FROM MINE
TO CUSTOMER
Image Resources NL
ABN: 57 063 977 579
ANNUAL FINANCIAL REPORT
31 December 2018
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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CORPORATE DIRECTORY
DIRECTORS
ROBERT BESLEY
Non-Executive Chairman
PATRICK MUTZ
Managing Director
GEORGE SAKALIDIS
Executive Director - Exploration
CHAODIAN CHEN
Non-Executive Director
HUANGCHENG LI
Non-Executive Director
AARON CHONG VEOY SOO
Non-Executive Director
PETER THOMAS
Non-Executive Director
FEI WU
Non-Executive Director
COMPANY SECRETARY
DENNIS WILKINS
(DW Corporate)
WEBSITE
www.imageres.com.au
FOR SHAREHOLDER INFORMATION CONTACT
SHARE REGISTRY
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
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
(08) 9485 2410
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
957,247,598 fully paid ordinary shares
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 2018 calendar year was finalisation
of project financing, successful completion of construction and commissioning, and the achievement of an exploration
company’s ultimate goal of transition to active mining company at the Company’s 100%-owned, high-grade, zircon-rich
Boonanarring Mineral Sands Project (the “Project”) in the North Perth Basin located 80 Kilometres north of Perth. The
achievement of transition to production is enriched by the fact that the first sale of HMC product and receipt of first
revenue were achieved in less than nine months following drawdown of project debt financing.
2018 in Review
Project Capital Financing
On 7 March 2018 the Company entered into a Loan Note Subscription Agreement (“LNSA”) with Pala Investments
Limited (“Pala”) and Castlelake IV, L.P. and CL V Investment Solutions LLC which are entities controlled by Castlelake
L.P. (collectively, “Castlelake”) as the Loan Note Holders, to raise the equivalent of AUD50M in USD from the issue of
senior secured loan notes.
On 15 March 2018, the Company announced that it had closed an equity raising, to raise the remaining AU$25 million
required for the development of the Boonanarring Project through the issue of 250 million Image shares at 10 cents per
share.
On 10 May 2018 Image satisfied all conditions precedent for funds drawdown under the LNSA and on 25 May 2018
received a single tranche USD equivalent of AU$50 million (less fees) for the Boonanarring project development.
Project Construction
In March 2018 project development activities commenced at Boonanarring with the start of construction of the site
entry road and in April site civil works were started. In May, topsoil and overburden removal for the initial box cut of the
mine was initiated, as was dismantling of the Wet Concentration Plant and ancillary equipment in South Australia in
preparation for relocation to Boonanarring. Construction activities ramped up in May and continued through
September.
Construction at Boonanarring was deemed practically complete in late October with the commencement of wet
commissioning of the processing plant, and construction was deemed fully complete and commissioning declared
successful and complete at the end of November 2018. Overall, project construction was completed in accordance
with the approved schedule and budget.
Transition to Production
On 1 December 2018 the Company transitioned to an active mining company with the commencement of the
production ramp-up period. Production statistics for December exceeded budgeted expectations in all categories.
Heavy mineral concentrate (HMC) production was sufficient to allow the scheduling and preparation of 10,000 tonnes
of HMC for the first sale and export of product under the Company’s HMC Off-take Agreements, with scheduled
departure in the first-half of January 2019.
Safety
Throughout the construction, commissioning and production ramp-up period through the end of December 2018, and
including for the entire calendar year of 2018, Image had zero reported lost-time injuries.
Zircon Prices and FX
During the year, the benchmark price for zircon, used by Image to determine the price for its HMC, increased
substantially. The price for Iluka premium grade zircon increased by 14% on 1 April 2018 to US$1,410 per tonne. As a
result of this price rise and an increase in the longer term price forecast for zircon by TZMI, Image updated its
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REVIEW OF OPERATIONS
Bankable Feasibility Study (BFS) for higher commodity prices and for a fixed USD:AUD foreign exchange rate of 0.75.
The net result was an increase in the NPV(8%) of the Boonanarring/Atlas project to AU$235M, an IRR of 125% and a
pay-back period of only 13 months. Results of the BFS update were announced to the ASX on 28 June 2018. Then on
1 October 2018, Iluka announced a further 12% increase in price for its premium grade zircon to US$1,580 per tonne.
The BFS has not been updated subsequent to the October price rise.
During the year, the USD:AUD foreign exchange rate softened favourably from approximately 0.78 at the beginning of
January 2018 to approximately 0.70 at the end of December 2018.
Second HMC Off-Take Agreement
In September 2018, Image executed a second HMC off-take agreement with Hainan Wensheng High-Tech Materials
Co., Ltd (“Wensheng”) to purchase 50% of HMC production from Image. The new agreement with Wensheng contains
the same terms and conditions and pricing as the original agreement with Natfort and both Wensheng and Natfort must
take up to 100% of HMC production in the event the other is unwilling or unable to purchase any or all of its 50%
portion of production. This dual arrangement serves to reduce Image’s risk of any delays in the receipt of revenue.
Subsequent to the end of the year:
In January 2019 the Company received its first revenue from the operation of the Boonanarring project
from the sale of its first shipment (Pic 1.) of 10,206 dry metric tonnes of HMC which finished loading on 12
January. The shipment was secured by a US$ letter of credit (“LC”) from off-taker Shantou Natfort
Zirconium and Titanium Co., Ltd (“Natfort”) and Image received full payment for the HMC by cashing the
LC in January following ship sailing and finalisation of appropriate shipping documents.
Pic 1. Shanghai Spirit with first shipment of HMC – 13 January 2019
As in December, production statistics for the second month of the production ramp-up period (January
2019) exceeded budgeted expectation in all categories. In particular, HMC production exceeded budget
by 179% and allowed the scheduling and preparation of a second shipment of HMC for the full
complement of 20,000 tonnes, which is the long-term average production rate for full-scale operations.
The reason for the higher HMC production was due to higher ore processing rates and higher recovery
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REVIEW OF OPERATIONS
than budgeted, but was primarily due to substantially higher ore grade than estimated in the ore reserve
model.
In February 2019 the Company received revenue from the sale of its second shipment of [20,200] tonnes
of HMC which finished loading 16 February. This shipment was also secured by a US$ LC from off-taker
Natfort and Image received full payment for the shipment by cashing the LC in February following ship
sailing and finalisation of appropriate shipping documents. February will likely be the Company’s first
month of positive cashflow from operations.
Boonanarring Project
Project Funding and Commencement of Construction
The Company’s primary focus during the 1st Quarter was securing project capital funding and commencing
construction at Boonanarring, with the goal of achieving first production in 4th Quarter 2018.
Debt Financing
On 7 March the Company entered into a Loan Note Subscription Agreement (“LNSA”) with Pala Investments Limited
(“Pala”) and Castlelake IV, L.P. and CL V Investment Solutions LLC which are entities controlled by Castlelake L.P.
(collectively, “Castlelake”) as the Loan Note Holders, to raise an equivalent of AU$50M in USD from the issue of senior
secured loan notes. Key terms include a single tranche drawdown of the full amount, 3-year loan term and interest rate
of 14% for the first 15 months and 13% thereafter. Full details of the terms and conditions of the LNSA were disclosed
in an ASX announcement on 8 March 2018. Drawdown of the loan notes under the LNSA was subject to certain
conditions precedent which were satisfied in the 2nd Quarter 2018.
Equity Raising
On 15 March 2018, the Company announced that it had closed its planned equity raising fully subscribed, to raise $25
million (before costs) by the issue of 250 million Image shares at 10 cents per share. The equity raising was supported
by Euroz Securities Limited and demand was filled by new and existing shareholders including new substantial
shareholder Vestpro International Limited.
Commencement of Construction
In March 2018 the Image Board approved the expenditure of funds to commence site construction at Boonanarring which
formally began on 14 March 2018 with the start of construction of the site entry road. Contractor BMD Constructions Pty Ltd
was awarded the contract to construct the main Boonanarring site entry road from Wannamal Road West to the proposed site
for the wet concentration plant and maintenance and administration buildings.
Expenditure commitments were also made to a number of other contractors for mobilisation of personnel and equipment
including Piacentini and Son Pty Ltd for site civil construction for the processing plant; ProjX Pty Ltd for overall project
construction management; and LGM Industries Pty Ltd for relocation and reassembly of the wet concentration plant and
associated equipment located in South Australia; as well as expenditures to procure select replacement capital equipment
being purchased to facilitate processing throughput, enhance operating efficiencies and/or reduce operating costs.
Project Construction
The primary focus during the 2nd Quarter was finalisation of LNSA conditions precedent to drawdown of debt funds and
ramping up project construction.
On 10 May 2018 Image was notified it had satisfied all conditions precedent for funds drawdown under the LNSA and on 25
May 2018 received a single tranche USD equivalent of AU$50 million (less fees) for the Boonanarring project development.
During the June quarter construction crews completed the dismantling of the wet concentration plant (WCP) in South Australia
and relocation of the WCP components and the majority of the associated plant and equipment to the Boonanarring mine site.
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REVIEW OF OPERATIONS
At Boonanarring, construction activities were ramped up and by the end of June 2018, site civil and concrete works for the
WCP were complete and general site civil works were 70% complete. Re-assembly of the WCP commenced in early June. In
addition, the deconstruction of a used slimes thickener located off-site was completed and was delivered to Boonanarring. and
partially re-assembled at Boonanarring in early July.
Procurement of remaining select equipment aimed at enhancing the process effectiveness was completed during the quarter
and construction of a new ore feed hopper commenced.
Mining contractor Piacentini and Son continued the process of mobilising equipment and personnel during the June quarter
and ramping up topsoil and overburden removal.
The primary focus during the 3rd Quarter was continuing construction at Boonanarring including associated infrastructure
services and connections.
By the end of September, re-assembly of the WCP relocated from South Australia was structurally complete and construction
of the slimes thickener was complete. Assembly of the ore feed preparation plant and construction of the tailings disposal
facilities, water storage ponds, HMC storage pad and a second water supply bore were all well-advanced.
Overburden removal for the initial box cut for open-cut mining operations continued to ramp up through September. Mining
contractor Piacentini and Son continued to ramp up with additional mining equipment and personnel, including maintenance
services, throughout the quarter. A second Hitachi 3600 excavator and additional CAT 785 and 777 haul trucks were added in
July/August and first low-grade ore was exposed in September.
