed and development of the project will be subject to funding
availability.
NOTE 10
TRADE AND OTHER PAYABLES
Trade payables
Accruals
Other payables
Provision for annual leave
Total trade and other payables
NOTE 11
BORROWINGS
Current
Other fi nancial liabilities
Convertible notes1, 2
Total borrowings
2016
$
143,493
49,110
201,827
-
394,430
2016
$
-
470,000
470,000
1 The following table shows the movement of convertible notes during the period:
2015
$
685,968
152,000
19,086
606
859,660
2015
$
138,805
600,000
738,805
2015
$
15,000
600,000
(15,000)
-
-
2016
$
600,000
-
-
(130,000)
-
470,000
600,000
46
Opening balance
Additions
Disposals
Redeemed
Finance costs
Closing balance
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 (continued)
NOTE 11
BORROWINGS (Continued)
2 Terms and conditions of the convertible notes:
Coupon:
10%
Term:
3 years from issue
Interest payments:
Quarterly in arrears
Denominations:
47 notes in denominations of AUD$10,000 per note
Ranking of Notes:
Will rank senior in obligation of payment to any future indebtedness including
dividends
Guarantees:
Conversion:
Redemption:
The issuer’s obligations under the Notes will be guaranteed by Gulf Manganese
Corporation Limited and International Manganese Limited and subject to all
regulatory approvals
Each note may be converted into Gulf shares at the rate of 85% of the 30 day VWAP
at the Holders option after 12 months from issue
Each note may be redeemed at the Holders option 12 months from issue or
any time thereafter with 3 months notifi cation and all outstanding notes will be
redeemed in full 36 months from issue.
NOTE 12
CONTRIBUTED EQUITY
2016
No
2016
$
2015
No
2015
$
Shares on issue
Listed fully paid ordinary shares on issue
1,179,178,307
23,325,358
81,470,638
19,903,222
Total contributed equity
1,179,178,307
23,325,358
81,470,638
19,903,222
Movement in share capital
Balance at 1 July 2015
14 Oct 2015 Issue of 5,538,667 ordinary shares at 1.5 cents each
2 Dec 2015 Issue of 75,000,000 ordinary shares at 1.5 cents each
10 Dec 2015 Issue of 30,000,000 ordinary shares
18 Jan 2016 Issue of 10,000,000 ordinary shares at 1.5 cents each
22 Feb 2016 Issue of 27,551,833 ordinary shares at 1.5 cents each
20 Apr 2016 Issue of 448,575,120 ordinary shares at 0.2 cents each
16 May 2016 Issue of 449,669,500 ordinary shares at 0.2 cents each
16 May 2016 Conversion of convertible notes at 0.255 cents each
20 May 2016 Issue of 20,000,000 ordinary shares at 0.2 cents each
Less: Capital raising costs1
Balance at 30 June 2016
2016
No
2016
$
81,470,638
19,903,222
5,538,667
75,000,000
30,000,000
10,000,000
27,551,833
448,575,120
449,669,500
31,372,549
20,000,000
83,080
1,125,000
900,000
150,000
413,277
897,150
899,339
80,000
40,000
-
(1,165,710)
1,179,178,307
23,325,358
1 Capital raising costs includes $911,440 of the valuation of the free attaching options issued in the
placement and rights issue and the options issued to the broker in relation to the raising. Refer to Note 13
for the inputs used for the valuation of these options.
47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 (continued)
2015
$
18,210,356
-
589,392
50,000
167,083
34,246
40,800
11,385
498,102
151,606
6,000
225,000
(80,748)
NOTE 12
CONTRIBUTED EQUITY (continued)
Balance at 1 July 2014
Share consolidation (50 to 1)
2015
No
1,117,503,856
(1,095,153,710)
3 Dec 2014 Issue of 19,646,430 ordinary shares at 0.3 cents each
19,646,430
23 Dec 2014 Issue of 1,666,667 ordinary shares at 0.3 cents each
31 Dec 2014 Issue of 5,569,433 ordinary shares at 0.3 cents each
30 Jan 2015 Issue of 1,141,531 ordinary shares at 0.3 cents each
16 Feb 2015 Issue of 1,360,000 ordinary shares at 0.3 cents each
20 Feb 2015 Issue of 379,500 ordinary shares at 0.3 cents each
1,666,667
5,569,433
1,141,531
1,360,000
379,500
26 Feb 2015 Issue of 16,603,398 ordinary shares at 0.3 cents each
16,603,398
27 Feb 2015 Issue of 5,053,533 ordinary shares at 0.3 cents each
22 May 2015 Issue of 200,000 ordinary shares at 0.3 cents each
29 May 2015 Issue of 7,500,000 ordinary shares at 0.3 cents each
Less: Capital raising costs
Balance at 30 June 2015
5,053,533
200,000
7,500,000
-
81,470,638
19,903,222
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the
Company in proportion to the number of and amounts paid on the shares held. Ordinary shareholders rank
behind creditors in the distribution of proceeds from the winding-up of the Company. On a show of hands
every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon
a poll each share is entitled to one vote.
