More annual reports from Inca Minerals Limited:
2023 Reportporphyry exploration in Peru porphyry exploration in Peru
Page II | ANNUAL REPORT 2015
porphyry exploration in Peru
Table of Contents
Operational Review
Corporate Governance Statement
Directors’ Report
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Auditor’s Independence Declaration
Independent Auditor’s Report
Shareholder Information
List of Tenements
Corporate Particulars
3
12
19
27
28
29
30
31
55
56
57
59
61
66
Page 1 | ANNUAL REPORT 2015
porphyry exploration in Peru
porphyry exploration in Peru
Operational Review
Operational Review
MANAGING DIRECTOR’S SUMMARY
Inca’s focus of activity during 2014-2015 continued to be on the Chanape Project in Peru. On the back of proof of
concept exploration results in 2013-2014, whereby epithermal and porphyry style mineralisation were confirmed at
Chanape, the Company sought to obtain a Category II drill permit, known as a Semi Detailed Environmental Impact
Assessment permit (or “sdEIA”) from Peru’s mining authority in preparation for sustained follow-up drilling. In the
latter stages of 2014-2015 the sdEIA permit and certificate to commence work were granted and finally, by the close
of the report period, a drill rig was mobilising to site to commence drilling.
Surface exploration at Chanape in 2014-2015 continued to deliver strong results with strong gold and copper coming
from sampling programmes in a number of different locations. We reported that the “prospectivity of Chanape
tripled” in the 2014-2015 period with the list of drill targets increasing significantly. A tweak of value propositions
and a successful capital raising late in the report period sees Inca well positioned for the new financial year.
The sdEIA permit process took frustratingly longer than expected to obtain. What is supposedly a maximum 90
business day granting process for this highly important permit took nearly twice this time. During this period the
Company undertook a thorough review of all previous data. Extensive surface sampling programmes were designed
and executed and a comprehensive list of drill targets were generated. Several major mining companies committed
resources to Inca’s Chanape Project during the 2014-2015 year and Chanape remains in the cross-hairs of an ever-
increasing number of boardroom scopes and dialogue with majors continues.
The new sdEIA has a significant drilling allowance of 22,500m of drilling on 59 drill platforms that covers nearly
100% of the project area, that lasts for a 24 month period. The permit was designed to cover the broad spread of
known and likely mineralisation at Chanape, as well as provide the capacity required for large exploration budgets
of majors. This was something identified as being critical to their potential participation.
Ross Brown
Page 3 | ANNUAL REPORT 2015
Operational Review
CHANAPE
EXPLORATION HIGHLIGHTS
Several phases of surface sampling were conducted at Chanape during the 2014-2015 report period. The focus of
the work was on the summit area of Mount Chanape and in the southern part of the project. Programmes included
channel-sampling and talus sampling (the latter conducted in collaboration with a visiting major mining house).
A detailed review of all previous drilling results and remodelling of geophysical data was also carried out in the
report period. The principal purpose of this work, in combination with concomitant surface sampling results, was
the identification of drill targets for the pending sdEIA.
Highlights of this year’s operations at Chanape include:
Strong gold, silver and lead mineralisation identified at the summit area of Mount Chanape. A follow-up
channel-sample programme targeted previously sampled, but as yet undrilled, breccia occurrences in the summit
and southern areas of Chanape. A number of high grade breccia zones were identified (Figure 1). The very high
values of Gold (Au), Silver (Ag) and Lead (Pb) are indicative of strong epithermal mineralisation which is a style
of mineralisation that typically occurs above porphyry deposits. Elevated levels of Copper (Cu) and Molybdenum
(Mo) are also recorded in this part of the project and are an indication that hotter mineralising conditions, like that
associated with porphyry mineralisation, occur in proximity to the summit and southern areas.
Peak values of channel samples include:
M183375: 12.65g/t Au, 746g/t Ag, 14.95% Pb
M183365: 9.11g/t Au, 88.40g/t Ag
M183356: 7.25g/t Au, 94.10g/t Ag
M183419: 4.17g/t Au, 17.30g/t Ag, 1.85% Pb
M183413: 3.96g/t Au, 59.20g/t Ag, 2.28% Pb
Large chargeability anomaly identified in data remodelling. The Company also reviewed its IP geophysical data of
the Chanape Project in the report period. The data of two IP surveys were remodelled and new 3D inversions were
generated. Two discrete chargeability anomalies have been identified at Chanape (Figure 2). The largest is a twin-
bell-shaped anomaly approximately 1,500m x 750m in area (surface projection). The second chargeability anomaly
is smaller but is open to the north (occurring on the limit of the IP survey).