Other project construction and related activities include installation of permanent site administration offices; commencement of
construction of the maintenance shop/warehouse/lab building; delivery of final long-lead equipment to enhance process
effectiveness; and significant progress on construction of the Brand Highway upgrade.
In addition to the progress on construction related activities, significant progress was made on other project related activities
including:
Selection and executing agreements with Braemar as ship broker and Mercantile Marine as shipping agent for the
export of HMC;
Construction by Qube Logistics of an HMC storage facility at Qube’s Picton facilities;
Settlement of the purchase of two parcels of land over the Boonanarring ore reserves being the Dewar Property and
the Yukich Property, both to the north of the Boonanarring processing plant;
Installation of high voltage electricity grid connection to the Boonanarring site: and
Recruitment of the majority of site-based Image employees for plant operations and maintenance (Pic 2).
Pic 2. Image Personnel at the Wet Concentration Plant – 2 October 2018
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REVIEW OF OPERATIONS
Commissioning and Transition to Production
The primary focus during the 4th Quarter was completion of construction and wet commissioning of the ore feed
preparation plant (FPP), WCP, tailings disposal and associated equipment and infrastructure facilities, followed by
transition to ramp-up production.
Despite numerous days lost to wet weather, construction of ore mining and processing facilities at Boonanarring
were deemed practically complete on 25 October 2018, and fully complete on 30 November., ‘on-time’ and ‘on-
budget’.
Wet commissioning commenced on 26 October and was deemed successfully complete on 30 November with the
processing of approximately 100,000 tonnes of ore and production of first heavy mineral concentrate (HMC).
Construction and commissioning were completed ‘on-time’ and ‘on-budget’.
The first month of a planned six-month production ramp-up period commenced 1 December with stellar results of
substantially higher production rates, operating availabilities and HMC production than budgeted (Pic 3).The key
reasons for the better than budgeted operational performance in December are 1) fundamental positive metallurgical
characteristics of the coarse-grained Boonanarring ore; 2) the correct fit of equipment and engineering to these ore
characteristics; and as equally important, 3) the skills and dedicated effort of an experienced and motivated operations
group.
Pic 3. Heavy Mineral Concentrate Product Inventory – 31 December 2018
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REVIEW OF OPERATIONS
Exploration
Discussions continued during the year with landowners, seeking access agreements to allow drilling of the
previously identified 5.6km northern extension of the Boonanarring Deposit.
A new Boonanarring West mineralisation target area, which is only 600 metres west of the Boonanarring
Deposit was identified during 2018. This area has now been enlarged to a significant 10 kilometres in
length and a programme of 35 drill holes was completed in the December Quarter 2018. A program of 126
holes totalling 3,150 metres is planned for 2019 mainly focused on the northern parts of the Boonanarring
West target area which will allow conversion of the northern Boonanarring West mineralisation to an
Indicated JORC category.
Drilling to develop additional ore reserves to enhance the mine life at Boonanarring will be a priority for
2019 and will focus on mineralisation extension to the north, south and west of the current Boonanarring
ore reserve footprint.
In the latter part of 2018, at Bidaminna, a 100-kilogramme bulk sample of drill cuttings from the
mineralised zone at Bidaminna, from two lines of drill holes across the deposit, was composited and
processed through wet and dry mineral separation testing, to determine the preliminary quality of potential
TiO2 products. Results indicated larger variations in the leucoxene content than previous sample
analyses. For this reason, more drilling is planned in 2019 to provide additional detail regarding the
variability in the Leucoxene content prior to economic studies.
At Munbinia the southern extension of the Atlas Deposit (6.5km) is expected to be further tested in 2019
by a 160-hole programme looking for a potential 3km extension.
The Woolka dredge target area is very large at up to 10km2 and has potential for a very large mineral
resource. A 13-hole drilling programme was completed in the quarter ended 31 December 2018, which
was sufficiently positive to allow Image to refocus the next round of more extensive drilling. A major drilling
programme of 94 holes totalling 3,760 metres is planned in 2019 with the target being to identify a
strategic world-class dredge deposit adjacent to Tronox’s Cooljarloo 2,000 tonnes/hour dredging
operation. The drilling is designed to allow a Mineral Resource determination in the Inferred and Indicated
categories.
At Erayinia the highest gold intersection from drilling completed in 2018 was 20m @ 0.7g/t Au from 40m
depth including 4m @ 1.2g/t from 48m depth and 4m @ 1.0g/t. from 56m. These results are considered
preliminary as fire assays are pending. The next step is a follow-on drilling programme in 2019 of 20
Reverse Circulation (RC) holes with the aim of mapping out a gold-enhanced supergene zone prior to deeper
RC drilling.
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RESOURCES AND RESERVES SCHEDULE
Table 1. Mineral Resources and Ore Reserves as at 3 August 2017
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High Grade Ore Reserves - Strand Deposits; in accordance with the JORC Code (2012)Project/DepositCategoryVolumeTonnes% HM% SlimesHM TonnesVHMIlmeniteLeucoxeneRutileZircon(%) (%)(%)(%)(%)Boonanarring2Proved5,008,0009,344,0008.614.3803,77176.08148.91.82.223.2Boonanarring2Probable5,565,00010,514,0005.917.6622,42978.65352.31.82.721.9Total Boonanarring10,573,00019,858,0007.216.11,426,20077.20350.41.82.422.7Atlas2Probable5,000,0009,477,0008.115.5767,63773.350.74.57.510.6Total Atlas5,000,0009,477,0008.115.5767,63773.350.74.57.510.6Total Ore Reserves15,573,00029,335,0007.515.92,193,83775.850.52.74.218.4Project/DepositCategoryVolumeTonnes% HM% SlimesHM TonnesVHMIlmeniteLeucoxeneRutileZircon(%) (%)(%)(%)(%)Boonanarring1Measured6,359,35911,799,2138.014942,16774.348.31.72.222.0Boonanarring1Indicated11,802,04722,265,4004.918.31,081,20871.749.22.22.517.8Boonanarring1Inferred4,987,7039,420,4494.521422,50768.850.03.53.411.9Boonanarring Total22,886,87543,485,0625.6182,445,88272.249.02.22.618.4Atlas1Measured5,210,5269,900,0007.916.1782,00071.049.14.27.210.5Atlas1Indicated3,368,4216,400,0003.717.3237,00056.541.63.44.76.8Atlas1Inferred947,3681,800,0004.019.972,00041.529.03.34.44.8Atlas Total9,526,31618,100,0006.016.91,091,00065.946.14.06.59.3Sub-Total Atlas/Boonanarring32,413,19161,585,0625.717.73,536,88270.348.12.83.815.6Project/DepositCategoryVolumeTonnes% HM% SlimesHM TonnesVHMIlmeniteLeucoxeneRutileZircon(%) (%)(%)(%)(%)Gingin Nth3Indicated680,1751,318,6425.715.775,16375.457.49.33.25.5Gingin Nth3Inferred580,0001,090,0005.214.057,11678.457.311.33.76.0Gingin Nth Total1,260,1752,408,6425.515.0132,27976.757.310.23.45.7Gingin Sth3Measured872,8301,526,1224.47.267,14979.450.715.35.67.8Gingin Sth3Indicated3,241,8355,820,4806.57.1377,16790.667.69.85.18.1Gingin Sth3Inferred398,573732,9126.58.447,56691.667.47.55.810.9Gingin Sth Total4,513,2388,079,5146.17.3491,88289.265.310.35.28.3Helene3Indicated5,568,11011,466,1064.618.6522,85488.774.60.03.610.5Hyperion3Indicated1,786,7813,742,4717.719.3286,67369.455.80.06.37.3Cooljarloo Nth Total7,354,89115,208,5775.318.8809,52881.967.90.04.69.4Red Gully3Indicated1,930,0003,409,7687.811.5265,96289.766.08.33.112.4Red Gully3Inferred1,455,0002,565,6317.510.7192,42289.065.48.23.012.3Red Gully Total3,385,0005,975,3997.711.2458,38489.465.78.23.112.4Sub-Total Other16,513,30431,672,1326.014.11,892,07385.266.05.44.39.6Project/DepositCategoryVolumeTonnes% HM% SlimesHM TonnesVHMIlmeniteLeucoxeneRutileZircon(%) (%)(%)(%)(%)Regans Ford4Indicated4,505,2859,024,2269.916.8893,39894.370.010.04.310.0Regans Ford4Inferred455,933918,5366.518.559,70590.568.37.74.410.1Regans Ford Total4,961,2189,942,7629.617.0953,10394.169.99.94.310.0Previously Reported Mineral Resources - Strand Deposits; in accordance with JORC Code (2004) @ 2.5% HM Cut-offHistoric Deposit - Strand deposit (Under EL application)High Grade Mineral Resources - Strand Deposits; in accordance with the JORC Code (2012) @ 2.0% HM Cut-off
RESOURCES AND RESERVES SCHEDULE
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Previously Reported Mineral Resources - Dredge deposits; in accordance with JORC Code (2004) @ 1.0% HM Cut-offProject/DepositCategoryVolumeTonnes% HM% SlimesHM TonnesVHMIlmenitLeucoxenRutileZircon(%) (%)(%)(%)(%)Titan3Indicated10,335,05321,163,7411.822.1378,83186.071.91.53.19.5Titan3Inferred58,517,775115,445,3911.918.92,205,00785.971.81.53.19.5Total TitanTotal68,852,828136,609,1321.919.42,583,83885.971.81.53.19.5Telesto3Indicated1,716,3283,512,2043.818.4134,49983.367.50.75.69.5Calypso3Inferred27,113,64751,457,0081.713.7854,18685.668.11.65.110.8Bidaminna3Inferred26,260,00044,642,0003.03.61,339,26096.883.117.21.05.5Total Dredge123,942,803236,220,3442.115.24,911,78388.774.13.12.98.61.COMPLIANCE STATEMENT Boonanarring/Atlas ResourceThe 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 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).2.COMPLIANCE STATEMENT Boonanarring/Atlas ReserveThe 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.
DIRECTORS' REPORT
Your directors present their report on the Company for the year ended 31 December 2018.
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
Huangcheng Li (Appointed 4 April 2018)
PRINCIPAL ACTIVITIES
The principal activities of the Company during the year related to finalising project funding and construction of its 100%-owned, high-grade,
zircon-rich Boonanarring mineral sands project located 80km north of Perth in WA. First production of HMC concentrate occurred during
November 2018.