Transaction costs arising on the issue of equity instruments are recognised directly in equity as a reduction of
the proceeds of the equity instruments to which the costs relate.
Capital risk management
The Company’s objectives when managing capital are to safeguard their ability to continue as a going
concern and to maintain an optimal capital structure so as to maximise shareholder value. In order to
maintain or adjust the capital structure, the Company may issue new shares or reduce its capital, subject to
the provisions of the Constitution and any relevant regulatory requirements.
NOTE 13
OPTIONS RESERVE
Balance at the beginning of the year
Option issued during the year
Balance at the end of the year
Nature and purpose of reserves
Options reserve
The options reserve is used to recognize the fair value of options issued.
2016
$
1,348,272
1,158,941
2,507,213
2015
$
1,055,793
292,479
1,348,272
2016
No
2016
$
2015
No
Share options on issue
Listed share options on issue
459,122,309
459,122
-
2015
$
-
Unlisted share options on issue
103,954,917
2,048,091
22,679,000
1,348,272
Total share options on issue
563,077,226
2,507,213
22,679,000
1,348,272
48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 (continued)
NOTE 13
OPTIONS RESERVE (continued)
2016
No
2016
$
2015
No
Listed share options on issue
Listed options exercisable at 0.5 cents
each expiring on or before 21 April 2019
459,122,309
459,122
Total listed share options on issue
459,122,309
459,122
2015
$
-
-
2016
$
-
-
-
2016
No
-
Movements in listed share options
Balance at 1 July 2015
(A) Issue of listed options exercisable at 0.5
cents each expiring on or before 21 April
2019
Balance at 30 June 2016
Unlisted share options on issue
Unlisted options exercisable at $0.375
each expiring on or before 30 June 2016
Unlisted options exercisable at $0.375
each expiring on or before 31 July 2017
Unlisted options exercisable at $0.25 each
expiring on or before 31 December 2018
Unlisted options exercisable at $0.02 each
expiring on or before 30 September 2018
Unlisted options exercisable at $0.05 each
expiring on or before 30 September 2018
Unlisted options exercisable at $0.02 each
expiring on or before 21 February 2018
459,122,309
459,122
459,122,309
459,122
2016
No
2016
$
2015
No
2015
$
1,279,000
76,428
1,279,000
76,428
13,900,000
980,094
13,900,000
980,094
7,500,000
291,750
7,500,000
291,750
56,275,917
452,818
15,000,000
228,001
10,000,000
19,000
-
-
-
-
-
-
Total unlisted share options on issue
103,954,917
2,048,091
22,679,000
1,348,272
Movements in unlisted share options
Balance at 1 July 2015
2016
No
2016
$
22,679,000
1,348,272
(A) Issue of unlisted options exercisable at $0.02 each expiring on or
37,500,000
397,500
before 30 September 2018 – Issued 2 Dec 2015
(B) Issue of unlisted options exercisable at $0.02 each expiring on or
5,000,000
19,500
before 30 September 2018 – Issued 18 Jan 2016
(C) Issue of unlisted options exercisable at $0.02 each expiring on or
13,775,917
35,818
before 30 September 2018 – Issued 22 Feb 2016
(D) Issue of unlisted options exercisable at $0.05 each expiring on or
15,000,000
228,001
before 30 September 2018 – Issued 10 Dec 2015
(E) Issue of unlisted options exercisable at $0.02 each expiring on or
10,000,000
19,000
before 21 February 2018 – Issued 17 Mar 2016
Balance at 30 June 2016
103,954,917
2,048,091
49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 (continued)
NOTE 13
OPTIONS RESERVE (continued)
Fair value of options granted
The fair value of options granted during the fi nancial year was calculated at the date of grant using the Black-
Scholes option-pricing model. The following table gives the assumption made in determining the fair value
of options on grant date:
Fair value per option
Number of options
Expiry date
A
B
C
D
E
$0.0106
$0.0039
$0.0026
$0.0152
$0.0019
37,500,000
5,000,000
13,775,917
15,000,000
10,000,000
30 Sep
2018
30 Sep
2018
30 Sep
2018
30 Sep
2018
Exercise price
$0.02
$0.02
$0.02
Price of shares on grant date
$0.018
$0.009
$0.007
Estimated volatility
Risk-free interest rate
Dividend yield
Discount on price calculated
100%
100%
100%
2%
0%
0%
2%
0%
0%
2%
0%
0%
$0.05
$0.03
100%
2%
0%
0%
Movements in unlisted share options
Balance at 1 July 2014
(A) Consolidation of unlisted options expiring on or before
