ANNUAL REPORT 2018
ABN 87 095 092 158
HAMMER METALS LIMITED (Hammer or The Company)
ABN 87 095 092 158
BOARD OF DIRECTORS
Russell Davis
Alex Hewlett
Ziggy Lubieniecki
Simon Bodensteiner Non-executive Director (resigned on 1 October 2018)
Executive Chairman
Executive Director / CEO (resigned on 1 October 2018)
Non-executive Director (appointed on 1 October 2018)
Nader El Sayed
Non-executive Director
COMPANY SECRETARY
Mark Pitts
PRINCIPAL AND REGISTERED OFFICE
Suite 1, 827 Beaufort Street
Mt Lawley, WA 6052
Telephone: +61 8 6369 1195
Email:
info@hammermetals.com.au
Website: www.hammermetals.com.au
POSTAL ADDRESS
PO Box 198
Mt Lawley WA 6929
Australia
AUDITORS
KPMG
235 St Georges Terrace
Perth WA 6000
Australia
Telephone: +61 8 9263 7171
Facsimile: +61 8 9263 7129
SHARE REGISTRY
Advanced Share Registry Ltd
110 Stirling Highway
Nedlands WA 6009
Australia
Telephone: +61 8 9389 8033
Facsimile: +61 8 9262 3723
STOCK EXCHANGE
ASX Limited
Level 40, Central Park,
152-158 St Georges Terrace
Perth WA 6000
ASX CODE
HMX
CORPORATE GOVERNANCE
The Company’s corporate governance statement can be found at the following URL:
http://www.hammermetals.com.au/company-profile/corporate-governance/
CONTENTS
Chairman’s Letter
Corporate Strategy
Operational Highlights
Corporate Activity
Mount Isa Project
Copper Gold Exploration
Cobalt Exploration
Other Commodities
Competent Person’s Statements
Annual Mineral Resource Statements
Directors Report
Independence Declaration
Consolidated Statement of Financial Position
Consolidated Statement Of Profit Or Loss and Other Comprehensive Income
Consolidated Statement of Changes In Equity
Consolidated Statement of Cash Flows
Notes To The Consolidated Financial Statements
Directors Declaration
Independent Auditors Report
ASX Additional Information
3
4
5
7
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HAMMER METALS LIMITED ANNUAL REPORT 2018 1
2 HAMMER METALS LIMITED ANNUAL REPORT 2018
CHAIRMAN’S LETTER
Many thanks to Alex Hewlett and Simon Bodensteiner for
their guidance and significant contributions to Hammer
over their respective terms as Directors. Alex, as a
founding Director of the Company in its present form has
been instrumental in building and funding Hammer Metals
during this period. Alex will continue to provide business
development services in a consulting capacity with the
Company.
The current Exploration Manager Mark Whittle will become
Hammer’s Chief Operations Officer. Mark has effectively
guided Hammer’s exploration effort in the Mount Isa region
for the last 5 years and will now broaden his role to include
additional stakeholder-engagement and commercial
activities.
In conclusion I look forward to the next period of Hammer’s
development with anticipation and sharing the Company’s
potential with the investment community. Hammer has
a large and strategic tenement position in the Mount Isa
mining district and a hardworking and dedicated exploration
team. Your Company has active joint ventures to assist in
funding exploration and a range of exciting copper-gold
targets including the recent Perentie discovery that will be
drilled in coming weeks.
Sincerely
Russell Davis
Executive Chairman
Dear Fellow Shareholders,
The team at Hammer Metals has continued to work
diligently towards its goal of making a transformational
new copper-gold discovery in the North West Queensland
mineral province.
Early-stage exploration produced exciting results with the
discovery of the Perentie copper-gold prospect in July 2018.
It is expected that first pass RC drilling will be completed
at Perentie before the end of 2018. Exploration within the
Mount Philp IOCG prospect commenced in earnest and has
quickly produced promising geochemical results at several
locations. Both Perentie and Mount Philp display potential
for large copper-gold deposits and will be a priority in 2019.
Drilling programs at the advanced Jubilee copper-gold
project in joint venture with Glencore and the Millennium
cobalt-copper project in joint venture with Global Energy
Metals Corporation both produced some outstanding
high-grade intersections and initial metallurgical sulphide
flotation test work has commenced for both deposits. It is
anticipated that the first mineral resource estimate for the
Jubilee deposit will also be finalised in coming months.
Hammer has continued to acquire prospective ground to
consolidate its ground position in the Mount Isa district
with areas considered to be of lesser prospectivity
relinquished. This has resulted in the area of the tenements
held by Hammer remaining stable at around 3000km2.
The Queensland Government has indicated the further
development of the North West Minerals Province is a
priority and Hammer intends to work collaboratively with
the relevant government agencies on programmes designed
to progress the region through successful exploration and
development.
Newmont withdrew from the Mount Isa Joint Venture with
Hammer in June 2018 after the targets were considered not
to meet their IOCG target-size criteria. Hammer considers
the prospects remain highly prospective and is confident
new partners will be secured to expedite exploration.
In September Hammer Metals announced changes to its
Board and Management team. The changes are designed
to streamline the Company’s corporate and exploration
operations, reduce costs and maximise the Company’s
chances of exploration success.
I am very pleased to have Ziggy Lubieniecki join the Board
of Hammer Metals as a Non-Executive Director. Ziggy’s
experience and enthusiasm for creating wealth through
exploration discovery is welcomed by myself and the team.
Ziggy has a successful exploration career including credit
for the discovery of the 6.2 million ounce Gruyere gold
deposit and will provide high level exploration direction to
the group.
HAMMER METALS LIMITED ANNUAL REPORT 2018 3
CORPORATE
STRATEGY
• Discover a large copper-gold deposit in the globally
significant Mount Isa mining district through innovative
and focused exploration
• Develop mining hubs centred centred on Hammers’
Kalman and Elaine/Jubilee Deposits
• Continue to consolidate and improve the quality of
Hammer’s strategic tenement position in the region
• Operate safely and effectively
• Deliver financial returns to shareholders
4 HAMMER METALS LIMITED ANNUAL REPORT 2018
OPERATIONAL
HIGHLIGHTS
• A major new discovery of outcropping copper-gold
mineralisation was made by Hammer at Perentie.
Ground geophysics (SAM) is currently underway as a
precursor to drilling before end of 2018.
• Multiple high-grade copper-gold intercepts in RC
and diamond drilling at Jubilee. First-pass flotation
metallurgical test work and the maiden Mineral
Resource Estimate are currently underway.
• Infill diamond drilling program at the 75%-owned
Millennium cobalt-copper deposit returns highest grade
cobalt intersection to date. Initial metallurgical flotation
recovery test work is in progress.
• RC and diamond drilling programs totalling 6600 metres
in 59 holes completed at seven projects:
a. Jubilee (Cu-Au)
b. Millennium (Co-Cu)
c. Elaine Dorothy (Cu-Au-REE)
d. Pharaoh (Cu-Au)
e. Hammertime (Cu-Au)
f. Serendipity (Cu-Au)
g. Kalman West (Au-Cu-Zn)
• Mt Philp Breccia program targeting large breccia hosted
IOCG deposits underway with first pass mapping, rock chip
and soil geochemistry completed and multiple anomalous
areas now under investigation. 6277 line kilometres of high
resolution aeromagnetic and radiometric surveys flown.
• Copper-gold targets generated and ready for drilling at
Prince of Wales, Lakeview, Toby (China Wall) and Trafalgar.
HAMMER METALS LIMITED ANNUAL REPORT 2018 5
6 HAMMER METALS LIMITED ANNUAL REPORT 2018
CORPORATE ACTIVITY
Exploration credits were distributed to eligible
shareholders through the Federal Government’s
Exploration Development Incentive Scheme (“EDI”). Based
on the number of shares on record the EDI credit amounts
to 0.067 cents per share.
A placement raising $1.24 million was completed on
September 6th, 2017 and a 1 for 7 shareholder entitlement
issue raising to $1.17 million on October 27th 2017.
A $0.8 million non-renounceable rights (option) issue and
$200,000 share placement was finalised on September
12th, 2018.
Hammer management actively interacts with the
investment and exploration community and keeps
shareholders and potential investors informed with regular
updates and conference presentations. Our website
provides additional project and corporate information and
access to previous announcements.
HAMMER’S CORPORATE ACTIVITIES ARE
FOCUSSED ON ENHANCING THE CAPACITY
OF OUR EXPLORATION TEAM TO MAKE
DISCOVERIES THROUGH ADEQUATE FUNDING,
AS WELL AS SECURING TENEMENTS OR
PROJECTS THAT IMPROVE THE QUALITY AND
POTENTIAL OF THE MOUNT ISA EXPLORATION
AS A WHOLE.
During the year Hammer pegged the remaining key
sections of the Mount Philp Breccia allowing the company
to proceed with a regional scale exploration program over
this prospective zone.
Hammer also reached agreement on terms to sell its 75%
interest in the Millennium cobalt-copper-gold project to its
JV partner (GEMC) - a focussed TSX listed North American
cobalt explorer and developer. This will allow Hammer
to focus on its copper-gold exploration activities whilst
maintaining significant exposure to the project through its
proposed 20% shareholding in GEMC.
New joint venture partners are being sought to assist in
expediting the exploration activity at Mount Isa following
Newmont’s withdrawal from the Mount Isa Joint Venture in
June 2018.
HAMMER METALS LIMITED ANNUAL REPORT 2018 7
MOUNT ISA PROJECT (QLD)
HAMMER METALS IS ONE OF THE MOST
ACTIVE MINERAL EXPLORERS IN THE MOUNT
ISA REGION, FOCUSED ON DISCOVERING
LARGE COPPER-GOLD DEPOSITS OF THE
ERNEST HENRY STYLE AND HAS A RANGE OF
PROSPECTIVE TARGETS AT VARIOUS STAGES OF
TESTING.
Hammer holds a strategic tenement position covering
over 3,000km2 within the Mount Isa mining district, with
100% interests in the Kalman (Cu-Au-Mo-Re) deposit, the
Overlander North and Overlander South (Cu-Co) deposits
and the Elaine-Dorothy (Cu-Au) deposit and a 75% interest
in the Millennium (Cu-Co-Au) deposit.
The ground position is focused on major regional-scale
structural zones and extends for over 100km from Mary
Kathleen in the north to the Tick Hill area in the south.
Activity during the past year included multi-disciplinary
exploration programs funded both internally and by our joint
venture partners. Project acquisition and target generation
activities continued to add highly prospective tenements to
the Hammer portfolio whilst less prospective tenements
were relinquished.
Successful drilling at the Jubilee (Cu-Au) deposit (51%
interest) during the year will culminate in the estimation
of the maiden Mineral Resource estimate for Jubilee in
coming weeks.
Looking forward Hammer has an extensive pipeline of
drilling targets to test. The Company will continue to seek
joint ventures with suitable parties to assist in the funding
of this work whilst pursuing self-funded exploration on its
own 100% owned targets.
Mount Isa Project Locations – Hammer Resources in Yellow
8 HAMMER METALS LIMITED ANNUAL REPORT 2018
COPPER-GOLD EXPLORATION
MARY KATHLEEN STRUCTURAL ZONE - JUBILEE
HAMMER HOLDS CONTIGUOUS TENEMENTS
THAT SECURE A 15KM LONG SECTION OF THE
MARY KATHLEEN STRUCTURAL ZONE AS FAR
SOUTH AS THE LAKEVIEW PROSPECT WHERE
THE STRUCTURE INTERSECTS THE FOUNTAIN
RANGE AND PILGRIM FAULTS.
The Mary Kathleen structural corridor is highly mineralised
and hosts several copper-gold, uranium and REE prospects
including the Mary Kathleen uranium deposit (closed),
Jubilee, Koppany, Chester, Blue Caesar and Elaine Dorothy.
The tenements are 100% owned by Hammer apart from
EPM 14467 located adjacent to the Mary Kathleen uranium
mine which is in joint venture with Mount Isa Mines Ltd
(MIM), a subsidiary of Glencore.
Hammer holds a 51% interest in the tenement and is
operator. Each party contributes to approved programs and
budgets as per its percentage interest.
In late 2017 the Queensland Geological Survey (GSQ) in
conjunction with Geoscience Australia flew a high resolution
aeromagnetic and radiometric survey over the entire Mary
Kathleen area. The data from this survey (provided at no
cost by the GSQ) has been processed in conjunction with
the high-resolution surveys flown by Hammer and others
over adjacent areas extending 55km to the south to form
a significant new dataset covering most of Hammer’s
tenement holding between the Pilgrim and Fountain
Range faults. Interpretation of this outstanding dataset by
Hammer’s consultants is underway.
Magnetic Image
HAMMER METALS LIMITED ANNUAL REPORT 2018 9
The sulphide mineralisation as defined is relatively close to
surface and is therefore potentially amenable to extraction
by open pit mining. The project is also well located, close to
the sealed Barkly Highway, midway between Mount Isa and
Cloncurry.
The diamond drilling was conducted to provide samples
for preliminary metallurgical work on the Jubilee sulphide
mineralisation. This metallurgical study will determine first
pass comminution parameters in addition to copper, gold
and cobalt recovery. The work will be conducted by ALS in
South Australia and it is expected results will be available
in late 2018.
Sufficient drilling has now been undertaken to provide the
data for estimation of an initial Mineral Resource for the
deposit. Resource estimation is underway and is expected to
be completed in late 2018.
Rock chip sampling and mapping has also highlighted
a mineralised trend extending between Jubilee and the
currently undrilled Lakeview mine (4.5km to the south),
enhancing the potential of the Jubilee structural trend for
further discoveries.
JUBILEE
THE JUBILEE COPPER-GOLD PROJECT FORMS
PART OF THE JOINT VENTURE WITH MIM. RC
AND DIAMOND DRILLING AT JUBILEE (26 HOLES
FOR 2450 METRES) CONTINUED TO GENERATE
STRONG COPPER AND GOLD RESULTS.
Significant intersections include:
• 5m at 7.34% Cu and 3.75g/t Au from 35m in HJRC009
within 8m of 4.72% Cu and 2.37g/t Au from 33m. Peak
assays over a one metre interval are 14.9g/t Au and
12.45% Cu.
• 6m at 2.55% Cu and 1.25g/t Au from 60m in HJRC003 with
peak values over a one metre interval of 4.46% Cu and
1.81g/t Au.
• 3m at 4.91% Cu and 5.73g/t Au from 26m in HJRC006
within 6m at 2.69% Cu and 2.89g/t Au from 23m. Peak
assays of 9.29g/t Au and 9.17% Cu.
• 5.5m at 6.87% Cu and 14.5g/t Au from 74m within 14m at
2.19% Cu and 5.93g/t Au from 66m in HJDD003. Individual
maximum assays over a one metre interval of 43g/t Au
and 9.03% Cu.
• 4m at 6.27% Cu and 0.70g/t Au from 59m within 14m at
2.0% Cu and 0.28g/t Au from 58m in HJRC020.
• 2m at 4.63% Cu and 0.21g/t Au within 9m at 1.30% Cu and
0.14g/t Au from 51m in HJRC010.
• 5m at 3.36% Cu and 0.81g/t Au within 14m at 1.43% Cu
and 0.37g/t Au from 113m in HJRC012.
• 3m at 2.95% Cu and 5.56g/t Au within 16m @ 1.18% Cu
and 1.21g/t Au from 141m in HJRC013.
• 2m at 2.61% Cu, 1.13g/t Au and 0.11% Co within 5m at
1.44% Cu, 0.51g/t Au and 607ppm Co from 106m in
HJRC023.
10 HAMMER METALS LIMITED ANNUAL REPORT 2018
Jubilee Drilling
Jubilee Long Section
HAMMER METALS LIMITED ANNUAL REPORT 2018 11
12 HAMMER METALS LIMITED ANNUAL REPORT 2018
PERENTIE
THE PERENTIE PROJECT IS A NEW COPPER-
GOLD DISCOVERY MADE IN AUGUST 2018 BY
SURFACE PROSPECTING AND ROCK CHIP
SAMPLING. THE PROJECT INCORPORATES AN
AREA OF APPROXIMATELY 50KM2 CENTRED ON
THE NORTH-WESTERN CORNER OF THE HIGHLY
MAGNETIC WIMBERU GRANITE, A WILLIAMS-
AGED GRANITE THAT IS CONSIDERED TO BE
ASSOCIATED WITH THE DEVELOPMENT OF IRON
OXIDE COPPER-GOLD (IOCG) MINERALISATION
WITHIN THE MOUNT ISA INLIER.
Perentie forms part of the Dronfield Joint Venture on EPM
18084 between Hammer Metals (80%) and Kabiri Pty Ltd
(20%). Previous exploration by Hammer in this area has
focussed on strong magnetic and gravity features along the
northern margin of the granite.
Recent grassroots prospecting and rock chip sampling has
identified multiple mineralised trends with multi-kilometre
strike lengths. These trends are located within zones of
demagnetisation of the granite. The demagnetisation is
caused by alteration of magnetite to hematite and is often
accompanied by quartz-carbonate veining, brecciation and
red-rock alteration.
Three of these prospects Judith, Paddy B and Susan are
located along one of these north-south structures where
they intersect north-westerly faults. A parallel structure,
termed the Rainbow Ridge – Trackside trend has now been
defined over a 5km strike length.