RESULTS FROM OPERATIONS AND FINANCIAL POSITION
During the year the Company recorded an operating profit of $7,325,466 (for the year to 31 December 2017: loss of $8,014,023). Basic profit per
share for the year was 0.39 cents (year to 31 December 2017: loss of 1.48 cents). Diluted profit / loss per share in respect of both periods ended
31 December 2018 and 31 December 2017 are the same as for the basic profit / loss per share.
During the year the net assets of the Company increased by $41,887,504 to $56,802,188 including cash and cash equivalents increasing by
$7,463,319 to $11,885,969 and property, plant and equipment increasing by $86,419,769 being for land purchases and the construction of the
Boonanarring mine. Inventory stockpiles from mine operations valued at $8,516,000 was also produced. This was largely funded by $25,085,000
being raised through share issues and $51,386,142 from a senior secured loan, offset by exploration and tenement expenses of $1,371,177 and
other expenses of $3,183,708. A foreign currency translation loss on the US$ senior secured loan and USD cash deposits of $3,308,584 was also
incurred.
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 12 January 2019, the Company’s first shipment of 10,206 Dry Metric Tonnes of HMC finished loading backed by a letter of credit.
Subsequently, in January, full payment for the shipment was received by Image, in USD.
On 16 February 2019, the Company’s second shipment of 20,038 Dry Metric Tonnes of HMC finished loading backed by a letter of credit.
Subsequently, in February, full payment for the shipment was received by Image, in USD.
There were no other material significant events subsequent to the reporting date.
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DIRECTORS' REPORT
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.
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,
resigned effective 28 February 2019
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.
- 13 -
DIRECTORS' REPORT
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.
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.
Huangcheng Li
Non-Executive Director – Appointed 4 April 2018
Mr Li is an investor from Taiwan, with more than 30 years of experience investing in various industries ranging from the general merchandising,
precious stones and certification businesses. Mr Li graduated from Tamkang University and in 1981 founded Leecotex International Limited in
Taiwan and Capital 88 International Limited in Hong Kong in 1993 where he served as the Managing Director. In 2015 Mr Li acquired a 49%
ownership interest in Giochi Preziosi Group (“GP Group”) and served as the Vice President until July 2017. GP Group is a leading global toy
company and has undergone a process of diversification and has expanded into new sectors and markets where it has successfully operated.
Currently, Mr Li is the co-founder of Lee & Wu Company Limited, a company focusing support towards high-tech industries in the development of
new material applications. Mr Li has not been a director of any other listed public companies in the past 3 years.
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.
- 14 -
DIRECTORS' REPORT
MEETINGS OF DIRECTORS
During the financial year ended 31 December 2018, there were six meetings of directors held. Attendances by each director during the year were
as follows:
Robert Besley
Patrick Mutz
Peter Thomas
Aaron Soo
George Sakalidis
Fei (Eddy) Wu
Chaodian Chen
Huangcheng Li
Directors’ Meetings
Audit Committee
Remuneration
Committee
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
6
6
6
6
6
6
6
4
6
6
6
6
6
6
6
2
1
-
-
1
-
-
1
-
1
-
-
1
-
-
1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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
Huangcheng Li
John McEvoy
Todd Colton
Non-Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Executive Director – Exploration
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Financial Officer
Chief Operating 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.
- 15 -
DIRECTORS' REPORT
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.
Employee Share Plan
The Image Employee Share Plan (ESP) was implemented after shareholder approval at the Shareholder General Meeting held on 13 February
2018.
The purpose of the ESP is to give an additional incentive to employees of the Company to provide dedicated and ongoing commitment and effort to
the Company, and for the Company to reward its employees for their efforts. It is considered to be an effective way to align the objectives of
management with the interests of shareholders.
The plan rewards share price growth. The plan shares are of value to the holder of the shares only to the extent to which the share price exceeds
the share price after the offer is made to the employee. Furthermore, the plan does not give rise to a tax liability on issue (unlike some options)
therefore encouraging long term holdings.
Issue of Plan Shares to Directors of the Company requires prior approval of Shareholder in accordance with Listing Rule 10.14.
During the 31 December 2018 year 3,504,132 ESP shares were issued. No issue of Plan Shares was made to Directors during the 31 December
2018 year.
The principal provisions of the plan include:
The Plan is available to all executive Directors and employees of the Company;
The Company may at any time, in its absolute discretion, make an offer to an Eligible Employee;
The number of Plan Shares issued to an Eligible Employee is determined by the Directors of the Company;
The issue price is the volume weighted average price of shares in the 5 trading days prior to the Issue Date;
The person accepting the offer (“Participant”) will have taken to have agreed to borrow from the Company on the terms of the loan
agreement referred to below an amount to fund the purchase of the Plan Shares;
The Plan Shares will rank pari passu with all issued fully paid shares in respect of voting rights, dividends and entitlement to participate
in any bonus or rights issues;
Plan participants may not dispose of any ESP Shares within 12 months of the issue date;
Until the loan to the Participant is fully repaid the Company has control over the disposal of the Plan Shares; and
Application will be made as soon as practicable after the allotment of the Plan Shares for listing for quotation on ASX.
The principal provisions of the loan agreement include:
The amount lent will be an advance equal to the issue price of the Plan Shares multiplied by the number of Plan Shares issued:
The repayment date is the date falling 3 years after the Issue Date.
The loan can be repaid at any time but the Participant must pay any amount outstanding on the date the employee ceases to be an
employee of Image (or such late date as determined by Image at its discretion. All dividends declared and paid on the Plan Shares will
be applied towards the repayment of the advance and there is no interest on the advance.
A holding lock will be placed on the Plan Shares until the loan is fully repaid.
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.
- 16 -
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 2018 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)
$450,000 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)
Mr H Li
(Non-Executive Director)
$30,000
$30,000
Mr G Sakalidis
(Executive Technical Director)
$225,000 inclusive of super
-
-
-
Key Management Personnel Remuneration
Table 1: Remuneration for the year ended 31 December 2018
Short-term benefits
Post-
employment
Share-based
payments
Directors
Fees/Salary
($)
Other Fees &
contractual
payments
($)
Non-
monetary
benefits
($)
Statutory
superannuati
on
($)
Equity-settled
share based
payments
($)
Non-Executive Directors
Robert Besley
Peter Thomas
Aaron Soo
Fei (Eddy) Wu
Chaodian Chen
Huang Cheng Li
Executive Directors
Patrick Mutz
George Sakalidis
Executive Officers
John McEvoy
Todd Colton 1
Total
45,000
35,000
30,000
35,000
30,000
22,151
-
-
-
-
-
-
319,821
110,663
147,821
-
274,062
40,000
27,084
-
-
-
-
-
-
-
-
-
-
-
965,939
150,663
--
4,275
3,325
-
3,325
-
-
20,167
14,043
21,420
2,083
68,638
Note 1 Mr Colton became a KMP on 1 December 2018.
- 17 -
Total
($)
49,275
38,325
30,000
38,325
30,000
22,151
450,651
161,864
335,482
29,167
-
-
-
-
-
-
-
-
-
-
--
1,185,240
DIRECTORS' REPORT
Table 1: Remuneration for the year ended 31 December 2017
Short-term benefits
Post-
employment
Share-based
payments
Directors
Fees/Salary
($)
Other Fees &
contractual
payments
($)
Non-
monetary
benefits
($)
Statutory
superannuati
on
($)
Equity-settled
share based
payments
($)
Total
($)
45,000
35,000
30,000
35,000
30,000
-
-
-
-
-
253,363
54,616
136,510
259,615
-
-
824,488
54,616
-
-
-
-
-
-
-
-
-
4,275
3,325
-
3,325
-
27,766
12,968
24,664
76,323
-
-
-
-
-
49,275
38,325
30,000
38,325
30,000
17,881
353,626
-
-
149,478
284,279
17,881
973,308
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
Table 3: Compensation options as at 31 December 2018
Nil
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 - $450,000 per annum (from 1 January 2019) inclusive of superannuation
Performance bonus – participates in a Company-wide executive performance incentive scheme.
Bonus payment of $50,000 for reaching the milestone of full funding of the Boonanarring Project and commencement of construction.
Allowances – from 1 January 2019, the Company will contribute up to $30,000 per 12 month period or proportion thereof for
accommodation whilst located in Perth and towards airfares for travel between Adelaide and Perth. The Company provides a Company
vehicle for use on Company business and commuting between his place of residence in the Perth area and the corporate office and the
Company’s various mining and exploration sites as and when necessary.
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.
George Sakalidis – Executive Director – Exploration
Base Salary - $225,000 per annum (from 1 December 2018) 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 $155 per hour inclusive of 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 - $350,000 per annum (from 1 December 2018) inclusive of superannuation.
Performance bonus – participates in a Company-wide executive performance incentive scheme.
Bonus payment of $40,000 for reaching the milestone of full funding of the Boonanarring Project and commencement of construction.
The agreement may be terminated by the provision of three month’s written notice by either the Company or Mr McEvoy.
- 18 -
DIRECTORS' REPORT
Todd Colton – Chief Operating Officer
Base Salary - $350,000 per annum (from 1 December 2018) inclusive of superannuation.
Performance bonus – participates in a Company-wide executive performance incentive scheme.
The agreement may be terminated by the provision of three month’s written notice by either the Company or Mr Colton.
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 2018 and the year to 31 December 2017 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
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
Huang Cheng Li
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 key management personnel to acquire fully paid ordinary shares. As shown in the following
table, Mr Mutz exercised 1,000,000 options at $0.085 during 2018.
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
-
-
-
-
(1,000,000)
85,000
(2,000,000)
(1,000,000)
85,000
(2,000,000)
-
-
Other than listed above no Key Management Person or their related entities held options in the Company during the financial year.
- 19 -
DIRECTORS' REPORT
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 Officers
John McEvoy
Todd Colton 1
Totals
Balance at
Beginning of
Year or Date of
Appointment
Purchased
during the Year
Award under
Employee Share
Plan
Other Changes
during the Year
Balance at End
of Year or Date
of Retirement
566,667
2,104,306
-
-
11,000,000
1,473,000
-
-
4,378,489
-
-
-
-
1,000,000
-
-
-
-
-
-
-
1,420,834
716,860
20,187,156
220,080
784,973
-
-
2,693,080
784,973
-
-
-
-
-
-
-
-
-
-
566,667
2,104,306
12,473,000
-
-
4,378,489
1,000,000
2,425,887
716,860
23,665,209
Note 1 Mr Colton held 716,860 shares in the Company when he became a KMP on 1 December 2018. Of these shares 706,860 were awarded under the employee
share plan.