31 July 2017
2015
No
897,300,002
(681,200,000)
(B) Consolidation of unlisted options expiring on or before
(62,671,000)
30 June 2016
(C) Consolidation of unlisted options expiring on or before
(125,211,331)
31 Oct 2014
(D) Consolidation of unlisted options expiring on or before
(10,371,663)
30 April 2015
21 Feb
2018
$0.02
$0.007
100%
2%
0%
0%
2015
$
1,055,793
-
-
-
-
(E) Issue of unlisted options exercisable at $0.25 each
7,500,000
291,750
expiring on or before 31 December 2018
(F) Issue of unlisted options exercisable at $0.375 each
100,000
expiring on or before 31 July 2017
Lapsing of unlisted options exercisable at $0.75 each
expiring on or before 31 October 2014
Lapsing of unlisted options exercisable at $0.75 each
expiring on or before 30 April 2015
(2,555,337)
(211,671)
2,680
(1,951)
-
Balance at 30 June 2015
22,679,000
1,348,272
NOTE 14
ACCUMULATED LOSSES
Accumulated losses at beginning of the year
Net loss for the year
Accumulated losses at end of the year
2016
$
(22,087,923)
(2,903,474)
(24,991,397)
2015
$
(19,493,364)
(2,594,559)
(22,087,923)
50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 (continued)
NOTE 15
EARNINGS PER SHARE
Basic and diluted loss per share
2016
Cents
(0.94)
2016
No
2015
Cents
(4.97)
2015
No
Weighted average number of ordinary shares outstanding during the
year used in the calculation of basic loss per share
307,877,648
52,252,274
Diluted loss per share has not been calculated as the Company made a loss for the year and the impact
would be to reduce the loss per share.
NOTE 16
COMMITMENTS FOR EXPENDITURE
Operating lease commitments
Offi ce operating lease rentals are payable as follows:
Not later than one year
Later than one year but no later than two years
Later than two years
Total operating lease commitments
2016
$
2015
$
44,865
-
-
161,648
90,040
-
44,865
251,688
The Company leases one offi ce under a non-cancellable operating lease expiring on 1 February 2017. On
renewal, the terms of the lease are renegotiated.
NOTE 17
KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Summarised compensation of Key Management Personnel
Summary of Directors and Key Management Personnel compensation in the following categories are as
follows:
Short-term employee benefi ts (directors)
Short-term employee benefi ts (MD/CEO)
Short-term employee benefi ts (executives)
Post-employment benefi ts
Share based payments
Total Directors and Key Management Personnel compensation
(b) Loans to Key Management Personnel
There are no loans to Key Management Personnel as at 30 June 2016 (2015: Nil).
2016
$
163,583
175,623
100,895
19,692
1,128,000
1,587,793
2015
$
176,535
55,800
79,500
-
272,300
584,135
51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 (continued)
NOTE 18
RELATED PARTY TRANSACTIONS
Transactions between related parties are on normal commercial terms and conditions no more favorable
than those available to other parties unless otherwise stated.
Transactions with related parties:
(i)
Leprechaun Holdings Pty Ltd and Bluewater Services Pty Ltd
Leprechaun Holdings Pty Ltd (a substantial shareholder of the Company), paid on behalf of the
Company for operating expenses excluding GST of $19,500 (2015: $28,804).
Bluewater Business Services Pty Ltd a related party of Leprechaun Holdings Pty Ltd and a substantial
shareholder of the Company provided consultancy services to the value of $75,000 (excluding GST)
to the Company (2015: $150,000). On 18 January 2016, the Company issued 10,000,000 shares and
5,000,000 options to Bluewater Business Services Pty Ltd in settlement of outstanding invoices totalling
$150,000. The options are exercisable at $0.02 each with an expiry date of 30 September 2018.
During the year, the Company entered into a Deed of Settlement and Release with Bluewater Business
Services Pty Ltd, Leprechaun Holdings Pty Ltd and Mr Michael Kiernan to terminate the consultancy
agreement with Bluewater and in fi nal satisfaction of all and any monies owing by Gulf to Bluewater,
Leprechaun and Mr Kiernan.
The settlement includes the issue of 17,500,000 Fully Paid Ordinary Shares and 8,750,000 options
exercisable at $0.02 each expiring 30 September 2018 at a deemed price of $0.015 each as well as a
total cash payment of $31,575.
