Image Resources NL
ANNUAL REPORT
FINANCIAL YEAR
ENDED 31 DECEMBER 2017
CONTENTS
Corporate Directory
Review of Operations
Resources and Reserves Schedule
Directors’ Report
Auditor’s Independence Declaration
Corporate Governance Statement
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to and forming part of the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
Schedule of Tenements
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3
4
12
14
23
24
25
26
27
28
29
46
47
50
52
CORPORATE DIRECTORY
DIRECTORS
ROBERT BESLEY
Non-Executive Chairman
PATRICK MUTZ
Managing Director
GEORGE SAKALIDIS
Executive Director - Exploration
AARON CHONG VEOY SOO
Non-Executive Director
PETER THOMAS
Non-Executive Director
CHAODIAN CHEN
Non-Executive Director
FEI WU
Non-Executive Director
COMPANY SECRETARY
DENNIS WILKINS
(DW Corporate)
WEBSITE
www.imageres.com.au
FOR INFORMATION ON THE COMPANY CONTACT
PRINCIPAL & REGISTERED OFFICE
Ground Floor, 23 Ventnor Avenue
West Perth WA 6005
PO Box 469
West Perth WA 6872
Telephone
Facsimile
(08) 9485 2410
(08) 9486 8312
BANKERS
Bank of Western Australia Ltd
Hay Street, West Perth WA 6005
AUDITORS
Greenwich & Co Audit Pty Ltd
35 Outram Street, West Perth WA 6005
Telephone: (08) 6555 9500
STOCK EXCHANGE
Australian Securities Exchange (ASX)
ASX Code - IMA (Fully paid shares)
ISSUED CAPITAL
FOR SHAREHOLDER INFORMATION CONTACT
861,289,987 fully paid ordinary shares
SHARE REGISTRY
3,000,000 unlisted options:
Security Transfers Registrars
770 Canning Highway
Applecross, WA 6153
Telephone 1 300 992 916 (within Australia)
Telephone +61 3 9628 2200 (from overseas)
Facsimile
+61 (0)8 9315 2233
ABN: 57 063 977 579
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REVIEW OF OPERATIONS
The principal focus of Image Resources NL (“Image” or “the Company”) during the 2017 calendar year was the
finalisation of the updated feasibility study for its 100%-owned, high-grade Boonanarring Mineral Sands Project (the
“Project”) in the North Perth Basin located 80 Kilometres north-northwest of Perth. The feasibility study results were
announced on 30 May 2017; and subsequently the Company has been focussed on delivering a financing solution for
the development of the Project.
Boonanarring/Atlas Feasibility Study Update
The highlights from the study results were as follows:
Pre-Tax NPV of A$135M at an 8% discount rate,
IRR of 64% and pre-tax EBITDA of A$266M,
Rapid pay-back of capital post production start-up of less than 2 years, and
Initial development capital, including contingency and resalable land of only A$52M.
In November, the Company updated its bankable feasibility study (BFS) financial model to include significantly higher
forecasted mineral sand commodity prices from TZMI, than were used in the original BFS results announced 30 May
2017.
Revised BFS financial metrics included:
Project Pre-Tax NPV increased from A$135M to A$197M (8% discount rate);
Project Pre-Tax IRR increased from 64% to 104%;
Pre-tax EBITDA increased from A$266M to A$339M, and
Payback period decreased from 22 months to 16 months.
Boonanarring Project Capital Financing
In March 2017, the Company secured the services of PCF Capital of Perth to act as financial advisor to identify potential
debt providers. The initial focus was on attracting interest from big banks to seek to secure a loan package with more
conventional terms and conditions, and generally lower interest rates.
The Company released the BFS results in May 2017 and focused on identifying, analysing and actively pursuing project
finance options to support the development of the Project.
In October 2017, the Company secured the services of Jett Capital of New York to identify non-banking financial
institutions as potential debt providers for Boonanarring. Following comparative analysis of a number of indicative debt
facility proposals, the Company selected a preferred provider and executed a non-binding term sheet which triggered
the start of due diligence in late December.
In October 2017, Euroz Securities Limited was selected to be lead broker to assist Image with raising equity capital for
the Project.
Subsequent to the end of the year:
On 8 March 2018, the Company announced the execution of a Loan Note Subscription Agreement with
Switzerland-based Pala Investments Limited (“Pala”) as the ‘arranger’, and Pala and USA-based Castlelake, L.P.
as the Loan Note Holders, to provide AU$50M from the issue of senior secured loan notes to be used for the
construction and commissioning of the Boonanarring Project, drawdown of funds is subject to satisfaction of certain
conditions precedent;
On 14 March 2018, the Company announced the issue of 250 million shares at 10 cents per share to raise A$25
million (before costs) as the balance of capital required for the construction and commissioning of the Boonanarring
Project. The share issue settled on 28 March 2018.
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REVIEW OF OPERATIONS
Boonanarring Ore Reserves & Mineral Resources
In January 2017, the Company announced an update of the Boonanarring Mineral Resource estimate in accordance with
the JORC Code (2012). Total Mineral Resources increased from 21.5 million tonnes (Image 2013 Mineral Resource
estimate) to 43.7 million tonnes, albeit at lower overall HM grade. The additional tonnes of Mineral Resources stem from
an expanded mineralisation area, the delineation of an overlying layer of lower grade mineralisation and using a lower
cut-off grade of 2.0%HM compared to 2.5% in 2013.
On 21 August 2017, the Company announced a 60% increase in ore tonnes in the ‘Proved’ category of Ore Reserves at
Boonanarring (Table 1 – Exploration). This change was based on grade control drilling completed in March 2017 and
designed to increase the confidence level of the Boonanarring Mineral Resources and Ore Reserves. The re-estimation
of Ore Reserves was conducted by Optiro Pty Ltd (Optiro) in accordance with the guidelines of the Australasian Code for
reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code - 2012 edition).
When compared to the previously estimated Ore Reserves for Boonanarring the total tonnes of Proved Ore Reserves
increased by 60% from 5.8 million to 9.3 million tonnes, albeit at a lower heavy mineral (HM) grade, but importantly at a
higher concentration of zircon in the HM.
Environmental Approvals and Land Access
The Company had already secured Part IV environmental approval prior to the start of the calendar year for the
development of the Boonanarring Project. A number of other approvals were received during the year. The final
regulatory approval (‘Works Approval’) required for the start of construction and commissioning of the Boonanarring
Project was received on 30 October 2017.
On 10 January 2017, the Company exercised its option to purchase 550 hectares of land required for the initial plant site
and mine development at Boonanarring. Completion of this purchase occurred in April 2017. A further 230 hectares of
land was secured for access for mining at Boonanarring via a lease agreement with the landowner, and negotiations of
purchase option agreements for two additional land parcels totalling 1,187 hectares were advanced significantly by the
end of the year.
Heavy Mineral Commodity Prices
After a significant fall in heavy mineral commodity prices from 2013 to mid-2016, consensus forecasts show increasing
prices for at least the next five years. Recent market evidence supports an increasingly positive view on the outlook for
mineral sands commodity prices in general, and zircon prices in particular.
The positive outlook for zircon prices is particularly important for the Company as the sale of zircon represents over 70%
of revenues from Boonanarring. The BFS, and the subsequent update, assumed a long term premium zircon price of
US$1,405 per tonne.
Effective from 1 January 2018, Tronox Limited increased the sales price for its premium grade zircon by 10% to
US$1,455 per tonne. Iluka Resources Limited increased the market price for its zircon effective 1 April 2018, from the
previous price of US$1,295 to US$1,410 per tonne. These price movements suggest that the long term zircon price
assumption in the BFS may be conservatively low.
Other Mineral Resources and Prospects
Whilst the Company’s primary focus remains the development of the Boonanarring and Atlas deposits and fast-tracking
the transition from advanced explorer to mineral sands miner, it also continues to consider options to unlock value from
its other projects with high-grade mineral resources such as Red Gulley, Gingin North, Gingin South, Helene and
Hyperion. In addition, the Company has continued work on the Bidaminna Project mineral resources as a potential
leucoxene-rich, dredge mining project and has also identified Woolka as an area that could deliver a significant dredge
mining resource.
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REVIEW OF OPERATIONS
Exploration
Boonanarring Northern Extensions
Landowners are actively being contacted to arrange access agreements for delineation drilling over the 5.6km
northern extension of the high-grade Boonanarring deposit announced on 13 March 2017. This extension area is
deemed to be within economic pumping distance of the planned location of the Boonanarring wet concentration plant.
The Company confirmed, after drilling the northernmost 2.6km extension shown in Figure1, that the Boonanarring
high grade extension delineated included zircon grades range from 16.4% to 22.2% of the HM content. The drill
results included outstanding high-grade intersections of 8m @ 23.8% HM in drill hole IX00245, 8m @ 21.1% HM in
IX00244 and 8m @ 16.3% HM in IX00250 (ASX release 26/06/2017).
Figure 1. Location of Drill Holes and Composite Samples in Boonanarring Northern Extension
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REVIEW OF OPERATIONS
Boonanarring Southern Extensions
An access agreement has been signed with the landowner at Gingin North which is interpreted to contain the
southernmost extension of the Boonanarring deposit. The Gingin North drilling was mainly designed to test for the
southernmost extension of the Boonanarring deposit and near surface mineralisation to the west. Twenty holes have
been completed totalling 538m (Figure 2). Results are pending while a further 50 holes are being planned.
Figure 2. Boonanarring Southern extension showing past and current drill programmes
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REVIEW OF OPERATIONS
Boonanarring Western Parallel Extensions
The Boonanarring West drilling was designed to test for potential adjacent and parallel mineralisation to the
Boonanarring Deposit (Figure 3). A sizeable target has been defined 3km by 0.3km and two programmes of drilling
have now been carried out here, comprising 15 holes for 411m. A further 7 holes for 200m are planned for early
February 2018. This target is only 600m west of the Boonanarring Deposit and augers well for the potential to add
valuable mine life.
Figure 3. Boonanarring West Target 3km by 0.3km showing current drilling west of the Boonanarring Deposit
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REVIEW OF OPERATIONS
Bidaminna Northern Extensions
The Bidaminna drilling programme was designed to investigate the northern extension of the Bidaminna deposit,
which has potential to be 18km in length (Figure 4) and to examine in detail the leucoxene content which were
previously confirmed to be unusually enriched and increasing in a northern direction to up to 69% of the THM. Thus
far, 25 holes have been drilled totalling 1,311m. In early February 2018 a further 14 holes for 700m are planned.
Figure 4. Bidaminna Northern Extension Target showing past and current drill programmes.
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REVIEW OF OPERATIONS
Woolka Major Dredge Target
The Woolka drilling was designed to test for large dredgeable targets over an area of 5km by 2km, which is adjacent
to and west of Tronox’s dredge mining operations (Figure 5). Thus far, 10 holes totalling 411m have been completed.
In early February 2018 a further 5 holes for 200m are planned.
Figure 5. Woolka Project showing very large drilling target over 5km by 2km area west of
proposed Tronox dredge deposits
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REVIEW OF OPERATIONS
Completed Exploration Drilling
Drilling at Bidaminna, Woolka, Winooka, Boonanarring West and Gingin North was completed in November 2017
(Table 1) totalling 79 holes for 3,231 metres.
Prospect
Bidaminna
Woolka
Winooka
Boonanarring West
Gingin North
Total
Table 1. Completed Drilling Programme November 2017
No. Holes
Total Metres
25
10
9
15
20
79
1,311
411
560
411
538
3,231
A short 31 drill hole programme will be completed in February 2018 on Bidaminna (14 holes), Bibby Springs (5 holes),
Woolka (5holes) and Boonanarring West (7 holes) to infill and further test several targets picked up from the
November 2017 and prior drilling programmes.