Michael Burnett holding an example of Judith mineralisation
Multiple samples with strongly anomalous copper and gold
with individual maximum grades of up to 31% Cu, 19g/t Au
and 240g/t Ag are reported.
Surface geophysics and drilling will commence shortly on
the higher ranked targets at Judith, Paddy B and Trackside.
A range of other similar demagnetised zones are concealed
under thin cover and are still to be evaluated.
HAMMER METALS LIMITED ANNUAL REPORT 2018 13
KALMAN
NO WORK WAS UNDERTAKEN ON THE KALMAN
DEPOSIT DURING THE YEAR. KALMAN REMAINS
AN IMPORTANT ASSET FOR HAMMER AND WE
ARE KEEN TO GENERATE VALUE FROM KALMAN
FOR SHAREHOLDERS.
The Indicated and Inferred Mineral Resource at Kalman
stands at 20Mt at 0.61% Cu, 0.14% Mo, 0.34g/t Au and 3.7g/t
Re (1.8% CuEq) (refer ASX release 27 September 2016). The
deposit remains open down plunge and at 0.14% Mo is one
of the highest grade molybdenum resources in the world.
Kalman Deposit Block Model (CuEq)
14 HAMMER METALS LIMITED ANNUAL REPORT 2018
KALMAN WEST AND HAMMERTIME
THE KALMAN WEST AND HAMMERTIME
PROSPECTS ARE SITUATED 1KM AND 2KM
RESPECTIVELY WEST OF KALMAN ON NESTED
(FLOWER) FAULT STRUCTURES THAT SPLAY
OFF AND RE-JOIN THE PILGRIM FAULT TO THE
NORTH AND SOUTH OF KALMAN.
Both structures (as does the Kalman structure) show
extensive base metal and gold soil and rock chip anomalism
and mineral occurrences along their length. The Ballara
Fault which forms the footwall to the Hammertime
mineralized zone dips moderately to shallowly east towards
the Pilgrim Fault whilst the Kalman West structure appears
to be dipping steeply to the west, parallel to the Kalman
Fault.
An additional 6 RC holes were drilled at Kalman West to
follow up the new gold zone located in 2017 which returned
gold results including 1m at 36.9g/t Au and 1m at 3.93g/t Au.
(Refer ASX release 28 August 2017).
The drilling intercepted several narrow intervals of elevated
gold mineralisation including 1m at 3.47g/t Au from 4m in
HKWRC007 and 1m at 2.78g/t Au from 76m in HKWRC006.
Detailed surface mapping is underway to identify the
orientation of the mineralised zone.
Two RC holes for 604m were drilled at Hammertime in
areas showing stronger brecciation and copper-gold
mineralisation at surface. Assay results were consistent
with the previous drilling, intercepting wide zones of low
grade copper and gold mineralisation in strongly altered and
brecciated rocks.
The Hammertime prospect remains of interest due to
the structural architecture and the size of the altered
and mineralised zone (4km x 1km). Additional electrical
geophysics (IP) is required to delineate targets for further
drilling.
Hammertime Prospect
RC Drilling at Kalman West
HAMMER METALS LIMITED ANNUAL REPORT 2018 15
OVERLANDER /
DRONFIELD /
EVEN STEVEN
A NEGOTIATED CONCLUSION TO THE JOINT
VENTURE WITH NEWMONT EXPLORATION
AUSTRALIA PTY LTD WAS REACHED MID-
YEAR WITH HAMMER RETAINING A 100%
INTEREST IN THE THREE FORMER FARM-IN
AREAS OF OVERLANDER, EVEN STEVEN AND
DRONFIELD. (REFER TO ASX RELEASE DATED
JUNE 4TH, 2018.)
The JV was targeting large IOCG deposits of the “Ernest
Henry style” and a collaborative, multi-disciplinary
exploration program of mapping, soil and rock chip sampling
and ground geophysics was undertaken, culminating in
diamond and RC drilling programs at Overlander and
Dronfield. The areas display many characteristics of an
IOCG system but ultimately did not meet Newmont’s target
size criteria.
Hammer will continue to progress exploration on specific
targets identified during the joint venture period. Amongst
these opportunities are the partially tested IOCG potential
at Overlander North, the Overlander cobalt potential, the
copper-gold potential of the Tourist Zone and several
copper-gold targets generated at Even Steven.
ELAINE DOROTHY
Hammer drilled two RC drill holes (for 322m) to target the
interpreted near-surface “up-plunge” position of previous
significant gold intercepts of 9m at 3.6g/t Au and 30m at
6.73g/t Au. Both RC holes intercepted low grade copper and
gold mineralisation but no gold values above 1g/t Au were
intercepted. No further work is planned at Elaine Dorothy
at this time.
MOUNT PHILP BRECCIA
THE MOUNT PHILP BRECCIA PROJECT COVERS
A STRONGLY ALTERED AND BRECCIATED
SEQUENCE OF ROCKS COVERING AN AREA
APPROXIMATELY 7KM LONG AND 3KM WIDE
LOCATED BETWEEN THE REGIONAL SCALE
FOUNTAIN RANGE AND PILGRIM FAULTS.
BOTH FAULTS ARE MORE THAN 200KM IN
LENGTH AND ARE MAJOR CRUSTAL FEATURES
OF THE CENTRAL PORTION OF THE MOUNT
ISA INLIER. THE MT PHILP BRECCIA IS ONE
OF THE LARGEST AREAS OF BRECCIA IN
THE INLIER.
Hammer recently consolidated its tenure position over
the breccia with the prime exploration objective being
IOCG mineralisation. There are known occurrences of
uranium, hematite (at the Mount Philp Iron Deposit),
magnetite, copper, gold, cobalt REE’s, scheelite and
molybdenite occurring in the project area. The large scale
of the alteration and brecciation, the favourable structural
framework and extensive felsic and mafic intrusive
activity are considered conducive to the formation of an
IOCG deposit.
Hammer’s 100%-owned Mt Philp haematite deposit is
immediately adjacent to the breccia and is considered of
epigenetic rather than sedimentary origin. Previous drilling
intercepted low-grade copper-gold mineralisation below the
northern end of the deposit indicating the potential for an
untested IOCG system at Mt Philp.
During the year an experienced consultant geologically
mapped the breccia body and its immediate surrounds
between the Fountain Range Fault and the Pilgrim Fault.
The mapping highlighted several areas of strong alteration
and brecciation with hallmarks of IOCG alteration.
Additionally, zones of mylonite and strong silicification were
found which are considered to have potential for Tick Hill
style gold mineralisation.
Age dating of alteration zones and intrusive rocks from the
Mt Philp Breccia by a Hammer commissioned consultant
indicates rock ages consistent with rocks associated with
the mineralising events and IOCG deposits in the Cloncurry
belt 60km to the east. This is considered to further enhance
the potential of Hammer’s tenement position.
A high resolution aeromagnetic and radiometric survey was
flown by Hammer over the area as well as soil geochemical
sampling on a nominal 200 x 200 metre staggered pattern.
The soil samples were analysed using a portable pXRF and
will subsequently be submitted for multi-element analysis
including gold. Rock chip sampling to follow up anomalies
is in progress.
16 HAMMER METALS LIMITED ANNUAL REPORT 2018
Mt Philp Breccia Zone on Magnetic Image
HAMMER METALS LIMITED ANNUAL REPORT 2018 17
Oblique Photo of the Millennium Mineralised Zone
Millennium Copper-Cobalt Mineralisation
18 HAMMER METALS LIMITED ANNUAL REPORT 2018
COBALT EXPLORATION
MILLENNIUM
THE MILLENNIUM COBALT-COPPER-GOLD
PROJECT IS CURRENTLY A JOINT VENTURE
WITH TSX LISTED GLOBAL ENERGY METALS
CORPORATION (GEMC). HAMMER CURRENTLY
HOLDS A 75% INTEREST AND OPERATES THE
JOINT VENTURE. THE PROJECT COMPRISES
FIVE GRANTED MINING LEASES LOCATED
ABOUT 30KM NORTHWEST OF CLONCURRY
AND LESS THAN 20KM FROM THE ROCKLANDS
CU-CO-AU DEPOSIT.
An Inferred Mineral Resource is estimated at 3.07Mt at
0.14% Co, 0.35% Cu and 0.12g/t Au (refer ASX release 6
December 2016). There is considered to be significant
potential to increase the size of the deposit at depth and in
the untested, geochemically anomalous areas to the north
of the deposit.
In June Hammer entered into a binding term sheet for the
sale of its 75% interest in the project to GEMC. Consideration
for the sale is the issue to Hammer of GEMC ordinary shares
whereby Hammer will own a 19.9% interest in TSX-listed
GEMC following the acquisition plus board representation.
(Refer to ASX Release dated June 27th 2018 for full details
of the proposed transaction.)
Under the terms of the Agreement GEMC will purchase
the remaining 75% interest in the project along with the
cobalt targets at Mt Dorothy and Cobalt Ridge. The sale is
contingent on a number of approvals being received and
completion of the final sale documentation (“Definitive
Agreement”).
Given Hammer’s technical and jurisdictional expertise, it
will remain as operator of the Property until at least the
first anniversary of the date of the Definitive Agreement,
with such engagement to be reviewed and renewed on an
annual basis thereafter. Hammer shall receive an operator’s
fee of 10% of the expenditures carried out on the Property.
Hammer will also have a right to appoint a representative to
the GEMC board of directors.
Hammer will also co-operate with GEMC with a view to
identifying and acquiring additional cobalt assets in the
Mount Isa region.
The work program that just concluded at Millennium,
continues to highlight the potential for the project to be
part of a much larger regional cobalt venture across the
Mount Isa region of Northwest Queensland. With the
proposed agreement Hammer will have the opportunity to
have a significant interest in a focused cobalt explorer and
developer, while retaining exposure to longer term value
creation that the Millennium and other Mount Isa cobalt
projects will offer. The sale to a focused cobalt explorer
in GEMC will allow Hammer to concentrate on its other
advanced copper-gold exploration programs in the Mount
Isa mining district.
A 10-hole, 1141-metre diamond drilling program (MIDD001
– MIDD010) was completed at Millennium during the year.
The drilling program was designed to test the up-dip
continuity at the northern end of the Millennium deposit.
Drilling results generally agree with the previous deeper
drilling with the further delineation of wide zones of cobalt
and copper mineralisation.
Detailed logging of the drill core has permitted an enhanced
understanding of the nature of the mineralisation and the
geology of the deposit. All mineralisation intercepted in the
program to date is un-oxidised primary sulphides, indicating
a thin zone of oxidation to 10-15 metres depth.
The best cobalt intercept to date at the project was returned
from in MIDD010 with 41 metres at 0.18% Co, 0.23% Cu and
0.11g/t Au from 14 metres.
Millennium Drill Hole Locations
HAMMER METALS LIMITED ANNUAL REPORT 2018 19
Millennium (cont’d)
Significant results from the program include:
• 15 metres at 0.22% Co, 0.21% Cu and 0.18g/t Au from
40 metres within a mineralised envelope of 41 metres at
0.18% Co, 0.11g/t Au and 0.23% Cu from 14m in MIDD010.
This zone includes a one metre interval of 1.85% Co (40-
41m).
• 7 metres at 0.11% Co and 0.15% Cu from 24 metres in
MIDD009 and 2 metres at 0.29% Co, 0.67% Cu and 0.24g/t
Au from 70 metres in MIDD009.
• 8 metres at 0.12% Co and 0.19% Cu from 39 metres
including 3m @ 0.21% Co from 39 metres in MIDD001.
• 7 metres at 0.15% Co, 0.36% Cu and 0.12g/t Au from 14
metres and 2 metres at 0.33% Co, 0.57% Cu and 0.11g/t
Au from 19 metres in MIDD003.
The results will now be fully assessed and interpreted
followed by planning of any additional drilling required and
undertaking preliminary metallurgical studies. Samples
have been submitted for first pass metallurgical test work
and results are expected shortly.
Rock chip sampling was conducted to test for additional
zones of cobalt and copper mineralisation along the
Millennium trend and the northern strike extension
where similar host rock units and strong soil geochemical
anomalies are located. This zone is located approximately
1km north of the current Millennium resource as defined.
Features such as, the continuation of elevated soil arsenic
and copper geochemistry, presence of anomalous cobalt and
copper in rock chip samples and analogous geology between
the Millennium resource and the extension zone indicate
that this area is a priority target for further investigation.
Peak values in the 71 rock chip samples taken were 0.12%
Co, 0.21g/t Au, 42.6g/t Ag, 45.3% Cu, 0.16% Pb and 0.25%
Zn. (Refer to ASX release dated June 5th, 2018.)
Millennium Rock Chip and Soil Sample Geochemical Plan
Hammer’s Mount Isa Target Pyramid
20 HAMMER METALS LIMITED ANNUAL REPORT 2018
OTHER COMMODITIES
As previously reported the significant potential of Hammer’s
tenement holding for several other commodities including
iron ore, potash, graphite and rare earth elements has
become apparent.
Partners will be sought to assist with advancing
these targets.
PILBARA IRON ORE (WA) –
HAMMER 100%
The Pilbara iron ore resource is a channel iron deposit
situated approximately 100km west of Tom Price. The
current Indicated Mineral Resource estimate for the project
is 11.5 million tonnes at 53% Fe. The deposit is held under
a retention license (E08/1997).
TARGET GENERATION AND
TENEMENT ACQUISITION
Hammer applied for several new exploration permits
over targets considered to hold good potential for copper-
gold mineralisation that were identified by a regional
targeting exercise.
COMPETENT PERSON’S STATEMENTS
EXPLORATION RESULTS
MINERAL RESOURCE ESTIMATES
The information in this report as it relates to exploration
results and geology was compiled by Mr. Mark Whittle,
who is a member of the AusIMM and a consultant to the
company. Mr. Mark Whittle has sufficient experience
which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity which he is
undertaking to qualify as a Competent Person as defined
in the 2012 Edition of the Australasian Code for Reporting
of Exploration Results, Mineral Resources and Reserves.
Mr. Whittle consents to the inclusion in the report of the
matters based on the information in the form and context in
which it appears.
Where the Company refers to Mineral Resource Estimates
for the following prospects:
•
•
•
the Kalman deposit (ASX 27 September 2016);
the Millennium Deposit (ASX 6 December 2016);
the Pilbara Iron Ore Deposit (ASX 30 October 2014)
it confirms that it is not aware of any new information or
data that materially affects the information included in
those announcements and all material assumptions and
technical parameters underpinning the resource estimates
continue to apply and have not materially changed.
HAMMER METALS LIMITED ANNUAL REPORT 2018 21
ANNUAL MINERAL RESOURCE STATEMENT
As of 30 June 2018
The Company’s Mineral Resource Statement has been compiled in accordance with the Australian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves (The JORC Code 2012 and 2004 Editions) and Chapter 5 of the
ASX Listing Rules and ASX Guidance Note 31. The Company has no Ore Reserve estimates.
The Company governs its activities in accordance with industry best-practice. The reported estimates for Overlander,
Kalman and Millennium were generated by a reputable, independent consulting firm – Haren Consulting Pty Ltd. The
resource reports and supporting data were subjected to internal analysis and peer-review before release.
In 2016, Hammer Metals commissioned Haren Consulting Pty Ltd to update the Kalman Resource based on new drilling and
geological interpretation. The resource was issued on the 27th of September 2016.
In November 2016, Haren Consulting was contracted by Hammer Metals Limited to complete a maiden mineral resource
estimate for the Millennium deposit. The estimate is based on good quality RC drilling data. The Mineral Resource was
based on a series of 23 RC holes drilled by Hammer Metals following its acquisition of the tenements in May 2016 and
17 RC holes drilled by the previous operator in 2013-2014. Drilling extends to a maximum down hole depth of 322m and
the mineralisation was modelled from surface to a depth of approximately 280m below surface. The drill hole spacing is
approximately 50 to 100m along strike.
There has been no material change to the Millennium resource estimate since its initial release to the ASX dated 6th
December 2016.
CSA Global Pty Ltd conducted the Resource Estimate over the West Pilbara Iron Ore Deposit and this was reported to the
ASX on the 26th of July 2010. In 2014, the Resource was updated to adhere to the JORC Code 2012 Edition, however the
Resource Estimate remained unchanged.
Cerro Resources Limited, the previous tenure holder over the Mt. Philp Hematite Deposit reported the Resource Estimate to
the ASX on the 12th of March 2012. The Mt Philp Resource Estimate adhered to the JORC Code 2004 edition.
In relation to the Overlander, West Pilbara and Mt Philp Resources, there have been no material changes to the Resource
Estimates during the reporting period.