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.
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 no options held over ordinary paid shares.
No options were issued to directors or executives as remuneration during the year ended 31 December 2018.
During the year ended 31 December 2018 1,000,000 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.
- 20 -
DIRECTORS' REPORT
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
$46,426 (the year to 31 December 2017: $31,548) 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, 25 February 2019
- 21 -
AUDITOR’S INDEPENDENCE DECLARATION
- 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 2018 Corporate Governance Statement is dated at 25 February 2019 and reflects the corporate governance practices in place throughout
the period ended 31 December 2018. The 2018 Corporate Governance Statement was approved by the Board on 25 February 2019. A
description of the Company’s current corporate governance practices is set out in the Company’s Corporate Governance Statement which can
be viewed at www.imageres.com.au.
- 23 -
STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
For the Year Ended 31 December 2018
Notes
3
3
11
3
3
4
7
7
Revenue
Interest income
Other revenue
Realised foreign currency gain
Expenses
Depreciation and amortisation expense
Exploration and evaluation expenses
Impairment of property, plant and equipment
Other expenses
Interest expense
Borrowing costs
Loss before income tax
Income tax benefit
Profit / (loss) from continuing operations
Other comprehensive income
Items that may be reclassified subsequently to profit and loss
Unrealised foreign currency loss
Changes in the fair value of available for sale financial assets
Other comprehensive income for the period, net of tax
Total profit / (loss) and other comprehensive income for the period
Total profit / (loss) and other comprehensive income for period
attributable to members of the Company
Basic profit / (loss) per share (cents per share)
Diluted profit / (loss) per share (cents per share)
The accompanying notes form part of these financial statements.
Year to
31 Dec
2018
($)
426,801
15,603
706,198
(356,281)
(1,371,177)
(734,007)
(3,183,709)
(916,760)
(4,000)
(5,417,332)
12,742,798
7,325,466
(4,014,782)
9,975
(4,004,807)
3,320,659
Year to
31 Dec
2017
($)
19,373
8,805
-
(53,132)
(5,096,598)
-
(2,694,875)
(206,252)
(24,000)
(8,048,965)
34,942
(8,014,023)
-
2,869
2,869
(8,011,154)
3,320,659
(8,011,154)
0.39
0.39
(1.48)
(1.48)
- 24 -
STATEMENT OF FINANCIAL POSITION
As at 31 December 2018
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventory
Deferred Tax Assets
Other assets
Total Current Assets
Non-Current Assets
Property, plant and equipment
Inventory
Deferred Tax Assets
Other financial assets
Total Non-Current Assets
TOTAL ASSETS
Current Liabilities
Trade and other payables
Provisions
Borrowings
Total Current Liabilities
Non-Current Liabilities
Provisions
Borrowings
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
Equity
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
The accompanying notes form part of these financial statements.
- 25 -
Notes
8
9
13
4
10
11
13
4
12
14
15
16
15
16
17
17
31 Dec
2018
($)
11,885,969
1,463,321
9,246,816
3,685,000
536,308
26,817,414
31 Dec
2017
($)
4,422,650
81,756
-
-
126,065
4,630,471
101,061,852
14,642,083
-
9,057,798
447,253
110,566,903
137,384,317
11,667,952
454,034
12,564,655
24,686,641
4,507,559
51,387,929
55,895,488
80,582,129
56,802,188
103,170,439
4,323,815
(50,692,066)
56,802,188
755,514
-
16,780
15,414,377
20,044,848
940,445
158,876
34,843
1,134,164
-
3,996,000
3,996,000
5,130,164
14,914,684
68,917,165
42,269
(54,044,750)
14,914,684
STATEMENT OF CHANGES IN EQUITY
For the Year Ended 31 December 2018
Fair Value
through Other
Comprehensive
Income
($)
Contributed
Equity
($)
Warrants
Reserve
($)
Employee
Benefit
Reserve
($)
Accumulated
Losses
($)
Total
($)
Balance at 1 January 2017
56,251,135
(2,600)
Comprehensive loss
Operating loss for the year
Other comprehensive income
Total comprehensive loss for the
year
Transactions with owners in
their capacity as owners
-
-
-
Shares issued during the year
13,353,548
Cost of share issue
(687,518)
Equity settled share based
payment transactions
-
Total transactions with owners in
their capacity as owners
12,666,030
-
2,869
2,869
-
-
-
-
Balance at 31 December 2017
68,917,165
269
Balance at 1 January 2018
Comprehensive loss
Operating profit for the year
Other comprehensive income
Total comprehensive loss for the
year
Transactions with owners in
their capacity as owners
68,917,165
-
-
-
Shares issued during the year
35,735,144
Cost of share issue
(1,481,870)
Warrants issued during the year
Options expired during the year
-
Total transactions with owners in
their capacity as owners
34,253,274
269
-
9,975
9,975
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,313,571
24,119
(46,030,727)
10,241,927
-
-
-
-
-
17,881
17,881
(8,014,023)
(8,014,023)
-
2,869
(8,014,023)
(8,011,154)
-
-
-
-
13,353,548
(687,518)
17,881
12,683,911
42,000
(54,044,750)
14,914,684
(54,044,750)
42,000
14,914,684
-
-
-
-
-
7,325,466
7,325,466
(4,014,782)
(4,004,807)
3,310,684
3,320,659
-
-
35,735,144
(1,481,870)
4,313,571
-
(42,000)
42,000
-
4,313,571
(42,000)
42,000
38,566,845
Balance at 31 December 2018
103,170,439
10,244
4,313,571
-
(50,692,066)
56,802,188
The accompanying notes form part of these financial statements.
- 26 -
Year to
31 Dec
2018
($)
6,831
(2,630,174)
424,989
(200,971)
(2,399,325)
2,000
(64,143,863)
(1,435,160)
14,685
(65,562,338)
25,085,000
(1,483,861)
51,386,142
(46,782)
74,940,499
6,978,836
4,422,650
484,483
11,885,969
Year to
31 Dec
2017
($)
6,008
(2,497,325)
21,582
(206,252)
(2,675,987)
182
(1,459,359)
(5,239,945)
-
(6,699,122)
13,353,548
(698,355)
112,159
(77,316)
12,690,036
3,314,927
1,107,723
-
4,422,650
STATEMENT OF CASH FLOWS
For the Year Ended 31 December 2018
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
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
Payments for exploration and evaluation
Proceeds from sale of investments
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from new issues of shares
Payments for share issue costs
Proceeds from interest bearing loan
Repayment of borrowings
Net cash inflows from / (used in) financing activities
Net increase in cash held
Cash at beginning of the year
Effect of exchange fluctuations on cash held
Cash at the end of the year
The accompanying notes form part of these financial statements.
17
16
16
8
- 27 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
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 25 February 2019.
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
The Company recognises that its ability to continue as a going concern to meet its debt when they fall due is dependent on successful production
and product sales from the Boonanarring project resulting in the project’s subsequent profitable operation. The Directors have reviewed the
business outlook, taking into account the early production achievements and the fact that the first shipment has been completed, 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.
New or amended Accounting Standards and Interpretations adopted
The Company has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards
Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
New or Amended Accounting Standards and Interpretations Adopted
The following Accounting Standards and Interpretations are most relevant to the Company:
AASB 9 Financial Instruments
The Company has adopted AASB 9 from 1 January 2018. The standard introduced new classification and measurement models for financial
assets. A financial asset shall be measured at amortised cost if it is held within a business model whose objective is to hold assets in order to
collect contractual cash flows which arise on specified dates and that are solely principal and interest. A debt investment shall be measured at fair
value through other comprehensive income if it is held within a business model whose objective is to both hold assets in order to collect contractual
cash flows which arise on specified dates that are solely principal and interest as well as selling the asset on the basis of its fair value. All other
financial assets are classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on initial recognition
to present gains and losses on equity instruments (that are not held-for-trading or contingent consideration recognised in a business combination)
in other comprehensive income ('OCI'). Despite these requirements, a financial asset may be irrevocably designated as measured at fair value
through profit or loss to reduce the effect of, or eliminate, an accounting mismatch. For financial liabilities designated at fair value through profit or
loss, the standard requires the portion of the change in fair value that relates to the entity's own credit risk to be presented in OCI (unless it would
create an accounting mismatch). New simpler hedge accounting requirements are intended to more closely align the accounting treatment with the
risk management activities of the entity. New impairment requirements use an 'expected credit loss' ('ECL') model to recognise an allowance.
Impairment is measured using a 12-month ECL method unless the credit risk on a financial instrument has increased significantly since initial
recognition in which case the lifetime ECL method is adopted. For receivables, a simplified approach to measuring expected credit losses using a
lifetime expected loss allowance is available.
- 28 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
AASB 15 Revenue from Contracts with Customers
The Company has adopted AASB 15 from 1 January 2018. The standard provides a single comprehensive model for revenue recognition. The core
principle of the standard is that an entity shall recognise revenue to depict the transfer of promised goods or services to customers at an amount
that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard introduced a new
contract-based revenue recognition model with a measurement approach that is based on an allocation of the transaction price. This is described
further in the accounting policies below. Credit risk is presented separately as an expense rather than adjusted against revenue. Contracts with
customers are presented in an entity's statement of financial position as a contract liability, a contract asset, or a receivable, depending on the
relationship between the entity's performance and the customer's payment. Customer acquisition costs and costs to fulfil a contract can, subject to
certain criteria, be capitalised as an asset and amortised over the contract period.
There was no impact on the financial performance and position of the Company from the adoption of these Accounting Standards.
Accounting Policies
a) Revenue Recognition
The Company recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Company is expected to be entitled in exchange for
transferring goods or services to a customer. For each contract with a customer, the Company: identifies the contract with a customer;
identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of variable
consideration and the time value of money; allocates the transaction price to the separate performance obligations on the basis of the
relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when or as each performance
obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts, rebates and
refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates are determined using either
the 'expected value' or 'most likely amount' method. The measurement of variable consideration is subject to a constraining principle
whereby revenue will only be recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue
recognised will not occur. The measurement constraint continues until the uncertainty associated with the variable consideration is
subsequently resolved. Amounts received that are subject to the constraining principle are initially recognised as deferred revenue in the
form of a separate refund liability.
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which is generally at the
time of delivery.