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Zircon
(%)
23.2
21.9
22.7
10.6
10.6
18.4
Zircon
(%)
RESOURCES AND RESERVES SCHEDULE
Table 2. Mineral Resources and Ore Reserves as at 3 August 2017
High Grade Ore Reserves - Strand Deposits; in accordance with the JORC Code (2012)
Project/Deposit
Category
Volume
Tonnes
% HM % Slimes HM Tonnes VHM Ilmenite Leucoxene Rutile
(%)
(%)
(%)
(%)
Boonanarring2
Boonanarring2
Total Boonanarring
Atlas2
Total Atlas
Proved
Probable
Probable
5,008,000
5,565,000
10,573,000
5,000,000
5,000,000
9,344,000
10,514,000
19,858,000
9,477,000
9,477,000
8.6
5.9
7.2
8.1
8.1
14.3
17.6
16.1
15.5
15.5
803,771
622,429
1,426,200
767,637
767,637
76.081
78.653
77.203
73.3
73.3
48.9
52.3
50.4
50.7
50.7
Total Ore Reserves
15,573,000
29,335,000
7.5
15.9
2,193,837
75.8
50.5
1.8
1.8
1.8
4.5
4.5
2.7
2.2
2.7
2.4
7.5
7.5
4.2
High Grade Mineral Resources - Strand Deposits; in accordance with the JORC Code (2012) @ 2.0% HM Cut-off
Project/Deposit
Category
Volume
Tonnes
Boonanarring1
Boonanarring1
Boonanarring1
Boonanarring Total
Atlas1
Atlas1
Atlas1
Atlas Total
Measured
Indicated
Inferred
Measured
Indicated
Inferred
6,359,359
11,802,047
4,987,703
22,886,875
5,210,526
3,368,421
947,368
9,526,316
11,799,213
22,265,400
9,420,449
43,485,062
9,900,000
6,400,000
1,800,000
18,100,000
Sub-Total Atlas/Boonanarring
32,413,191
61,585,062
% HM % Slimes HM Tonnes VHM Ilmenite Leucoxene Rutile
(%)
(%)
(%)
(%)
8.0
4.9
4.5
5.6
7.9
3.7
4.0
6.0
5.7
14
18.3
21
18
16.1
17.3
19.9
16.9
942,167
1,081,208
422,507
2,445,882
782,000
237,000
72,000
1,091,000
74.3
71.7
68.8
72.2
71.0
56.5
41.5
65.9
48.3
49.2
50.0
49.0
49.1
41.6
29.0
46.1
17.7
3,536,882
70.3
48.1
1.7
2.2
3.5
2.2
4.2
3.4
3.3
4.0
2.8
2.2
2.5
3.4
2.6
7.2
4.7
4.4
6.5
22.0
17.8
11.9
18.4
10.5
6.8
4.8
9.3
3.8
15.6
Previously Reported Mineral Resources - Strand Deposits; in accordance with JORC Code (2004) @ 2.5% HM Cut-off
Project/Deposit
Category
Volume
Tonnes
Gingin Nth3
Gingin Nth3
Gingin Nth Total
Gingin Sth3
Gingin Sth3
Gingin Sth3
Gingin Sth Total
Helene3
Hyperion3
Cooljarloo Nth Total
Red Gully3
Red Gully3
Red Gully Total
Sub-Total Other
Indicated
Inferred
Measured
Indicated
Inferred
Indicated
Indicated
Indicated
Inferred
680,175
580,000
1,260,175
872,830
3,241,835
398,573
4,513,238
5,568,110
1,786,781
7,354,891
1,930,000
1,455,000
3,385,000
16,513,304
1,318,642
1,090,000
2,408,642
1,526,122
5,820,480
732,912
8,079,514
11,466,106
3,742,471
15,208,577
3,409,768
2,565,631
5,975,399
31,672,132
Historic Deposit - Strand deposit (Under EL application)
Project/Deposit
Category
Volume
Tonnes
% HM % Slimes HM Tonnes VHM Ilmenite Leucoxene Rutile
(%)
(%)
(%)
(%)
5.7
5.2
5.5
4.4
6.5
6.5
6.1
4.6
7.7
5.3
7.8
7.5
7.7
6.0
15.7
14.0
15.0
7.2
7.1
8.4
7.3
18.6
19.3
18.8
11.5
10.7
11.2
14.1
75,163
57,116
132,279
67,149
377,167
47,566
491,882
522,854
286,673
809,528
265,962
192,422
458,384
1,892,073
75.4
78.4
76.7
79.4
90.6
91.6
89.2
88.7
69.4
81.9
89.7
89.0
89.4
85.2
57.4
57.3
57.3
50.7
67.6
67.4
65.3
74.6
55.8
67.9
66.0
65.4
65.7
66.0
9.3
11.3
10.2
15.3
9.8
7.5
10.3
0.0
0.0
0.0
8.3
8.2
8.2
5.4
3.2
3.7
3.4
5.6
5.1
5.8
5.2
3.6
6.3
4.6
3.1
3.0
3.1
4.3
% HM % Slimes HM Tonnes VHM Ilmenite Leucoxene Rutile
(%)
(%)
(%)
(%)
Regans Ford4
Regans Ford4
Regans Ford Total
Indicated
Inferred
4,505,285
9,024,226
455,933
4,961,218
918,536
9,942,762
9.9
6.5
9.6
16.8
18.5
17.0
893,398
59,705
953,103
94.3
90.5
94.1
70.0
68.3
69.9
10.0
7.7
9.9
4.3
4.4
4.3
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Zircon
(%)
5.5
6.0
5.7
7.8
8.1
10.9
8.3
10.5
7.3
9.4
12.4
12.3
12.4
9.6
Zircon
(%)
10.0
10.1
10.0
RESOURCES AND RESERVES SCHEDULE
Previously Reported Mineral Resources - Dredge deposits; in accordance with JORC Code (2004) @ 1.0% HM Cut-off
Project/Deposit Category
Volume
Tonnes
% HM % Slimes HM Tonnes VHM Ilmenit Leucoxen Rutile Zircon
Titan3
Titan3
Total Titan
Telesto3
Calypso3
Bidaminna3
Indicated 10,335,053 21,163,741
Inferred
Total
58,517,775 115,445,391
136,609,132
68,852,828
Indicated
1,716,328
3,512,204
Inferred
27,113,647 51,457,008
Inferred
26,260,000 44,642,000
1.8
1.9
1.9
3.8
1.7
3.0
22.1
18.9
19.4
18.4
13.7
3.6
378,831
2,205,007
2,583,838
134,499
854,186
1,339,260
(%)
86.0
85.9
85.9
83.3
85.6
96.8
(%)
71.9
71.8
71.8
67.5
68.1
83.11
Total Dredge
123,942,803 236,220,344
2.1
15.2
4,911,783 88.7
74.1
(%)
1.5
1.5
1.5
0.7
1.6
7.2
3.1
(%)
3.1
3.1
3.1
5.6
5.1
1.0
(%)
9.5
9.5
9.5
9.5
10.8
5.5
2.9
8.6
1.COMPLIANCE STATEMENT Boonanarring/Atlas Resource
The information in this report that relates to the estimation of Mineral Resources is based on information compiled by Mrs Christine
Standing, who is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM) and the Australian Institute of
Geoscientists (AIG). Mrs Standing is a full-time employee of Optiro Pty Ltd and has sufficient experience which is relevant to the style
of mineralisation and type of deposit under consideration and to the activity which she is undertaking to qualify as a Competent
Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’. Mrs Standing consents to the inclusion in this report of the matters based on her information in the form and context in
2.COMPLIANCE STATEMENT Boonanarring/Atlas Reserve
The Ore Reserves statement has been compiled in accordance with the guidelines of the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves (The JORC Code – 2012 Edition). The Ore Reserves have been compiled by
Jarrod Pye, Mining Engineer and full-time employee of Image Resources, under the direction of Andrew Law of Optiro, who is a
Fellow of the Australasian Institute of Mining and Metallurgy. Mr Law has sufficient experience in Ore Reserves estimation relevant to
the style of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined in the 2012 Edition of
the “Australasian Code for Reporting of Mineral Resources and Ore Reserves”. Mr Law consents to the inclusion in the report of the
matters compiled by him in the form and context in which it appears.
3. COMPETENT PERSON’S STATEMENT – MINERAL RESOURCE ESTIMATES
The information in this presentation that relates to Mineral Resources is based on information compiled by Lynn Widenbar BSc, MSc,
DIC MAusIMM MAIG employed by Widenbar & Associates who is a consultant to the Company. Lynn Widenbar 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 2004 edition of the ‘Australasian Code of Reporting of Exploration
Results, Mineral Resources and Ore Reserves’. Lynn Widenbar consents to the inclusion of this information in the form and context in
4. HISTORIC INFORMATION - REGANS FORD DEPOSIT
The information in this presentation that relates to tonnes, grades and mineral assemblage is based on historic information published
by Iluka Resources Limited and indicating the mineral resources were compiled in accordance with the JORC Code (2004).
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DIRECTORS' REPORT
Your directors present their report on the Company for the year ended 31 December 2017.
DIRECTORS
The following persons were directors of Image Resources NL (“Image”) during the year and up to the date of this report, unless stated otherwise:
Robert Besley
Peter Thomas
George Sakalidis
Aaron Chong Veoy Soo
Chaodian Chen
Fei Wu
Patrick Mutz
PRINCIPAL ACTIVITIES
The principal activities of the Company during the year was the completion of a bankable feasibility study of the 100%-owned high-grade
Boonanarring and Atlas mineral sands projects in the North Perth Basin in Western Australia and then actively seeking project finance to support
the development of the Boonanarring mineral sands project.
RESULTS FROM OPERATIONS AND FINANCIAL POSITION
During the year the Company recorded an operating loss of $8,014,023 (6 months to 31 December 2016: $2,852,955). Basic loss per share for the
year was 1.48 cents (6 months to 31 December 2016: 0.75 cents). Diluted loss per share in respect of both periods ended 31 December 2017 and
31 December 2016 are the same as for the basic loss per share.
During the year the net assets of the Company increased by $4,672,757 to $14,914,684 including cash and cash equivalents increasing by
$3,314,927 to $4,422,650 and property, plant and equipment increasing by $1,888,607 being for equipment and land purchases. This was largely
funded by $12,666,030 being raised through share issues offset by exploration and tenement expenses of $5,096,598 and other expenses of
$2,697,161.
DIVIDENDS
No amounts have been paid or declared by way of dividend by the Company since the end of the previous financial year and the directors do not
recommend the payment of any dividend.
REVIEW OF OPERATIONS
A review of operations is covered elsewhere in this Annual Report.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
All significant changes in the state of affairs of the Company during the year are discussed in detail above.
SIGNIFICANT EVENTS SUBSEQUENT TO REPORTING DATE
Other than the following matters:
On 13 February 2018, at a general meeting of shareholders, shareholders gave approval for the Company to issue up to 300,000,000
shares at an issue price of 10 cents or not less than 80% of the VWAP of shares (calculated over the five days on which sales of shares
were recorded before the day on which the issue is made),
On 13 February 2018, shareholders also gave approval for the Company to administer and issue securities under an Employee Share
Plan. The shareholders also gave approval for the Company to provide financial assistance to employees in the form of interest free
loans to enable the employees to participate in the Employee Share Plan,
On 8 March 2018, the Company announced the execution of a Loan Note Subscription Agreement with Switzerland-based Pala
Investments Limited (“Pala”) as the ‘arranger’, and Pala and USA-based Castlelake, L.P. as the Loan Note Holders, to provide AU$50M
from the issue of senior secured loan notes to be used for the construction and commissioning of the Boonanarring Project; and
On 14 March 2018, the Company announced the issue of 250 million shares at 10 cents per share to raise A$25 million (before costs)
as the balance of capital required for the construction and commissioning of the Boonanarring Project with site construction to begin
prior to 31 March 2018. The share issue settled on 28 March 2018.
There were no other material significant events subsequent to the reporting date.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
Likely developments in the operations of the Company and the expected results of those operations in future financial years have not been included
in this report as the directors believe, on reasonable grounds, that the inclusion of such information would be likely to result in unreasonable
prejudice to the Company.
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DIRECTORS' REPORT
ENVIRONMENTAL ISSUES
The Company carries out operations in Australia which are subject to environmental regulations under both Commonwealth and State legislation in
relation to those exploration activities. The Company’s exploration director is responsible for being aware of, and monitoring compliance with,
regulations. During or since the financial year there have been no known significant breaches of these regulations.