The discovery of a copper-rich breccia pipe at surface north of the gold-silver-copper-bearing Clint/Pipe 8 Breccia
complex. The newly recognised breccia contains the highest Cu values of any outcropping breccia pipe at Chanape
to date. Cu values range from 0.01% to 5.5%, with Au values ranging from 0.034g/t Au to 2.2g/t Au (av. 0.5g/t Au)
and Ag values ranging from 1.7g/t to 51.1g/t Ag. The breccia was discovered 300m north of CH-DDH012 and is a
hydrothermal tourmaline breccia with visible Cu-mineralisation (chrysocolla and malachite). The high Cu levels and
extent of tourmaline alteration makes it similar to the Clint Breccia, which was identified in CH-DDH012 drilled in the
previous report period.
New zones of surface mineralisation indicated in talus sampling. Assay results of a talus sampling programme
has identified several Cu, Au and Ag anomalies. The programme included the collection of 103 talus samples.
Approximately 50% of the talus samples are anomalous and indicative of mineralisation upslope from the sample
location. The lateral spread of anomalous talus samples is indicative of widespread mineralisation in the northern,
central and southern areas of Chanape and brings into sharp focus the high levels of prospectivity of the breccias
and intrusive rocks that were recently discovered in the summit and southern areas of Chanape.
Page 4 | ANNUAL REPORT 2015
Operational Review
Figure 1: Channel-sample results (Au) with the highlighted breccia zones with strong Au mineralisation. The seven breccias
with >1g/t Au are indicated by red circles. The very high Ag and Pb values largely coincide with the Au-bearing breccias.
The polymetallic nature of the breccias at the summit reflect the relatively higher position this area has in relation to the
porphyry system occurring below.
Page 5 | ANNUAL REPORT 2015
Operational Review
Mount Chanape summit area
S
Tourmaline Breccia Pipe 8 hosts
epithermal mineralisation and
occurs immediately above the
northern bell
Violeta breccia
cluster
N
Largest tourmaline breccia pipe and
largest breccia cluster at Chanape
occur at the summit
Southern
Bell
500m
CH-DDH011 drilled into porphyry
mineralisation
Northern
Bell
CH-DDH012 skirts the outer limit of the anomaly
Figure 2: A 3D projection facing WSW showing chargeability anomalies (pink/red) and drill hole projections. The main chargeability anomaly
closely coincides with the known porphyry and extends to and surfaces at the summit. The second chargeability anomaly, further north,
occurs below the Violeta cluster of breccia pipes.
The talus sample results indicate the occurrence of Cu, Au and Ag mineralisation in close association with a large
(1,000m x 600m) monzonite/monzodiorite intrusion in the southern part of Chanape (Figure 3). The monzonite/
monzodiorite intrusion is the same rock type that forms part of the mineralised porphyry sequence encountered
in the Company’s seminal drill holes CH-DDH001, CH-DDH011 and CH-DDH012. The spread of talus sample anomalies
in this area also indicates proximal mineralisation associated with veins and breccias that occur beyond the outer
limits of the intrusion.
The talus sample results also indicate the occurrence of Cu, Au and Ag mineralisation in close association with
the largest individual tourmaline breccia and largest breccia cluster occurring at Chanape at the summit area. The
summit area also hosts two intrusive stocks and widespread argillic and phyllic alteration.
The discovery of significant levels of tungsten in Breccia Pipe 8. Assay results from a core re-sampling programme
of CH-DDH012 has revealed strong tungsten (W) mineralisation over an interval of 30m from 41m down-hole depth.
Selected contiguous intervals of core from pertinent sections of CH-DDH012 were re-sampled (84 samples) and
re-assayed using lithium-borate fusion ICP-MS analysis to obtain a more precise measure of WO3 levels that was
identified in initial testing (using four-acid ICP-MS). The new results indicate a zone of WO3 mineralisation from 41m
down-hole depth to 62m down-hole depth, with high-grade mineralisation of 1.22% WO3 over 6m from 54m. This 6m
zone occurs within a 9m zone of 1.08% WO3, which in turn occurs within a broader 21m zone of 0.65% WO3.
Page 6 | ANNUAL REPORT 2015
Operational Review
Figure 3:Talus sample locations on contour plan of Chanape, showing location of
Cu/Au anomalies “up-slope” from talus sample anomalies. High
Low
PERMITTING
sdEIA Approved
On 24 March 2015 the Company’s sdEIA permit application was approved by the Ministerio de Energia y Minas
(MEM). The approval of the sdEIA was a significant milestone in a vigorous process of appraisal conducted by the
MEM.
Peru’s exploration and mining permitting system is governed by relatively new mining legislation that has been subject
to significant amendment as recently as January 2015. The incrementally thorough permit system progressively
protects and extends the rights of the permit holder, whilst at the same time increases protection of the environment
and affected communities. Inca is operating in a country with a robust albeit frequently changing permit system that
enshrines social and environmental responsibility not unlike that operating in Australia. Importantly, once afforded
the holder, sustained and sustainable exploration can be planned and executed and Inca’s sdEIA provides for up to
22,500m of uninterrupted drilling over 2 years. The capability to undertake a meaningful drill evaluation of Chanape
is also a key aspect in the evaluation by potential project partners for the project.