Rendering of services
Revenue from a contract to provide services is recognised over time as the services are rendered based on either a fixed price or an hourly
rate.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a
financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
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) Foreign Currency Translation
Functional and Presentation Currency
Both the functional and presentation currency of Image is Australian Dollars.
Foreign Currency Translation
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange at balance date.
- 29 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
All translation differences relating to transactions and balances denominated in foreign currency are taken to the Statement of Profit and
Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date
of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rate at the date
when the fair value was determined.
d) 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.
e) 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.
f) 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.
g)
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.
- 30 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
h) 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.
i)
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.
j)
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.
k)
Inventory
Inventories of heavy mineral concentrate are valued at the lower of an average weighted cost and net realisable value (NRV). Cost comprises
direct costs and an appropriate proportion of fixed and variable expenditure including depreciation and amortisation.
Inventories of consumable supplies and spare parts to be used in production are valued at weighted average cost.
NRV is the estimated selling price in the ordinary course of business less the estimated costs of production and to complete the sale.
l)
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.
Mine development costs are capitalised to property, plant and equipment only once a decision to mine is made and the development is fully
funded. Mine development expenditure represents the cost incurred in preparing mines for commissioning and production, and also includes
other attributable costs incurred before production commences. These costs are capitalised to the extent they are expected to be recouped
through successful exploitation of the related mining project. Once production commences, these costs are amortised over the estimated
economic life of the mine on a units of production basis. Mine development costs are written off if the mine property is abandoned.
Development costs incurred to maintain production are expensed as incurred against the related production.
At each reporting date, the entity assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment
exists, the entity makes a formal assessment of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount
the asset is considered impaired and is written down to its recoverable amount. Recoverable amount is the greater of fair value less costs of
disposal and value in use.
Depreciation
Depreciation is provided on a straight-line or units of production basis on all plant and equipment commencing from the time the asset is held
ready for use. Major depreciation periods are:
Plant and equipment – 1 to 5 years
Motor vehicles – 3 to 5 years
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.
- 31 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
m) Borrowings
Recognition and Measurement
Borrowings are initially recognised at fair value and revalued where the borrowings are denominated in a foreign currency.
Transaction costs paid on the establishment of loan facilities are capitalised to property, plant and equipment to the extent that it is probable
that some or all of the facility will be drawn down and that the borrowings are directly related to the purchase of property, plant and
equipment. Where there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is expensed to profit and
loss. Borrowing costs incurred after the property, plant and equipment is installed and operating are expensed to the profit and loss
statement directly.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12
months after the reporting period.
The fair value of financial liabilities carried at amortised cost approximates their carrying values.
n)
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial measurement,
except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either amortised cost or fair value
depending on their classification. Classification is determined based on both the business model within which such assets are held and the
contractual cash flow characteristics of the financial asset unless, an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the Company has
transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a
financial asset, it's carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as financial assets at fair
value through profit or loss. Typically, such financial assets will be either: (i) held for trading, where they are acquired for the purpose of
selling in the short-term with an intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where permitted.
Fair value movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the Company intends to hold for the
foreseeable future and has irrevocably elected to classify them as such upon initial recognition.
Impairment of financial assets
The Company recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised cost or fair
value through other comprehensive income. The measurement of the loss allowance depends upon the Company’s assessment at the end
of each reporting period as to whether the financial instrument's credit risk has increased significantly since initial recognition, based on
reasonable and supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss allowance
is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a default event that is possible
within the next 12 months. Where a financial asset has become credit impaired or where it is determined that credit risk has increased
significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss recognised is
measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the
original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is recognised within other
comprehensive income. In all other cases, the loss allowance is recognised in profit or loss.
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.
- 32 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
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.
o) 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.
p) 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.
q) 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.
r) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current
financial year.
s) 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.
t) Critical Accounting Estimates, Assumptions and Judgements
The Company makes estimates and assumptions concerning the future in applying its accounting policies. The resulting accounting
estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Estimates and
underlying assumptions are reviewed on an ongoing basis, with revisions recognised in the period in which the estimates are revised and
future periods affected.
Impairment of Property, Plant and Equipment and Mine Development Expenditure
Non-current assets are assessed for impairment when there is an indication that their carrying amount may not be recoverable. The
recoverable amount of each Cash Generating Unit (CGU) is determined as the higher of value-in-use and fair value less costs of disposal
estimated on the basis of discounted present value of the future cash flows (a level 3 fair value estimation method).
The estimates of discounted future cash flows for each CGU are based on significant assumptions including:
estimates of the quantities of mineral reserves and ore resources for which there is a high degree of confidence of economic
extraction and the timing of access to these reserves and ore resources:
future production levels and the ability to sell that production
future product prices based on the Company’s assessment of forecast short and long term prices for each of the key products
- 33 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
future exchange rates for the Australian dollar compared to the US dollar using external forecasts by recognised economic
forecasters
future cash costs of production, sustaining capital expenditure, rehabilitation and mine closure
the asset specific discount rate applicable to the CGU
Determination of Mineral Resources and Ore Reserves
The determination of reserves impacts the accounting for asset carrying values, depreciation and amortisation rates, and provision for
decommissioning and restoration. The information in this report as it relates to ore reserves, mineral resources or mineralisation is reported
in accordance with the AusIMM “Australian Code for Reporting of Identified Mineral Resources and Ore Reserves 2012”. The information
has been prepared by or under supervision of competent persons as identified by the Code.
There are numerous uncertainties inherent in estimating mineral resources and ore reserves and assumptions that are valid at the time of
estimation may change significantly when new information becomes available. Changes in the forecast prices of commodities, exchange
rates, production costs or recovery rates may change the economic status of reserves and may ultimately result in the reserves being
restated.
Rehabilitation and Site Restoration Provision
Significant estimates and assumptions are made in determining the provision for rehabilitation of the mine as there are numerous factors
that will affect the ultimate liability payable. These factors include estimates of the extent and costs of rehabilitation activities, technological
changes, regulatory changes, cost increases as compared to inflation rates, and changes in discount rates. These uncertainties may result
in future actual expenditure differing from amounts currently provided.
Recovery of Deferred Tax Assets
Judgement is required in determining whether deferred tax assets are recognised in the Consolidated Statement of Financial Position.
Deferred tax assets, including those arising from unutilised tax losses, require management to assess the likelihood that the Company will
generate taxable earnings in future periods, in order to utilise recognised deferred tax assets. Estimates of future taxable income are
based on forecast cash flows from operations and the application of existing tax laws. To the extent that future cash flows and taxable
income differ significantly from estimates, the ability of the Company to realise net deferred tax assets could be impacted. Additionally,
future changes in tax laws could limit the ability of the Company to obtain tax deductions in future periods.
The Company has unrecognised deferred tax assets arising from tax losses and other temporary differences. The ability of the Company
to utilise its tax losses is subject to meeting the relevant statutory tests.
The income tax expense has been estimated and calculated based on management’s best knowledge of current income tax legislation.
There may be differences with the treatment of individual jurisdiction provisions but these are not expected to have any material impact on
the amounts as reported.
u) 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
production and exploration 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 derived from sources and assets located wholly within Australia.
Major customers
The Company currently provides products to two offtakers.
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.
- 34 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
NOTE 3
INCOME AND EXPENDITURE
Operating Expenses
Mine operating costs
Mine depreciation and amortisation
Reclassified to Inventory
Year to
31 Dec
2018
($)
(4,301,889)
(974,000)
5,275,889
-
Year to
31 Dec
2017
($)
-
-
-
-
Interest Revenue
426,801
19,373
Other Revenue
Revaluation of available for sale financial assets
Rendering of Services
Profit on the sale of available for sale financial assets
Profit/(loss) on disposal of property, plant and equipment
-
-
14,685
918
15,603
6,397
2,408
-
(2,286)
6,519
Interest Expense
(916,760)
(206,252)
Other Expenses
Occupancy costs
Filing and ASX Fees
Corporate, staff and management
Other expenses from continuing operations
(174,151)
(32,286)
(2,388,961)
(588,311)
(3,183,709)
(169,872)
(43,436)
(1,827,345)
(654,222)
(2,694,875)
NOTE 4
INCOME TAX
Reconciliation of income tax expense to prima facie tax payable
A reconciliation of income tax benefit applicable to accounting profit/(loss) before income
tax at the statutory income tax rate to income tax expense at the Company’s effective
income tax rate for the years ended 31 December 2018 and 31 December 2017.
Loss from continuing operations before income tax
(5,417,332)
(8,014,023)
Prima facie tax benefit attributable to loss from continuing operations before income tax
at statutory rate of 27.5% (2017: 30%)
Non-deductible expenses
Tax effect on temporary differences brought to account
Non-assessable income
Under/over provision in prior year
Tax losses brought to account as a deferred tax asset
Tax losses not brought to account as a deferred tax asset
Income tax benefit/(expense)
(1,489,766)
193,367
(2,029,735)
(4,038)
-
(9,412,626)
(12,742,798)
(2,404,207)
607,376
(230,877)
(1,919)
92,378
-
1,937,249
-
The Corporate tax rate payable by the Company if the Company was required to pay income tax in the year ended 31 December 2018 was 27.5%
as it was a Base Rate Entity for taxation purposes. Company budgets indicate that the company will not be a Base Rate Entity in future years and
will be required to pay income tax at the standard income tax rate of 30%. The deferred tax asset held on the balance sheet is calculated at the
30% income tax rate.
- 35 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
(a)
Recognised deferred tax assets and liabilities
Assets
Liabilities
Net
Tax losses
Property, plant and equipment
Unrealised foreign exchange gains
Provisions and accruals
Capital raising costs
Borrowing costs
Other
Investments
Deferred tax asset not taken to account
2018
$
(16,130,740)
(1,204,435)
(180,917)
(502,669)
2017
$
-
-
-
(8,227)
(209,283)
2018
$
-
521,475
-
-
-
-
-
-
-
-
4,749,911
(663)
-
218,173
759
3,818
-
Net tax (assets)/liabilities
(18,018,761)
-
5,275,963
2017
$
-
-
-
-
-
-
-
-
-
-
2018
$
(16,130,740)
521,475
(1,204,435)
(180,917)
(502,669)
4,749,911
759
3,818
2017
$
-
-
-
(8,227)
(209,283)
-
(663)
-
-
218,173
(12,742,798)
-
Deferred tax assets of $12,742,798 at 31 December 2018 (31 December 2017: Nil) have been recognised in relation to unused tax losses at 30%,
due to taxable income being forecast from the Boonanarring project.