INFORMATION ON DIRECTORS AND COMPANY SECRETARIES
Robert Besley
Chairman
Appointed as Director and Chair on 8 June 2016 Robert Besley is also Chairman of Silver City Minerals Ltd (ASX:SCI) and has more than 40 years’
experience in the mining industry. Mr Besley has served in a number of Government and industry advisory roles including several years as Deputy
Chairman of the NSW Minerals Council. He holds a BSc (Hons) in Economic Geology from the University of Adelaide and is a Member of the
Australian Institute of Geoscientists. He managed the creation, listing and operation of two successful mining companies; CBH Resources Limited
which he led as Managing Director from a small exploration company to Australia’s 4th largest zinc producer; and Australmin Holdings Limited
(acquired by Newcrest) which brought into production a gold mine in WA and mineral sands mine in NSW. More recently he was a founding
Director of KBL Mining Limited which operated the Mineral Hill copper-gold mine in NSW and is Chairman of Silver City Minerals Limited, which is
actively exploring for silver-lead-zinc in the Broken Hill District. He was a Non-Executive and independent Director of Murray Zircon from
commencement of development and production of the Mindarie Mineral Sands Project until June 2016. He also serves on the Company’s audit and
remuneration committees. During the past three years he has served as a director of the following other listed companies:
KBL Mining Limited, appointed 29 February 2008, resigned 17
November 2016.
Silver City Minerals Limited - appointed 5 March 2010,
continuing.
Patrick Mutz
Managing Director
Patrick Mutz has more than thirty years of international mining industry experience in technical (metallurgist), managerial, consulting and executive
roles in all aspects of the industry from exploration through project development, mining and mine rehabilitation. He has operational experience in
open cut, underground, and in-situ mining and related processing, on projects in the USA, Germany, Africa and Australia. Since his arrival in
Australia from the USA in 1998, he has served as CEO / Managing Director of a number of publicly listed and private mining companies based in
South Australia, Victoria and Western Australia, primarily involved with project development and company transitioning from exploration to
production. Mr Mutz is a Fellow of the AusIMM and a member of the Australian Institute of Company Directors. He holds a Bachelor of Science
(Honours) and an MBA from the University of Phoenix in the US. Prior to joining Image Patrick was CEO of Murray Zircon Pty Ltd focusing on the
development and mining and processing operations of its 100%-owned Mindarie Mineral Sands Project in South Australia, where he lead the
company on its goal of becoming South Australia’s newest mineral sands mining company at that time. Mr Mutz has not been a director of any
other listed public companies in the past 3 years.
Peter Thomas
Non-Executive Director
Mr Thomas, having served on ASX listed company boards for over 30 years, has been a non-executive director of Image Resources NL since 10
April 2002. For over 30 years until June 2011, he ran a legal practise on his own account specialising in the delivery of wide ranging legal,
corporate and commercial advice to listed explorers and miners. He serves on the Company’s remuneration committee. During the past three years
he has served as a director of the following other listed companies:
Emu NL – appointed August 2007, continuing.
Middle Island Resources Limited – appointed March 2010,
continuing.
George Sakalidis
Executive Director - Exploration
Mr Sakalidis is an exploration geophysicist with over 35 years’ industry experience. His career has included extensive gold, diamond, base metals
and mineral sands exploration. Mr Sakalidis has been involved in a number of significant mineral discoveries in Western Australia, including the
Three Rivers and Rose gold deposits, the Dongara Mineral Sands Deposits, the Boonanarring-Gingin South-Hyperion Mineral Sands Deposits and
he was involved in the tenement applications over the Silver Swan nickel deposit. He was also involved with the tenement application for the
recently discovered Monty Copper mineralisation adjacent to the Degrussa Copper deposit. He was the founding Director of Magnetic Minerals
Limited, which was taken over in March 2003 after he was instrumental in the discovery of the Dongara mineral sand deposits north of Eneabba.
He is a founding Director and is currently an Executive Director of this Company (since listing on 4 July 2002) and is Managing Director of Magnetic
Resources NL (which listed on 5 April 2007). Mr Sakalidis is also a founding director of ASX listed companies Meteoric Resources NL, Emu NL,
and Potash West NL. During the past three years he has also served as a director of the following other listed companies:
Meteoric Resources NL - appointed February 2004, resigned
November 2017.
Magnetic Resources NL - appointed August 2006, resigned
October 2014, reappointed 29 January 2016.
Aaron Chong Veoy Soo
Non-Executive Director
Mr Soo has been a long term supporter and shareholder in Image Resources. Mr Soo is an advocate & solicitor practising in West Malaysia with 16
years of experience in legal practice and currently a partner in Stanley Ponniah, Ng & Soo, Advocates & Solicitors. He also serves on the
Company’s audit committee. Mr Soo has not been a director of any other listed public companies in the past 3 years.
- 15 -
DIRECTORS' REPORT
Chaodian Chen
Non-Executive Director
Mr Chen founded Orient Zirconic in 1995 and has built the company into a leading company in the zirconium industry. He served as President and
Chairman of the company until mid-2013 when China National Nuclear Corporation (CNNC) became the largest shareholder in Orient Zirconic. He
became the Chairman of Murray Zircon when the company was founded in 2011 as a result of Orient Zirconic’s first investment in mining in
Australia. Mr Chen is the Vice President of China non-ferrous metals industry association titanium zirconium & Hafnium Branch. He holds an EMBA
degree and is a Certified Engineer. He also owns a number of patents involving the processing of zircon. During the past three years he has also
served as a director of the following other listed company:
Guangdong Orient Zirconic Ind Sci & Tech Co., Ltd, resigned 9 November 2016.
Fei (Eddy) Wu
Non-Executive Director
Mr Wu has solid operational experience in the Australian resource and mining industry. He specialises in combining the strengths of Australian
upstream mining with Chinese downstream processing and end use to optimise the strategy for resource development and maximise the resource
value. As the first CEO of Murray Zircon, he built and led the team to complete the development and start-up at the Mindarie mineral sands project
in late 2012. Mr Wu was appointed as a Non-Executive Director of Murray Zircon in early 2013. He was the CEO of Queensland Mining Corporation
Limited (QMC) from August 2013 until January 2018. He is currently a Non-Executive Director of QMC and the CEO of WIM Resources Pty Ltd.
Eddy graduated from the University of Science and Technology, Beijing. He holds a Master’s Degree in Commerce (Finance) from the Australian
National University and a Master’s Degree in Science from Cass Business School, City University London. He also serves on the Company’s audit
and remuneration committees as Chair of both. During the past three years he has also served as a director of the following other listed company:
Queensland Mining Corporation Limited. Appointed 9 August 2013, continuing.
Dennis Wilkins
Company Secretary (Appointed 25 September 2012)
Mr Wilkins is the founder and principal of DW Corporate Pty Ltd, a leading privately held corporate advisory firm servicing the natural resources
industry. Since 1994 he has been a director of, and involved in the executive management of, several publicly listed resource companies with
operations in Australia, PNG, Scandinavia and Africa. From 1995 to 2001 he was the Finance Director of Lynas Corporation Ltd during the period
when the Mt Weld Rare Earths project was acquired by the group. He was also founding director and advisor to Atlas Iron Limited at the time of
Atlas’ initial public offering in 2006. Since July 2001 Mr Wilkins has been running DW Corporate Pty Ltd, where he advises on the formation of, and
capital raising for, emerging companies in the Australian resources sector.
AUDIT COMMITTEE
At the date of this report the members of the Company’s audit committee comprise Messrs Besley, Soo and Wu (with Mr Wu undertaking the role of
the Chair of that committee). During the year, the committee held one meeting. All members attended this meeting.
REMUNERATION COMMITTEE
At the date of this report the Remuneration Committee (“committee”) comprises Messrs Besley, Thomas and Wu (with Mr Wu undertaking the role
of the Chair of that committee). During the year, the committee held one meeting. All members attended this meeting.
MEETINGS OF DIRECTORS
During the financial year ended 31 December 2017, there were 6 meetings of directors held. Attendances by each director during the year were as
follows:
Robert Besley
Peter Thomas
George Sakalidis
Aaron Soo
Chaodian Chen
Fei Wu
Patrick Mutz
Directors’ Meetings
Audit Committee
Remuneration
Committee
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
1
-
-
1
-
1
-
1
-
-
1
-
1
-
1
1
-
-
-
1
-
1
1
-
-
-
1
-
6
6
6
6
6
6
6
6
6
6
6
6
6
6
- 16 -
DIRECTORS' REPORT
REMUNERATION REPORT (Audited)
Names and positions held of key management personnel (defined by the Australian Accounting Standards as being “those people having authority
and responsibility for planning, directing, and controlling the activities of an entity, either directly or indirectly. This includes an entity's directors”) in
office at any time during the financial year were:
Key Management Personnel
Position
Robert Besley
Patrick Mutz
Peter Thomas
Aaron Soo
George Sakalidis
Fei (Eddy) Wu
Chaodian Chen
John McEvoy
Non-Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Executive Director – Exploration
Non-Executive Director
Non-Executive Director
Chief Financial Officer
The Company’s policy for determining the nature and amount of emoluments of key management personnel is set out below:
Key Management Personnel Remuneration and Incentive Policies
The Remuneration committee’s mandate is to make recommendations to the Board with respect to appropriate and competitive remuneration and
incentive policies (including basis for paying and the quantum of any bonuses), for key management personnel and others as considered
appropriate to be singled out for special attention, which:
motivates them to contribute to the growth and success of the Company within an appropriate control framework;
aligns the interests of key leadership with the interests of the Company’s shareholders;
are paid within any limits imposed by the Constitution and make recommendations to the Board with respect to the need for increases
to any such amount at the Company’s annual general meeting; and
in the case of directors, only permits participation in equity-based remuneration schemes after appropriate disclosure to, due
consideration by and with the approval of the Company’s shareholders.
Non-Executive Directors
The committee is to ensure that non-executive directors are not provided with retirement benefits other than statutory superannuation
entitlements.
To the extent that the Company adopts a remuneration structure for its non-executive directors other than in the form of cash and
superannuation, the disclosure thereof shall be made to stakeholders and approvals obtained as required by law and the ASX listing
rules.
Incentive Plans and Benefits Programs
The committee is to:
review and make recommendations concerning long-term incentive compensation plans, including the use of equity-based plans.
Except as otherwise delegated by the Board, the committee will act on behalf of the Board to administer equity-based and employee
benefit plans, and as such will discharge any responsibilities under those plans, including making and authorising grants, in
accordance with the terms of those plans;
ensure that, where practicable, incentive plans are designed around appropriate and realistic performance targets that measure
relative performance and provide remuneration when they are achieved; and
review and, if necessary, improve any existing benefit programmes established for employees.
Retirement and Superannuation Payments
Prescribed benefits were provided by the Company to directors by way of superannuation contributions to externally managed complying
superannuation funds during the year. These benefits were paid as superannuation contributions to satisfy (at least) the requirements of the
Superannuation Contribution Guarantee Act and in satisfaction of any salary sacrifice requests. All contributions were made to accumulation type
funds selected by the director and accordingly actuarial assessments were not required.
- 17 -
DIRECTORS' REPORT
Relationship between Company Performance and Remuneration
There is no relationship between the financial performance of the Company for the current or previous financial year and the remuneration of the
key management personnel. Remuneration is set having regard to market conditions and encourage the continued services of key management
personnel.
Use of Remuneration Consultants
The Company did not employ the services of a remuneration consultant during the financial year ended 31 December 2017 to make a remuneration
recommendation in relation to any Key Management Personnel.
Current Board Remuneration Structure
The current remuneration structure for the board is as follows:
Director
Annual Directors Fees
Committee Fees
Mr R Besley
(Non-Executive Chairman)
$40,000 + statutory super
$5,000 + statutory super
Mr P Mutz
(Managing Director)
$340,000 inclusive of super
-
Mr P Thomas
(Non-Executive Director)
$30,000 + statutory super
$5,000 + statutory super
Mr A Soo
(Non-Executive Director)
$30,000
-
Mr F Wu
(Non-Executive Director)
$30,000 + statutory super
$5,000 + statutory super
Mr C Chen
(Non-Executive Director)
$30,000
Mr G Sakalidis
(Executive Technical Director)
$175,000 inclusive of super
-
-
Key Management Personnel Remuneration
Table 1: Remuneration for the year ended 31 December 2017
Short-term benefits
Directors
Fees/Salary
($)
Other Fees
&
contractual
payments
($)
Non-
monetary
benefits
($)
Post-
employment
Statutory
superannuat
ion
($)
Share-based
payments
Equity-
settled
share based
payments
($)
Total cash
and cash
equivalent
benefits
($)
Non-Executive Directors
Robert Besley
Peter Thomas
Aaron Soo
Fei (Eddy) Wu
Chaodian Chen
Executive Directors
Patrick Mutz
George Sakalidis
Executive Officers
John McEvoy
Total
.