The approval of the sdEIA paved the way for the next stages of granting involving ministerial sign-off and culminating
in the issuing of a certificate to commence work.
Certificate to Commence Operations (Exploration Permit) Approved
On 29 June 2015 the certificate to commence operations (also known as an Exploration Permit) was approved by the
MEM. This was the final step in the ministry’s permitting process and means that Inca’s semi-detailed Environmental
Impact Assessment drill permit (sdEIA or Permit) was activated as at that date. In anticipation of the full granting of
the sdEIA and Exploration Permit the Company had begun establishing its own 35-40 person camp facility, so that
drilling could commence without delay.
Page 7 | ANNUAL REPORT 2015
Operational Review
SUBSEQUENT ACTIVITIES AND FUTURE EXPLORATION
At the time of writing the Company had completed 13 drill holes under its sdEIA drill permit. A total of 2,597.35m
had been drilled for an average hole depth of 195m. Various targets had been tested including the Clint Breccia
(CH-DDH013), parallel breccia veins (CH-DDH014/15/16), the Summit Breccia (CH-DDH017), the Cerro Ver Breccia (CH-
DDH018/19), the Oro Doble Breccia (CH-DDH020), the Water Tank Breccia (CH-DDH021/22) and the Trinity Breccia
(CH-DDH023/24/25). Assay results for Ch-DDH013 through to CH-DDH020 were available and made public at the time
of writing.
Future exploration is planned to include continued drilling under the current sdEIA and resource modelling to
establish a possible maiden resource at various drill centres at Chanape, namely at the Clint/pipe 8 Breccia complex,
the summit area and possibly the Oro Doble Breccia complex.
SOCIAL LICENCE
Social licence is the ability of a company to undertake sustained and sustainable exploration activities within the
framework of community and environmental protection guidelines and best-practices. The Company has achieved
a perfect record in this respect.
Social licence is by default warranted by virtue of a valid sdEIA. Nevertheless, the Company’s approach to social
licence extends beyond mandated obligations. We have a dedicated community liaison officer who manages the
relations with the Chanape communities in a personable manner, interacting on a daily basis, providing clarification
on any concerns they may have, tending to large and small needs as and when required and utilising them where
possible in the exploration programs. It is fair to say, Inca has the 100% support of its communities in our activities
at Chanape.
PARTNERSHIPS
During the report period several mining houses visited Chanape. A number of companies committed to multiple
trips. Whilst no partnership was consummated during the report period, Chanape continues to attract attention
from majors. However the lack of progress regarding the major mining houses that have already visited Chanape
can be principally attributed to a global down-turn in majors’ reduced exploration budgets, a concentration on their
core operations and also the lack of a drill permit. At the time of writing (as a subsequent event) two additional
global mining houses are visiting Chanape.
The Company continues to assess the timing and nature of a potential partnership at Chanape. In the context of a
granted sdEIA and with many high priority drill targets the Company feels value can be added to the projects at the
same time as welcoming majors to the project.
TENURE
The Chanape Project comprises a group of 20 mining concessions covering an area of 805 hectares (Figure 4). These
concessions are the subject of the Mining Assignment Agreement (MAA) (described below). For the duration of
the MMA the concessions are assigned to Inca. The Company also owns 10 mining concessions immediately SW
of Chanape. They cover a large area of approximately 10,000 hectares. Their proximity to Chanape, occurrence of
“remote-sensing” anomalies, occurrence of satellite mineralisation (about the centrally located Chanape porphyry
system), marks them as being prospective for porphyry and porphyry-related mineralisation.
LOCATION
Chanape is located approximately 90km east of Lima, in the Miocene Porphyry Belt (Figure 4). Chinalco’s Toromocho
1.4Bt Cu-Ag-Mo porphyry mine development has now commenced production and is only 30km NE of Chanape.
Nyrstar’s Coricancha Au-Ag-Zn-Pb mine is located 15km NW of Chanape. There are numerous small-scale mines
within the vicinity of Chanape. The Siberia, Germania, Millotingo and Pacococha mines are all located within 10km of
Chanape. A small-scale mine was operated at Chanape in the 1930’s and 1980’s by Pacococha and Milpo.
Page 8 | ANNUAL REPORT 2015
Operational Review
Figure 4: Location of Chanape, TOP LEFT: Chanape is located approximately 90km east of Lima; TOP RIGHT: The main Chanape Project
comprises twenty concessions (outlined in blue); BOTTOM: The Miocene Porphyry Belt in long-section (north – left to south – right). Chanape
is located SW of Toromocho and is part of this conveyor-belt of porphyry systems.