During the year, Bluewater and Leprechaun ceased as related parties following ceasing as substantial
shareholders
(ii) Dr Peter Williams, a director of Gulf, loaned $100,000 to Gulf during the year, to assist with working
capital needs. The loan was subsequently converted into 10 Convertible Notes at a face value of
$10,000 per convertible note. Dr Peter Williams ceased as a related party following his resignation on
the 17 February 2016.
(iii) GDA Corporate Pty Ltd provided Directorship, Chief Financial Offi cer services, Company Secretary
and accounting services to the Gulf at normal commercial terms, to the value of $31,700 (excluding
GST; 2015: $79,500). Graham Anderson was a Director of GDA Corporate and Mr Leonard Math is
an employee of GDA Corporate. Graham Anderson ceased as a Director on 20 July 2015 and GDA
Corporate ceased as a related party on that date.
Amounts owing to related parties
Leprechaun Holdings Pty Ltd(a)
Bluewater Business Services Pty Ltd(a)
Dr Peter Williams(b)
GDA Corporate(c)
Graham Anderson(c)
Michael Walters(d)
Paul O’Shaughnessy
Total amounts owing to related parties
2016
$
-
-
-
-
-
21,000
10,000
31,000
2015
$
28,804
82,500
118,000
61,584
20,460
18,000
31,935
361,283
(a) Leprechaun Holdings Pty Ltd (the substantial shareholder of the Company) provided an unsecure loan to
the Company.
(b) Resigned as a director on 17 February 2016
(c) Mr Graham Anderson ceased as a director on 20 July 2015 and GDA Corporate ceased as a related party
on the same date.
(d) Resigned as a director on 1 February 2016
For details of remuneration disclosures relating to Key Management Personnel, refer to Note 17: Key
Management Personnel disclosures and the remuneration report in the Directors’ Report.
52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 (continued)
NOTE 19
FINANCIAL RISK MANAGEMENT
The Company’s fi nancial instruments consist of deposits with banks, accounts receivable and payable, and
convertible notes.
Overall risk management
The Company’s activities expose it to a variety of fi nancial risks; market risk (including fair value interest rate
risk), credit risk, liquidity risk and cash fl ow interest rate risk. The Company’s overall risk management program
focuses on the unpredictability of fi nancial markets and seeks to minimise potential adverse eff ects on the
fi nancial performance of the Company. Risk management is carried out by the Board of directors under
policies approved by the Board.
Credit risk
Credit risk arises from the fi nancial assets of the Company, which comprise cash and cash equivalents and
trade and other receivables. The Company’s exposure to credit risk arises from potential default of the
counter party, with a maximum exposure equal to the carrying amount of these instruments.
The Company does not have any signifi cant credit risk exposure to any single counterparty. The credit risk on
liquid funds is limited because the counter party is a bank with a high credit rating.
The carrying amount of the Company’s fi nancial assets represents the maximum credit exposure. The
Company’s maximum exposure to credit risk at the reporting date was:
Cash and cash equivalents
Trade and other receivables
Other assets
Maximum exposure to credit risk
2016
$
621,747
106,756
-
2015
$
9,638
123,179
-
728,503
132,817
The credit quality of fi nancial assets that are neither past due nor impaired can be assessed by reference to
external credit ratings (if available) or to historical information about counterparty default rates.
Liquidity risk
Liquidity risk management implies maintaining suffi cient cash to meet commitments as and when they fall
due. The Company’s fi nancial liabilities include trade payables which are non-interest. Expenses are managed
on an ongoing basis and the Company expects to be able to raise additional funds as and when necessary
to meet these commitments. Additionally, a major shareholder has signed a letter of comfort to provide
fi nancial support to the Company for the next 12 months.
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity
prices will aff ect the Company’s income or the value of its holdings of fi nancial instruments. The objective
of market risk management is to manage and control market risk exposures within acceptable parameters,
while optimising the return.
Foreign exchange
The Group undertakes certain transactions denominated in foreign currency and are exposed to foreign
currency risk through foreign exchange rate fl uctuations.
Foreign exchange risk arises from future commercial transactions and recognised fi nancial assets and
fi nancial liabilities denominated in a currency that is not the entity’s functional currency. The risk is measured
using sensitivity analysis and cashfl ow forecasting.
As a result of the operating activities in Indonesia and the ongoing funding of overseas operations from
Australia, the Group’s Statement of Financial Position can be aff ected by movements in Indonesian Rupiah
dollar (IDR) / Australian Dollar (AUD) and US Dollar (USD) / Australian Dollar (AUD) exchange rates. The
Group seeks to mitigate the eff ect of its foreign currency exposure by timing its purchase and payment to
coincide with highs in the IDR/AUD and USD/AUD exchange rate cycle. 95% of the Group’s transactions are
denominated in AUD, thus eliminating the need for measures to mitigate currency exposure.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash fl ows of fi nancial instruments will fl uctuate
because of changes in market interest rates. The Company’s exposure to interest rate risk is not signifi cant
and is limited to cash and cash equivalents. The company does not rely on the generation of interest to
provide working capital.