45,000
35,000
30,000
35,000
30,000
253,363
136,510
259,615
824,488
-
-
-
-
-
54,616
-
-
54,616
-
-
-
-
-
-
-
-
-
4,275
3,325
-
3,325
-
27,766
12,968
24,664
76,323
-
-
-
-
-
-
-
-
-
- 18 -
Total
($)
49,275
38,325
30,000
38,325
30,000
-
-
-
-
-
17,881
353,626
-
-
149,478
284,279
17,881
973,308
DIRECTORS' REPORT
Table 2: Remuneration for the 6 months ended 31 December 2016
Short-term benefits
Post-
employment
Directors
Fees
($)
Other Fees
&
contractual
payments
($)
Non-
monetary
benefits
($)
Statutory
Superannuation
($)
Total cash
and cash
equivalent
benefits
($)
Share-based
payments
Equity-
settled
share based
payments
($)
Non-Executive Directors
Robert Besley
Peter Thomas
Aaron Soo
Fei (Eddy) Wu
Chaodian Chen
Executive Directors
Patrick Mutz
George Sakalidis
Executive Officers
John McEvoy 1
Total
22,500
17,500
15,000
17,500
15,000
105,000
76,230
20,833
289,563
-
-
-
-
-
32,245
-
-
32,245
-
-
-
-
-
-
-
-
-
2,138
1,662
-
1,662
-
15,000
7,242
1,979
29,683
-
-
-
-
-
-
-
-
-
Total
($)
24,638
19,162
15,000
19,162
15,000
-
-
-
-
-
24,119
176,364
-
-
83,472
22,812
24,119
375,610
Note 1 Mr McEvoy became a KMP on 1 December 2016.
Table 3: Compensation options as at 31 December 2017
Granted
No.
Grant
Date
Fair value
per option
at grant
date
Exercise
price per
option
(note 23)
$
$
Executive Director
Expiry
Date
First
Exercise
Date
Last
Exercise
Date
Vested
No.
Vested
%
Patrick Mutz
1,500,000
30-Nov-16
0.013
0.085
4-Dec-18
30-Nov-16
4-Dec-18
1,500,000
Patrick Mutz
1,500,000
30-Nov-16
0.015
0.10
4-Dec-18
30-Apr-17
4-Dec-18
1,500,000
100
100
Key Management Personnel Contracts
Remuneration arrangements for Key Management Personnel are formalised in employment agreements. The following outlines the details of
contracts:
Executives
Patrick Mutz – Managing Director
Base Salary - $340,000 per annum inclusive of superannuation
Performance bonus - $100,000 per annum awarded as part of an executive performance incentive scheme and on completion of
measured key performance indicators and performance above and beyond mere ordinary performance.
Allowances – The Company will contribute up to $60,000 per 12 month period or proportion thereof for a company vehicle or taxis and
car rental provided for use on company business, accommodation whilst located in Perth and towards airfares for travel between
Adelaide and Perth. The allowances for accommodation and airfares are provided for in the contract until 31 December 2018.
The agreement may be terminated by the Company by the provision of three months written notice. The employee may terminate the
contract by the provision of two months’ notice.
Unvested options terminate upon resignation as Managing Director in accordance with the terms on which the options were granted.
- 19 -
DIRECTORS' REPORT
George Sakalidis – Executive Director – Exploration
Base Salary - $175,000 per annum inclusive of superannuation based on a 70% commitment of time being an average of 28 hours work
per week. Salary is paid monthly based on a rate of $110 per hour plus 9.5% superannuation.
The agreement may be terminated by the provision of one month’s written notice by either the Company or Mr Sakalidis.
John McEvoy – Chief Financial Officer
Base Salary - $250,000 per annum plus minimum superannuation guarantee contribution of 9.5%.
The agreement may be terminated by the provision of three month’s written notice by either the Company or Mr McEvoy.
Non Executives
Clause 91 (1) of the Company’s Constitution provides that Directors are entitled to receive Directors’ fees within the limits approved by
shareholders in general meeting. Shareholders approved the aggregate fees to be paid to Directors to be $300,000 per annum on 30 November
2009.
Each Non-Executive Director’s actual remuneration for the year ended 31 December 2017 and 6 months to 31 December 2016 is shown above.
Each Non-Executive Director has an unspecified term of appointment, which is subject to the Company’s Constitution. Conditions are reviewed at
least annually by the Remuneration Committee. There are no termination benefits for any Non-Executive Director.
Base fees for each non-executive director during their period in office were as follows:
Base Fees
per annum
$
40,000
30,000
30,000
30,000
30,000
Audit
Committee Fee
Remuneration
Committee Fee
Superannuation
$
-
-
-
-
-
$
5,000
5,000
-
5,000
-
%
9.5
9.5
-
9.5
-
Robert Besley
Peter Thomas
Aaron Soo
Fei (Eddy) Wu
Chaodian Chen
Consultant Agreements
DW Corporate Services Pty Ltd: provides the services of Dennis Wilkins as Company Secretary. These services are provided under a services
agreement for a fixed monthly retainer fee of $2,000 plus additional services charged at specified hourly rates. Four months’ written notice of
termination is required from either party.
Guaranteed Rate Increases
There are no guaranteed rate increases fixed in the contracts of any of the key management personnel.
Options and Rights Granted as Remuneration
During the financial year no options were issued to / or exercised by key management personnel to acquire fully paid ordinary shares.
- 20 -
DIRECTORS' REPORT
Options held by Key Management Personnel
KMP
Directors
Patrick Mutz
Totals
Balance at
Beginning of
Year
No.
Grant Details
Exercised
Lapsed
No.
Value
$
No.
Value
$
No.
Balance at
End of
Year
No.
3,000,000
3,000,000
-
-
-
-
-
-
-
-
-
-
3,000,000
3,000,000
Other than listed above no Key Management Person or their related entities held options in the Company during the financial year.
KMP
Directors
Patrick Mutz
Totals
Balance at
End of Year
Vested
Exercisable
Unexercisable
No.
No.
No.
Total at End
of Year
No.
Unvested
Total at End
of Year
No.
3,000,000
3,000,000
3,000,000
3,000,000
-
-
3,000,000
3,000,000
-
-
Shares held by Key Management Personnel
The number of shares in the company held at the beginning and end of the year and net movements during the financial year by key management
personnel and/or their related entities are set out below:
Name
Directors
Robert Besley
Peter Thomas
Aaron Soo
Fei Wu
Chaodian Chen
George Sakalidis
Patrick Mutz
Executive Officer
John McEvoy
Totals
Balance at
Beginning of
Year or Date
of
Appointment
Other
Changes
during the
Year
Balance at
End of Year or
Date of
Retirement
400,000
166,667
566,667
2,104,306
-
2,104,306
15,988,861
(4,988,861)
11,000,000
-
-
-
-
-
-
3,878,489
500,000
4,378,489
-
-
-
475,000
950,834
1,420,834
22,846,656
(3,371,360)
19,470,296
Other Equity-related KMP Transactions
There have been no other transactions involving equity instruments apart from those described in the tables above relating to options, rights and
shareholdings.
- 21 -
DIRECTORS' REPORT
Other Transactions with KMP and/or their Related Parties
There were no other transactions conducted between the Company and KMP or their related parties, apart from those disclosed above relating to
equity, compensation and loans, that were conducted other than in accordance with normal employee, customer or supplier relationships on terms
no more favourable than those reasonably expected under arm’s length dealings with unrelated persons.
End of remuneration report audited.
OPTIONS
At the date of this report, there were 3,000,000 options over 3,000,000 unissued ordinary shares in the Company as follows: Refer to note 22 for
further details of the options outstanding.
Grant Date
5 December 2016
5 December 2016
Date of Expiry
4 December 2018
4 December 2018
Exercise Price
Number under Option
8.5 cents
10 cents
1,500,000
1,500,000
Option holders do not have any rights to participate in any issues of shares of the Company during or since the end of the reporting year.
For details of options issued to directors and executives as remuneration, refer to the remuneration report.
During the year ended 31 December 2017 no ordinary shares were issued on the exercise of options granted. No further shares have been issued
since year-end. No amounts are unpaid on any of the shares.
CORPORATE STRUCTURE
Image is a no liability company incorporated and domiciled in Australia.
ACCESS TO INDEPENDENT ADVICE
Each director has the right, so long as he is acting reasonably in the interests of the Company and in the discharge of his duties as a
director, to seek independent professional advice and recover the reasonable costs thereof from the Company. The advice shall only be
sought after consultation about the matter with the chairman (where it is reasonable that the chairman be consulted) or, if it is the chairman
that wishes to seek the advice or it is unreasonable that he be consulted, another director (if that be reasonable). The advice is to be made
immediately available to all Board members other than to a director against whom privilege is claimed.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has entered into agreements indemnifying, to the extent permitted by law, all the directors and officers of the Company against all
losses or liabilities incurred by each director and officer in their capacity as directors and officers of the Company. During the year an amount of
$31,548 (6 months to 31 December 2016: $12,140) was incurred in insurance premiums for this purpose.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to
intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of
those proceedings.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out in this annual report.
Signed in accordance with a resolution of the directors
SIGNED: ROBERT BESLEY
CHAIRMAN
Perth, 28 March 2018
- 22 -
CORPORATE GOVERNANCE STATEMENT
Image Resources NL and the Board are committed to achieving and demonstrating the highest standards of corporate governance. Image
Resources NL has reviewed its corporate governance practices against the Corporate Governance Principles and Recommendations (3rd
edition) published by the ASX Corporate Governance Council.
The 2017 Corporate Governance Statement is dated at 27 March 2018 and reflects the corporate governance practices in place throughout
the period ended 31 December 2017. The 2017 Corporate Governance Statement was approved by the Board on 27 March 2018. A
description of the Group’s current corporate governance practices is set out in the Group’s Corporate Governance Statement which can be
viewed at www.imageres.com.au.
- 24 -
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the Year Ended 31 December 2017
Notes
3
11
3
4
7
7
Year to
31 Dec
2017
($)
19,373
8,805
(53,132)
(5,096,598)
(2,697,161)
(230,252)
(8,048,965)
34,942
(8,014,023)
2,869
2,869
6 months to
31 Dec
2016
($)
20,699
5,497
(25,000)
(1,484,003)
(1,257,326)
(112,822)
(2,852,955)
-
(2,852,955)
(20)
(20)
(8,011,154)
(2,852,975)
(8,011,154)
(2,852,975)
(1.48)
(1.48)
(0.75)
(0.75)
Revenue
Interest and dividends income
Other revenue
Expenses
Depreciation expense
Exploration and evaluation expenses
Other expenses
Finance costs
Loss before income tax
Income tax benefit
Loss from continuing operations
Other comprehensive income
Items that may be reclassified subsequently to profit and loss
Changes in the fair value of available for sale financial assets
Other comprehensive income for the period, net of tax
Total loss and other comprehensive income for the period
Total loss and other comprehensive income for period attributable to
members of the Company
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
The accompanying notes form part of these financial statements.
- 25 -
STATEMENT OF FINANCIAL POSITION
As at 31 December 2017
Current Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total Current Assets
Non-Current Assets
Property, plant and equipment
Inventory
Other financial assets
Total Non-Current Assets
TOTAL ASSETS
Current Liabilities
Trade and other payables
Provisions
Borrowings
Total Current Liabilities
Non-Current Liabilities
Borrowings
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
Equity
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
The accompanying notes form part of these financial statements.