Resource
Project
Millennium
Kalman
Overlander
Mineral Resource
Competent Person
Ms. E. Haren
Ms. E. Haren
Ms. E. Haren
Organization
ASX Reporting Date
Haren Consulting
December 6th 2016
Haren Consulting
September 27th 2016
Haren Consulting
August 26th 2015
West Pilbara
Mr. C. Allen
CSA Global Pty Ltd
July 26th 2010
Mt. Philp
Mr. T. Leahey
Cerro Resource NL
September 28th 2012
22 HAMMER METALS LIMITED ANNUAL REPORT 2018
KALMAN DEPOSIT JORC 2012 MINERAL RESOURCE ESTIMATE
2.9
3.9
4.5
3.7
Mining
Method
Open Pit
Open Pit
Classification
Indicated
Inferred
Inferred
CuEq
Cut-off
Tonnes
Kt
CuEq % Cu %
Mo % Au ppm Ag ppm Re ppm
0.75%
0.75%
7,100
6,200
7,000
1.5
1.6
2.4
0.48
0.44
0.89
0.12
0.15
0.16
0.27
0.24
0.50
1.4
1.5
2.9
Underground
1.4%
20,000
Total
• Note: (1) The copper equivalent equation is: CuEq= Cu+(0.864268*Au)+(0.011063*Ag)+(4.741128*Mo)+(0.064516*Re)
0.14
0.61
0.34
1.8
1.9
• Note: (2) Copper Equivalent Price assumptions are: Cu: US$4,650/t; Au: US$1,250/oz; Ag: US$16/oz; Mo: US$10/lb; and Re: US$3,000/kg.
The Kalman Molybdenum-Rhenium-Copper-Gold-Silver (Mo-Re-Cu-Au-Ag) deposit is situated 60 kilometres southeast of
Mt Isa within the Mt Isa Inlier, and forms part of the company’s Kalman Project.
Drilling extends to a maximum down hole depth of 998.3 metres and the mineralisation was modelled from surface to a
depth of approximately 800 metres below surface. The estimate is based on good quality RC and diamond core drilling data.
The drill hole spacing is approximately 100 metres along strike with some 50 metre-spaced infill drilling.
The Kalman Mineral Resource has been reported at two cut-off grades to reflect both open pit and underground
mining scenarios. The Kalman Mineral Resource estimate comprises a combined 20 million tonnes at 1.8%
copper equivalent (CuEq) at 0.61% copper, 0.34 g/t gold, 0.14% molybdenum and 3.7 g/t rhenium in the Indicated
and Inferred categories at revised cut-off grades. (Refer to the ASX release dated 27th September 2016).
There has been no material change to the mineral resource estimates for Kalman during the financial year
HAMMER METALS LIMITED ANNUAL REPORT 2018 23
OVERLANDER NORTH AND SOUTH DEPOSITS
JORC 2012 MINERAL RESOURCE ESTIMATES
(Reported at 0.7% Cu cut-off)
OVERLANDER NORTH MINERAL RESOURCE
Classification
Indicated
Inferred
Total
Tonnes
253,000
870,000
1,123,000
Cu
%
1.4
1.3
1.3
Co
ppm
254
456
410
Cu
Tonnes
3,414
11,350
14,764
Co
Tonnes
64
396
461
• Note: (1) Numbers rounded to two significant figures to reflect appropriate levels of confidence
• Note: (2) Totals may differ due to rounding
OVERLANDER SOUTH MINERAL RESOURCE
Classification
Indicated
Inferred
Tonnes
-
649,000
Cu
%
-
1.0
Co
ppm
-
500
649,000
Total
• Note: (1) Numbers rounded to two significant figures to reflect appropriate levels of confidence
500
1.0
• Note: (2) Totals may differ due to rounding
OVERLANDER NORTH AND SOUTH COMBINED MINERAL RESOURCE
Classification
Indicated
Inferred
Tonnes
253,000
1,518,000
Cu
%
1.4
1.2
Co
ppm
254
476
1,772,000
Total
• Note: (1) Numbers rounded to two significant figures to reflect appropriate levels of confidence
445
1.2
Cu
Tonnes
-
6,352
6,352
Cu
Tonnes
3,414
17,700
21,112
Co
Tonnes
-
327
327
Co
Tonnes
64
723
788
• Note: (2) Totals may differ due to rounding
The 100%-owned Overlander Project is situated 60 kilometres to the southeast of the mining centre of Mount Isa in North
West Queensland and 6 kilometres to the west of Hammer’s Kalman copper-gold-molybdenum-rhenium deposit. It is a
high-priority target area for both shear-hosted copper and IOCG copper mineralisation. The Overlander North and South
Copper Deposits are situated approximately one kilometre apart within a common shear zone.
There has been no material change to the Overlander resource base during the financial year.
24 HAMMER METALS LIMITED ANNUAL REPORT 2018
MT. PHILP DEPOSIT JORC 2004 MINERAL RESOURCE ESTIMATE
Classification
Tonnes
Indicated
Inferred
19,110,000
11,400,000
Fe
%
41
34
P
%
0.02
0.02
SiO2
%
38
48
Al2O3
%
1.3
2.0
1.6
Total
• Note: (1) Numbers rounded to two significant figures to reflect appropriate levels of confidence
30,510,000
0.02
42
39
TiO2
%
0.38
0.46
0.41
LOI
%
0.29
0.31
0.30
• Note: (2) Totals may differ due to rounding
The Mount Philp Iron Ore deposit is located in north-western Queensland, 1,500 kilometres northwest of Brisbane. The
Mineral Resource Estimate is based on 48 diamond and reverse circulation (RC) drillholes completed in 2011 for a total of
3,801 metres. Drilling comprises fans located on a nominal 100 metre pattern along the strike length of the ironstone. The
Mineral Resource was estimated and reported in-house by Cerro Resource NL.
The current resource totals 19.1 million tonnes grading 41.4% iron and 37.9% silica in the Indicated category and 11.4
million tonnes grading 33.8% iron and 47.4% silica in the Inferred category. This resource is open at depth.
A resource estimate was first completed and reported to ASX by previous owners on 28th September 2012 and there has
been no material change to the resource base during the financial year. A review of the resource estimate was completed
for the purpose of compiling this statement and the principles and methodology of the resource estimation procedure and
the resource classification procedure have been reconciled with the CIM Resource Reserve definitions and found to comply.
WEST PILBARA DEPOSIT JORC 2012 MINERAL RESOURCE ESTIMATE
(Reported at 50% Fe cut-off)
Classification
Indicated
Inferred
Total
Mining
Method
Open Pit
-
Tonnes
11,500,000
-
Open Pit
11,500,000
Fe
%
53
-
53
P
%
0.042
-
0.042
SiO2
%
Al2O3
%
7.8
-
7.8
5.6
-
5.6
LOI
%
9.9
-
9.9
• Note: (1) Numbers rounded to two significant figures to reflect appropriate levels of confidence
• Note: (2) Totals may differ due to rounding
The West Pilbara Channel Iron Deposit is situated in the West Pilbara region of Western Australia about 100 km west of Tom
Price, adjoining Atlas Iron’s Anthiby Well iron ore project.
The deposit has been drilled with 40 Reverse Circulation holes totalling 2010 metres sampled on 1 metre intervals, on
east-west sections spaced 100 metres apart. The drill holes are generally spaced 50 metres apart on section and drilled to
between 42 and 60 metres depth.
Midas Resources Limited (now Hammer Metals Limited) commissioned CSA Global Pty Ltd (CSA) in July 2010 to estimate
the Mineral Resource at its West Pilbara iron ore prospect. The West Pilbara deposit contains an Indicated Mineral Resource
of 11.5 million tonnes at 53.1% Fe, 0.042% P, 7.75% SiO2, 5.57% Al2O3 and 9.86% LOI. This is based on an interpreted
mineralised envelope with a nominal Fe cut-off of 50%. (Refer to the ASX release dated July 26th 2010).
In 2014 Hammer Metals commissioned CSA to convert the existing JORC 2004 resource statement to comply with the new
2012 JORC code. The JORC 2012 conversion statement was issued by CSA on October 30th 2014. The resource estimate
remained unchanged. There has been no material change to the resource base of this project during the financial year.
HAMMER METALS LIMITED ANNUAL REPORT 2018 25
MILLENNIUM JORC 2012 MINERAL RESOURCE ESTIMATE
Classification
Tonnes
Cu
%
Inferred
• Note: [1] Numbers rounded to two significant figures to reflect appropriate levels of confidence
3,070,000
0.35
Co
%
0.14
Au
ppm
0.12
• Note: [2] Totals may differ due to rounding
• Note: [3] 1.0% CuEq Cut-off (CuEq = Cu % + (Co % x 5.9) + (Au ppm x 0.9) + (Ag ppm x 0.01)
The 100%-owned Millennium polymetallic deposit is situated on granted mining leases approximately 32 kilometres
northwest of Cloncurry in North West Queensland and 19 kilometres northwest of the operating Rocklands copper-gold-
cobalt mine. The Millennium deposit lies within five Mining Leases; ML’s 2512, 2761, 2762, 7506 and 7507. Hammer currently
has a 100% interest in all five Mining Leases. The tenements are in good standing and no known impediments exist.
In November 2016, Haren Consulting was contracted by Hammer Metals Limited to complete a maiden mineral resource
estimate for the deposit. The estimate is based on good quality RC drilling data. The Mineral Resource was based on a series
of 23 RC holes drilled by Hammer Metals following its acquisition of the tenements in May 2016 and 17 RC holes drilled by
the previous operator in 2013-2014. Drilling extends to a maximum down hole depth of 322m and the mineralisation was
modelled from surface to a depth of approximately 280m below surface. The drill hole spacing is approximately 50 to 100m
along strike.
There has been no material change to the resource estimate base of this project during the financial year.
26 HAMMER METALS LIMITED ANNUAL REPORT 2018
GOVERNANCE AND INTERNAL CONTROLS – RESOURCE CALCULATIONS
The Company ensures good governance in relation to resource estimation through the use of third party resource consultants and
internal review in accordance with industry best practice. All reported resource estimates were generated by reputable, independent
consulting firms. The resource reports and supporting data were subjected to internal analysis and peer review before release. The
Company is not aware of any additional information, other than that reported, which would have a material effect on the estimates
as reported.
Due to the nature, stage and size of the Company’s existing operations, the Board believes there would be no efficiencies gained by
establishing a separate mineral reserves and resources committee responsible for reviewing and monitoring the Company’s processes
for calculating mineral reserves and resources estimates and for ensuring that the appropriate controls are applied to such calculations.
The Company will report any future mineral reserves and resources estimates in accordance with the 2012 JORC Code.
RESOURCE BY COMMODITY
Primary
Commodity Project
Copper
Kalman
Kalman
Lower Cut-Off
0.75% CuEq
(Open Pit)
1.4% CuEq
(Underground)
Tonnes
kt
CuEq
(1) % Cu %
Au
ppm
Ag
ppm
Mo
%
Re
ppm
Co
ppm Fe % P %
SiO2
%
Al2O3
%
TiO2
%
LOI
%
13,300
1.55
0.46
0.26
1.45
0.13
3.37
7,000
2.4
0.9
0.5
2.9
0.2
4.5
Overlander
0.7% Cu
Millennium
1% CuEq (2)
Iron Ore
Mt. Philp
West Pilbara
50% Fe
1,772
3,070
30,510
11,500
1.2
0.4
0.1
445
1400
39
53
0
0
42
7.8
1.6
5.6
0.41
0.3
9.9
(1) - CuEq = Cu + (0.864268 * Au) + (0.011063 * Ag) + (4.741128 * Mo) + (0.064516 * Re)
(2) - CuEq = Cu % + (Co % * 5.9)+(Au ppm * 0.9)+(Ag ppm * 0.01)
COMPETENT PERSONS STATEMENT
The information in this Annual Mineral Resources Statement is based on, and fairly represents information and supporting
documentation reviewed by Mr Mark Whittle, a Competent Person who is a member of the AusIMM and a consultant to the
company. Mr Whittle has sufficient experience which is relevant to the style of mineralisation and type of deposits under
consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of
the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (2004 JORC Code) and
the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (2012
JORC Code). Mr Whittle consents to the inclusion in the report of the matters based on this information in the form and
context in which it appears.
HAMMER METALS LIMITED ANNUAL REPORT 2018 27
TENEMENT INTERESTS AT END OF SEPTEMBER 2018
MT DOCKERELL MINING PTY LTD
Lease
EPM 18084
EPM 13870
EPM 14232
EPM 15972
EPM 16726
EPM 16987
EPM 17762
EPM 18116
EPM 25369
EPM 25425
EPM 25486
EPM 25523
EPM 25666
EPM 25686
EPM 25777
EPM 25997
EPM 26128
EPM 26172
EPM 26306
EPM 26392
EPM 26474
EPM 26511
EPM 26628
EPM 26994
EPM 26809
EPM 26902
EPM 26904
EPM 27018
Lease Name
Dronfield
Pelican
Trafalgar
Pilgrim South
Malbon
Devoncourt
Trekelano
Malbon #2
Rats and Mice
Big Hope
Scalper
Ballara Fault
Hawk
Pilgrim Fault
Lake Corella
Petrogold
Undaunted
Brown Eye
Duchess North
Python
Enterprise
Sling Shot
Argylla
Mt Philp
Rosebud
Marriage
Jady Jenny
Dingo Creek
Lease Status
Interest
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Application
Application
Application
Application
Application
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
28 HAMMER METALS LIMITED ANNUAL REPORT 2018
Lease
E08/1997
EPM 12205
EPM 14019
EPM 14022
EPM 14467
EPM 19783
EPM 19784
EPM 25145
EPM 25866
EPM 25867
EPM 25892
EPM 26126
EPM 26127
EPM 26130
EPM 26512
EPM 26809
Lease
ML 2512
ML 2761
ML 2762
ML 7506
ML 7507
MULGA MINERALS PTY LTD
Lease Name
West Pilbara
Cloncurry
South Mary K
North Mary K
Mt Frosty
Malbon West #1
Malbon West #2
Green Creek
Malbon
Mt Jasper
Pearce’s Bore
Cathay
Resolve
El Questro
Black Angel
Malbon South
Lease Status
Interest
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Application
Application
100%
100%
100%
100%
51%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
ELEMENT MINERALS AUSTRALIA PTY LTD
Lease Name
Rita Margaret
This Time Maybe
Federal
Millennium 1
Millennium 2
Lease Status
Interest
Granted
Granted
Granted
Granted
Granted
100%
100%
100%
100%
100%
HAMMER METALS LIMITED ANNUAL REPORT 2018 29
DIRECTORS’ REPORT
THE DIRECTORS PRESENT THEIR REPORT TOGETHER WITH THE FINANCIAL REPORT OF HAMMER
METALS LIMITED (“THE COMPANY”, “HAMMER”) AND OF THE GROUP, COMPRISING THE COMPANY
AND ITS SUBSIDIARIES, FOR THE YEAR ENDED 30 JUNE 2018 AND THE AUDITOR’S REPORT
THEREON.
1. DIRECTORS
THE DIRECTORS AT ANY TIME DURING OR SINCE THE END OF THE FINANCIAL YEAR ARE:
RUSSELL DAVIS
EXECUTIVE CHAIRMAN
(APPOINTED 13 JANUARY 2014)
ALEXANDER HEWLETT
EXECUTIVE DIRECTOR
(APPOINTED 26 JUNE 2013)
BSc (Honours) MBA MAusIMM, MAICD
BSc MAusIMM
Russell Davis is a Geologist with over 30 years’ experience
in the mineral resources business. He has worked on the
exploration and development of a range of commodities
for a number of international and Australian companies,
holding senior technical and corporate positions including
Chief Mine Geologist, Exploration Manager and Managing
Director.
Mr Davis was a founding Director of Gold Road Resources
Limited and also Syndicated Metals Limited where he was
Managing Director from December 2007 to March 2012. Mr
Davis has been a Director of Hammer Metals (Australia) Pty
Ltd since its inception in 2012.
Alexander Hewlett is a Geologist graduating from the
University of Western Australia. Mr Hewlett worked as
a resource-modelling geologist for CSA Global, before
accepting management positions in ASX listed explorers
including Managing Director of US Nickel Ltd and
Chairperson of Groote Resources Ltd (now Northern
Manganese Limited). Mr Hewlett was employed as a
consultant for a New York resource fund working as an
analyst.
Mr Hewlett is highly skilled at project identification and
acquisition and has a flair for company and investor
communications. He has raised significant funds for both
domestic and international projects in the mining and
exploration sector. Mr Hewlett has also acquired packaged
and vended project portfolio’s into ASX listed companies
including – White Star Resources, Groote Resources and
Spitfire Resources as well as identifying and acquiring
projects for US Nickel (later Kalgoorlie Mining Company).
Mr Hewlett is a member of the Australasian Institute of
Mining and Metallurgy and been a Director of Hammer
Metals (Australia) Pty Ltd since its inception in 2012. Mr
Hewlett is also a director of ASX-listed companies Spectrum
Metals Limited and Black Cat Syndicate Limited.
30 HAMMER METALS LIMITED ANNUAL REPORT 2018
NADER EL SAYED
SIMON BODENSTEINER
INDEPENDENT NON-EXECUTIVE DIRECTOR
(APPOINTED 26 JUNE 2013)
INDEPENDENT NON-EXECUTIVE DIRECTOR
(APPOINTED 8 SEPTEMBER 2015)
B.Comm, MA, CA
MSc
Nader El Sayed holds a Bachelor of Commerce (Banking
& Finance), Masters (Accounting) and is a member of
the Australian Institute of Chartered Accountants. Mr El
Sayed is currently the Chief Executive Officer of Multiplant
Holdings, a mining and civil services business based in
Western Australia. Mr El Sayed’s previous roles include
holding a senior management position with KPMG providing
assurance, capital markets and other advisory services to
key Australian and international resource companies. Mr
El Sayed brings a wealth of risk management, corporate
governance, strategic and financial experience to the Board.