53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 (continued)
NOTE 19
FINANCIAL RISK MANAGEMENT (continued)
Profi le
At the reporting date the interest rate profi le of the company’s interest-bearing fi nancial instruments was:
Fixed
interest
$
Floating
interest
$
Non-interest
bearing
$
-
621,747
470,000
-
-
-
Total
$
621,747
470,000
Financial assets
Cash and cash equivalents
Financial liabilities
Convertible notes
Sensitivity analysis
If the interest rates had weakened/strengthen by 1% at 30 June 2016, there would be no material impact on
the statement of comprehensive income. There would be no eff ect on the equity reserves other than those
directly related to statement of comprehensive income movements.
NOTE 20
FAIR VALUE MEASUREMENT OF FINANCIAL ASSETS
Financial assets and fi nancial liabilities measured at fair value in the statement of fi nancial position are
grouped into three Levels of a fair value hierarchy. The three Levels are defi ned based on the observability of
signifi cant inputs to the measurement, as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly
• Level 3: unobservable inputs for the asset or liability
The following tables provide the fair values of the fi nancial assets measured and recognised on a recurring
basis after initial recognition and their categorisation within the fair value hierarchy:
Level 1
Level 2
Level 3
Total
30 June 2016
Financial assets
Available-for-sale fi nancial assets
Net fair value
30 June 2015
Financial assets
Available-for-sale fi nancial assets
Net fair value
Note
6
6
$
-
-
75,000
75,000
$
-
-
-
-
$
-
-
75,000
75,000
$
-
-
-
-
54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 (continued)
NOTE 21
SHARE BASED PAYMENTS
The share based payments of $1,128,000 incurred during the year period relates to the 30,000,000 shares
and 15,000,000 options issued to Mr Hamish Bohannan under his employment agreement. The shares were
valued based on the share price at the date of grant ($0.03 per share).
The fair value of options granted during the half year was calculated at the date of grant using the Black-
Scholes option-pricing model. The following table gives the assumption made in determining the fair value
of options on grant date:
Option Series
Fair value per option
Grant date
Number of options
Expiry date
Exercise price
Price of shares on grant date
Estimated volatility
Risk-free interest rate
Dividend yield
MD Options
$0.0152
27 November 2015
15,000,000
30 September 2018
$0.05
$0.03
100%
2.00%
0%
NOTE 22
SEGMENT INFORMATION
For management purposes, the Group is organised into one main operating segment, which involves the
exploration for minerals and evaluation of mineral investment opportunities for its investors, presently solely
in Australia. All of the Group’s activities are interrelated, and discrete fi nancial information is reported to the
Board (chief operating decision maker) as a single segment. Accordingly, all signifi cant operating decisions
are based upon analysis of the Group as one segment.
The fi nancial results from this segment are equivalent to the fi nancial statements of the Group as a whole.
The accounting policies applied for internal reporting purposes are consistent with those applied in the
preparation of these fi nancial statements.
NOTE 23
CONTINGENT ASSETS AND LIABILITIES
Subsequent to the year end, the Company received a claim relating to a purported historical transaction
between the Company and Mighty River International Limited.
At present, this matter is under review by the directors and the Company’s legal counsel, to ascertain
whether the claim has any legal substance.
Given the lack of substantiation for this claim, it is not practicable – or reasonable – to estimate any potential
liability in relation to it.
Other than as above disclosed, there were no contingent liabilities at the end of the reporting period.
NOTE 24
EVENTS OCCURRING AFTER REPORTING PERIOD
Subsequent to year end, Mr Paul O’Shaughnessy retired as a director on 27 July 2016.
On 5 August 2016, the Company announced that it has entered into a binding term sheet with Marthen
Amtiran (“Pak Marthen”) for the investment of US$10 million in Gulf’s Indonesian-based subsidiary PT Gulf
Mangan Grup (“PT Gulf”), for a 10% interest in PT Gulf (subject to any regulatory approval).
Pak Marthen paid a non-refundable deposit of US$0.2 million deposit after of the signing of this Term Sheet.
The deposit was received on 12 August 2016. The balance of US$9.8M was to be paid within 5 business days
of the Bupati providing a written recommendation of the Kupang Smelter Project to the Governor of the
Province of NTT.
Following the initial US$10 million investment, Pak Marthen will have a six month option to purchase an
additional 5% interest in PT Gulf for US$7 million. Pak Marthen will be entitled to one board representative on
the PT Gulf Mangan Grup Board.