Notes
8
9
10
11
13
12
14
15
16
16
17
17
- 26 -
31 Dec
2017
($)
4,422,650
81,756
126,065
4,630,471
31 Dec
2016
($)
1,107,723
15,142
117,886
1,240,751
14,642,083
12,753,476
755,514
16,780
15,414,377
20,044,848
940,445
158,876
34,843
1,134,164
3,996,000
3,996,000
5,130,164
14,914,684
68,917,165
42,269
(54,044,750)
14,914,684
756,084
7,514
13,517,074
14,757,825
416,284
127,614
-
543,898
3,972,000
3,972,000
4,515,898
10,241,927
56,251,135
21,519
(46,030,727)
10,241,927
STATEMENT OF CHANGES IN EQUITY
For the Year Ended 31 December 2017
Contributed
Equity
Available for
Sale Financial
Asset Reserve
Employee
Benefit Reserve
Accumulated
Losses
($)
($)
($)
($)
Total
($)
Balance at 1 July 2016
56,283,014
(2,580)
393,640
(43,571,412)
13,102,662
Comprehensive loss
Operating loss for the period
Other comprehensive loss
Total comprehensive loss for the
year
Transactions with owners in their
capacity as owners
Options expired during the period
Equity settled share based payment
transactions
Cost of share issue
Total transactions with owners in
their capacity as owners
-
-
-
-
-
(31,879)
(31,879)
-
(20)
(20)
-
-
-
-
-
-
-
(2,852,955)
(2,852,955)
-
(20)
(2,852,955)
(2,852,975)
(393,640)
393,640
-
24,119
-
-
-
24,119
(31,879)
(369,521)
393,640
(7,760)
Balance at 31 December 2016
56,251,135
(2,600)
24,119
(46,030,727)
10,241,927
Balance at 1 January 2017
56,251,135
(2,600)
24,119
(46,030,727)
10,241,927
Comprehensive loss
Operating loss for the year
Other comprehensive income
Total comprehensive loss for the
year
Transactions with owners in their
capacity as owners
Shares issued during the year
Cost of share issue
Equity settled share based payment
transactions
Total transactions with owners in
their capacity as owners
-
-
-
13,353,548
(687,518)
-
12,666,030
-
2,869
2,869
-
-
-
-
-
-
-
-
-
17,881
17,881
(8,014,023)
(8,014,023)
-
2,869
(8,014,023)
(8,011,154)
-
-
-
-
13,353,548
(687,518)
17,881
12,683,911
Balance at 31 December 2017
68,917,165
269
42,000
(54,044,750)
14,914,684
The accompanying notes form part of these financial statements.
- 27 -
STATEMENT OF CASH FLOWS
For the Year Ended 31 December 2017
Notes
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and contractors
Interest received
Interest paid
Net cash used in operating activities
18
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for exploration and evaluation
Payments for restricted cash – term deposit for bank guarantee
Reclassification of deposits at call
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from new issues of shares
Payments for share issue costs
Proceeds from borrowings
Repayment of borrowings
17
16
16
Year to
31 Dec
2017
($)
6,008
(2,497,325)
21,582
(206,252)
(2,675,987)
(1,459,359)
182
6 months to
31 Dec
2016
($)
21,714
(1,342,770)
19,401
(112,877)
(1,414,532)
(83,721)
-
(5,239,945)
(1,145,602)
-
-
(6,699,122)
13,353,548
(698,355)
112,159
(77,316)
(20,000)
750,000
(499,323)
-
(14,556)
-
-
Net cash inflows from / (used in) financing activities
12,690,036
(14,556)
Net increase / (decrease) in cash and cash equivalents
Net foreign exchange difference
Cash and Cash equivalents at beginning of the year
Cash and cash equivalents at the end of the year
8
3,314,927
-
1,107,723
4,422,650
(1,928,411)
-
3,036,134
1,107,723
The accompanying notes form part of these financial statements.
- 28 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2017
This financial report includes the financial statements and notes of the Company.
NOTE 1
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation
The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian
Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and the Corporations Act
2001.
The financial statements were authorised for issue on 27 March 2018.
The following is a summary of the material accounting policies adopted by the Company in the preparation of the financial report.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and
reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial
statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this
financial report are presented below and have been consistently applied unless otherwise stated.
Reporting Basis and Conventions
The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current
assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.
Going Concern
As outlined in Note 21, subsequent to year end the Company entered into a $50m senior secured debt facility and raised $25m from an equity
raising for the construction and commissioning of an open cut mine and wet concentration plant at the Boonanarring Mineral Sands Project. The
Company recognises that its ability to continue as a going concern to meet its debt when they fall due is dependent on successful development of
the open-cut mine broadly within budgeted cost expectations, ongoing compliance with debt covenants, and the mines subsequent profitable
operation. The Directors have reviewed the business outlook and are of the opinion that the use of the going concern basis of accounting is
appropriate as they believe the Company will achieve the matters set out above.
However, the conditions outlined above create uncertainty that may cast significant doubt as to whether the Company will continue as a
going concern and, therefore whether the Company will realize its assets and extinguish its liabilities in the normal course of business and
at the amounts stated in these financial statements. This financial report does not include any adjustments relating to the recoverability and
classification of recorded asset amounts nor to the amounts and classification of liabilities that may be necessary should the Company be
unable to continue as a going concern.
Accounting Policies
a) Revenue
Interest revenue is recognised on a proportional basis taking into account interest rates applicable to the financial asset.
Research and development tax incentives are recognised as other revenue during the financial year in which the claim for refund is made.
Profit on sale of exploration areas of interest is recognised upon the transfer of ownership.
All revenue is stated net of the amount of goods and services tax (GST).
b) Employee Benefits
Provision is made for the Company’s liability for employee benefits arising from services rendered by non-casual employees to balance date.
Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability
is settled. There is no liability for long service leave entitlements.
c) Exploration and Evaluation Expenditure
All exploration and evaluation expenditure is expensed to the Statement of Profit or Loss and other Comprehensive Income as incurred. The
effect of this write-off is to increase the loss incurred from continuing operations as disclosed in the Statement of Profit or Loss and other
Comprehensive Income and to decrease the carrying values in the Statement of Financial Position. That the carrying value of mineral
assets, as a result of the operation of this policy, is zero does not necessarily reflect the board’s view as to the market value of that asset.
d) Asset Acquisitions
The cost method is used for all acquisitions of assets regardless of whether shares or other assets are acquired. Cost is determined as the
fair value of assets given up at the date of acquisition plus costs incidental to the acquisition.
Costs relating to the acquisition of new areas of interest are classified as either exploration and evaluation expenditure or mine properties
based on the stage of development reached at the date of acquisition.
- 29 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2017
e) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except where the GST incurred on a purchase of goods and
services is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the
asset or as part of the expense item as applicable. Receivables and payables in the Statement of Financial Position are shown inclusive of
GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the Statement
of Financial Position.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing
activities, which are disclosed as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
f)
Income Tax
The income tax expense for the year comprises current income tax expense and deferred tax expense.
Current income tax expense charged to the Statement of Profit or Loss and Other Comprehensive Income is the tax payable on taxable
income calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities and assets
are therefore measured at the amounts expected to be paid to or recovered from the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused
tax losses, if any in fact are brought to account.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and
their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax
deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business
combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the year when the asset is realised or the
liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement also reflects the manner in
which management expects to recover or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future
taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or
simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a
legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on
either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement
of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to
be recovered or settled.
g) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks and other short-term highly liquid investments with original
maturities of three months or less.
h)
Impairment of Assets
At each reporting date, the Company reviews the carrying values of its tangible and intangible assets to determine whether there is any
indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the
asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over
its recoverable amount is expensed to the Statement of Profit or Loss and Other Comprehensive Income. This policy has no application
where paragraph (c) Exploration and Evaluation Expenditure applies.
i)
Earnings per Share
(i)
(ii)
Basic Earnings per Share – Basic earnings per share (EPS) is determined by dividing the loss from continuing operations after related
income tax expense by the weighted average number of ordinary shares outstanding during the financial year.
Diluted Earnings per Share – Options that are considered to be dilutive are taken into consideration when calculating the diluted
earnings per share.
- 30 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2017
j)
Property, plant, and equipment
Property, plant and equipment is stated at historical cost, less accumulated depreciation and accumulated impairment losses, if any.
Historical cost includes expenditure that is directly attributable to the acquisition of the items and costs incurred in bringing the asset into use.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable
that future economic benefits associated with the item flow to the Company and the cost of the item can be measured reliably. The carrying
amount of the replaced part is derecognised. All other repairs and maintenance costs are recognised in the income statement as incurred.
Mine development costs are capitalised only once a decision to mine is made and the development is fully funded.
Depreciation
The depreciable amount of all plant, equipment and motor vehicles are depreciated on a straight-line basis over the asset’s useful life to the
Company commencing from the time the asset is held ready for use.
The depreciation rates used for the class of plant, equipment and motor vehicle depreciable assets range between 20% and 100%.
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future
economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is
derecognised.
The assets’ residual values, useful lives and depreciation methods are reviewed at each reporting period and adjusted prospectively, if
appropriate.
k)
Financial Instruments
Recognition and Initial Measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For
financial assets, this is equivalent to the date that the Company commits itself to either the purchase or sale of the asset.
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified at fair value through
profit and loss, in which case transaction costs are expensed to profit and loss immediately.
Classification and Subsequent Measurement
Finance instruments are subsequently measured at either of fair value, amortised cost using the effective interest rate method, or cost. Fair
value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties. Where
available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted.
Amortised cost is calculated as:
-
-
-
-
the amount at which the financial asset or financial liability is measured at initial recognition;
less principal repayments;
plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the maturity amount
calculated using the effective interest method; and
less any reduction for impairment.
The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that
exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the
expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the
financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a
consequential recognition of an income or expense in profit and loss.
The Company does not designate any interests in joint venture entities as being subject to the requirements of accounting standards
specifically applicable to financial instruments.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and
are subsequently measured at amortised cost.
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the
Company’s intention to hold these investments to maturity. They are subsequently measured at amortised cost.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are not suitable to be classified into other categories of financial
assets due to their nature, or they are designated as such by management. They comprise investments in the equity of other entities where
there is neither a fixed maturity or determinable payments.
- 31 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2017
They are subsequently measured at fair value with changes in such fair value (i.e., gains and losses) recognised in other comprehensive
income (except for impairment losses and foreign exchange gains and losses). When the financial asset is derecognised, the cumulative
gain or loss pertaining to that asset previously recognised in other comprehensive income is reclassified into profit and loss.
Available-for-sale financial assets are included in current assets where they are expected to be sold within 12 months after the end of the
reporting period. All other financial assets are classified as non-current assets.
Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.
Fair Value
Fair value is determined based on closing market prices for all quoted investments. Valuation techniques are applied to determine the fair
value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models. The
expression “fair value” – and derivatives thereof – wherever used in this report bears the meaning ascribed to that expression by the
Australian Accounting Standards Board.
Impairment
At each reporting date, the Company assesses whether there is objective evidence that a financial instrument has been impaired. In the
case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an
impairment has arisen. Impairment losses are recognised in the profit or loss.
Financial Guarantees
Where material, financial guarantees issued, which require the issuer to make specified payments to reimburse the holder for a loss it incurs
because a specified debtor fails to make payment when due, are recognised as a financial liability at fair value on initial recognition.
The guarantee is subsequently measured at the higher of the best estimate of the obligation and the amount initially recognised less, when
appropriate, cumulative amortisation in accordance with AASB 118: Revenue. Where the entity gives guarantees in exchange for a fee,
revenue is recognised under AASB 118.
The fair value of financial guarantee contracts has been assessed using a probability weighted discounted cash flow approach. The
probability has been based on:
-
the likelihood of the guaranteed party defaulting in a year period;
-
-
the proportion of the exposure that is not expected to be recovered due to the guaranteed party defaulting; and
the maximum loss exposed if the guaranteed party were to default.
De-recognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party
whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial
liabilities are derecognised where the related obligations are either discharged, cancelled or expired. The difference between the carrying
value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of
non-cash assets or liabilities assumed, is recognised in profit or loss.
l)
Provisions
Provisions are recognised when the Company has a legal or constructive obligation, as a result of past events, for which it is probable that an
outflow of economic benefits will result and that outflow can be reliably measured.
m) Leases
Lease payments for operating leases (where substantially all the risks and benefits remain with the lessor) are charged as an expense in the
periods in which they are incurred.
Lease incentives under operating leases, if any, are recognised as a liability and amortised on a straight-line basis over the life of the lease
term.
n) Contributed Equity
Ordinary share capital is recognised at the fair value of the consideration received by the Company. Any transaction costs arising on the
issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.
o) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current
financial year.
- 32 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2017
p) Segment Reporting
Operating segments are reported in a manner that is consistent with the internal reporting to the chief operating decision maker (“CODM”),
which has been identified by the Company as the Managing Director and other members of the Board of directors.
q) Critical Accounting Estimates, Assumptions and Judgements
The directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available
current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data
obtained both externally and from within the Company.