Mr El Sayed is also a director of Spectrum Metals Limited.
Simon Bodensteiner, previously Chief Mining Engineer
for major shareholder Deutsche Rohstoff AG, a Germany
based resource and investment company. He is an
experienced mining professional holding a Masters
Degree in Mining Engineering and has previously held
operational and senior technical positions at several
Rio Tinto operations across Australia. Before joining
Deutsche Rohstoff, he worked as a consultant for The
Boston Consulting Group. Mr Bodensteiner brings
significant bulk and selective mining experience from
underground and open pit operations to the Board.
HAMMER METALS LIMITED ANNUAL REPORT 2018 31
DIRECTORS’ REPORT (CONTINUED)
2. DIRECTORSHIPS OF OTHER LISTED COMPANIES
Directorships of other ASX listed companies held by Directors in the 3 years immediately before the end of the financial year
are as follows:
Name
Russell Davis
Company
Period of Directorship
Gold Road Resources Ltd
May 2004 – June 2016
Alexander Hewlett
Spectrum Rare Earths Limited
March 2017 – to date
Nader El Sayed
Spectrum Rare Earths Limited
October 2017 – to date
Black Cat Syndicate Limited
January 2018 – to date
Simon Bodensteiner
None
-
3. COMPANY SECRETARY
Mark Pitts – Company Secretary (appointed 13 August 2010)
B.Bus, FCA
Mr Pitts is a Chartered Accountant with over 25 years’ experience in statutory reporting and business administration. He
has been directly involved with, and consulted to a number of public companies holding senior financial management
positions. Mr Pitts is a Partner in the corporate advisory firm Endeavour Corporate providing secretarial support, corporate
and compliance advice to a number of ASX listed public companies.
4. DIRECTORS’ MEETINGS
The number of Directors’ meetings held and the number of meetings attended by each of the Directors of the Company
during their term in office in the financial year is as follows.
Director
Mr R Davis
Mr A Hewlett
Mr N El Sayed
Mr S Bodensteiner
Meetings held
Meetings attended
6
6
6
6
5
6
6
5
The Company does not have any committees. Matters usually considered by an audit, remuneration or nomination
committee were dealt with by the whole Board during regular Board meetings.
5. PRINCIPAL ACTIVITY
The principal activity of the Group during the course of the financial year was mineral exploration in Australia.
6. OPERATING AND FINANCIAL REVIEW
The Group incurred an after-tax loss for the year of $654,312 (2017: loss $528,328).
CORPORATE:
The following issues of ordinary shares were completed during the year:
• On 17 August 2017 the Company issued 250,000 shares at 4.3 cents per share to acquire tenements;
• On 12 September 2017 the Company completed a private placement of 35,500,000 shares at 3.5 cents per share,
raising $1,242,500;
• On 19 October 2017, the Company allotted 8,553,581 shares at 3.5 cents per share, raising $299,375 before costs,
as part of the Entitlement Issue;
• On 27 October 2017, the Company issued 24,883,515 shares at 3.5 cents per share, raising $870,923 before costs,
representing the shortfall of the Entitlement Issue; and
• On 1 November 2017, the Company issued 1,428,571 shares to consultants in lieu of fees of $50,000, at 3.5 cents
per share.
32 HAMMER METALS LIMITED ANNUAL REPORT 2018
DIRECTORS’ REPORT (CONTINUED)
Subsequent to the year end, the Company raised $806,776 (before costs) through a non-renounceable rights issue of
161,355,200 options. The offer was completed on the basis of 3 options for every 5 shares held, and the options were issued
for 0.5 cents per option. The options issued under the offer are exercisable at 3 cents per share on or before 30 September
2020.
The following options were granted during the period:
•
•
2,412,798 options with an exercise price of $0.07 and an expiry date of 31 August 2020 were granted on 11
September 2017
1,500,000 options with an exercise price of $0.07 and an expiry date of 30 November 2019 were granted on 1
December 2017
The following options expired during the period:
•
•
•
•
•
•
8,338,334 options with an exercise price of $0.10 expired on 30 July 2017
500,000 options with an exercise price of $0.10 expired on 6 August 2017
1,000,000 options with an exercise price of $0.10 expired on 11 September 2017
7,100,000 options with an exercise price of $0.14 expired on 30 November 2017
1,000,000 options with an exercise price of $0.10 expired on 30 November 2017
3,811,953 options with an exercise price of $0.15 expired on 6 February 2018
No options have expired subsequent to the end of the financial year.
No options were exercised during the financial year or up to the date of this report.
EXPLORATION ACTIVITIES:
The Group is focused on discovering large iron oxide copper-gold (IOCG) deposits of the Ernest Henry style (approximately
220 million tonnes at 1.1% Cu and 0.5g/t Au) within its strategic Mount Isa project area in Northwest Queensland.
The Group’s tenure covers an area of approximately 3000km2 in the central part of this world-class mining district.
During the past year programs of geological mapping, geochemical sampling, airborne and ground based geophysical
surveys and RC and diamond drilling were undertaken at several prospects.
High grade copper and gold mineralisation was intercepted by several programs of RC and diamond drilling at the Jubilee
project in joint venture with MIM Limited (a Glencore subsidiary). In addition, some of the highest-grade cobalt intercepts
to date were returned from diamond drilling at the Millennium Cobalt Project in joint venture with TSX listed Global Energy
Metals Corporation (GEMC). Drill core samples have now been collected from both projects for metallurgical test work.
In late June 2018 the Company announced the proposed sale of the Millennium project and several other exploration stage
cobalt targets to GEMC - a focused cobalt explorer and developer. Hammer will retain exposure to the Millennium and the
other projects through a significant shareholding in GEMC.
Active targeting and ground based exploration activities continued during the year on Hammer’s 100%-owned tenure with
drilling programs at Elaine, Kalman West, Hammertime, Pharaoh North and Serendipity. A new discovery was also made
at Perentie within the Dronfield project area. Outcropping high grade copper and gold mineralisation has been located at
surface at several localities at Perentie and further field mapping and rock chip sampling programs are currently underway
to better define these targets.
In June 2018 it was announced that Hammer and Newmont Exploration Australia Pty Ltd had reached a negotiated
conclusion to the Mt Isa Farm-In and Joint Venture Agreement that had commenced in December 2015 over the Overlander,
Even Steven and Dronfield IOCG targets. Hammer retained a 100% interest in these highly prospective target areas and is
seeking new partners to assist with advancing exploration on these targets and the Mount Isa Project as a whole.
HAMMER METALS LIMITED ANNUAL REPORT 2018 33
DIRECTORS’ REPORT (CONTINUED)
Following a period of successful tenement acquisition and consolidation activities a high resolution magnetic-radiometric
survey was completed over the large Mount Philp Breccia IOCG target areas north of Kalman along with reconnaissance soil
sampling and geological mapping. This area is one of several areas within Hammer’s Mount Isa tenure that is considered
to have significant potential for large copper-gold deposits.
Looking forward Hammer will continue to progress the advanced Jubilee copper-gold project as well as the new Perentie
and Mount Philp Breccia copper-gold targets.
7. DIVIDENDS
No dividends were paid or declared by the Company during the financial year.
8. EVENTS SUBSEQUENT TO BALANCE DATE
Subsequent to the year end, the Company raised $806,776 (before costs) through a non-renounceable rights issue of
161,355,206 options. The offer was completed on the basis of 3 options for every 5 shares held, and the options were issued
for 0.5 cents per option. The options issued under the offer are exercisable at 3 cents per share on or before 30 September
2020. The Company also raised an additional $200,000 through the issue of 6,666,667 shares at $0.03 per share and
4,000,000 free attaching options exercisable at 3 cents per share on or before 30 September 2020. Additionally, 2,305,074
ordinary shares and 236,280 options exercisable at 7 cents on or before 31 August 2020 were issued to the underwriter in
lieu of fees.
Other than the above, there has not been any other matter or circumstance that has arisen after balance date that has
significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of
affairs of the Group in future financial periods.
9. LIKELY DEVELOPMENTS
The Company will continue planning and executing exploration and development work on its existing projects in Australia as
well as projects under review in Australia to complement and expand on existing tenement holdings.
10. DIRECTORS’ INTERESTS
The relevant interest of each Director in the shares and options of the Company as notified by the Directors to the Australian
Securities Exchange in accordance with S205G(1) of the Corporations Act 2001, at the date of this report is as follows:
Director
Mr R Davis
Mr A Hewlett
Mr N El Sayed
Mr S Bodensteiner
Ordinary shares
Options over ordinary shares
11,000,000
5,525,476
19,500
30,568
10,600,000
5,000,000
511,700
518,340
The above table includes indirect shareholdings held by related parties to the directors.
11. ENVIRONMENTAL REGULATIONS
In the course of its normal mining and exploration activities the Group adheres to environmental regulations imposed on
it by the various regulatory authorities, particularly those regulations relating to ground disturbance and the protection of
rare and endangered flora and fauna. The Group has complied with all material environmental requirements up to the date
of this report. The Board believes that the Group has adequate systems in place for the management of its environmental
requirements and is not aware of any breach of these environmental requirements as they apply to the Company.
34 HAMMER METALS LIMITED ANNUAL REPORT 2018
DIRECTORS’ REPORT (CONTINUED)
12. REMUNERATION REPORT – AUDITED
12.1 PRINCIPLES OF COMPENSATION
Remuneration levels for key management personnel and other staff of the Group are competitively set to attract and retain
appropriately qualified and experienced personnel and therefore includes a combination of cash paid and the issuance
of options and rights. Key management personnel comprise the directors of the Company and senior executives for the
Group. Staff remuneration is reviewed annually.
Consequences of performance on shareholder wealth
In establishing performance measures and benchmarks to ensure incentive plans are appropriately structured to align
corporate behaviour with the long-term creation of shareholder wealth, the Board has regard for the stage of development
of the Company’s business, share price, operational and business development achievements (including results of
exploration activities) that are of future benefit to the Company.
Service contracts
Alexander Hewlett - Executive Director:
The Company has entered into a Consulting agreement with Mazza Resources Pty Ltd (an entity of which Mr Hewlett is the
principal) on 22 September 2014. A Consulting fee of $220,000 per annum is payable with a 3-year term. The Company may
terminate the agreement after twelve months by giving six months’ notice or paying the executive an amount equal to six
months of the consulting fee. The executive may, after twelve months from the commencement of the agreement, terminate
this agreement by giving three months’ notice to the Company. Currently the base cash component of remuneration is not
dependent on the satisfaction of any performance condition. In an effort to reduce operating costs, Mr Hewlett has agreed
to a 32% reduction of fees to $150,000. The original term of the Consulting agreement expired on 22 September 2017 and
the Company and Mr Hewlett have agreed to roll the agreement forward on a similar basis and for a term to be agreed.
Russell Davis – Executive Chairman:
The Company has entered into an Executive Service agreement with Mr Davis on 22 September 2014. An Executive service
fee of $220,000 per annum is payable with a 3-year term. The Company may terminate the engagement after twelve
months by giving six months’ notice or paying the executive an amount equal to six months of the executive fee. The
executive may, after twelve months from the commencement of the agreement, terminate this agreement by giving three
months’ notice to the Company. Currently the base cash component of remuneration is not dependent on the satisfaction
of any performance condition. In an effort to reduce operating costs, the Mr Davis has agreed to a 32% reduction of fees
to $150,000. The original term of the Consulting agreement expired on 22 September 2017 and the Company and Mr Davis
have agreed to roll the agreement forward on a similar basis and for a term to be agreed.
Mark Pitts – Company Secretary
Mr Pitts is a Partner in the corporate advisory firm Endeavour Corporate providing secretarial support and corporate and
compliance advice, pursuant to a contract between Endeavour Corporate and the Company. The contract with Endeavour
Corporate has no fixed term with the option of termination by either party with two months’ written notice. Mr Pitts is not
entitled to any termination payments other than for services rendered at time of termination.
HAMMER METALS LIMITED ANNUAL REPORT 2018 35
DIRECTORS’ REPORT (CONTINUED)
Non-executive directors
From 1 July 2013, all non-executive Directors receive a fixed Directors’ fee of $30,000 (plus superannuation benefits of 9.5%)
per annum.
The maximum aggregate amount of non-executive Directors’ fees payable by the Company as approved by the shareholders
at the 2011 annual general meeting is $300,000 per annum.
There are no other items of contingent remuneration to Directors.
Share trading policy
In December 2010, the Group introduced a share trading policy which sets out the circumstances in which directors,
executives, employees and other designated persons may deal with securities held by them in the Company. This
includes any shares or any other securities issued by the Company such as options. The policy includes restriction on
key management personnel and other employees from entering into arrangements that limit their exposure to losses that
would result from share price decreases. Entering into such arrangements has been prohibited by law since 1 July 2011.
36 HAMMER METALS LIMITED ANNUAL REPORT 2018
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HAMMER METALS LIMITED ANNUAL REPORT 2018 37
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DIRECTORS’ REPORT (CONTINUED)
12.3 VALUE OF OPTIONS TO EXECUTIVES
The value of options will only be realised if and when the market price of the Company shares, as quoted on the Australian
Securities Exchange, rises above the Exercise Price of the options. Further details of the options are contained in the
section Share Options below.
12.4 OPTIONS AND RIGHTS OVER EQUITY INSTRUMENTS GRANTED AS COMPENSATION
150,000 options were issued to the Company Secretary during the year. These options are exercisable at $0.07 on or
before 30 November 2019. No options were issued to Directors. No options previously granted as compensation have been
exercised during the year or to the date of this report.
12.5 ANALYSIS OF OPTIONS AND RIGHTS OVER EQUITY INSTRUMENTS GRANTED AS
COMPENSATION
The table below details the vesting profile of the options granted as remuneration to each key management person during
the year. No options were granted as remuneration to key management personnel during the prior year.
Year ended
30 June 2018
Key Management Person
Number
of options
granted
Date granted
% Vested
% Forfeited /
Lapsed
Financial year
in which grant
vested
Mr M Pitts
The fair value of the options issued during the year was determined by reference to the Black-Scholes option pricing model.
15 December 2017
150,000
100%
-
30 June 2018
The key inputs and valuations are summarised as follows:
Underlying security spot price on grant date
Exercise price
Grant date
Expiration date
Life (years)
Volatility
Risk free rate
Dividend Yield
Number of options
Valuation per option
Remaining life (years)
12.6 Option holdings
Options issued to KMP
$0.034
$0.07
15 December 2017
30 November 2019
1.96
86%
1.91%
-
150,000
$0.00937
1.42
The movement during the reporting period in the number of options over ordinary shares in Hammer Metals Limited held,
directly, indirectly or beneficially, by each key management person, including their personally-related entities, is as follows:
Year ended
30 June 2018
Key Management
Person
Mr R Davis
Mr A Hewlett
Mr N El Sayed
Mr S Bodensteiner
Mr M Pitts
Held at
beginning
of period
6,625,000
6,166,667
1,500,000
500,000
500,000
Granted
Purchased
Exercised
Lapsed or
Expired
Held at end
of period
Vested and
exercisable
at end of
period
-
-
-
-
150,000
-
-
-
-
-
-
-
-
-
-
(2,625,000)
4,000,000
4,000,000
(2,166,667)
4,000,000
4,000,000
(1,000,000)
-
-
500,000
500,000
650,000
500,000
500,000
650,000
38 HAMMER METALS LIMITED ANNUAL REPORT 2018
DIRECTORS’ REPORT (CONTINUED)
12.7 EQUITY HOLDINGS AND TRANSACTIONS
No shares were granted to key management personnel during the year as compensation (2017: Nil).
The movement during the reporting period in the number of ordinary shares in Hammer Metals Limited held directly,
indirectly or beneficially, by each key management person, including their personally-related entities (shown on a post-
consolidation basis), is as follows:
Year ended
30 June 2018
Mr R Davis
Mr A Hewlett
Mr N El Sayed
Mr S Bodensteiner
Mr M Pitts
Held at
beginning of
period
8,391,667
5,525,476
19,500
30,568
53,334
Purchases
2,608,333
Sales
-
-
-
-
Held at end of
period
11,000,000
5,525,476
19,500
30,568
53,334
-
-
-
-
-
12.8 KEY MANAGEMENT PERSONNEL TRANSACTIONS
The following table provides the total amount of transactions which have been entered into with related parties for the
relevant financial year exclusive of GST:
Key
management
Person
Mark Pitts
Transaction
Accounting
services
Transaction value year ended
Balance outstanding as at
30 June 2018
$
30 June 2017
$
30 June 2018
$
30 June 2017
$
23,556
33,261
6,488
3,657
The Company paid fees to Endeavour Corporate, a company associated with Mark Pitts, for accounting and financial
reporting services provided to the company.
END OF REMUNERATION REPORT
13. SHARE OPTIONS
Unissued shares under option
At the date of this report unissued ordinary shares of the Company under option are:
Directors’ Options
Employee / Contractor Options
Advisor options
Advisor options
Expiry Date
30 June 2020
30 June 2020
29 June 2019
31 August 2020
Employee / Contractor Options
30 November 2019
Listed HMXOD options
30 September 2020
Exercise price
Number of options
$0.06
$0.06
$0.075
$0.07
$0.07
$0.03
9,000,000
3,800,000
5,000,000
2,676,078
1,500,000
165,355,206
These options do not entitle the holder to participate in any share issue of the Company or any other body corporate.