55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 (continued)
NOTE 24
EVENTS OCCURRING AFTER REPORTING PERIOD (continued)
Following the receipt of approval from the Governor of East Nusa Tenggara for the construction of a
Manganese Smelting Hub in the Bolok Industrial Estate in Kupang, the recommendation by the Bupati
was no longer requisite. The Company has commenced discussions with Pak Marthen to make a minor
amendment to the term sheet refl ecting this change. However the Board remains confi dent of securing this
investment in the near-term.
On 8 August 2016, the Company advised that it has fi nalised an agreement with South African-based
Transalloys (Pty) Limited for the acquisition and relocation of two ferromanganese smelting furnaces.
Under the terms of the agreement, Gulf will purchase two furnaces (including related equipment), from
Transalloys for the total cash consideration of US$1 million. Gulf has also agreed to supply Transalloys with
up to 30,000tpa of high grade manganese ore at the prevailing reported Metal Bulletin’s index price for
manganese lumpy, for a period of three years (once export licenses have been granted) and to marketing
rights for 60% of the production from these smelters for three years under commercial terms.
Specialist engineering fi rm, XRAM Technologies (Pty) Limited (“XRAM”), has been engaged to undertake all
design and construction requirements associated with the refurbishment and relocation of the furnaces to
the Kupang Smelting Hub. XRAM will also act as EPCM Managers for the Indonesian construction program
utilising local Indonesian contractors and construction companies.
Having now received necessary approvals to start construction in the industrial estate at Bolok in Kupang,
the Company is revising its construction program but still expects to be in production in late 2017.
On 23 August 2016, 3 convertible notes with a face value of $10,000 each were converted to shares in the
Company. A total of 2,941,177 shares were issued at a price of 1.02 cents each.
Following shareholders’ approval at the General Meeting held on 2 September 2016, the following securities
were issued:
1) 20,000,000 shares at a price of 0.2 cents per share and 10,000,000 Listed Options exercisable at
0.5 cents each were issued to Triple C Consulting Pty Ltd as a settlement of outstanding fees of
$40,000.
2) 10,000,000 shares were issued to Mrs Nukantini Putri Parincha to acquire 100% interest in PT Gulf
Mangan Grup.
3) 4,500,000 shares were issued to Mr John Woodacre at a price of 0.4 cents per share in satisfaction
of outstanding consulting fees of $18,000.
4) 10,000,000 Unlisted Options exercisable at 2 cents expiring 5 September 2021 were issued each
to Mr Craig Munro and Mr Andrew Wilson
5) 30,000,000 Unlisted Options exercisable at 2 cents expiring 5 September 2021 were issued to Mr
Hamish Bohannan.
6) 24,000,000 Unlisted Options exercisable at 2 cents expiring 5 September 2021 were issued to
employees and contractors of the Company under the Company’s Employee and Contractor
Share Option Plan.
On 8 September 2016, the Company completed $1 million raising to provide additional working capital, as
the Company continues to progress towards the development of its Kupang Smelting Hub Project in West
Timor, Indonesia.
Gulf raised circa $1 million via the placement of 70 million shares at 1.5c per share, with an attaching 1 for 2
listed option (GMCO). The issue of the attaching listed options will be subject to shareholders approval.
A further 4 convertible notes with a face value of $10,000 each were converted to shares in the Company. A
total of 2,941,176 shares were issued at a price of 1.36 cents each.
On 15 September 2016, the Company raised a further $100,000 through the issue of 6,666,667 shares at 1.5
cents each.
A total of 760,890 shares were issued on 20 September 2016 due to the conversion of listed options (GMCO)
raising $3,804.
Other than being disclosed, there are no other events occurred after the reporting period.
56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 (continued)
NOTE 25
AUDITOR’S REMUNERATION
Audit and review of fi nancial statements
Total auditor’s remuneration
NOTE 26
DIVIDENDS
2016
$
21,000
21,000
2015
$
21,200
21,200
There were no dividends recommended or paid during the fi nancial years ended 30 June 2016 and 30 June
2015.
NOTE 27
INVESTMENT IN CONTROLLED ENTITIES
Details of investment in the ordinary share capital of controlled entities are as follows:
Name of entity
Parent entity
Place of
incorporation
Equity holding
2016
%
2015
%
Gulf Manganese Corporation Limited
Australia
Controlled entities
Gulf Copper Pty Ltd1
Gulf Manganese Pty Ltd1
Gulf Coal Pty Ltd1,3
Gulf Project Services Pty Ltd1,3
International Manganese Group Limited
Ebagoola Gold Mines Pty Ltd2
PT Gulf Mangan Grup4
Australia
Australia
Australia
Australia
Australia
Australia
Indonesia
100
100
100
-
-
100
-
98
100
100
100
100
100
100
100
98
1 These companies were inactive during the years ended 30 June 2016 and 30 June 2015.
2 Ebagoola was liquidated during the year ended 30 June 2015 and was deregistered on 8 September 2015.
3 Gulf Coal Pty Ltd and Gulf Project Services Pty Ltd were deregistered on 22 June 2016.
4 100% of PT Gulf Mangan Grup was obtained post year end.