Taxation
Balances disclosed in the financial statements and the notes thereto related to taxation are based on best estimates by directors. These
estimates take into account both the financial performance and position of the Company as they pertain to current income tax legislation and
the directors understanding thereof. No adjustment has been made for pending or future taxation legislation. The current tax position
represents the directors’ best estimate pending an assessment being received from the Australian Taxation Office.
Environmental Issues
Balances disclosed in the financial statements and notes thereto are not adjusted for any pending or enacted environmental legislation and
the directors understanding thereof. At the current stage of the Company’s development and its current environmental impact, the directors
believe such treatment is reasonable and appropriate.
Impairment
The Company assesses impairment at each reporting date by evaluating conditions specific to the Company that may lead to impairment of
assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in
assessing recoverable amounts incorporate a number of key estimates.
Share based payments
Share-based payment transactions made from time to time, in the form of options to acquire ordinary shares, are ascribed a fair value using
the Black-Scholes option pricing model. This model uses assumptions and estimates as inputs.
r) New Accounting Standards for Application in Future Years
There are a number of new Accounting standards and Interpretations issued by the AASB that are not yet mandatorily applicable to the
Company and have not been applied in preparing these financial statements. The Company does not plan to adopt these standards early.
These standards are not expected to have a material impact on the Company in the current or future period until mandatory adoption.
NOTE 2 OPERATING SEGMENTS
Segment Information
Identification of reportable segments
The Company has identified that it operates in only one segment based on the internal reports that are reviewed and used by the board of directors
(chief operating decision makers) in assessing performance and determining the allocation of resources. The Company is a minerals sands
exploration and evaluation company. Currently all the Company’s mineral sands tenements and resources are located in Western Australia.
Revenue and assets by geographical region
The Company's revenue is received from sources and assets located wholly within Australia.
Major customers
Due to the nature of its operations, the Company does not yet provide products or ongoing services.
Financial information
Reportable items required to be disclosed in this note are consistent with the information disclosed in the Statement of Profit or Loss and Other
Comprehensive Income and Statement of Financial Position and are not duplicated here.
- 33 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2017
REVENUE AND EXPENDITURE
NOTE 3
REVENUE
Other Income
Revaluation of available for sale financial assets
Rendering of Services
EXPENDITURE
Other Expenses
Loss on disposal of property, plant and equipment
Occupancy costs
Filing and ASX Fees
Corporate, staff and management
Other expenses from continuing operations
INCOME TAX
NOTE 4
The components of tax expense comprise:
Current tax
Deferred tax asset/liability
The prima facie tax on loss from ordinary activities before income tax is reconciled to
income tax as follows:
Loss from continuing operations before income tax
Prima facie tax benefit attributable to loss from continuing operations before income tax
at 30%
Tax effect of Non-allowable and additional deductible items
Revaluation of available-for-sale financial assets
Capital raising costs
Exploration expenses not deductible
Effect of tax losses and temporary differences not brought to account
Under provision for prior period arising from R and D tax refund
Income tax offset attributable to the Company
Unrecognised temporary differences
Net deferred tax assets (calculated at 30%) have not been recognised in respect of the
following items:
Prepayments
Provisions
Capital raising costs
Unrecognised deferred tax assets relating to the above temporary differences
Unrecognised deferred tax assets
The Company has accumulated tax losses of $42,277,297 (2016: $36,210,256).
The potential deferred tax benefit of these losses of $12,683,189 will only be recognised if:
Year to
31 Dec
2017
($)
6,397
2,408
8,805
(2,286)
(169,872)
(43,436)
(1,827,345)
(654,222)
(2,697,161)
-
-
-
8,014,023
2,404,207
1,919
(77,294)
(530,082)
(1,706,372)
(92,378)
-
663
8,227
209,283
218,173
6 months to
31 Dec
2016
($)
-
5,497
5,497
-
(73,772)
(30,111)
(625,478)
(527,965)
(1,257,326)
-
-
-
2,852,955
855,887
-
(24,559)
-
(831,328)
-
-
(389)
80,322
6,728
86,661
(i)
(ii)
(iii)
the Company derives future assessable income of a nature and of an amount sufficient to enable the benefit from the losses and
deductions to be released;
the Company continues to comply with the conditions for deductibility imposed by the law; and
no changes in tax legislation adversely affect the Company in realising the benefit from the deductions for the losses.
- 34 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2017
NOTE 5 KEY MANAGEMENT PERSONNEL COMPENSATION
Short-term employee benefits
Post-employment benefits
Equity-settled share based payments
Year to
31 Dec
2017
($)
879,104
76,323
17,881
973,308
6 months to
31 Dec
2016
($)
321,808
29,683
24,119
375,610
Short-term employee benefits
These amounts include fees and benefits paid to non-executive Chair and non-executive directors as well as all salary and paid leave benefits
awarded to executive directors and other KMP.
Post-employment benefits
These amounts are the costs of superannuation contributions payable for the period.
Equity-settled share based payments
This amount is calculated as the fair value of the options and represents the value of the services received during the period the options are held
over the financial period. This value was calculated using the Black-Scholes option pricing model. Further information on the share based payment
transaction is disclosed in Note 22.
Further key management personnel remuneration information has been included in the Remuneration Report section of the Directors
Report.
Information on related party and entity transactions are disclosed in Note 23.
NOTE 6
Amounts received or due and receivable by the auditors of the Company for:
AUDITORS REMUNERATION
Auditing and reviewing the financial reports – Greenwich & Co Audit Pty Ltd
NOTE 7
Basic and diluted loss per share
EARNINGS PER SHARE
The following reflects the earnings and share data used in the calculation of
basic and diluted loss per share
Loss for the period attributable to owners of the Company
Loss used in calculating basic and diluted loss per share
20,279
(Cents)
1.48
($)
35,583
(Cents)
0.75
($)
(8,011,154)
(8,011,154)
(2,852,955)
(2,852,955)
Number of shares
Number of shares
Weighted average number of ordinary shares used in calculating basic loss per share
542,790,567
379,511,740
The Company had 3,000,000 (2016: 3,000,000) options over fully paid ordinary shares on issue at balance date. Options are considered to be
potential ordinary shares, however, they are not considered to be dilutive in this year (6 months to 31 December 2016: not dilutive) and accordingly
have not been included in the determination of diluted loss per share.
CASH AND CASH EQUIVALENTS
NOTE 8
Cash at bank
Deposits at call
TRADE AND OTHER RECEIVABLES
NOTE 9
Trade receivables
GST and tax refundable
- 35 -
31 Dec
2017
($)
4,408,780
13,870
4,422,650
19,272
62,484
81,756
31 Dec
2016
($)
589,242
518,481
1,107,723
2,928
12,214
15,142
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2017
OTHER ASSETS - CURRENT
NOTE 10
Restricted cash – security for guarantees
Prepayments
31 Dec
2017
($)
54,667
71,398
126,065
31 Dec
2016
($)
54,667
63,219
117,886
Restricted cash represents term deposits held by the Company’s bank as security for a bank guarantee ($34,667) in favour of the property manager
in relation to operating lease commitments for the office premises and security for the Company credit card ($20,000).
Deposits at call consist of term deposits with maturity dates greater than three months.
PROPERTY, PLANT AND EQUIPMENT
NOTE 11
Period ended 31 December 2016
Balance at 1 July 2016
Additions
Depreciation
Closing Net Book Value
At 31 December 2016
Cost
Accumulated Depreciation
Net Book Value
Year ended 31 December 2017
Balance at 1 January 2017
Additions
Disposals
Depreciation
Closing Net Book Value
At 31 December 2017
Cost
Accumulated Depreciation
Net Book Value
Plant and
Equipment
($)
12,702,544
75,932
(25,000)
12,753,476
12,925,896
(172,420)
12,753,476
12,753,476
3,113
(2,468)
(53,132)
12,700,989
12,902,291
(201,302)
12,700,989
Land and
Buildings
($)
-
-
-
-
-
-
-
-
1,941,094
-
-
1,941,094
1,941,094
-
1,941,094
Total
($)
12,702,544
75,932
(25,000)
12,753,476
12,925,896
(172,420)
12,753,476
12,753,476
1,944,207
(2,468)
(53,132)
14,642,083
14,843,385
(201,302)
14,642,083
Property, plant and equipment includes the purchase of a wet concentration mineral sands processing plant and ancillary mining and processing
equipment from Murray Zircon on 8 June 2016 for $11,935,028. The wet concentration mineral sands processing plant and ancillary mining and
processing equipment from Murray Zircon is yet to be depreciated because it is not yet in the location and condition necessary for it to be capable
of operating in the manner intended by management.
As at 31 December 2017 the carrying value of motor vehicles was $58,029 (31 December 2016: $82,219)
OTHER FINANCIAL ASSETS
NOTE 12
Non-Current
Available-for-sale financial assets – shares in listed corporations
Investments in related parties
Available-for-sale financial assets includes the following investments held in director-
related party entities:
Magnetic Resources NL – partly-paid shares
31 Dec
2017
($)
16,780
31 Dec
2016
($)
7,514
780
14
- 36 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2017
INVENTORY
NOTE 13
Non-Current
Inventory
31 Dec
2017
($)
755,514
31 Dec
2016
($)
756,084
Inventory of $1,080,177 including wet plant spares and other inventory items, were purchased from Murray Zircon on 8 June 2016. Of this $324,093
was allocated to property, plant and equipment as it was considered that the items relating to this amount will not be used in the first year of mineral
sands production.
TRADE AND OTHER PAYABLES
NOTE 14
Trade creditors and accruals
GST and tax payable
NOTE 15
Employee leave benefits
CURRENT PROVISIONS
BORROWINGS
NOTE 16
Current
Interest bearing loan
Non-Current
Interest bearing loan
Fees associated with draw-down on 8 June 2016
(a)
Current
875,022
65,423
940,445
366,512
49,772
416,284
158,876
127,614
34,843
-
Interest Rate
5%
4,000,000
(4,000)
3,996,000
4,000,000
(28,000)
3,972,000
The loan is with Hunter Premium Funding Limited and was fully drawn on 12 July 2017 to the amount of $112,159 for the payment of insurance
premium renewal invoices. The key terms of the loan include a flat 6.44% interest rate and 10 monthly repayments of $11,938.22.
(b)
Non-Current
The loan is with Murray Zircon Pty Ltd and was fully drawn down on 8 June 2016 on completion of the transaction with Murray Zircon and Orient
Zirconic. Murray Zircon is a related party due to it holding a 37.8% interest in the shares of the Company.
The key terms of the loan include an interest rate of 5% per annum accruing daily, payment of interest half-yearly in arrears, amounts outstanding
repayable upon first production of 20,000 wet tonnes of heavy mineral concentrates (First Production) and allows for repayment to be made using
funds under the Prepayment Facility once available (early payment is allowed at any time, with no ability to redraw) and customary default
provisions. The loan is secured against all present and after-acquired property of the Company and a mining mortgage in respect of certain core
tenements held by Image.
NOTE 17 ISSUED CAPITAL
Contributed Equity – Ordinary Shares
At the beginning of the period
Placement issue of shares at $0.04
Placement issue of shares at $0.09
Placement issue of shares at $0.09
Placement issue of shares at $0.10
Share issue costs
Balance at the end of the period
Year to 31 Dec 2017
6 months to 31 Dec 2016
No.
$
No.
$
379,511,740
158,129,891
15,870,578
17,777,778
40,000,000
-
611,289,987
56,251,135
6,325,196
1,428,352
1,600,000
4,000,000
(687,518)
68,917,165
379,511,740
-
-
-
-
-
379,511,740
56,283,014
-
-
-
-
(31,879)
56,251,135
- 37 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2017
NOTE 17 ISSUED CAPITAL (CONT’D)
Reserves
Available-for-sale financial assets reserve
Employee benefits reserve (i)
Closing balance
Reserve – Available for Sale Financial Assets
Balance at the beginning of the period
Changes in the fair value of available for sale financial assets
Balance at the end of the period
Reserve – Employee Benefits
Balance at the beginning of the period
Lapse of options
Share based payment benefit expense
Balance at the end of the period
31 Dec
2017
($)
269
42,000
42,269
Year to
31 Dec
2017
($)
(2,600)
2,869
269
24,119
-
17,881
42,000
31 Dec
2016
($)
(2,600)
24,119
21,519
6 months to
31 Dec
2016
($)
(2,580)
(20)
(2,600)
393,640
(393,640)
24,119
24,119
(i)
The employee benefits reserve is used to recognise the fair value of options issued. During the six months to 31 December 2016, the
value previously ascribed to options that lapsed during the year was transferred to retained losses.