HAMMER METALS LIMITED ANNUAL REPORT 2018 39
DIRECTORS’ REPORT (CONTINUED)
Shares issued on exercise of options
The Company has not issued ordinary shares as a result of the exercise of options during this year or the previous financial
year.
No shares have been issued since the year end to the date of this report as a result of the exercise of options.
14. INDEMNIFICATION OF OFFICERS AND AUDITORS
The Company has entered into Director and Officer Protection Deeds (Deed) with each Director and the Company Secretary
(officers). Under the Deed, the Company indemnifies the officers to the maximum extent permitted by law and the
Constitution against legal proceedings, damage, loss, liability, cost, charge, expense, outgoing or payment (including legal
expenses on a solicitor/client basis) suffered, paid or incurred by the officers in connection with the officers being an officer
of the Company, the employment of the officer with the Company or a breach by the Company of its obligations under the
Deed.
Also pursuant to the Deed, the Company must insure the officers against liability and provide access to all board papers
relevant to defending any claim brought against the officers in their capacity as officers of the Company.
The Company has paid insurance premiums during the year in respect of liability for any past, present or future Directors,
secretary, officers and employees of the Company or related body corporate. The insurance policy does not contain details
of the premium paid in respect of individual officers of the Company. Disclosure of the nature of the liability cover and the
amount of the premium is subject to a confidentiality clause under the insurance policy.
The Company has not provided any insurance or indemnification for the Auditor of the Company.
15. NON-AUDIT SERVICES
During the year, KPMG, the Company’s auditor provided taxation compliance services in addition to their statutory duties.
16. LEAD AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001
The lead auditor’s independence declaration is set out on page 41 and forms part of the Directors’ report for the financial
year ended 30 June 2018.
17. SIGNIFICANT CHANGES IN STATE OF AFFAIRS
In the opinion of Directors, other than that disclosed elsewhere in this report, there were no other significant changes in the
state of affairs of the Group that occurred during the financial year under review.
This report is made with a resolution of the Directors:
R Davis
Executive Chairman
Perth
28 September 2018
40 HAMMER METALS LIMITED ANNUAL REPORT 2018
AUDITOR’S INDEPENDENCE DECLARATION
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Hammer Metals Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Hammer Metals Limited
for the financial year ended 30 June 2018 there have been:
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
no contraventions of the auditor independence requirements as set out in the Corporations
Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
ii.
i.
To the Directors of Hammer Metals Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Hammer Metals Limited
for the financial year ended 30 June 2018 there have been:
R Gambitta
KPMG
Partner
no contraventions of the auditor independence requirements as set out in the Corporations
Act 2001 in relation to the audit; and
i.
Perth
ii.
no contraventions of any applicable code of professional conduct in relation to the audit.
28 September 2018
KPMG
R Gambitta
Partner
Perth
28 September 2018
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under
Professional Standards Legislation.
HAMMER METALS LIMITED ANNUAL REPORT 2018 41
KPMG, an Australian partnership and a member firm of the KPMG
Liability limited by a scheme approved under
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Professional Standards Legislation.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
Current Assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Total current assets
Non-current assets
Other financial assets
Plant and equipment
Exploration and evaluation expenditure
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Advanced cash call
Total current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Accumulated losses
Total equity
30 June 2018
30 June 2017
Note
$
$
10
11
12
12
13
14
15
16
17
934,045
106,751
454,746
1,495,542
60,000
2,420
11,316,751
11,379,171
12,874,713
273,932
448,007
721,939
721,939
838,027
335,161
359,954
1,533,142
86,250
3,755
9,377,823
9,467,828
11,000,970
132,142
359,954
492,096
492,096
12,152,774
10,508,874
44,907,743
788,885
(33,543,854)
42,655,110
1,230,127
(33,376,363)
12,152,774
10,508,874
The consolidated statement of financial position is to be read in conjunction with the accompanying notes.
42 HAMMER METALS LIMITED ANNUAL REPORT 2018
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
Other income
Marketing expenses
Administrative expenses
Share based payments
Occupancy expenses
Depreciation
Project evaluation and generation expenses
Exploration expenditure written off
Impairment of other financial assets
Other expenses
Result from operating activities
Finance income
Net finance income / (expense)
Loss before income tax
Income tax benefit
Net loss for the year from continuing operations
Note
4
5
14
5
6
8
30 June 2018
$
30 June 2017
$
113,738
(146,544)
(565,933)
(14,054)
(45,255)
(1,335)
-
-
(9,500)
(9,582)
(678,465)
6,794
6,794
(671,671)
17,359
(654,312)
139,940
(75,986)
(493,951)
-
(46,073)
(4,955)
-
(275,699)
-
-
(756,724)
28,784
28,784
(727,940)
199,612
(528,328)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Net change in fair value of financial assets
(18,750)
(11,250)
Other comprehensive loss for the year, net of income tax
(18,750)
(11,250)
Total Comprehensive loss for the year
(673,062)
(539,578)
Loss per share:
Basic and diluted loss per share (cents per share)
9(a)
(0.26)
(0.28)
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the
accompanying notes.
HAMMER METALS LIMITED ANNUAL REPORT 2018 43
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44 HAMMER METALS LIMITED ANNUAL REPORT 2018
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2018
Note
30 June 2018
$
30 June 2017
$
Cash flows from operating activities
Interest received
Rental income received
Fuel rebate received
Cash payments in the course of operations
Net cash used in operating activities
22
Cash flows from investing activities
Payments for exploration expenditure
Cash calls and management fees from farm-in and joint
venture partners
Option fee received
Receipt of research and development grant
Sale of royalty
Proceeds on sale of equipment
Payments for purchase of plant and equipment
Net cash used in investing activities
4
13
Cash flows from financing activities
Proceeds from issue of share capital
Transaction costs from issue of shares
Net cash from financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
10
6,794
3,600
22,086
(624,683)
(592,203)
(2,044,001)
92,384
193,997
123,682
-
30,000
-
(1,603,938)
2,412,798
(120,640)
2,292,158
96,018
838,027
934,045
The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.
28,784
-
-
(830,704)
(801,920)
(2,692,620)
206,515
-
-
30,000
(2,746)
(2,458,851)
2,251,158
(44,454)
2,206,704
(1,054,067)
1,892,094
838,027
HAMMER METALS LIMITED ANNUAL REPORT 2018 45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. REPORTING ENTITY
Hammer Metals Limited (the “Company”) is a company domiciled in Australia. The Company’s registered office is Suite 1,
827 Beaufort Street, Mt. Lawley WA. The consolidated financial statements of the Company for the financial year ended 30
June 2018 comprises the Company and its subsidiaries (together referred to as the “Group”).
The Group is a for profit entity and is primarily is involved in the exploration and extraction of mineral resources.
2. BASIS OF PREPARATION
(A) STATEMENT OF COMPLIANCE
The consolidated financial statements are general purpose financial statements which have been prepared in accordance
with Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board (AASB) and the
Corporations Act 2001. The consolidated financial statements also comply with International Financial Reporting Standards
(IFRS’s) adopted by the International Accounting Standards Board (IASB).
The consolidated financial report was authorised for issue by the Directors on 28 September 2018.
(B) BASIS OF MEASUREMENT
The financial report is prepared on the historical cost basis except for share based payments and available for sale financial
assets which are measured at their fair value. Non-current assets held for sale are measured at the lower of their carrying
amount and fair value less costs to sell.
(C) FUNCTIONAL AND PRESENTATION CURRENCY
The financial report is presented in Australian dollars which is the functional and presentation currency of the Company and
its subsidiaries.
(D) USE OF ESTIMATES AND JUDGEMENTS
Set out below is information about:
• critical judgements in applying accounting policies that have the most significant effect on the amounts recognised
in the financial statements; and
• assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the
next financial year.
Critical judgements
i. Going concern
A key assumption underlying the preparation of the financial statements is that the Group will continue as a going
concern. An entity is a going concern when it is considered to be able to pay its debts as and when they are due,
and to continue in operation without any intention or necessity to liquidate or otherwise wind up its operations. A
significant amount of judgement has been required in assessing whether the Group is a going concern, as set out
in note 2(f).
ii. Ore Reserves and Mineral Resources
Economically recoverable reserves represent the estimated quantity of product in an area of interest that can
be expected to be profitably extracted, processed and sold under current and foreseeable economic conditions.
The Group determines and reports ore reserves and mineral resources under the standards incorporated in the
Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves, 2012 edition (the JORC
Code). The determination of ore reserves or mineral resources includes estimates and assumptions about a range
of geological, technical and economic factors, including: quantities, grades, production techniques, recovery rates,
production costs, transport costs, commodity demand, commodity prices and exchange rates. Changes in ore
reserves and mineral resources impact the assessment of recoverability of exploration and evaluation assets,
provisions for site restoration and the recognition of deferred tax assets, including tax losses.
46 HAMMER METALS LIMITED ANNUAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. BASIS OF PREPARATION (continued)
(D) USE OF ESTIMATES AND JUDGEMENTS (CONTINUED)
Estimates and assumptions
iii. Exploration and evaluation assets
Determining the recoverability of exploration and evaluation expenditure capitalised in accordance with
the Group’s accounting policy (refer note 3(n)), requires estimates and assumptions as to future events and
circumstances, in particular, whether successful development and commercial exploitation, or alternatively sale,
of the respective areas of interest will be achieved. Critical to this assessment is estimates and assumptions
as to ore reserves (refer note 2(d)(ii)), the timing of expected cash flows, exchange rates, commodity prices and
future capital requirements. Changes in these estimates and assumptions as new information about the presence
or recoverability of an ore reserve becomes available, may impact the assessment of the recoverable amount
of exploration and evaluation assets. If, after having capitalised the expenditure under accounting policy 3(n), a
judgement is made that recovery of the expenditure is unlikely, an impairment loss is recorded in the statement of
profit and loss and other comprehensive income in accordance with accounting policy 3(f). The carrying amounts
of exploration and evaluation assets are set out in note 14.
iv. Impairment of assets
The recoverable amount of each non-financial asset is determined as the higher of the value-in-use and fair value
less costs to sell, in accordance with the Group’s accounting policy note 3(f). Determination of the recoverable
amount of an asset based on a discounted cash flow model, requires the use of estimates and assumptions,
including: the appropriate rate at which to discount the cash flows, the timing of the cash flow and the expected life
of the relevant area of interest, exchange rates, commodity prices, ore reserves, future capital requirements and
future operation performance. Changes in these estimates and assumptions impact the recoverable amount of the
asset, and accordingly could result in an adjustment to the carrying amount of that asset.
v. Measurement of fair values
When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible.
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation
techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly (i.e. as price) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable
inputs)
If the inputs used to measure the fair value of an asset or a liability are categorised in different levels of the fair
value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value
hierarchy as the lowest level that is significant to the entire measurement.
HAMMER METALS LIMITED ANNUAL REPORT 2018 47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. BASIS OF PREPARATION (continued)
(E) NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED
The following standards, amendments to standards and interpretations have been identified as those which may impact
the entity in the period of initial application. They are not yet effective and have not been applied in preparing this financial
report.
• AASB 9 Financial Instruments includes revised guidance on the classification and measurement requirements of
financial liabilities and assets, including a new expected credit loss model for calculating impairment, and general hedge
accounting requirements. AASB 9 is effective for annual periods beginning on or after 1 January 2018 with early adoption
permitted. The adoption of AASB 9 is not expected to have a material impact on the Group’s financial assets or financial
liabilities.
• AASB 15 Revenue from Contracts with Customers provides a single, principles based five-step model to be applied to
all contracts with customers. Guidance is provided for determining whether, how much and when revenue is recognised.
New disclosures about revenue are also introduced. AASB 15 is effective for annual periods beginning on or after 1
January 2018 with early adoption permitted. The impact on the Group’s revenue recognition of the adoption of AASB 15 is
not expected to have a material impact.
• AASB 16 Leases provides a new lessee accounting model requiring the recognition of assets and liabilities for all leases
with a term greater than 12 months, unless the underlying asset is of low value. It requires the lessee to recognise
a right-of-use asset, representing the rights to use the underlying lease asset and a lease liability representing the
obligation of lease payments. AASB 16 is effective for annual periods beginning on or after 1 January 2019 with early
adoption permitted. The impact on the Group’s financial assets and financial liabilities of the adoption of AASB 16 has yet
to be determined and will depend upon the leases in place on transition.
• AASB 2016-5 Amendments to Australian Accounting Standards - Classification and Measurement of Share-based
Payment Transactions. The standard makes amendments to AASB 2 Share-based Payment. The amendments address
the accounting for the effects of vesting and non-vesting conditions and the accounting for a modification to the terms
and conditions of a share-based payment that changes the classification of the transaction from cash-settled to equity-
settled, is effective for annual reporting periods beginning on or after 1 January 2018 and it is not expected that this will
have a significant impact on the consolidated financial statements.
(F) GOING CONCERN
The financial report has been prepared on the going concern basis, which contemplates the continuity of normal business
activity and the realisation of assets and the settlement of liabilities in the normal course of business.
For the year ended 30 June 2018, the Group has incurred a consolidated loss before tax of $671,671 and net cash outflows
from operating and investing activities of $2,196,140. As at 30 June 2018 the Group had $934,045 in cash and cash
equivalents and net current assets of $773,603.
As announced on the 12 September 2018, the Company completed a non-renounceable rights issue of 161,355,200 options,
raising $806,776 before costs of the offer. Furthermore, the Company has agreed to issue an additional 6,666,667 shares at
$0.03 per share to raise an additional $200,000 as a share placement to the underwriter of the rights issue.
Whilst not immediately required, the Group will need to raise additional funds to meet its ongoing obligations and tenement
expenditure commitments and subject to the results of its ongoing exploration activities, expand or accelerate its work
programs.
The Group’s capacity to raise additional funds will be impacted by the success of the ongoing exploration activities and
market conditions. Additional sources of funding available to the Group include a capital raising via preferential issues to
existing shareholders, placements to new and existing investors or through farm in or similar arrangements.
If necessary the Group can delay exploration expenditure and the directors can also institute cost saving measures to
further reduce corporate and administrative costs.
However, should the above planned activities to raise or conserve capital not be successful, there exists a material
uncertainty surrounding the Group’s ability to continue as a going concern and, therefore, realise its assets and dispose of
its liabilities in the ordinary course of business and at the amounts stated in the financial report.
48 HAMMER METALS LIMITED ANNUAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The Group has consistently applied the accounting policies set out in note 3 to all periods presented in these consolidated
financial statements.
(A) BASIS OF CONSOLIDATION
i. Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power over
the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date
on which control commences until the date on which control ceases.
ii. Investments in associates
Associates are those entities in which the Group has significant influence, but not control or joint control, over the
financial and operating policies. Significant influence is presumed to exist when the Group holds between 20 percent
and 50 percent of the voting power of another entity.
Investments in associates are accounted for using the equity method and are recognised initially at cost. The cost of
the investments includes transaction costs.
The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income
of equity accounted investees, after adjustments to align the accounting policies with those of the Group, from the date
that significant influence commences until the date that significant influence ceases.
When the Group’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of the
investment, including any long-term interest that form part thereof, is reduced to zero, and the recognition of further
losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the
investee.
iii. Joint arrangements
The Group classifies its interests in joint arrangements as either joint operations or joint ventures depending on the
Group’s rights to the assets and obligation for the liabilities of the arrangements. When making this assessment, the
Group considers the structure of the arrangements, the legal form of any separate vehicles, the contractual terms of
the arrangements and other facts and circumstances.
iv. Transactions eliminated on consolidation
Intragroup balances, and any unrealised gains and losses or income and expenses arising from intragroup
transactions, are eliminated in preparing the consolidated financial statements.
v. Business combinations
Business combinations are accounted for by applying the acquisition method.
For every business combination, the Group identifies the acquirer, which is the combining entity that obtains control
of the other combining entities or businesses. The Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power over
the entity. The acquisition date is the date on which control is transferred to the acquirer. Judgement is applied in
determining the acquisition date and determining whether control is transferred from one party to another.
vi. Contingent liabilities
A contingent liability of the acquiree is assumed in a business combination only if such a liability represents a present
obligation and arises from a past event, and its fair value can be measured reliably.
vii. Non-controlling interest
The Group measures any non-controlling interest at its proportionate interest in the identifiable net assets of the
acquiree.
HAMMER METALS LIMITED ANNUAL REPORT 2018 49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(B) FOREIGN CURRENCY
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to
Australian dollars at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation
are recognised in the statement of profit and loss and other comprehensive income. Non-monetary assets and
liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate
at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated
at fair value are translated to Australian dollars at foreign exchange rates ruling at the dates the fair value was
determined.
The assets and liabilities of foreign operations, including fair value adjustments arising on consolidation, are
translated to Australian dollars at foreign exchange rates ruling at the balance sheet date. The revenues and
expenses of foreign operations are translated to Australian dollars at rates approximating the foreign exchange rates
ruling at the dates of the transactions. Foreign exchange differences arising on retranslation are recognised directly
in a separate component of equity.