57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 (continued)
GULF MANGANESE CORPORATION LIMITED PARENT COMPANY INFORMATION
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets/(liabilities)
Equity
Contributed equity
Options reserve
Accumulated losses
Total equity
Financial performance
Loss for the year
Other comprehensive income
Total comprehensive loss
Parent
2016
$
700,418
1,035,303
1,735,721
864,430
-
864,430
871,291
Parent
2015
$
85,541
667,267
752,808
1,598,464
-
1,598,464
(845,656)
23,325,345
2,507,213
19,903,209
1,348,273
(24,961,267)
(22,097,138)
871,291
(845,656)
(2,864,128)
(6,777,276)
-
-
(2,864,128)
(6,777,276)
58
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
1. The fi nancial statements and note set out on pages 32 to 58, are in accordance with the Corporations Act
2001 and:
(a) comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements and
(b) give a true and fair view of the consolidated entity’s fi nancial position as at 30 June 2016 and of
its performance for the year ended on that date.
In the Director’s opinion, there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they become due and payable.
2. The remuneration disclosures included in the Directors’ report (as part of audited Remuneration Report)
for the year ended 30 June 2016, comply with section 300A of the Corporations Act 2001.
3. The Directors have been given the declarations by the chief executive offi cer and chief fi nancial offi cer
required by section 295A.
4. The Company has included in the notes to the fi nancial statements an explicit and unreserved statement
of compliance with International Financial Reporting Standards.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on
behalf of the Directors by:
Craig Munro
Non-Executive Chairman
Perth, Western Australia
30 September 2016
59
INDEPENDENT AUDITOR’S REPORT
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(cid:44)(cid:81)(cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)
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(cid:3)
60
INDEPENDENT AUDITOR’S REPORT
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(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:76)(cid:72)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:86)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:22)(cid:19)(cid:19)(cid:36)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:36)(cid:70)(cid:87)(cid:3)(cid:21)(cid:19)(cid:19)(cid:20)(cid:17)(cid:3) (cid:3)
(cid:3)
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(cid:3)
(cid:3)
(cid:3)
(cid:49)(cid:76)(cid:70)(cid:75)(cid:82)(cid:79)(cid:68)(cid:86)(cid:3)(cid:43)(cid:82)(cid:79)(cid:79)(cid:72)(cid:81)(cid:86)(cid:3)
(cid:48)(cid:68)(cid:81)(cid:68)(cid:74)(cid:76)(cid:81)(cid:74)(cid:3)(cid:39)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:3)
(cid:3)
(cid:22)(cid:19)(cid:3)(cid:54)(cid:72)(cid:83)(cid:87)(cid:72)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)
(cid:3)
(cid:51)(cid:72)(cid:85)(cid:87)(cid:75)(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
61
(cid:3)
ASX ADDITIONAL INFORMATION
Additional information as required by the Australian Securities Exchange Limited and not disclosed
elsewhere in this report is set out below. The information is current as at 18 October 2016.
1.1 Ordinary Shares on Issue
There are 1,301,105,864 ordinary shares on issue (GMC).
1.2 Listed Options on issue
There are 505,361,419 Listed Options (GMCO) exercisable at $0.005 expiring 21 April 2019.
1.3 Unlisted Options on issue
Terms
Exercisable at $0.0196 options expiring 30 Sep 2018
Exercisable at $0.0196 options expiring 21 Feb 2018
Exercisable at $0.0496 options expiring 30 Sep 2018
Exercisable at $0.3746 options expiring 31 July 2017
Exercisable at $0.2496 options expiring 31 Dec 2018
Exercisable at $0.02 options expiring 5 Sep 2021
Exercisable at $0.02 options expiring 5 Sep 2021 (ECSOP)
1.4 Distribution of shareholders and listed option holders
Analysis of numbers of equity security holders by size of holding:
Holding Ranges
Holders
Total Units
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
> 100,001
Totals
353
154
67
388
676
1,638
134,171
389,331
528,678
20,516,510
1,279,537,174
1,301,105,864
Quantity
56,275,917
10,000,000
15,000,000
13,900,000
7,500,000
50,000,000
24,000,000
% Issued
Share Capital
0.01%
0.03%
0.04%
1.58%
98.34%
100.00%
Based on the price per security at $0.025, number of holders with an unmarketable holding: 620, with
total 1,665,662, amounting to 0.13% of Issued Capital
Analysis of numbers of listed option holders by size of holding:
Holding Ranges
Holders
Total Units
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
> 100,001
Totals
6
12
5
39
277
339
3,134
39,322
31,380
2,117,104
503,170,479
505,361,419
% Issued
Share Capital
0.00%
0.01%
0.01%
0.42%
99.57%
100.00%
1.5 Voting Rights
Subject to any rights or restrictions for the time being attached to any class or classes, all fully paid
ordinary shares carry one vote per share.