Options
The Company had the following options over un-issued fully paid ordinary
shares at the end of the year:
Options exercisable at $0.085 on or before 4.12.2018
Options exercisable at $0.010 on or before 4.12.2018
Total Options
Terms and Conditions of Contributed Equity
31 Dec 2017
No.
31 Dec 2016
No.
1,500,000
1,500,000
3,000,000
1,500,000
1,500,000
3,000,000
Ordinary shares have the right to receive dividends as declared and, in the event of winding up of the Company, to participate in the proceeds from
the sale of all surplus assets in proportion to the number of shares held, regardless of the amount paid up thereon.
At a general meeting every shareholder present in person or by proxy, representative or attorney has: a) on a show of hands, one vote; and b) on a
poll, one vote for each fully paid share held.
- 38 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2017
CASH FLOW INFORMATION
NOTE 18
Reconciliation of operating loss after income tax with funds used in operating activities:
Operating loss after income tax
Depreciation
Exploration and evaluation expenditure
Loss on sale of property, plant and equipment
Revaluation of available for sale financial assets
Share based payments
Borrowing costs
Changes in operating assets and liabilities:
(Increase) / Decrease in trade and other receivables relating to operating activities
(Increase) / Decrease in prepayments
Decrease in inventory
Increase / (Decrease) in trade and other payables relating to operating activities
Increase in current borrowings
Increase in provisions
Cash flow from operations
Year to
31 Dec
2017
($)
(8,014,023)
53,132
5,096,598
2,286
(6,397)
17,881
24,000
(48,061)
(8,181)
570
140,103
34,843
31,262
(2,675,987)
6 months to
31 Dec
2016
($)
(2,852,955)
25,000
1,496,062
-
-
-
12,000
1,310,837
17,132
-
(1,435,037)
-
12,429
(1,414,532)
NOTE 19
TENEMENT EXPENDITURE CONDITIONS AND LEASING COMMITMENTS
The Company has certain obligations to perform minimum exploration work on the tenements in which it has an interest. These obligations vary
from time to time. The aggregate of the prescribed expenditure conditions applicable to the granted tenements for the next twelve months amounts
to $1,426,500.
Application for exemption from all or some of the prescribed expenditure conditions will be made but no assurance is given that any such
application will be granted. Nevertheless, the Company is optimistic, given its level of expenditure in the North Perth Basin, that it would likely be
granted exemptions, on a project basis, in respect of the prescribed expenditure conditions applicable to many of its North Perth Basin tenements.
If the prescribed expenditure conditions are not met with respect to a tenement, that tenement is liable to forfeiture.
The Company has the ability to diminish its exposure under these conditions through the application of a variety of techniques including applying for
exemptions (from the regulatory expenditure obligations), surrendering tenements, relinquishing portions of tenements or entering into farm-out
agreements whereby third parties bear the burdens of such obligation in whole or in part.
The Company has leased office premises at 23 Ventnor Avenue, West Perth, WA. The lease was renewed for two years for the period 1 February
2017 to 31 January 2019. The commitment for the 2018 financial year is $147,056 including all outgoings and car parking. The commitment for
more than one year and less than five years is $12,255.
NOTE 20
TENEMENT ACCESS
The interests of holders of freehold land encroached by the Tenements are given special recognition by the Mining Act (WA). As a general
proposition, a tenement holder must obtain the consent of the owner of freehold before conducting operations on such freehold land. Unless it
already has secured such rights, there can be no assurance that the Company will secure rights to access those portions of the Tenements
encroaching freehold land.
The Company has commenced negotiations with the Traditional Owners and their representatives in regard to the Native Title claim affecting part
of the Atlas deposit and being the subject of a registered (but undetermined) claim. This is the only deposit forming part of the high grade dry
mining targets within the North Perth Basin (NPB) Project which has, insofar as the Company is aware, any potential to be subject to Native Title.
However, heritage aspects of the remaining areas of the project still have to be taken into consideration.
Outside of the NPB Project the Company’s other tenements may contain dredge mining targets which could be subject to Native Title claim.
The Company is not in a position at this time to assess the likely effect of any Native Title claim impacting the Company.
The Company is in advanced negotiations with a number of landholders with a view to signing Option Agreements for the purchase of properties
critical to the development of the Boonanarring section of the North Perth Basin Project.
- 39 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2017
NOTE 21
SIGNIFICANT EVENTS SUBSEQUENT TO REPORTING DATE
Other than the following matters:
On 13 February 2018, at a general meeting of shareholders, shareholders gave approval for the Company to issue up to 300,000,000
shares at an issue price of 10 cents or not less than 80% of the VWAP of shares (calculated over the five days on which sales of shares
were recorded before the day on which the issue is made).
On 13 February 2018 shareholders also gave approval for the Company to administer and issue securities under an Employee Share
Plan. The shareholders also gave approval for the Company to provide financial assistance to employees in the form of interest free
loans to enable the employees to participate in the Employee Share Plan.
On 8 March 2018, the Company announced the execution of a Loan Note Subscription Agreement with Switzerland-based Pala
Investments Limited (“Pala”) as the ‘arranger’, and Pala and USA-based Castlelake, L.P. as the Loan Note Holders, to provide AU$50M
from the issue of senior secured loan notes to be used for the construction and commissioning of the Boonanarring Project; and
On 14 March 2018, the Company announced the issue of 250 million shares at 10 cents per share to raise A$25 million (before costs)
as the balance of capital required for the construction and commissioning of the Boonanarring Project with site construction to begin
prior to 31 March 2018. The share issue settled on 28 March 2018.
There were no other material significant events subsequent to the reporting date.
NOTE 22
EQUITY-SETTLED SHARE BASED PAYMENTS
The Directors may, in their absolute discretion, grant options to Directors and full or part time employees of the Company for nil consideration in
accordance with guidelines established by the Directors. The exercise price of the option is set by the Board of Directors. Unvested options may
terminate upon cessation of employment in accordance with the terms on which the options were granted.
The share based payments expense for the year ending 31 December 2017 amounting to $17,881 (6 months to 31 December 2016: $24,119) is
stated in the income statement under “Other Expenses”.
a)
Summaries of options granted
The following table details the number and weighted average exercise prices (WAEP) and movements in employee share options issued during the
year.
Outstanding at the beginning of the period
Granted during the period
Expired during the period
Outstanding at the end of the period
Exercisable at reporting date
31 Dec
2017
(No.)
3,000,000
-
-
3,000,000
3,000,000
31 Dec
2017
(WAEP)
0.0925
-
-
0.0925
0.0925
31 Dec
2016
(No.)
2,600,000
3,000,000
(2,600,000)
3,000,000
1,500,000
31 Dec
2016
(WAEP)
0.3908
0.0925
0.3908
0.0925
0.0925
b)
Weighted average remaining contractual life
The weighted average remaining contractual life for the share options outstanding as at 31 December 2017 is between 0 and 1 year (31 December
2016: 1 and 2 year).
c)
Range of exercise price
The range of exercise prices for options outstanding at the end of the year was $0.085 to $0.10 (31 December 2016: $0.085 to $0.10).
d)
Weighted average fair value
The weighted average fair value of options granted during the year was Nil (6 months to 31 December 2016: $0.014).
- 40 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2017
e)
Option pricing model
The fair value of the equity settled share options granted during the period ending 31 December 2016 under the option plan was estimated as at the
date of grant using a Black-Scholes option pricing model taking into account the terms and conditions upon which the options were granted.
The following table lists the inputs to the model used for the period ended 31 December 2016.
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected life of options (years)
31 Dec
2016
Nil
85%
1.78%
2
Option exercise prices ($)
$0.085 and $0.10
Weighted average share price at grant date ($)
$0.047
The expect life of the options was based on historical data and was not necessarily indicative of exercise patterns that may occur. The expected
volatility reflects the assumption that the historical volatility was indicative of future trends, which may also not necessarily be the actual outcome.
No other features of options granted were incorporated into the measurement of fair value.
f)
Details of options
31 December 2017
Managing Director
Total
Balance at
Beginning of
Grant
Details
Lapsed
Balance at
End of Year
No.
Year
No.
3,000,000
3,000,000
No.
No.
-
-
-
-
3,000,000
3,000,000
(i)
Details of Managing Director Options
Number
Grant Date
Expiry
1,500,000
1,500,000
30 November 2016
30 November 2016
4 December 2018
4 December 2018
Vesting Date
30 November 2016
30 April 2017
Exercise Price
$0.085
$0.10
The options can be exercised at any time after the vesting date and prior to the expiry date.
31 December 2016
Balance at
Beginning of
Grant
Details
Lapsed
Balance at
Non-Executive Director
Executive Director
Other (i)
Managing Director
Total
Period
No.
650,000
800,000
1,150,000
No.
-
-
No.
650,000
800,000
1,150,000
End of
Period
No.
-
-
-
3,000,000
3,000,000
2,600,000
3,000,000
2,600,000
3,000,000
Note 1: Other refers to options issued to a former Executive Director and a former Company Secretary.
- 41 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2017
NOTE 23
RELATED PARTY AND RELATED ENTITY TRANSACTIONS
Transactions with directors, director-related parties and related entities other than those disclosed elsewhere in this financial report are as
follows:
Orient Zirconic Resources (Australia) Pty Ltd – Chaodian Chen
Leeman Pty Ltd, a George Sakalidis related party, hire of specialised equipment
Magnetic Resources NL, a George Sakalidis related party, purchase of stationary
Murray Zircon Pty Ltd – Interest on $4,000,000 loan (Note 17)
Murray Zircon Pty Ltd – Vehicle repairs, flights & camp meals
Spouse of Patrick Mutz – The Company purchases travel expenses from a national
travel agency of which his spouse is an agent and receives a commission. The amount
disclosed is an estimate of the fees and commissions which is shared between the
agency and the spouse of Patrick Mutz
Year to
31 Dec
2017
($)
(45,550)
(2,695)
(1,045)
(200,000)
(2,684)
(2,280)
(254,254)
6 months to
31 Dec
2016
($)
-
(5,775)
(938)
(100,822)
(6,987)
-
(114,522)
Total amounts owing to directors and/or director-related parties and related entities at 31 December 2017 were Nil (31 December 2016: $5,322).
Murray Zircon Pty Ltd is a related party due to it holding a 37.8% interest in the shares of the Company.
NOTE 24
CONTINGENT LIABILITIES
On 8 June 2016 the Company settled completion of a transaction between the Company and Murray Zircon Pty Ltd (Murray Zircon) and its parent
Guangdong Orient Zirconic Sci Tech Co Ltd (Orient Zirconic), which included the Company issuing 156,703,542 ordinary shares to Murray Zircon
for a 42% interest in the expanded capital of the Company. If a decision to mine is reached (including financing being secured) within 2 years of
completion (or 3 years if a Directors who is not a nominee of Murray Zircon unreasonably frustrates such a decision being made in the first 2 years)
the Company will be required to issue to Murray Zircon further 32,595,987 shares in the Company.
NOTE 25
FINANCIAL INSTRUMENTS DISCLOSURE
(a)
Financial Risk Management Policies
The Company’s financial instruments consist of deposits with banks, receivables, available-for-sale financial assets, payables and
borrowings.
Risk management policies are approved and reviewed by the board. The use of hedging derivative instruments is not contemplated at this
stage of the Company’s development.
Specific Financial Risk Exposure and Management
The main risks the Company is exposed to through its financial instruments, are interest rate and liquidity risks.
Interest Rate Risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at reporting date whereby a future change in
interest rates will affect future cash flows or the fair value of fixed rate financial instruments.
Liquidity Risk
The Company manages liquidity risk by monitoring forecast cash flows, cash reserves, liquid investments, receivables, financial liabilities and
commitments.
Capital Risk
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern so that the
Company may continue to provide returns for shareholders and benefits for other stakeholders.
Due to the nature of the Company’s activities, the Company does not have ready access to credit facilities, with the primary source of funding
being via equity raisings. Therefore, the focus of the Company’s capital risk management is the current working capital position against the
requirements of the Company to meet exploration programmes, mine development and corporate overheads. The Company’s strategy is to
ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raising as
required.