(C) PLANT AND EQUIPMENT
Items of plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses (see
accounting policy 3(f)). Depreciation is charged to the statement of profit and loss and other comprehensive income
on a straight-line basis over their estimated useful lives. The estimated useful lives in the current and comparative
periods are as follows:
•
office equipment
3 to 4 years
The residual value, if significant, is reassessed annually.
(D) FINANCIAL INSTRUMENTS
Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that are
either designated in this category or not classified in any of the other categories. They are included in current assets
unless management intends to hold the investment for greater than twelve months from the balance sheet date.
Purchases and sales of investments are recognised on trade-date – the date on which the Group commits to purchase
or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not
carried at fair value through profit or loss. Financial assets are derecognised when the rights to receive cash flows
from the financial assets have expired or have been transferred and the Group has transferred substantially all the
risks and rewards of ownership.
Available-for-sale financial assets are subsequently carried at fair value. Unrealised gains and losses arising from
changes in the fair value of non-monetary securities classified as available-for-sale are recognised in equity in the
fair value reserve. When securities classified as available-for-sale are sold or impaired, the accumulated fair value
adjustments are included in the statement of profit and loss and other comprehensive income as gains and losses
from investment securities.
The fair values of quoted investments are based on quoted bid prices at reporting date.
(E) CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or
less. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are
included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
50 HAMMER METALS LIMITED ANNUAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(F) IMPAIRMENT
Financial assets
A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired.
A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative
effect on the estimated future cash flows of that asset. For an investment in an equity security, a significant or prolonged
decline in its fair value below its cost is objective evidence of impairment. The Group considers a decline of 20% to be
significant and a period of nine months to be prolonged.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its
carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate.
An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its fair value.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are
assessed collectively in groups that share similar credit risk characteristics.
All impairment losses are recognised in profit or loss. Any cumulative loss in respect of an available-for-sale financial asset
recognised previously in equity is transferred to profit or loss, calculated as the difference between the acquisition cost and
the current fair value, less any impairment loss recognised previously in profit or loss.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss
was recognised. For financial assets measured at amortised cost and available-for-sale financial assets that are debt
securities, the reversal is recognised in profit or loss. For available-for-sale financial assets that are equity securities, the
reversal is recognised in equity.
Non-financial assets
The carrying amounts of the Company’s non-financial assets, other than deferred tax assets (see accounting policy 3(k)) are
reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists
then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are
not yet available for use, the recoverable amount is estimated each year at the same time.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs
to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For
the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-
generating unit”). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to
cash-generating units that are expected to benefit from the synergies of the combination.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable
amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating
units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying
amount of the other assets in the unit (group of units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in
prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An
impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An
impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
(G) SHARE CAPITAL
Ordinary shares
Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax
benefit.
(H) INTEREST BEARING BORROWINGS
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial
recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption
value being recognised in the statement of profit and loss and other comprehensive income over the period of the
borrowings on an effective interest basis.
HAMMER METALS LIMITED ANNUAL REPORT 2018 51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(I) EMPLOYEE BENEFITS
Defined contribution plans
Obligations for contributions to defined contribution pension plans are recognised as an expense in the statement of profit
and loss and other comprehensive income as incurred.
Share based payment transactions
The share option programme allows Company and Group employees to acquire shares of the Company. The fair value of
options granted is recognised as an employee expense with a corresponding increase in equity.
The fair value is measured at grant date and spread over the period during which the employees become unconditionally
entitled to the options. The fair value of the options granted is measured using the Black Scholes option pricing model,
taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense
is adjusted to reflect the actual number of share options that vest except where forfeiture is only due to share prices not
achieving the threshold for vesting.
Wages, salaries, annual leave, sick leave and non-monetary benefits
Liabilities for employee benefits for wages, salaries, annual leave and sick leave represent present obligations resulting
from employees’ services provided to reporting date, calculated at undiscounted amounts based on remuneration wage and
salary rates that the Group expects to pay as at reporting date including related on-costs, such as, workers compensation
insurance and payroll tax.
(J) FINANCE INCOME AND EXPENSES
Net finance income
Net finance income comprises interest payable on borrowings calculated using the effective interest method, interest
receivable on funds invested and realised foreign exchange gains and losses. Interest income is recognised in the statement
of profit and loss and other comprehensive income as it accrues, using the effective interest method.
(K) INCOME TAX
Income tax on the statement of profit and loss and other comprehensive income for the periods presented comprises
current and deferred tax. Income tax is recognised in the statement of profit and loss and other comprehensive income
except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted
at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The
following temporary differences are not provided for: the initial recognition of assets or liabilities in a transaction that is not
a business combination and that affects neither accounting nor taxable profit or loss and differences relating to investments
in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax
provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using
tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against
which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related
tax benefit will be realised.
The Company and its Australian resident wholly owned subsidiaries adopted the tax consolidation legislation with effect
from 1 July 2014 and are therefore taxed as a single entity from that date. Hammer Metals Ltd is the head entity within the
tax-consolidated group. Any current tax liabilities (or assets) and deferred tax assets arising from unused tax losses of the
subsidiaries are assumed by the head entity in the tax-consolidated group.
52 HAMMER METALS LIMITED ANNUAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(L) PROVISIONS
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of
a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is
material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and, when appropriate, the risks specific to the liability.
A provision for site restoration in respect of contaminated and disturbed land, and the related expense, is recognised when
the land is contaminated or disturbed. Such activities include dismantling infrastructure, removal and treatment of waste
material, and land rehabilitation, including restoring, topsoiling and revegetation of the disturbed area.
(M) SEGMENT REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Board of Directors of the Company.
(N) EXPLORATION AND EVALUATION EXPENDITURE
Exploration for and evaluation of mineral resources is the search for mineral resources after the Group has obtained legal
rights to explore in a specific area, as well as the determination of the technical feasibility and commercial viability of
extracting the mineral resources. Accordingly, exploration and evaluation expenditures are those expenditures incurred by
the Group in connection with the exploration for and evaluation of minerals resources before the technical feasibility and
commercial viability of extracting mineral resources are demonstrable.
Accounting for exploration and evaluation expenditure is assessed separately for each area of interest. An area of interest
is an individual geological area which is considered to constitute a favourable environment for the presence of a mineral
deposit or has been proved to contain such a deposit.
Expenditure incurred on activities that precede exploration and evaluation of mineral resources, including all expenditure
incurred prior to securing legal rights to explore an area, is expensed as incurred. For each area of interest, the expenditure
is recognised as an exploration and evaluation asset where the following conditions are satisfied:
a) The rights to tenure of the area of interest are current; and
b) At least one of the following conditions is also met:
i.
ii.
The expenditure is expected to be recouped through successful development and commercial
exploitation of an area of interest, or alternatively by its sale; and
Exploration and evaluation activities in the area of interest have not, at reporting date, reached a stage
which permits a reasonable assessment of the existence or otherwise ‘economically recoverable
reserves’ and active and significant operations in, or in relation to, the area of interest are continuing.
Economically recoverable reserves are the estimated quantity of product in an area of interest that can
be expected to be profitably extracted, processed and sold under current and foreseeable conditions.
Exploration and evaluation assets include
• Acquisition of rights to explore;
• Topographical, geological, geochemical and geophysical studies;
• Exploratory drilling, trenching, and sampling and
• Activities in relation to evaluating the technical feasibility and commercial viability of extracting the mineral resource.
General and administrative costs are allocated to, and included in, the cost of exploration and evaluation assets only to the
extent that those costs can be related directly to the operational activities in the area of interest to which the exploration and
evaluation assets relate. In all other instances, these costs are expensed as incurred.
Exploration and evaluation assets are transferred to Development Assets once technical feasibility and commercial viability
of an area of interest is demonstrable. Exploration and evaluation assets are assessed for impairment, and any impairment
loss is recognised prior to being reclassified.
The carrying amount of the exploration and evaluation assets is dependent on successful development and commercial
exploitation, or alternatively, sale of the respective area of interest.
HAMMER METALS LIMITED ANNUAL REPORT 2018 53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(N) EXPLORATION AND EVALUATION EXPENDITURE (CONTINUED)
Impairment testing of exploration and evaluation assets
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical feasibility and
commercial viability or facts and circumstances suggest that the carrying amount exceeds the recoverable amount.
Exploration and evaluation assets are tested for impairment when any of the following facts and circumstances exist:
•
The term of exploration licence in the specific area of interest has expired during the reporting period or will
expire in the near future, and is not expected to be renewed;
• Substantive expenditure on further exploitation for and evaluation of mineral resources in the specific area are
not budgeted or planned;
• Exploration for and evaluation of mineral resources in the specific area have not led to the discovery of
commercially viable quantities of mineral resources and the decision was made to discontinue such activities in
the specified are; or
• Sufficient data exists to indicate that, although a development in the specific area is likely to proceed, the
carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful
development of by sale.
Where a potential impairment is indicated, an assessment is performed for each cash generating unit which is no larger
than the area of interest. The Group performs impairment testing in accordance with accounting policy 3(f).
Farm-in arrangements (in the exploration and evaluation phase)
For exploration and evaluation asset acquisitions (farm-in arrangements) in which the Group has made arrangements to
fund a portion of the selling partner’s (farmor’s) exploration and/or future development expenditures (carried interests),
these expenditures are reflected in the financial statements as and when the exploration work progresses.
Farm-out arrangements (in the exploration and evaluation phase)
The Group does not record any expenditure made by the farmee on its account. It also does not recognise any gain or loss
on its exploration and evaluation farm-out arrangements but redesignates any costs previously capitalised in relation to the
whole interest as relating to the partial interest retained.
Monies received pursuant to farm-in agreements are treated as a liability (advanced cash call) on receipt and until such
time as the relevant expenditure is incurred.
(O) NON-CURRENT ASSETS HELD FOR SALE OR DISTRIBUTION
Non-current assets, or disposal groups comprising assets and liabilities, that are expected to be recovered primarily
through sale or distribution rather than through continuing use, are classified as held for sale or distribution. Immediately
before classification as held for sale or distribution, the assets or components of a disposal group, are remeasured in
accordance with the Groups’ accounting policies. Thereafter, generally the assets, or disposal group, are measured at
the lower of their carrying value amount and fair value less cost to sell. Any impairment loss on a disposal group first is
allocated to goodwill, and then to remaining assets and liabilities on a pro rata basis, except that no loss is allocated to
inventories, financial assets, deferred tax assets which continue to be measured in accordance with the Group’s accounting
policy. Impairment losses on initial classification as held for sale or distribution and subsequent gains or losses on re-
measurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss.
54 HAMMER METALS LIMITED ANNUAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(P) DISCONTINUED OPERATIONS
Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as
held for sale or distribution (see note 3(o)), if earlier.
(Q) GOVERNMENT GRANTS
The Group recognises the refundable research and development tax incentive (received under the tax legislation passed in
2011) as a government grant. This incentive is refundable to the Group regardless of whether the Group is in a tax payable
position and is presented by deducting the grant from the carrying amount of the related exploration asset. Government
grants are recognised when there is reasonable assurance that (a) the Group will comply with the conditions attaching to
them; and (b) the grants will be received; they are then recognised in profit or loss on a systematic basis over the useful life
of the asset.
4.
OTHER INCOME
Management fee from farm-in partners
Rental income
Sale of royalty
5.
RESULT FROM OPERATING ACTIVITIES
Net loss for the year before tax has been arrived at after the charging
the following expenses:
30 June 2018
$
30 June 2017
$
110,138
3,600
-
113,738
109,940
-
30,000
139,940
30 June 2018
$
30 June 2017
$
Depreciation of plant and equipment
1,335
4,955
Salary and wages
Superannuation expense
Share based payments
Other employment costs
Total employee costs
6.
FINANCE INCOME AND FINANCE COSTS
Recognised in loss for the year:
Interest income
Net finance income
105,000
5,609
14,054
10,948
135,611
60,000
5,700
-
9,088
74,788
30 June 2018
$
30 June 2017
$
6,794
6,794
28,784
28,784
HAMMER METALS LIMITED ANNUAL REPORT 2018 55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7.
AUDITORS’ REMUNERATION
Auditors of the Company - KPMG
Audit services:
Audit and review of financial reports
Non-audit services:
Taxation compliance services
8.
INCOME TAX
(A) INCOME TAX BENEFIT
Current tax
Deferred tax
Total income tax benefit
Numerical reconciliation of income tax benefit to pre-tax accounting loss:
Loss before income tax
Income tax benefit using the Company’s domestic tax rate of 27.5% (2017:
30%)
Adjusted for:
Non-deductible expenses
Temporary differences and tax losses not recognised
Research and development income tax benefit
Prior year tax losses recognised for exploration development incentive
credits distributed to shareholders
Income tax benefit
(B) UNRECOGNISED DEFERRED TAX ASSETS
Deferred tax assets have not been recognised in respect of the following
items:
Temporary timing differences related to:
Prepayments
Investments
Property, plant and equipment
Accrued expenses and provisions
Capital raising costs
Income tax losses
(C) RECOGNISED DEFERRED TAX ASSETS & LIABILITIES
Temporary timing differences related to:
Other financial assets
Exploration and evaluation expenditure
Income tax losses
30 June 2018
$
30 June 2017
$
41,322
38,341
23,319
64,641
17,750
56,091
30 June 2018
$
30 June 2017
$
17,359
-
17,359
199,612
-
199,612
(671,671)
(184,710)
(727,940)
(218,382)
1,345
183,365
17,359
1,258
217,124
-
-
199,612
17,359
199,612
-
14,438
2,083
(2,635)
77,108
10,434,781
10,525,775
5,915
7,875
3,252
7,998
70,309
7,723,344
7,818,693
(3,112,107)
3,112,107
-
(2,813,347)
2,813,347
-
The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in
respect of these items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits from.
During the previous financial year, the Group participated in the Federal Government’s Exploration Development Incentive Scheme (“EDI”) which
entitled the Group to distribute EDI exploration credits to eligible shareholders. EDI credits totalling $199,612 were distributed on 28th June 2017
and the Group’s carried forward losses reduced accordingly.
56 HAMMER METALS LIMITED ANNUAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8.
INCOME TAX (continued)
(D) MOVEMENT OF TEMPORARY DIFFERENCES RECOGNISED DURING THE YEAR ENDED 30 JUNE 2018:
Other financial assets
Exploration and evaluation
expenditure
Balance 1
July 2017
Profit or
Loss
-
(2,813,347)
(298,760)
Carried-forward tax losses
2,813,347
298,760
-
-
Other
comprehensive
income
Equity
Balance 30 June
2018
-
-
-
(3,112,107)
3,112,107
-
-
-
(E) MOVEMENT OF TEMPORARY DIFFERENCES RECOGNISED DURING THE YEAR ENDED 30 JUNE 2017:
Other
comprehensive
income
Equity
Balance 30 June
2017
Other financial assets
Exploration and evaluation
expenditure
Balance 1
July 2016
Profit or
Loss
-
(2,116,517)
(696,830)
Carried-forward tax losses
2,116,517
696,830
-
-
-
-
-
-
-
-
(2,813,347)
2,813,347
-
30 June 2018
$
30 June 2017
$
(0.26) cents
(0.28) cents
9.
LOSS PER SHARE
(a) Basic and dilutive loss per share calculated using the weighted average
number of fully paid ordinary shares on issue at the reporting date.
Options disclosed in Note 16(b) are potential ordinary shares which are
considered anti-dilutive, therefore diluted earnings per share are the
same as basic earnings per share.
(b) Weighted average number of shares used in calculation of basic and
dilutive earnings per share
250,689,415
190,148,769
10. CASH AND CASH EQUIVALENTS
Cash at bank and on hand
30 June 2018
$
30 June 2017
$
934,045
838,027
The Group’s exposure to interest rate risk and sensitivity analysis for Financial assets and financial liabilities are
disclosed in Note 24.
11. TRADE AND OTHER RECEIVABLES
Current
GST receivable
Security deposit
Other receivables
Trade and other receivables are non-interest bearing.
The Group’s exposure to credit and currency risk and impairment losses
related to trade and other receivables is disclosed in Note 24.
30 June 2018
$
30 June 2017
$
33,193
46,808
26,750
106,751
20,658
46,808
267,695
335,161
HAMMER METALS LIMITED ANNUAL REPORT 2018 57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
12.
OTHER FINANCIAL ASSETS
Current
30 June 2018
$
30 June 2017
$
Advanced contributions from Farm-in partners (note 21)
454,746
359,954
Non - Current
Investments in other entities
Listed shares
60,000
86,250
The Group’s exposure to equity price risk and sensitivity analysis in disclosed in Note 24.
13.
PLANT AND EQUIPMENT
Office equipment and fittings at cost
Accumulated depreciation
Net book value
Reconciliation of office equipment is as follows:
Opening carrying value
Additions
Depreciation
Closing carrying value
30 June 2018
$
30 June 2017
$
252,906
(250,486)
2,420
252,906
(249,151)
3,755
3,755
-
(1,335)
2,420
5,964
2,746
(4,955)
3,755
14.