62
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
ASX ADDITIONAL INFORMATION
1.6 Twenty largest shareholders
Position Holder Name
Mr Eduardo Siao & Mrs Evelyn Siao
Passio Pty Ltd
Trinity Management Pty Ltd
Mr Gavin Vucic
Abn Amro Clearing Sydney Nominees Pty Ltd
Holding
%
38,200,000
2.94%
33,600,000
30,000,000
28,967,800
27,511,182
2.58%
2.31%
2.23%
2.11%
Mr Peter David Sheppeard & Mrs Sharon Fay Sheppeard
25,700,000
1.98%
Mr Jeremy Nicholas Tolcon & Mrs Nadine Ruth Tolcon
25,040,000
1.92%
Hamish Bohannan
Mrs Perla Bailey
Mr Shane Timothy Ball
Mrs Helen Jelena Latkovic
International Business Network (Services) Pty Ltd
Cappig Finance Pty Ltd
44 Capital Pty Ltd
Mrs Nadine Ruth Tolcon
Pigequity Pty Ltd
Mr Samuel John Mcphee
Paradise Bay International Pty Ltd
Mr Joel Chan
Mr Brett David Sellars & Mrs Janelle Marie Sellars
24,000,000
21,233,333
19,200,000
17,624,510
15,000,000
14,700,000
13,500,000
13,450,000
13,000,000
12,347,144
11,500,000
11,470,588
11,383,329
1.84%
1.63%
1.48%
1.35%
1.15%
1.13%
1.04%
1.03%
1.00%
0.95%
0.88%
0.88%
0.87%
Total
Total issued capital
407,427,886
31.31%
1,301,105,864
100.00%
63
ASX ADDITIONAL INFORMATION
1.7 Twenty largest listed option holders (GMCO)
Position Holder Name
1
2
3
4
5
5
6
7
8
9
10
11
12
13
14
15
16
17
18
18
19
19
19
19
19
19
20
Carmilou Pty Ltd
Paradise Bay International Pty Ltd
Passio Pty Ltd
Abn Amro Clearing Sydney Nominees Pty Ltd
Mr Mitchell James Burgon
Hamish Bohannan
Mr Shane Timothy Ball
Mr Eduardo Siao & Mrs Evelyn Siao
Mr Mitchell James Burgon
Mr Peter David Sheppeard & Mrs Sharon Fay Sheppeard
Mrs Leanne Barnes
Mrs Perla Bailey
Mr Gavin Vucic
44 Capital Pty Ltd
Mr Brett David Sellars & Mrs Janelle Marie Sellars
Mr Frank Weng Thong Chew
Palais Park Pty Ltd
Pigequity Pty Ltd
Hamish Bohannan & Julie Bohannan
Ubs Nominees Pty Ltd
International Business Network (Services) Pty Ltd
Delta Grove Pty Ltd
St Barnabas Investments Pty Ltd
Holding
17,200,000
15,000,000
12,500,000
12,231,902
12,000,000
12,000,000
11,750,000
11,100,000
10,500,000
10,350,000
9,700,000
8,850,000
8,445,000
8,000,000
7,552,601
7,330,000
6,222,500
6,000,000
5,500,000
5,500,000
5,000,000
5,000,000
5,000,000
%
3.40%
2.97%
2.47%
2.42%
2.37%
2.37%
2.33%
2.20%
2.08%
2.05%
1.92%
1.75%
1.67%
1.58%
1.49%
1.45%
1.23%
1.19%
1.09%
1.09%
0.99%
0.99%
0.99%
Mr Jeremy Nicholas Tolcon & Mrs Nadine Ruth Tolcon
5,000,000
0.99%
The Stephens Group Pty Ltd
Mr Samuel John Mcphee
Mrs Jodie Helene Carabott
Total
Total issued - listed options (GMCO)
5,000,000
5,000,000
4,573,233
0.99%
0.99%
0.90%
232,305,236
45.97%
505,361,419
100.00%
64
Gulf Manganese Corporation Limited
T2, 152 Great Eastern Highway
Ascot 6104
Western Australia
+61 8 9367 9228
www.gulfmanganese.com