The Company is considering various options for the development of the Boonanarring mineral sands project and may seek to raise a
significant amount of debt and equity finance to develop the project.
- 42 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2017
The working capital position of the Company at 31 December 2017 and 31 December 2016 was as follows:
Cash and cash equivalents
Restricted cash
Trade and other receivables
Trade and other payables and provisions
Borrowings
Working capital position
Credit Risk
31 Dec
2017
($)
4,422,650
54,667
81,756
(940,445)
(34,843)
3,583,785
31 Dec
2016
($)
1,107,723
54,667
15,142
(543,898)
-
633,634
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets, is
the carrying amount, net of any provisions for impairment of those assets, as disclosed in the Statement of Financial Position and notes to
the financial statements.
The Company has lodged cash deposits (designated as restricted cash above) totalling $54,667 (2016: $54,667) with the bank as collateral
security for office lease property managers for rental guarantees and also security for company credit cards.
The following table provides information regarding the credit risk relating to cash and cash equivalents, term deposits and restricted cash
based on credit ratings:
AAA rated
AA rated
A rated
Financial Instruments
The Company holds no derivative instruments, forward exchange contracts or interest rate swaps.
Financial Instrument composition and maturity analysis
The table below reflects the undiscounted contractual settlement terms for financial instruments.
-
-
4,477,317
-
-
1,162,390
Weighted
Average
Effective
Interest Rate %
Fixed
Interest
Rate
($)
31 December 2017
Financial Assets:
Cash and cash equivalents
Restricted cash
Trade and other receivables
Available-for-sale financial
assets
Total Financial Assets
0.14%
Financial Liabilities:
Trade and other payables and
provisions
Borrowings
Total Financial Liabilities
5.01%
Net Financial Assets
-
-
-
-
-
-
(4,034,843)
(4,034,843)
(4,034,843)
- 43 -
Floating
Interest
Rate
($)
4,420,641
54,667
-
-
4,475,308
Non-Interest
Bearing
($)
2,010
-
81,756
16,780
100,546
Total
($)
4,422,650
54,667
81,756
16,780
4,575,854
-
-
-
4,475,308
(1,099,321)
-
(1,099,321)
(998,775)
(1,099,321)
(4,034,843)
(5,134,164)
(558,310)
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2017
Weighted
Average
Effective
Interest Rate %
Fixed
Interest
Rate
($)
31 December 2016
Financial Assets:
Cash and cash equivalents
Restricted cash
Trade and other receivables
Available-for-sale financial
assets
Total Financial Assets
1.50%
Financial Liabilities:
Trade and other payables and
provisions
Borrowings
Total Financial Liabilities
5.0%
Net Financial Assets
Floating
Interest
Rate
($)
1,105,928
54,667
-
-
1,160,595
-
-
-
1,160,595
Non-Interest
Bearing
($)
1,795
-
15,142
7,514
24,451
Total
($)
1,107,723
54,667
15,142
7,514
1,185,046
(543,898)
-
(543,898)
(519,447)
(543,898)
(4,000,000)
(4,543,898)
(3,358,852)
-
-
-
-
-
-
(4,000,000)
(4,000,000)
(4,000,000)
The table below summarises the maturity profile of the Company’s’ financial liabilities according to their contractual maturities. The amounts
disclosed are based on contractual undiscounted cash flows. As a result, these balances may not agree with the amounts disclosed in the
statement of financial position:
31 December 2017
Trade and other payables and provisions
Borrowings
31 December 2016
Trade and other payables and provisions
Borrowings
Less than
3 months
940,445
34,843
975,288
Less than
3 months
543,898
-
543,898
3 to 12
months
-
99,178
99,178
3 to 12
months
-
100,822
100,822
1 to 5
years
-
800,000
800,000
1 to 5
years
-
800,000
800,000
Total
940,445
934,021
1,874,466
Total
543,898
900,822
1,444,720
The borrowings have no fixed maturity date. Please refer to Note 16 Murray Zircon Pty Ltd investment in Image Resources NL for further
details.
- 44 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2017
(b)
Financial Instruments Measured at Fair Value
The financial instruments recognised at fair value in the statement of financial position have been analysed and classified using a fair value
hierarchy reflecting the significance of the inputs used in making the measurements. The fair value hierarchy consists of the following levels:
Quoted prices in active markets for identical assets or liabilities (Level 1);
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly
(derived from prices) (Level 2); and
Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
31 December 2017
Financial Assets:
Financial assets at fair value through profit or loss:
Available-for-sale financial assets:
-
Listed investments
31 December 2016
Financial Assets:
Financial assets at fair value through profit or loss:
Available-for-sale financial assets:
-
Listed investments
Sensitivity Analysis – Interest rate risk
Level 1
$
Level 2
$
Level 3
$
Total
$
16,780
16,780
-
-
-
-
16,780
16,780
Level 1
$
Level 2
$
Level 3
$
Total
$
7,514
7,514
-
-
-
-
7,514
7,514
The Company has performed a sensitivity analysis relating to its exposure to interest rate risk at balance date. The sensitivity analysis
demonstrates the effect on the financial period results and equity which could result from a change in this risk.
As at balance date, the effect on loss and equity as a result of changes in the interest rate on financial assets, with all other variables
remaining constant would be as follows:
Change in loss – increase/(decrease):
-
-
Increase in interest rate by 2%
Decrease in interest rate by 2%
Change in equity – increase/(decrease):
-
-
Increase in interest rate by 2%
Decrease in interest rate by 2%
31 Dec
2017
($)
(89,546)
89,546
89,546
(89,546)
31 Dec
2016
($)
(23,248)
23,248
23,248
(23,248)
- 45 -
DIRECTORS’ DECLARATION
The directors of the Company declare that:
1.
the accompanying financial statements and notes are in accordance with the Corporations Act 2001 and:
(a)
(b)
(c)
comply with Accounting Standards and the Corporations Act 2001;
give a true and fair view of the financial position as at 31 December 2017 and performance for the year ended on that date of
the Company; and
the audited remuneration disclosures set out in the Remuneration Report section of the Directors’ Report for the year ended
31 December 2017 complies with section 300A of the Corporations Act 2001;
2.
the Chief Financial Officer has declared pursuant to section 295A(2) of the Corporations Act 2001 that:
(a)
(b)
(c)
the financial records of the company for the financial year have been properly maintained in accordance with section 286 of
the Corporations Act 2001;
the financial statements and the notes for the financial year comply with Accounting Standards; and
the financial statements and notes for the financial year give a true and fair view;
3.
4.
in the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable;
the directors have included in the notes to the financial statements an explicit and unreserved statement of compliance with
International Financial Reporting Standards.
This declaration is made in accordance with a resolution of the Board of Directors.
ORIGINAL SIGNED BY ROBERT BESLEY
CHAIRMAN
PERTH
Dated this 28 March 2018
- 46 -
ASX ADDITIONAL INFORMATION
Additional information required by the ASX Listing Rules and not shown elsewhere in this report is as follows. The information is current as at 28
March 2018.
Distribution of Equity Securities
-
-
-
-
1
1,001
5,001
10,001
100,001
1,000
5,000
10,000
100,000
and over
Ordinary shares
Number of holders
Number of shares
297
503
291
663
329
2,083
170,389
1,482,993
2,386,522
26,118,377
831,131,706
861,289,987
The number of shareholders holding less than a marketable parcel of shares are:
714
1,224,014
Twenty Largest Shareholders:
The names of the twenty largest holders of quoted ordinary shares are:
Listed ordinary shares
Number of shares
Percentage of ordinary
shares
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Murray Zircon Pty Ltd
Vestpro International
Orient Zirconic Resources (Australia) Pty Ltd
Million Up Ltd
HSBC Custody Nominees Australia Ltd
XQ (HK) Enterprises Ltd
J P Morgan Nominees Australia Ltd
Ava Cartel SDN BHD
TQ International
UBS Nominees Pty Ltd
Target Range Pty Ltd
Zonglin Cai
Pontian Orico Plantations
Choy Fuan Ku
Shumei Chen
Citicorp Nominees Pty Ltd
Ribton Super Fund Pty Ltd
Lim Pang Soo
Zero Nominees Pty Ltd
Choon Kong Lim
156,703,542
131,936,921
51,761,950
40,624,754
22,922,722
22,420,082
21,921,638
18,000,000
18,000,000
15,596,481
13,288,888
11,555,546
11,539,728
11,000,000
11,000,000
10,466,596
10,100,000
10,000,000
10,000,000
6,235,624
18.19
15.32
6.01
4.72
2.66
2.60
2.55
2.09
2.09
1.81
1.54
1.34
1.34
1.28
1.28
1.22
1.17
1.16
1.16
0.72
605,074,472
70.25
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ASX ADDITIONAL INFORMATION
Substantial shareholders:
The names of substantial shareholders who have notified the Company in accordance with section 617B of the Corporations Act 2001 are:
Murray Zircon Pty Ltd together with Orient Zirconic Resources (Australia) Pty Ltd, Guangdong Orient Zirconic
Ind. Sci. Tech. Co. Ltd. and XQ (HK) Enterprises Limited
Image Resources NL
Million Up Ltd
Pontian Orico Plantations
Voting Rights
Number of Ordinary
Shares
221,996,685
156,703,542
31,735,865
11,539,728
The voting rights attaching to ordinary shares are governed by the Constitution. On a show of hands every person present who is a Member or
representative of a member shall have one vote and on a poll, every member present in person or by proxy or by attorney or duly authorised
representative shall have one vote for each fully paid ordinary share held. None of the options have any voting rights.
Unquoted Securities
Class
Number of
Securities
Number of
Holders
Options exercisable at $0.085 expiring 04/12/2018
Options exercisable at $0.10 expiring 04/12/2018
1,500,000
1,500,000
1
1
Holder Name
Patrick Mutz
Patrick Mutz
Number of
Securities
1,500,000
1,500,000
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SCHEDULE OF TENEMENTS
Tenement
Status
Project
Equity (%)
Other Holder/Manager
Red Gully project C151/2011
E70/3032
E70/3041
E70/3100
E70/3192
E70/3411
E70/3494
E70/3720
E70/4077
E70/4689
E70/4946
E70/4949
M70/0448
M70/1192
M70/1194
M70/1311
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
GINGIN
REGANS FORD SOUTH
QUINNS HILL
BOOTINE
REGANS FORD
BRYALANA
BLUE LAKE
DARLING RANGE
BOONANARRING WEST
RED GULLY NORTH
NAMMEGARRA
GINGIN SOUTH
RED GULLY
BOONANARRING
BOONANARRING NORTH
Cooljarloo project C97/2007
E70/2636
E70/2898
E70/3997
E70/4244
E70/4631
E70/4656
E70/4663
P70/1516
R70/0051
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
COOLJARLOO
COOLJARLOO
MUNBINIA
WOOLKA
MUNBINEA WEST
WINOOKA NORTH
BIBBY SPRINGS
COOLJARLOO
COOLJARLOO NORTH
Bidaminna project C46/2009
E70/2844
E70/3298
E70/4245
E70/4779
E70/4794
E70/4245
Granted
Granted
Granted
Granted
Granted
Granted
BIDAMINNA NTH
BIDAMINNA - PARK
WINOOKA
MIMEGARRA
REGANS FORD NORTH
WINOOKA
Erayina project C85/2011
E28/1895
Granted
KING (INTEGRA JV)
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ARF MASLIN 10%
Other projects
G70/0250
E52/2067
M52/1067
E70/3418
E70/3892
E70/4129
E70/4130
R69/0001
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
BOONANARRING
WILTHORPE JV
WILTHORPE JV
BELL (POTASH WEST JV)
CHAPMAN HILL (DORAL JV)
MULLERING SOUTH
MULLERING NORTH
SERPENTINE LAKES
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RESOURCEFUL MINING GROUP 100%
RESOURCEFUL MINING GROUP 100%
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TRONOX 100%
TRONOX 100%
DIATREME RESOURCES LIMITED 100%
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IMAGE 1% ROYALTY
POTASH WEST JV
IMAGE SLIDING ROYALTY
IMAGE SLIDING ROYALTY
IMAGE 1% ROYALTY
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SCHEDULE OF TENEMENTS
Tenement
Status
Project
Equity (%)
Other Holder/Manager
Tenement Applications
E70/4795
Application BIDAMINNA SOUTH
M70/1305
Application ATLAS
P70/1520
Application COOLJARLOO
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