EXPLORATION AND EVALUATION EXPENDITURE
30 June 2018
$
30 June 2017
$
Balance at 1 July
Exploration and evaluation expenditure incurred
Exploration and evaluation assets acquired
Exploration and evaluation expenditure impaired
Research and development grant received
Reimbursement of costs on exploration and evaluation
Balance at 30 June
9,377,823
2,833,157
9,750
-
(106,323)
(797,982)
11,316,751
7,055,058
2,631,288
63,750
(275,699)
(96,574)
9,377,823
The ultimate recovery of costs carried forward for exploration and evaluation phases is dependent on the
successful development and commercial exploitation or sale of the respective areas of interest at an amount
greater than or equal to carrying value. Refer note 3 (n).
58 HAMMER METALS LIMITED ANNUAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15.
TRADE AND OTHER PAYABLES
30 June 2018
$
30 June 2017
$
Trade creditors and accruals
273,932
132,142
All trade and other payables are non-interest bearing and payable on normal commercial terms.
The Group’s exposure to currency and liquidity risk related to trade and other payables is disclosed in Note 24.
16.
(A)
ISSUED CAPITAL
SHARE CAPITAL
Ordinary shares
On issue at 1 July
Shares issued for cash at $0.07 per share
Conversion of convertible note to ordinary
shares
Shares issued for acquisition of asset at
$0.051 per share
Shares issued for acquisition of asset at
$0.043 per share
Shares issued for cash at $0.035 per
share
Shares issued in lieu of fees at $0.035 per
share
Share issue costs
30 June 2018
No.
30 June 2017
No.
30 June 2018
$
30 June 2017
$
198,309,674
153,434,961
42,655,110
39,800,503
-
-
-
32,250,002
11,374,711
1,250,000
-
-
-
2,258,658
614,153
63,750
250,000
68,937,096
1,428,571
-
-
-
-
-
10,750
2,412,798
50,000
-
-
-
(220,915)
(81,954)
On issue at 30 June – fully paid
268,925,341
198,309,674
44,907,743
42,655,110
Terms and conditions
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one
vote per share at shareholders’ meetings. The company does not have authorised capital or par value in respect
of its issued shares.
In the event of winding up of the Company, ordinary shareholders rank after all other shareholders and creditors
and are fully entitled to any proceeds of liquidation.
Dividends
No dividends were paid or declared for the year (2017: NIL).
HAMMER METALS LIMITED ANNUAL REPORT 2018 59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16.
ISSUED CAPITAL (continued)
(b)
Options outstanding over ordinary shares
Unlisted options exercisable at $0.10 expiring 30 July 2017
Unlisted options exercisable at $0.10 expiring 6 August 2017
Unlisted options exercisable at $0.20 expiring 11 September 2017
Unlisted options exercisable at $0.135 expiring 30 November 2017
Unlisted options exercisable at $0.135 expiring 30 November 2017
Unlisted options exercisable at $0.10 expiring 30 November 2017
Unlisted options exercisable at $0.15 expiring 6 February 2018
Unlisted options exercisable at $0.075 expiring 29 June 2019
Unlisted options exercisable at $0.06 expiring 30 June 2020
Unlisted options exercisable at $0.07 expiring 31 August 2020
Unlisted options exercisable at $0.07 on or before 30 November 2019
30 June 2018
No.
30 June 2017
No.
-
-
-
-
-
-
-
5,000,000
12,800,000
2,412,798
1,500,000
21,712,798
8,338,334
500,000
1,000,000
6,000,000
1,100,000
1,000,000
3,811,953
5,000,000
12,800,000
-
-
39,550,287
All options were granted for no cash consideration.
No unlisted options were granted to directors during the year (2017: nil).
3,912,798 unlisted options were granted to employees, consultants and contractors during the year (2017: nil)
No unlisted options were exercised during the period.
21,750,287 fully vested unlisted options expired unexercised during the period.
Options carry no voting rights until converted to fully paid ordinary shares.
17.
RESERVES
Share-based payment reserve (1)
Balance at beginning of period
Options issued to Directors and executives
Options issued to Employees and contractors
Options issued for professional services
Adjustment to valuation of options issued due to vesting conditions not
met
Fully vested options expired unexercised during the period
Fair value reserve (2)
Balance at beginning of period
30 June 2018
$
30 June 2017
$
1,211,377
2,508,368
64,329
-
-
-
(486,821)
788,885
-
-
-
30,000
(1,326,991)
1,211,377
18,750
30,000
Net increase/(decrease) in the market value of listed shares available
for sale
(18,750)
Convertible note reserve (3)
Balance at beginning of period
Conversion to equity
-
-
-
-
(11,250)
18,750
614,153
(614,153)
-
788,885
1,230,127
(1) The share-based payment reserve is used to record the fair value of options issued to Directors and employees
and consultants under various share-based payment schemes and options issued for the acquisition of assets.
(2) The fair value reserve is used to record changes in the fair value of available for sale investments until the
investments are derecognised or impaired.
(3) The convertible note reserve is used to record the face value of convertible notes issued that are accounted for
as equity instruments. On 7 September 2016, the Company issued shares for the conversion of the convertible
note and related charges.
60 HAMMER METALS LIMITED ANNUAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
18.
A)
COMMITMENTS
OPERATING LEASE COMMITMENTS
The operating lease over the Company’s head office is currently on a month to month basis.
There are no other operating leases.
B)
EXPLORATION EXPENDITURE COMMITMENTS
In order to maintain current rights of tenure to exploration tenements the Company is required to perform minimum
exploration work to meet the minimum expenditure requirements specified by various State Governments within
Australia. These obligations may be reset when application for a mining lease is made and at other times.
The Group has a minimum expenditure commitment on tenure under its control.
The Company can apply for exemption from compliance with the minimum exploration expenditure requirements.
Due to the nature and scale of the Company’s exploration activities the Company is unable to estimate its likely
tenement holdings and therefore minimum expenditure requirements more than 1 year ahead.
These obligations are not provided for in the financial report and are payable:
Consolidated
Company
30 June 2018
30 June 2017
30 June 2018
30 June 2017
$
$
$
$
2,116,750
2,163,643
-
-
Minimum exploration expenditure not
later than 1 year
19.
SHARE BASED PAYMENTS
Incentive Option Plan
The Hammer Metals Incentive Option Plan was approved by shareholders on 10 June 2016.
The key features of this plan are:
(a) The plan will be available to directors, employees and other permitted persons of the Company and its
subsidiaries.
(b) Options are granted for no consideration.
(c) The options are issued at an exercise price as determined by the Board from time to time.
(d) The number of shares the subject of options issued under this plan and other similar plans will not exceed 5%
of the Company’s issued capital from time to time.
(e) If a holder ceases to be an eligible participant of the plan during the exercise period of a vested option, the
holder may exercise the options within 30 days of ceasing to be an eligible participant and thereafter the options
will lapse.
(f) The options issued under this plan shall not be quoted on ASX.
(g) The options’ terms are at the discretion of the Directors.
No options granted as incentive or for services have lapsed, expired or were exercised during the year.
The number and weighted average exercise price of share options on issue is as follows:
Outstanding at 1 July
Granted during the period
Expired / lapsed or exercised during the period
Outstanding at 30 June
Exercisable at 30 June
No of options
39,550,287
3,912,798
(21,750,287)
21,712,798
21,712,798
Weighted average
exercise price
$0.10
$0.07
$0.12
$0.07
The options outstanding at year end have exercise prices ranging from $0.06 to $0.075 a weighted average
remaining contractual life of 1.75 years.
HAMMER METALS LIMITED ANNUAL REPORT 2018 61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20.
RELATED PARTIES
Key Management Personnel Compensation:
The following were key management personnel of the Group at any time during the reporting period and unless
otherwise indicated were key management personnel for the entire period:
Executive Directors
Mr R Davis (Chairman)
Mr A Hewlett
Non-executive Directors
Mr N El Sayed
Mr S Bodensteiner
Executives
Mr M Pitts (Company Secretary)
The key management personnel compensation comprised:
Short-term employee benefits
Post-employment benefits
Share- based payments
30 June 2018
$
30 June 2017
$
402,000
5,700
1,405
409,105
410,000
5,700
-
415,700
Remuneration levels are competitively set to attract and retain appropriately qualified and experienced Directors
and executives. Remuneration packages include a mix of fixed remuneration and equity-based remuneration.
Information regarding individual Directors and executive’s compensation and some equity instruments disclosures
as permitted by Corporations Regulations 2M.3.03 and 2M.6.04 is provided in the remuneration report section of
the Directors’ report.
Certain key management personnel, or their related parties, hold positions in other entities that result in them
having control or significant influence over the financial or operating policies of those entities. One of these
entities (as detailed below) transacted with the Group during the reporting period. The terms and conditions of
the transaction were no more favourable than those available, or which might be reasonably be expected to be
available, on similar transactions to non-key management personnel related entities on an arm’s length basis.
The aggregate value of transactions and outstanding balances relating to this entity were as follows:
Transaction
Accounting
services
Mark Pitts
Transaction value year ended
Balance outstanding as at
30 June 2018
$
30 June 2017
$
30 June 2018
$
30 June 2017
$
23,556
33,261
6,488
3,657
The Company paid fees to Endeavour Corporate, a company associated with Mark Pitts, for accounting and
financial reporting services provided to the company.
Equity instruments
All options refer to options over ordinary shares of Hammer Metals Limited, which are exercisable on a one for one
basis.
No options were issued to directors in this financial year (2017: Nil)
150,000 options were issued to executives in regard to their employment or provision of services during this
financial year (2017: Nil).
No shares were granted to key management personnel during the year as compensation (2016: Nil).
62 HAMMER METALS LIMITED ANNUAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20.
RELATED PARTIES (continued)
Other related party disclosure
The Company has a related party relationship with its controlled entities.
Transactions between the Company and its controlled entities consisted of:
(a) Loans advanced by Hammer Metals Limited. The loans are interest free, unsecured and repayable at call.
During the financial year ended 30 June 2017, loans to subsidiaries totalled $9,525,764 (2017: $8,831,482).
These loans have been impaired by $3,013,273 at 30 June 2018 (2017: $3,013,273).
(b) Expenses incurred by Hammer Metals Limited are on-charged to controlled entities at cost.
(c) Administrative services are provided at no cost to the controlled entities.
21.
INTEREST IN OTHER ENTITIES
Name
Parent and ultimate controlling entity
Hammer Metals Limited
Subsidiaries
Hammer Metals Australia Pty Ltd
Mt. Dockerell Mining Pty Ltd
Mulga Minerals Pty Ltd
Element Minerals Australia Pty Ltd
Hammer Bulk Commodities Pty Ltd (i)
Midas Metals Asia Pty Ltd (i)
Country of
Incorporation
Percentage held
2018
Percentage held
2017
Australia
Australia
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
85%
100%
100%
100%
100%
100%
85%
(i) These subsidiaries are dormant and have not traded during the year.
The investments held in controlled entities are included in the financial statements of the parent at cost.
Joint arrangements
The Group has the following farm-in / farm-out arrangements:
Dronfield
The Group has a farm-in agreement in relation to a tenement held in the Mt. Isa region. The Group has earned an
80% interest in the project. The Group’s interest in the above arrangement includes capitalised exploration phase
expenditure totalling $187,376 at 30 June 2018 and is included in exploration and evaluation assets (note 14).
Mt Isa – Newmont
The Group had a farm-out agreement with Newmont Exploration Australia Pty Ltd (Newmont) that commenced
in December 2015 in relation to three of the Group’s IOCG prospects; Overlander, Even Steven and Dronfield;
covering approximately 250km2 of the Groups Mt. Isa Project and encompasses sub-blocks of 4 tenements in
which the Group has an interest. Newmont could earn up to 75% of the Group’s interest in the area by spending
US$10,500,000.
US$75,000 was reimbursed to the Group on commencement for project consolidation costs.
During the year, Newmont met the criteria to acquire the first 35% interest in the project, but elected to
discontinue and withdraw from the arrangement. The joint venture was terminated in June 2018.
HAMMER METALS LIMITED ANNUAL REPORT 2018 63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21.
INTEREST IN OTHER ENTITIES (continued)
Joint arrangements (continued)
Mt Frosty – Mt Isa Mines (Glencore)
During the financial year the Group (through its wholly owned subsidiary Mulga Minerals Pty Ltd (‘Mulga’))
completed the acquisition of a 51% interest in the Mt. Frosty prospect and agreed terms for a new joint venture
agreement with Mount Isa Mines Limited (‘MIM’) (a 100% owned subsidiary of Glenore PLC).
Each party to the joint venture contributes exploration expenditure according to their participating interest
(Hammer – 51% and MIM – 49%).
Dilution provisions apply if a party elects not to contribute to a programme. If a party’s participating interest falls
below 10% their interest will convert to a 3% Net Profits Royalty.
Mulga acts as the initial manager of the joint venture. The Group’s interest in the above arrangement includes
capitalised exploration phase expenditure totalling $240,465 at 30 June 2018 and is included in exploration and
evaluation assets (note 14).
Millennium Project – Global Energy Metals Corporation (GEMC)
The Millennium cobalt-copper-gold project is currently a joint venture with TSX listed Global Energy Metals
Corporation (GEMC). GEMC can earn up to a 75% interest in the five granted mining leases at Millennium by
spending CAD2.5 million. GEMC has earned a 25% interest to date. Hammer operates the joint venture.
During the financial year Hammer also negotiated and entered into a binding term sheet for the sale of its 75%
interest in the project to GEMC. Consideration for the sale is the issue to Hammer of GEMC ordinary shares
whereby Hammer will own a 19.9% interest in TSX-listed GEMC following the acquisition plus board representation.
Under the terms of the Agreement GEMC will purchase the remaining 75% interest in the project along with the
cobalt targets at Mt Dorothy and Cobalt Ridge. The sale is contingent on a number of approvals being received and
completion of the final sale documentation (“Definitive Agreement”).
22.
RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the year
Adjustments for:
Depreciation
Share based payments
Exploration expenditure written off
Impairment expense
Distribution of exploration development incentive credits
Management fee from farm-in partners
Profit on sale of assets
Research & development income tax benefit
30 June 2018
$
30 June 2017
$
(654,312)
(528,328)
1,335
14,054
-
17,000
-
(58,053)
(30,000)
(17,359)
4,955
275,699
-
-
(199,612)
(109,940)
(30,000)
-
Add/(less):
Decrease / (increase) in trade and other receivables
Increase / (decrease) in trade and other payables
(6,657)
141,789
(94,673)
(120,021)
Net cash used in operating activities
(592,203)
(801,920)
64 HAMMER METALS LIMITED ANNUAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23.
SEGMENT INFORMATION
The Group has one reportable segment, being Copper-Gold exploration in the Mount Isa region in
Australia.
The Group’s operating segments have been determined with reference to the monthly management
accounts, program budgets and cash flow forecasts used by the chief operating decision maker to make
decisions regarding the Group’s operations and allocation of working capital.
Accordingly, the financial information presented in the consolidated statement of profit or loss and other
comprehensive income and the consolidated statement of financial position is the same as that presented
to the chief operating decision maker.
24.
FINANCIAL INSTRUMENTS DISCLOSURES
Overview
The Company and Group have exposure to the following risks from their use of financial instruments:
Credit risk
Liquidity risk
Market risk
This note presents information about the Group’s exposure to each of the above risks, their objectives, policies and
processes for measuring and managing risk, and the management of capital.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.
Management monitors and manages the financial risks relating to the operations of the Group through regular reviews of
the risks.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations and arises principally from the Group’s receivables from customers and investment securities.
Trade and other receivables
As the Company operates in the mining exploration sector it does not have significant trade receivables and is therefore
not exposed to credit risk in relation to trade receivables. The Group receives advanced cash calls from its farm-in / joint
venture partner which are classified as other receivables. The cash call amounts are reduced as and when expenditure in
terms of the farm-in/ joint venture agreement is incurred.
The Group has established an allowance for impairment that represents their estimate of incurred losses in respect of
other receivables and investments. The main components of this allowance are a specific loss component that relates to
individually significant exposures. The management does not expect any other counterparty to fail to meet its obligations.
No allowance for impairment has been made.
Presently, the Group undertakes exploration and evaluation activities in Australia. At the balance sheet date there were no
significant concentrations of credit risk.
Exposure to credit risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum
exposure to credit risk at the reporting date was:
Consolidated
Cash and cash equivalents
Trade and other receivables
Advanced contributions from Farm-in partners
Carrying amount
Note
30 June 2018
$
30 June 2017
$
10
11
12
934,045
106,751
454,746
838,027
335,161
359,954
HAMMER METALS LIMITED ANNUAL REPORT 2018 65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24.
FINANCIAL INSTRUMENTS DISCLOSURES (continued)
Impairment losses
None of the Group’s trade and other receivables are past due and impaired (2017: Nil).
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due (refer Note 2(f)). The
Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage
to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate reserves by continuously monitoring forecast and actual cash
flows.
Typically, the Group ensures it has sufficient cash on demand to meet expected operational expenses for a period of 90 days,
this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.
All financial liabilities are due and payable on terms of no more than 30 days. All financial liabilities are generally settled
within stated payment terms.
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will
affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is
to manage and control market risk exposures within acceptable parameters, while optimising the return.
Currency risk
The Group has no exposure to currency risk on investments and transactions that are denominated in a currency other than
the respective functional currencies of Group entities.