(b)
Unrecognised deferred tax assets
Deferred tax assets (recognised at 30%) have not been recognised in respect of
temporary differences on the following items
Other deductible temporary differences
Unused tax losses
NOTE 5 KEY MANAGEMENT PERSONNEL COMPENSATION
Short-term employee benefits
Post-employment benefits
Equity-settled share based payments
Year to
31 Dec
2018
($)
-
-
-
1,116,602
68,638
-
1,185,240
Year to
31 Dec
2017
($)
(218,173)
(12,683,189)
12,901,362
879,104
76,323
17,881
973,308
Short-term employee benefits
These amounts include fees and benefits paid to non-executive Chair and non-executive directors as well as all salary and paid leave benefits
awarded to executive directors and other KMP.
Post-employment benefits
These amounts are the costs of superannuation contributions payable for the period.
Equity-settled share based payments
This amount is calculated as the fair value of the options and represents the value of the services received during the period the options are held
over the financial period. This value was calculated using the Black-Scholes option pricing model. Further information on the share based payment
transaction is disclosed in Note 22.
Further key management personnel remuneration information has been included in the Remuneration Report section of the Directors
Report.
Information on related party and entity transactions are disclosed in Note 23.
NOTE 6
Amounts received or due and receivable by the auditors of the Company for:
AUDITORS REMUNERATION
Auditing and reviewing the financial reports – Greenwich & Co Audit Pty Ltd
40,000
20,279
- 36 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
NOTE 7
Basic and diluted profit / (loss) per share
EARNINGS PER SHARE
The following reflects the earnings and share data used in the calculation of
basic and diluted loss per share
Profit / (loss) for the period attributable to owners of the Company
Profit / (loss) used in calculating basic profit / (loss) per share
Profit / (loss) used in calculating diluted profit / (loss) loss per share
Year to
31 Dec
2018
(Cents)
0.39
($)
3,310,684
3,310,684
3,320,659
Year to
31 Dec
2017
(Cents)
(1.48)
($)
(8,011,154)
(8,011,154)
(8,011,154)
Weighted average number of ordinary shares used in calculating basic loss per share
859,218,824
542,790,567
Number of shares
Number of shares
The Company had Nil (2017: 3,000,000) options over fully paid ordinary shares on issue at balance date. Options are considered to be potential
ordinary shares, however, they are not considered to be dilutive in the year to 31 December 2017 and accordingly have not been included in the
determination of diluted loss per share.
CASH AND CASH EQUIVALENTS
NOTE 8
Cash at bank
Deposits at call
TRADE AND OTHER RECEIVABLES
NOTE 9
Trade receivables
GST and tax refundable
Other receivables
31 Dec
2018
($)
11,871,418
14,551
11,885,969
-
486,790
976,531
1,463,321
31 Dec
2017
($)
4,408,780
13,870
4,422,650
19,272
62,484
-
81,756
Other receivables represent an amount expected to be recovered for expenses incurred dismantling the wet concentrator plant at Mindarie, South
Australia offset by additional equipment purchased from Murray Zircon Pty Ltd.
OTHER ASSETS - CURRENT
NOTE 10
Restricted cash – security for guarantees
Prepayments
54,667
481,641
536,308
54,667
71,398
126,065
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 ($20,000).
Deposits at call consist of term deposits with maturity dates greater than three months.
- 37 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
PROPERTY, PLANT AND
NOTE 11
EQUIPMENT
Period ended 31 December 2017
Balance at 1 January 2017
Additions
Disposals
Depreciation
Closing Net Book Value
At 31 December 2017
Cost
Accumulated Depreciation
Net Book Value
Year ended 31 December 2018
Balance at 1 January 2018
Additions
Mine closure and rehabilitation asset
Disposals
Impairments
Transfer to inventory
Depreciation
Closing Net Book Value
At 31 December 2018
Cost
Accumulated Depreciation
Net Book Value
Plant and
Equipment
($)
12,753,476
3,113
(2,468)
(53,132)
12,700,989
12,902,291
(201,302)
12,700,989
12,700,989
37,892,479
-
(1,082)
(734,007)
(293,240)
(660,281)
48,904,858
49,766,441
(861,583)
48,904,858
Land and
Buildings
($)
Mine
Development
($)
Borrowing
Costs
($)
Total
($)
12,753,476
1,944,207
(2,468)
(53,132)
14,642,083
14,843,385
(201,302)
14,642,083
14,642,083
84,380,667
4,397,712
(1,082)
(734,007)
(293,240)
(1,330,281)
101,061,852
-
-
-
-
-
-
-
21,960,927
-
-
-
(329,000)
21,631,927
21,960,927
(329,000)
21,631,927
102,593,435
(1,531,583)
101,061,852
-
1,941,094
-
-
1,941,094
1,941,094
-
1,941,094
1,941,094
9,453,318
-
-
-
-
-
11,394,412
11,394,412
-
11,394,412
-
-
-
-
-
-
-
-
-
15,073,943
4,397,712
-
-
-
(341,000)
19,130,655
19,471,655
(341,000)
19,130,655
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 and construction costs incurred building the Boonanarring Mine. Mine development
expenditure represents the cost incurred in preparing mines for commissioning and production, other attributable costs incurred before production
commences and mine closure and rehabilitation costs.
Land represents lots at Boonanarring which the company has acquired.
Impairments of plant and equipment represent the write down in the value of plant and equipment purchased from Murray Zircon Pty Ltd and not
used in the construction of the Boonanarring mine.
Borrowing costs incurred financing the senior debt facility were fully capitalised to property, plant and equipment. Depreciation on the borrowing
costs was expensed directly to profit and loss. Depreciation on plant and equipment and mine development is charged to the inventory cost base.
As at 31 December 2018 the carrying value of motor vehicles was $53,656 (31 December 2017: $58,029)
OTHER FINANCIAL ASSETS
NOTE 12
Non-Current
Loans to Employees – (Employee Share Plan)
Loans to Key Management Personnel – (Employee Share Plan)
Available-for-sale financial assets – shares in listed corporations
Investments in related parties
Available-for-sale financial assets includes the following investments held in director-
related party entities:
Magnetic Resources NL – partly-paid shares
- 38 -
31 Dec
2018
($)
241,478
179,020
26,755
447,253
31 Dec
2017
($)
-
-
16,780
16,780
355
780
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
NOTE 13
INVENTORY
Current
Ore stockpiles (at cost)
Heavy mineral concentrate and other intermediate stockpiles (at NRV)
Stores and consumables (at cost)
Non-Current
Inventory
31 Dec
2018
($)
1,254,000
7,262,000
730,816
9,246,816
31 Dec
2017
($)
-
-
-
-
-
755,514
Inventories of heavy mineral concentrate are valued at the lower of an average weighted cost and net realisable value (NRV). Cost comprises direct
costs and an appropriate proportion of fixed and variable expenditure including depreciation and amortisation.
Inventories of consumable supplies and spare parts to be used in production are valued at weighted average cost.
NRV is the estimated selling price in the ordinary course of business less the estimated costs of production and to complete the sale.
TRADE AND OTHER PAYABLES
NOTE 14
Trade creditors
Accruals
GST and tax payable
Other payables
7,527,402
3,899,169
185,529
55,852
11,667,952
781,258
80,130
65,423
13,634
940,445
Trade creditors, accruals, GST and tax payables and other payables are normally settled on 30 Day terms.
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. Trade and
other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date.
PROVISIONS
NOTE 15
Current
Employee leave benefits
Non-Current
Employee leave benefits
Mine closure and rehabilitation
454,034
158,876
109,847
4,397,712
4,507,559
-
-
--
Mine closure and rehabilitation obligations
The calculation of the mine closure and rehabilitation provision requires assumptions such as application of environmental legislation, plant closure
dates, available technologies, engineering costs and inflation and discount rates. A change in any of the assumptions used may have a material
impact on the carrying value of mine closure and rehabilitation obligations.
The mine closure and rehabilitation provision is recorded as a liability at fair value, assuming a risk-free discount rate equivalent to the 5 year
Australian US Government bond rate of 2.25% as at 31 December 2018 (31 December 2017: N/A) and an inflation factor of 2.25% (31 December
2017: N/A). Although the ultimate amount to be incurred is uncertain, management has, at 31 December 2018, estimated the asset retirement cost
of work completed to date using an expected remaining mine life of 5 ½ years and a total undiscounted estimated cash flow of $4,517,185 (31
December 2017: N/A). Management’s estimate of the underlying asset retirement costs are independently reviewed by an external consultant on a
regular basis for completeness.
- 39 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
Recognition and measurement of 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.
A mine closure and rehabilitation provision is recognised at the commencement of a mining project and/or construction based on the estimated
costs necessary to meet legislative requirements by estimating future costs and discounting these to a present value. The provision is recognised
as a liability, separated into current (estimated costs arising within twelve months) and non-current components based on the expected timing of
these cash flows. A corresponding asset is included property, plant and equipment (mine development assets section), only to the extent that it is
probable that future economic benefits associated with the restoration expenditure will flow to the entity, and is amortised over the life of the mine.
At each reporting date the mine closure and rehabilitation provision is re-measured in line with changes in discount rates and timing or amounts of
the costs to be incurred. Adjustments to the estimated amount and timing of future closure and rehabilitation cash flows are a normal occurrence in
light of the significant judgements and estimates involved and are dealt with on a prospective basis as they arise.
Changes in the liability relating to mine closure and rehabilitation obligations are added to or deducted from the related asset (where it is probable
that future economic benefits will flow to the entity), other than the unwinding of the discount which is recognised as a financing expense in the
Statement of Profit and Loss and Other Comprehensive Income. Changes in the asset value have a corresponding adjustment to future
amortisation charges.
The mine closure and rehabilitation provision does not include any amounts related to remediation costs associated with unforeseen
circumstances.
BORROWINGS
NOTE 16
Current
Interest bearing loan – Murray Zircon Pty Ltd
Interest bearing loan – Senior Secured Loan Notes
Non-Current
Interest bearing loan – Senior Secured Loan Notes
Interest bearing loan – Murray Zircon Pty Ltd
Fees associated with draw-down on 8 June 2016
(a)
Loan – Murray Zircon Pty Ltd
Interest Rate
(5%)
(14%)
(14%)
31 Dec
2018
($)
4,000,000
8,564,655
12,564,655
51,387,929
-
-
51,387,929
31 Dec
2017
($)
34,843
-
34,843
-
4,000,000
(4,000)
3,996,000
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 [20.1]% 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 four months after first production of 20,000 wet tonnes of heavy mineral concentrates (First Production) (early payment is allowed at any
time, with no ability to redraw) and customary default provisions. The loan is secured by a second mortgage against all present and after-acquired
property of the Company and a mining mortgage in respect of certain core tenements held by Image.
(b)
Senior Secured Debt Facility.
A senior secured debt facility with Pala Investments Limited (“Pala”) and Castelake IV, L.P. and CL V Investment Solutions LLC which are entities
controlled by Castlelake L.P. as the Loan Note Holders, to raise A$50,000,000 from the issue of senior secured loan notes. The senior loan notes
amount to US$38,865,000. $8,564,655 is the current portion of the loan at 31 December 2018 (31 December 2017: Nil).
The key terms of the loan include a loan period of three years from draw down, an interest rate of 14% for the first fifteen months following draw
down and 13% thereafter for the balance of the loan. Interest for the first fifteen months is added to the loan amount and thereafter paid quarterly
in arrears. The principal is to be repaid in seven equal instalments starting in the 18th month following drawdown. Drawdown occurred on 25 May
2018.
- 40 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
NOTE 17 ISSUED CAPITAL
Contributed Equity – Ordinary Shares
At the beginning of the period
Underwritten issue of shares at $0.10
Loan note holder bonus shares valued at $0.1111
Shares issued for decision to mine valued at $0.1130
Employee share plan shares issued at $0.12
Shares issued on exercise of options at $0.085
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
Reserves
Available-for-sale financial assets reserve
Share based payments reserve (i)
Warrants reserve
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 – Share Based Payments
Balance at the beginning of the period
Options expired
Exercise of options
Share based payment benefit expense
Balance at the end of the period
Reserve – Warrants
Balance at the beginning of the period
Issue of warrants
Balance at the end of the period
Year to 31 Dec 2018
No.
$
Year to 31 Dec 2017
No.
$
611,289,987
250,000,000
56,255,000
35,198,459
3,504,152
1,000,000
68,917,165
25,000,000
6,252,220
3,977,426
420,498
85,000
957,247,598
(1,481,870)
103,170,439
379,511,740
56,251,135
158,129,891
15,870,578
17,777,778
40,000,000
-
611,289,987
6,325,196
1,428,352
1,600,000
4,000,000
(687,518)
68,917,165
31 Dec
2018
($)
10,244
-
4,313,571
4,323,815
Year to
31 Dec
2018
($)
269
9,975
10,244
42,000
(29,000)
(13,000)
-
-
-
4,313,571
4,313,571
31 Dec
2017
($)
269
42,000
-
42,269
Year to
31 Dec
2017
($)
(2,600)
2,869
269
24,119
-
-
17,881
42,000
-
-
-
(i)
The employee benefits reserve is used to recognise the fair value of options issued. During the year to 31 December 2018, the value
previously ascribed to options that lapsed and exercised during the year was transferred to retained losses.
- 41 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
Options
The Company had the following options over un-issued fully paid ordinary
shares at the end of the year:
Exercisable at $0.085 on or before 4.December 2018
Exercisable at $0.010 on or before 4 December 2018
Total Options
Warrants
The Company had the following warrants over un-issued fully paid
ordinary shares at the end of the year:
Exercisable at $0.1365 on or before 20.May 2023
Exercisable at $0.11385 on or before 24.May 2023
Total Warrants
Terms and Conditions of Contributed Equity
31 Dec 2018
No.
31 Dec 2017
No.
-
-
-
1,500,000
1,500,000
3,000,000
31 Dec 2018
No.
31 Dec 2017
No.
14,285,714
35,000,000
49,285,714
-
-
-
Ordinary shares have the right to receive dividends as declared and, in the event of winding up of the Company, to participate in the proceeds from
the sale of all surplus assets in proportion to the number of shares held, regardless of the amount paid up thereon.
At a general meeting every shareholder present in person or by proxy, representative or attorney has: a) on a show of hands, one vote; and b) on a
poll, one vote for each fully paid share held.
CASH FLOW INFORMATION
NOTE 18
Reconciliation of operating loss after income tax with funds used in operating activities:
Operating profit / (loss) after income tax
Income tax benefit
Depreciation and amortisation expense
Exploration and evaluation expense
(Profit) / loss on sale of property, plant and equipment
Impairment of property, plant and equipment
Revaluation of available for sale financial assets
Foreign currency revaluation gain
Profit on sale of available for sale financial assets
Interest expense
Share based payments expense
Borrowing costs
Changes in operating assets and
liabilities:
(Increase) in trade and other receivables relating to operating activities
(Increase) in prepayments
(Increase) / decrease in inventory
Increase in trade and other payables relating to operating activities
Increase in current borrowings
Increase in provisions
Cash flow from operations
- 42 -
Year to
31 Dec
2018
($)
7,325,466
(12,742,798)
356,281
1,371,177
(918)
734,007
-
(683,167)
(14,685)
692,474
-
4,000
(1,812)
(7,823)
(4,301,889)
4,465,355
-
405,007
(2,399,325)
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)
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
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 $1,512,300.
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 lease is currently in the process of being extended. The commitment for the 2019 financial year is $12,684 including
all outgoings and car parking. The commitment for less than one year is $12,684.
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 purchase agreements on properties required to
expand reserves at the Boonanarring project to the north.
NOTE 21
SIGNIFICANT EVENTS SUBSEQUENT TO REPORTING DATE
Other than the following matters:
On 12 January 2019, the Company’s first shipment of 10,206 Dry Metric Tonnes of HMC finished loading backed by a letter of credit.
Subsequently, in January, full payment for the shipment was received by Image, in USD.
On 16 February 2019, the Company’s second shipment of 20,038 Dry Metric Tonnes of HMC finished loading backed by a letter of credit.
Subsequently, in February, full payment for the shipment was received by Image, in USD.
There were no other material significant events subsequent to the reporting date.
NOTE 22
EMPLOYEE BENEFITS
Employee Share Plan
Under the terms of the Image Share Plan (“ESP”), as approved by shareholders, Image may, in its absolute discretion, make an offer of ordinary
fully paid shares in Image to any Eligible Employee, to be funded by a limited recourse interest free loan granted by the Company.
The issue price is determined by the Directors and is not to be less than the volume weighted average price of shares in the 5 trading days prior to
the Issue Date. Eligible Employees use the abovementioned loan to acquire the plan shares.
- 43 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in plan shares during the year.
Outstanding at 1 January
Granted during the year
Forfeited during the year
Expired during the period
Outstanding at 31 December
Exercisable at 31 December
Warrants
a)
Summaries of warrants granted
Number
2018
-
3,504,152
-
3,504,152
3,504,152
WAEP
2018
-
0.12
-
0.12
0.12
Number
2017
-
-
-
-
-
-
WAEP
2017
-
-
-
-
-
-
The following table details the number and weighted average exercise prices (WAEP) and movements in warrants issued during the year.
Outstanding at 1 January
Issued during the year
Expired during the year
Outstanding at 31 December
Exercisable at 31 December
Number
2018
WAEP
2018
49,285,714
0.1204
49,285,714
49,285,714
0.1204
0.1204
Number
2017
-
WAEP
2017
-
-
-
-
-
-
-
-
-
b)
Weighted average remaining contractual life
The weighted average remaining contractual life for the warrants outstanding as at 31 December 2018 is between 4 and 5 years (31 December
2017: Nil).
b)
Range of exercise price
The range of exercise prices for warrants outstanding at the end of the year was $0.11385 to $0.1365 (31 December 2017: Nil).
c)
Weighted average fair value
The weighted average fair value of warrants granted during the year was $0.0875 (31 December 2017: Nil).
d)
Warrants pricing model
The fair value of the warrants granted during the year ending 31 December 2018 was estimated as at the date of grant using a Black-Scholes
option pricing model taking into account the terms and conditions upon which the warrants were granted.
The following table lists the inputs to the model used for the year ended 31 December 2018.
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected life of warrants (years)
Warrant exercise prices ($)
Weighted average share price at grant date ($)
31 Dec
2018
Tranche B
Nil
85%
2.47%
4.95
$0.79
$0.12
31 Dec
2018
Tranche A
Nil
85%
2.50%
5.02
$0.091
$0.13
- 44 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
The minimum life of the Warrants is the length of any vesting period. The maximum life is based on the expiry date. For the purposes of these
warrants the exercise date is estimated as the expiry date 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 warrants granted were incorporated into the
measurement of fair value.
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 2018 and year to 31 December 2017 was Nil.
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 1 January
Granted during the year
Converted to shares during the year
Expired during the year
Outstanding at 31 December
Exercisable at 31 December
b)
Weighted average remaining contractual life
Not applicable.
c)
Range of exercise price
Number
2018
3,000,000
-
(1,000,000)
(2,000,000)
-
-
WAEP
2018
0.09250
-
0.08500
0.09625
-
-
Number
2017
3,000,000
-
-
WAEP
2017
0.0925
-
-
3,000,000
3,000,000
0.0925
0.0925
The range of exercise prices for options outstanding at the end of the year was $0 as no options were outstanding (31 December 2017: $0.085 to
$0.10).
d)
Weighted average fair value
The weighted average fair value of options granted during the year was Nil (the year to 31 December 2017: Nil).
e)
Option pricing model
The fair value of the equity settled share options granted during the period ending 31 December 2017 under the option plan was estimated as at the
date of grant using a Black-Scholes option pricing model taking into account the terms and conditions upon which the options were granted.
The following table lists the inputs to the model used for the period ended 31 December 2017.
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected life of options (years)
31 Dec
2017
Nil
85%
1.78%
2
Option exercise prices ($)
$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.
- 45 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
f)
Details of options
31 December 2018
Balance at
Exercised
Lapsed
Balance at
Beginning of
Year
No.
End of Year
No.
No.
No.
Managing Director
Total
3,000,000
(1,000,000)
(2,000,000)
3,000,000
(1,000,000)
(2,000,000)
-
-
(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 2017
Balance at
Beginning of
Grant
Details
Lapsed
Balance at
Managing Director
Total
Period
No.
3,000,000
3,000,000
End of
Period
No.
No.
No.