The Group has not entered into any derivative financial instruments to hedge such transactions and anticipated future
receipts or payments that are denominated in a foreign currency.
Interest rate risk
The Group is not exposed to interest rate risk on borrowings as it has no borrowings subject to variable interest. The Group
is exposed to interest rate risk on its cash balances.
Profile
At the reporting date the interest rate profile of the Company’s and the Group’s interest-bearing financial instruments was:
Fixed rate instruments
Cash and cash equivalents
Weighted average interest rates
Variable rate instruments
Cash and cash equivalents
Weighted average interest rates
Carrying amount
30 June 2018
$
30 June 2017
$
20,972
2.40%
913,073
0.26%
20,480
2.18%
817,547
0.66%
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore, a
change in interest rates at the reporting date would not affect profit or loss or equity (2016: Nil)
66 HAMMER METALS LIMITED ANNUAL REPORT 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24.
FINANCIAL INSTRUMENTS DISCLOSURES (continued)
Cash flow sensitivity analysis for variable rate instruments
A sensitivity of 50 basis points has been used and considered reasonable given current interest rates. A 0.5% movement
in interest rates at the reporting date would have increased equity and profit or loss by the amounts shown below. This
analysis assumes that all other variables remain constant. The analysis for 2016 was performed on the same basis.
Consolidated
Loss
Equity
50bp
increase
50bp
decrease
50bp
increase
50bp
decrease
30 June 2018
Variable rate instruments
4,565
(4,565)
4,565
(4,565)
30 June 2017
Variable rate instruments
4,087
(4,087)
4,087
(4,087)
Carrying amounts versus fair values
The fair values of financial assets and liabilities are as per the carrying amounts shown in the statement of financial
position.
Financial assets carried at fair value
Equity securities – listed on ASX at quoted prices
60,000
83,250
30 June 2018
$
30 June 2017
$
Financial assets carried at amortised costs
Cash and cash equivalents
Trade and other receivables
Advanced contributions from Farm-in partners
Financial liabilities carried at amortised costs
Trade and other payables
Advanced cash call
Other Market Price Risk
934,045
106,751
454,746
(273,932)
(448,007)
838,027
335,161
359,954
(132,142)
(359,954)
Other Equity price risk is the risk that the value of the instrument will fluctuate as a result of changes in market prices
(other than those arising from interest rate risk or currency risk), whether caused by factors specific to an individual
investment, its issuer or all factors affecting all instruments traded in the market.
Investments are managed on an individual basis and material buy and sell decisions are approved by the Board of Directors.
The primary goal of the Group’s investment strategy is to maximise investment returns.
Commodity Price Risk
The Group operates primarily in the exploration and evaluation phase and accordingly the Group’s financial assets and
liabilities are subject to minimal commodity price risk at this stage.
Capital Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, so as to
maintain a strong capital base sufficient to maintain future exploration and development of its projects. In order to maintain
or adjust the capital structure, the Group may return capital to shareholders, issue new shares or sell assets to reduce debt.
The Group’s focus has been to raise sufficient funds through equity to fund exploration and evaluation activities.
There were no changes in the Group’s approach to capital management during the year. Risk management policies and
procedures are established with regular monitoring and reporting.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
HAMMER METALS LIMITED ANNUAL REPORT 2018 67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
25.
PARENT ENTITY DISCLOSURES
Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Total liabilities
Net Assets
Equity
Issued capital
Accumulated losses
Reserves
Total equity
Financial Performance
Loss for the year
Other comprehensive income
Total Comprehensive income
Company
30 June 2018
$
30 June 2017
$
6,874,306
5,511,161
12,385,467
7,865,208
3,135,762
11,000,970
232,693
232,693
492,096
492,096
12,152,774
10,508,874
44,907,743
(33,543,854)
788,885
12,152,774
42,655,110
(33,376,363)
1,230,127
10,508,874
(654,312)
-
(654,312)
(1,126,517)
(11,250)
(1,137,767)
Contingent liabilities of the parent entity
There are no contingent liabilities at 30 June 2018 (2017: None)
Commitments of the parent entity
For details on commitments, see note 19.
26.
EVENTS SUBSEQUENT TO BALANCE DATE
Subsequent to the year end, the Company raised $806,776 (before costs) through a non-renounceable rights issue of
161,355,200 options. The offer was completed on the basis of 3 options for every 5 shares held, and the options were
issued for 0.5 cents per option. The options issued under the offer are exercisable at 3 cents per share on or before 30
September 2020. The Company also raised an additional $200,000 through the issue of 6,666,667 shares at $0.03 per share
and 4,000,000 free attaching options exercisable at 3 cents per share on or before 30 September 2020.
Other than the above, there has not been any other matter or circumstance that has arisen after balance date that has
significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of
affairs of the Group in future financial periods.
68 HAMMER METALS LIMITED ANNUAL REPORT 2018
DIRECTORS’ DECLARATION
HAMMER METALS LIMITED
and its Controlled Entities
DIRECTORS’ DECLARATION
1.
In the opinion of the Directors of Hammer Metals Limited (“the Company”):
(a) the consolidated financial statements and notes and the remuneration report in the Directors’ report, are in
accordance with the Corporations Act 2001, including:
i.
giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its performance for
the financial year ended on that date; and
ii.
complying with Australian Accounting Standards and the Corporations Regulations 2001;
(b)
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 Directors have been given the declarations by the managing director and company secretary for the financial
year ended 30 June 2018 pursuant to Section 295A of the Corporation Act 2001.
3. The Directors draw attention to Note 2(a) to the consolidated financial statements, which includes a statement
of compliance with International Financial Reporting Standards.
Signed in accordance with a resolution of the Directors:
R Davis
Executive Chairman
Perth
Dated 28 September 2018
‐ 40 ‐
HAMMER METALS LIMITED ANNUAL REPORT 2018 69
Independent Auditor’s Report
To the shareholders of Hammer Metals Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
Hammer Metals Limited (the Company).
In our opinion, the accompanying Financial
Report of the Company is in accordance with the
Corporations Act 2001, including:
giving a true and fair view of the Group’s
financial position as at 30 June 2018 and of
its financial performance for the year ended
on that date; and
•
•
The Financial Report comprises:
• Consolidated statement of financial position
as at 30 June 2018
• Consolidated statement of profit or loss and
other comprehensive income, Consolidated
statement of changes in equity, and
Consolidated statement of cash flows for
the year then ended
• Notes including a summary of significant
complying with Australian Accounting
Standards and the Corporations Regulations
2001.
accounting policies
• Directors’ Declaration.
The Group consists of the Company and the
entities it controlled at the year-end or from
time to time during the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
the audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of
Ethics for Professional Accountants (the Code) that are relevant to our audit of the Financial Report
in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code.
Material uncertainty related to going concern
We draw attention to Note 2(f), “Going Concern” in the financial report. The conditions disclosed in
Note 2(f) indicate a material uncertainty exists that may cast significant doubt on the Group’s ability
to continue as a going concern and, therefore, whether it will realise its assets and discharge its
liabilities in the normal course of business, and at the amounts stated in the financial report. Our
opinion is not modified in respect of this matter.
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under
Professional Standards Legislation.
70 HAMMER METALS LIMITED ANNUAL REPORT 2018
In concluding there is a material uncertainty related to going concern we evaluated the extent of
uncertainty regarding events or conditions casting significant doubt in the Group’s assessment of
going concern. Our approach to this involved:
•
Evaluating the feasibility, quantum and timing of the Group’s plans to raise additional
shareholder funds to address going concern;
• Assessing the Group’s cash flow forecasts for incorporation of the Group’s operations and plans
to address going concern, in particular in light of the history of loss making operations; and
• Determining the completeness of the Group’s going concern disclosures for the principle
matters casting significant doubt on the Group’s ability to continue as a going concern, the
Group’s plans to address these matters, and the material uncertainty.
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgement, were of most significance
in our audit of the Financial Report of the current year.
These matters were addressed in the context of our audit of the Financial Report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material uncertainty related to going concern section, we
have determined the matter described below to be the Key Audit Matter.
Capitalised exploration and evaluation ("E&E") assets ($11,316,751)
Refer to Note 14 to the Financial Report
The key audit matter
How the matter was addressed in our
audit
Exploration and evaluation expenditure
capitalised (E&E) is a key audit matter due to:
•
•
The significance of the activity to the Group’s
business and the balance (being 88% of total
assets); and
The greater level of audit effort to evaluate
the Group’s application of the requirements
of the industry specific accounting standard
AASB 6 Exploration for and Evaluation of
Mineral Resources, in particular the
conditions allowing capitalisation of relevant
expenditure and presence of impairment
indicators. The presence of impairment
indicators would necessitate a detailed
analysis by the Group of the value of E&E,
therefore given the criticality of this to the
scope and depth of our work, we involved
senior team members to challenge the
Group’s determination that no such
indicators existed.
Our audit procedures included:
•
Evaluating the Group’s accounting policy to
recognise exploration and evaluation assets
using the criteria in the accounting
standard;
• We assessed the Group’s determination of
its areas of interest for consistency with
the definition in the accounting standard.
This involved analysing the licenses in
which the Group holds an interest and the
exploration programmes planned for those
for consistency with documentation such
as joint venture agreements and planned
work programmes;
•
For each area of interest, we assessed the
Group’s current rights to tenure by
corroborating the ownership of the relevant
license to government registries and
evaluating agreements in place with other
parties. We also tested for compliance with
conditions, such as minimum expenditure
requirements, on a sample of licenses;
HAMMER METALS LIMITED ANNUAL REPORT 2018 71
In assessing the presence of impairment
indicators, we focused on those that may draw
into question the commercial continuation of
E&E activities for the Mt Isa, Mt Frost and
Millennium areas where significant capitalised
E&E exists. In addition to the assessments
above, and given volatile base metal
prices/financial position of the Group we paid
particular attention to:
• Documentation available regarding rights to
tenure, via licensing, and compliance with
relevant conditions, to maintain current rights
to an area of interest and the Group’s
intention and capacity to continue the
relevant E&E activities;
•
The ability of the Group to fund the
continuation of activities; and
• Results from latest activities regarding the
existence or otherwise of economically
recoverable reserves/commercially viable
quantity of reserves.
Other Information
• We tested the Group’s additions to E&E for
the year by evaluating a statistical sample
of recorded expenditure for consistency to
underlying records, the capitalisation
requirements of the Group’s accounting
policy and the requirements of the
accounting standard;
• We evaluated Group documents, such as
minutes of Board meetings, for consistency
with their stated intentions for continuing
E&E in certain areas. We corroborated this
through interviews with key operational and
finance personnel.
• We analysed the Group’s determination of
recoupment through successful
development and exploitation of the area by
evaluating the Group’s documentation of
planned future/continuing activities
including work programmes and project and
corporate budgets.
Other Information is financial and non-financial information in Hammer Metals Limited’s annual
reporting which is provided in addition to the Financial Report and the Auditor’s Report. The
Directors are responsible for the Other Information.
The Other Information we obtained prior to the date of this Auditor’s Report was the Director’s
Report. The Chairman’s Letter, Operations Report and ASX Additional Information are expected to
be made available to us after the date of the Auditor's Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do
not express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other
Information. In doing so, we consider whether the Other Information is materially inconsistent with
the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
We are required to report if we conclude that there is a material misstatement of this Other
Information, and based on the work we have performed on the Other Information that we obtained
prior to the date of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
•
•
preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001
implementing necessary internal control to enable the preparation of a Financial Report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error
72 HAMMER METALS LIMITED ANNUAL REPORT 2018
•
assessing the Group’s ability to continue as a going concern and whether the use of the going
concern basis of accounting is appropriate. This includes disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless they either
intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
to obtain reasonable assurance about whether the Financial Report as a whole is free from
material misstatement, whether due to fraud or error; and
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of this Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our
Auditor’s Report.
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report of
Hammer Metals Limited for the year ended 30
June 2018, complies with Section 300A of the
Corporations Act 2001.
The Directors of the Company are responsible
for the preparation and presentation of the
Remuneration Report in accordance with
Section 300A of the Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report
included in section 12 of the Directors’ report
for the year ended 30 June 2018.
Our responsibility is to express an opinion on
the Remuneration Report, based on our audit
conducted in accordance with Australian
Auditing Standards.
KPMG
R Gambitta
Partner
Perth
28 September 2018
HAMMER METALS LIMITED ANNUAL REPORT 2018 73
ASX ADDITIONAL INFORMATION
Additional information required by the Australian Stock Exchange Listing Rules and not disclosed elsewhere in this report is set out below.
Information regarding share and option holdings is current as at 16 October 2018.
(A)
ORDINARY SHAREHOLDERS
Twenty largest holders of ordinary shares
Number of shares
BNP PARIBAS NOMINEES PTY LTD
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
DAVIS FAMILY CAPITAL PTY LTD
DJ CARMICHAEL PTY LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
ZENITH PACIFIC LIMITED
SAMLISA NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
CENTRAL MUTUAL (INVESTMENTS) PTY LTD
LUNDIE INVESTMENTS PTY LTD
MR ZBIGNIEW WALDEMAR LUBIENIECKI
ELEFANTINO PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
GECKO RESOURCES PTY LTD
GECKO RESOURCES PTY LTD
MR ZBIGNIEW WALDEMAR LUBIENIECKI
VALSER HOLDINGS PTY LTD
DR DIANMIN CHEN
MRS NATASHA KAY CLARKE
SCINTILLA STRATEGIC INVESTMENTS LIMITED
SIGNIFICANT SHAREHOLDERS ARE:
Shareholder
Deutsche Rohstoff AG*
Resource Capital Fund VI L.P*
*includes shares held by related entities.
43,864,400
25,535,722
11,000,000
10,800,312
10,350,462
10,000,000
9,000,000
8,599,507
6,783,333
6,673,888
5,871,160
4,150,000
3,596,414
3,000,000
2,500,000
2,461,540
2,371,429
2,342,857
2,340,296
2,250,000
% held
15.76%
9.18%
3.95%
3.88%
3.72%
3.59%
3.23%
3.09%
2.44%
2.40%
2.11%
1.49%
1.29%
1.08%
0.90%
0.88%
0.85%
0.84%
0.84%
0.81%
173,491,320
62.33%
Number of Shares
35,158,439
25,000,000
Each fully paid ordinary share entitles the holder to one vote at general meetings of shareholders and is entitled to dividends when declared.
The total number of shares on issue is 278,297,082
The number of shareholders holding less than a marketable parcel is 862.
There is no current on market buy back.
The Company has no ordinary shares which are subject to voluntary escrow.
74 HAMMER METALS LIMITED ANNUAL REPORT 2018
DISTRIBUTION OF ORDINARY SHAREHOLDERS
Category of shareholding
Number of shareholders
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
133
72
80
339
238
862
(B)
OPTIONS HOLDERS OF LISTED OPTIONS
Twenty largest holders of HMXOD Listed Options
Number of options
BNP PARIBAS NOMINEES PTY LTD
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
DAVIS FAMILY CAPITAL PTY LTD
DJ CARMICHAEL PTY LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
ZENITH PACIFIC LIMITED
SAMLISA NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
CENTRAL MUTUAL (INVESTMENTS) PTY LTD
LUNDIE INVESTMENTS PTY LTD
MR ZBIGNIEW WALDEMAR LUBIENIECKI
ELEFANTINO PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
GECKO RESOURCES PTY LTD
GECKO RESOURCES PTY LTD
MR ZBIGNIEW WALDEMAR LUBIENIECKI
VALSER HOLDINGS PTY LTD
DR DIANMIN CHEN
MRS NATASHA KAY CLARKE
SCINTILLA STRATEGIC INVESTMENTS LIMITED
21,095,063
10,857,142
6,924,110
6,600,000
6,520,000
6,000,000
5,400,000
5,000,000
5,000,000
4,069,999
4,004,332
4,000,000
3,745,742
3,690,000
3,522,696
3,375,000
3,080,000
3,040,000
3,000,000
2,550,717
% held
12.76%
6.57%
4.19%
3.99%
3.94%
3.63%
3.27%
3.02%
3.02%
2.46%
2.42%
2.42%
2.27%
2.23%
2.13%
2.04%
1.86%
1.84%
1.81%
1.54%
Listed options do not entitle the holder to vote at general meetings of shareholders and are not entitled to dividends when declared.
The total number of listed options on issue is 165,355,206
There is no current on market buy back.
There are no listed options subject to voluntary escrow.
111,474,801
67.41%
HAMMER METALS LIMITED ANNUAL REPORT 2018 75
DISTRIBUTION OF LISTED OPTIONHOLDERS
Category of shareholding
Number of optionholders
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
20
13
25
95
118
271
(C)
UNQUOTED SECURITIES
The Company has the following unquoted securities on issue.
Category of security
Number
Number of holders
Options expiring 30 June 2020 exercisable at $0.06
Options expiring 29 June 2019 exercisable at $0.075
Options expiring 30 June 2020 exercisable at $0.06
Options expiring 31 August 2020 exercisable at $0.07
Options expiring 30 November 2019 exercisable at $0.07
9,000,000
5,000,000
3,800,000
2,676,078
1,500,000
4
1
6
1
8
76 HAMMER METALS LIMITED ANNUAL REPORT 2018
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