-
-
-
-
3,000,000
3,000,000
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 $4,000,000 loan (Note 17)
Murray Zircon Pty Ltd – Vehicle repairs, flights & camp meals, car hire
Spouse of Patrick Mutz – The Company purchases travel expenses from a national
travel agency of which his spouse is an agent and receives a commission. The amount
disclosed is an estimate of the fees and commissions which is shared between the
agency and the spouse of Patrick Mutz
Year to
31 Dec
2018
($)
-
(3,150)
(1,996)
(200,000)
(5,955)
(3,730)
(214,831)
Year to
31 Dec
2017
($)
(45,550)
(2,695)
(1,045)
(200,000)
(2,684)
(2,280)
(254,254)
Total amounts owing to directors and/or director-related parties and related entities at 31 December 2018 were Nil (31 December 2017: $Nil). All
transactions were incurred on normal commercial terms and were arm’s length transactions.
Murray Zircon Pty Ltd is a related party due to it holding a 20.14% interest in the shares of the Company.
- 46 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
NOTE 24
CONTINGENT LIABILITIES
The Company has approved the payment of $300,000 as a bonus to management for the completion of the construction of the Boonanarring
project within a fixed timeframe subject to production of 20,000 tonnes of heavy mineral concentrates also within a fixed timeframe. Construction
was completed within the timeframe and the bonus became payable when the first 20,000 tonnes of heavy mineral concentrate was produced in
January 2019.
Other than those matters disclosed in Notes 19 and 20 and above, there are no contingent liabilities or commitments.
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 commodity price, 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.
The Company completed its first shipment of product in January 2019 and expects to be generating sufficient cash flows from operations to
meet all its obligations during first quarter 2019. The focus of the Company’s capital risk management is managing the timing and quantity of
product shipments to meet operational, exploration and corporate overhead expenditure requirements. In addition the Company is focussed
on building up a cash position sufficient to be able to repay a short term loan ($4 million due May 2019) and loan note repayments (first
repayment due in November 2019).
The working capital position of the Company at 31 December 2018 and 31 December 2017 was as follows:
Cash and cash equivalents
Restricted cash
Trade and other receivables
Trade and other payables and provisions
Inventory
Borrowings ($4 million due May 2019 and remainder due November 2019)
Working capital position
31 Dec
2018
($)
11,885,969
54,667
1,463,321
(12,231,831)
9,246,816
(12,564,655)
(2,145,713)
31 Dec
2017
($)
4,422,650
54,667
81,756
(940,445)
-
(34,843)
3,583,785
- 47 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
Credit Risk
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 (2017: $54,667) with the bank as collateral
security for office lease property managers for rental guarantees and also security for company credit cards.
The following table provides information regarding the credit risk relating to cash and cash equivalents, term deposits and restricted cash
based on credit ratings:
A rated
Financial Instruments
11,940,372
4,477,317
The Company holds no derivative instruments, forward exchange contracts or interest rate swaps.
Financial Instrument composition and maturity analysis
The table below reflects the undiscounted contractual settlement terms for financial instruments.
Weighted
Average
Effective
Interest Rate %
Fixed
Interest
Rate
($)
31 December 2018
Financial Assets:
Cash and cash equivalents
Restricted cash
Trade and other receivables
Available-for-sale financial
assets
Total Financial Assets
0.57%
Financial Liabilities:
Trade and other payables and
provisions
Borrowings
Total Financial Liabilities
12.5%
Floating
Interest
Rate
($)
11,885,669
54,667
-
-
Non-Interest
Bearing
($)
Total
($)
300
-
1,463,321
11,885,969
54,667
1,463,321
26,755
26,755
11,940,336
1,490,376
13,430,712
-
-
-
12,231,831
-
12,231,831
12,231,831
63,952,584
76,184,415
-
-
-
-
-
-
63,952,584
63,952,584
Net Financial Assets
(63,952,584)
11,940,336
(10,741,455)
(62,753,703)
- 48 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
Weighted
Average
Effective
Interest Rate %
Fixed
Interest
Rate
($)
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
Floating
Interest
Rate
($)
4,420,641
54,667
-
-
4,475,308
Non-Interest
Bearing
($)
2,010
-
81,756
16,780
100,546
Total
($)
4,422,651
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)
-
-
-
-
-
-
(4,034,843)
(4,034,843)
(4,034,843)
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 2018
Trade and other payables and provisions
Borrowings
31 December 2017
Trade and other payables and provisions
Borrowings
Less than
3 months
12,231,831
3 to 12
months
-
1 to 5
years
Total
-
12,231,831
4,000,000
8,564,655
51,387,929
63,952,584
16,231,831
8,564,655
51,387,929
76,184,415
Less than
3 months
940,445
34,843
975,288
3 to 12
months
-
99,178
99,178
1 to 5
years
-
800,000
800,000
Total
940,445
934,021
1,874,466
Please refer to Note 16 (a) Murray Zircon Pty Ltd investment in Image Resources NL for further details of the $4 million short term loan and
to Note 16 (b) for further details of the Senior Secured Debt Facility.
(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).
- 49 -
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
For the Year Ended 31 December 2018
31 December 2018
Financial Assets:
Financial assets at fair value through profit or loss:
Available-for-sale financial assets:
-
Listed investments
31 December 2017
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
$
26,755
26,755
-
-
-
-
26,755
26,755
Level 1
$
Level 2
$
Level 3
$
Total
$
16,780
16,780
-
-
-
-
16,780
16,780
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
2018
($)
(238,807)
238,807
238,807
(238,807)
31 Dec
2017
($)
(89,546)
89,546
89,546
(89,546)
- 50 -
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 2018 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 2018 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 25 February 2019
- 51 -
INDEPENDENT AUDITOR’S REPORT
- 52 -
INDEPENDENT AUDITOR’S REPORT
- 53 -
INDEPENDENT AUDITOR’S REPORT
- 54 -
INDEPENDENT AUDITOR’S REPORT
- 55 -
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 22
February 2019.
Distribution of Equity Securities
-
-
-
-
1
1,001
5,001
10,001
100,001
1,000
5,000
10,000
100,000
and over
The number of shareholders holding less than a marketable parcel of shares are:
Twenty Largest Shareholders:
The names of the twenty largest holders of quoted ordinary shares are:
1
2
3
4
5
6
7
8
9
Murray Zircon Pty Ltd
Vestpro International
Orient Zirconic Resources (Australia) Pty Ltd
Million Up Ltd
Citicorp Nom PL
XQ (HK) Enterprises Ltd
J P Morgan Nominees Australia Ltd
Ava Cartel SDN BHD
TQ International
10
Target Range Pty Ltd
11 Merrill Lynch Aust Nom PL
12
13
14
15
16
17
18
19
20
Choy Fuan Ku
Cai Zonglin
Pontian Orico Plantations
Aktiengesellschaft D U
Shumei Chen
Ribton Super Fund Pty Ltd
UBS Nom PL
Lim Pang Soo
Alcock Super Fund PL
Ordinary shares
Number of holders
Number of shares
290
502
304
776
429
2,301
532
161,072
1,519,562
2,502,933
32,914,587
927,149,444
964,247,598
618,111
Listed ordinary shares
Number of shares
Percentage of ordinary
shares
191,902,001
131,936,921
51,761,950
40,624,754
36,873,023
22,420,082
22,367,411
18,000,000
18,000,000
17,033,888
12,845,587
12,473,000
11,555,546
11,539,728
11,100,000
11,000,000
10,100,000
10,044,622
10,000,000
8,788,888
19.90
13.68
5.37
4.21
3.82
2.33
2.32
1.87
1.87
1.77
1.33
1.29
1.20
1.20
1.15
1.14
1.05
1.04
1.04
0.91
660,367,401
68.49
- 56 -
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
Vestpro International
Voting Rights
Number of Ordinary
Shares
266,084,033
131,936,921
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
Holders
Warrants exercisable at $0.1365 expiring 20/05/2023
Warrants exercisable at $0.11385 expiring 24/05/203
Warrants exercisable at $0.11385 expiring 24/05/203
Warrants exercisable at $0.11385 expiring 24/05/203
1
1
1
1
Holder Name
Jett Capital Advisors LLC
Pala Investments Limited
Number of
Securities
14,285,714
13,475,000
CLV Investment Solutions
12,054,000
Castlelake IV LP
9,471,000
- 57 -
SCHEDULE OF TENEMENTS
Location Tenement
Nature of
Interest
Project
Equity (%) held at
start of Quarter
Equity (%) held at end
of Quarter
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
E28/1895
E70/2636
E70/2844
E70/2898
E70/3032
E70/3041
E70/3100
E70/3192
E70/3298
E70/3411
E70/3494
E70/3720
E70/3892
E70/3997
E70/4077
E70/4244
E70/4245
M70/0448
M70/1192
M70/1194
P70/1516
M70/1311
G70/0250
R70/0051
M70/1305 Application
Application
P70/1520
Granted
E70/4631
Granted
E70/4656
Granted
E70/4663
Granted
E70/4689
Granted
E70/4779
Granted
E70/4794
Application
E70/4795
Granted
E70/4919
Granted
E70/4946
Granted
E70/4949
Application
E28/2742
Application
E70/5192
Application
E70/5193
Application
E70/5213
ERAYINIA
COOLJARLOO
BIDAMINNA NTH
COOLJARLOO
GINGIN
REGANS FORD SOUTH
QUINNS HILL
BOOTINE
BIDAMINNA -PARK
REGANS FORD
BRYALANA
BLUE LAKE
CHAPMAN HILL
MUNBINIA
DARLING RANGE
WOOLKA
WINOOKA
GINGIN SOUTH
RED GULLY
BOONANARRING
COOLJARLOO
BOONANARRING NORTH
BOONANARRING
COOLJARLOO NORTH
ATLAS
COOLJARLOO
MUNBINIA WEST
WINOOKA NORTH
BIBBY SPRINGS
BOONANARRING WEST
MIMEGARRA
REGANS FORD NORTH
BIDAMINNA SOUTH
ORANGE SPRINGS
RED GULLY NORTH
NAMMEGARRA
MADOONIA DOWNS
WINOOKA SOUTH
CHAPMAN HILL NORTH
GINGINUP HILL
100%
100%
100%
100%
100%
100%
100%
100%
90%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100% pending grant
100% pending grant
100%
100%
100%
100%
100%
100%
100% pending grant
100%
100%
100% pending grant
100% pending grant
-
-
-
100%
100%
100%
100%
100%
100%
100%
100%
90%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100% pending grant
100% pending grant
100%
100%
100%
100%
100%
100%
100% pending grant
100%
100%
100%
100% pending grant
100% pending grant
100% pending grant
100% pending grant
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