OWNERSHIP
The Company is in its fourth year of a 5-year mining assignment agreement (“Agreement”) with the concession
owner of Chanape. By virtue of this Agreement the concessions are effectively leased to Inca via public deed.
Inca has the right to acquire 100% of the project for expenditure commitment, cash/shares and royalty. The principal
terms and conditions of the 5-year mining assignment agreement are as follows:
Payment of US$1,500,000 by US$25,000 per month for five years (±$1,050,000 paid to date)
Payment of US$3,000,000 at the expiry of the five years
The issue of US$500,000 of shares in Inca (one year after company listing) – completed
NSR of US$20 per oz Aueq
Drilling expense commitment of US$3,600,000 over five years (±$1,900,000 spent to date)
Inca has the right to purchase the project (100% transfer of concessions) at any time
Inca has a right to withdraw at any time (no separation penalty)
Page 9 | ANNUAL REPORT 2015
Operational Review
OTHER PROJECTS
MOQUEGUA – PERU
The Moquegua Project comprises three separate prospects called Jose Alonso, Agua Blanco and Oscar Alberto.
Moquegua is centred approximately 60km south east of Arequipa, within the Palaeocene Southern Peru Copper
Porphyry Belt. The annual production from this Cu-belt is 16Mt (57% of Peru’s Cu production). The three prospects,
defining a triangular area of approximately 40km x 15km, are in close proximity to several substantial operating
mines, including Freeport McMoran’s +3Bt Cerro Verde Mine and Southern Copper Corporation’s Cuajone porphyry
mine and Metminco’s Los Calatos Deposit.
The Moquegua concessions are 100%-owned by Inca Minerales S.A.C., a subsidiary of Inca Minerals.
The prospects are considered early stage exploration though walk-up targets already exist. Several major mining
houses hold ground in the vicinity and the Company believes that the Moquegua concessions are not only prospective
in their own right but strategic in their location.
OTHER OPPORTUNITIES – PERU
The Company continues to assess new projects in Peru to compliment the company’s flagship Chanape Project
and to take advantage of the Company’s well-established operational capacity. The advantages of Peru in terms of
acquiring additional projects include, among other reasons, that:
Peru is ranked first in Latin America in terms of zinc, tin and gold production, and is ranked second in Latin
America for copper, silver, lead and molybdenum production (USGS, 2013).
less than 35% of Peru’s land surface is covered by concessions.
Peru attracts billions of dollars of mining investment each year. This figure is increasing especially from Asian
countries (China, Japan, Korea).
Global mining houses have a large presence in Peru. Many mines are mature and, with large mining
investments, majors may look to replenish mine supply through expansion, joint ventures and/or project
acquisition.
Peru is considered under-explored, yet is ranked highly among countries likely to achieve mine discoveries. Fittingly,
Peru is an attractive destination in terms of exploration and brown-fields development. The Company believes its
competitive advantage among global juniors will serve well in the pursuit of quality exploration and/or brown-field
projects in Peru.
DINGO RANGE – WESTERN AUSTRALIA
Located approximately 200kms East of Leinster, Dingo Range is a project covering a significant portion of the Dingo
Range Greenstone Belt. The project comprises five tenements. The tenements are held in the name of Inca and
the Company owns all rights to the tenements. The Dingo Range Project is prospective for Nickel (Ni) and Au. In
recent years the Mt Fisher Greenstone Belt has risen to prominence through the progressive development of Rox
Resources’ Mount Fisher Nickel Project. The Company is currently defending a plaint lodged over certain Dingo
Range exploration licences.
Page 10 | ANNUAL REPORT 2015
Operational Review
Competent Person Statements
The information in this report that relates to epithermal and porphyry style mineralisation for the Chanape Project, located in Peru, is based
on information compiled by Mr Ross Brown BSc (Hons), MAusIMM, SEG, MAICD Managing Director, Inca Minerals Limited, who is a Member of
the Australasian Institute of Mining and Metallurgy. He has sufficient experience, which is relevant to the style of mineralisation and types of
deposits under consideration, and to the activity which has been undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the
“Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Brown is a full time employee of Inca Minerals
Limited and consents to the report being issued in the form and context in which it appears.
Some of the information in this report may relate to previously released epithermal and porphyry style mineralisation for the Chanape Project,
located in Peru, and subsequently prepared and first disclosed under the JORC Code 2004. It has not been updated to comply with the JORC Code
2012 on the basis that the information has not materially changed since it was last reported, and is based on the information compiled by Mr Ross
Brown BSc (Hons), MAusIMM, SEG, MAICD Managing Director, Inca Minerals Limited, who is a Member of the Australasian Institute of Mining and
Metallurgy. He has sufficient experience, which is relevant to the style of mineralisation and types of deposits under consideration, and to the activity
which has been undertaken, to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves”. Mr Brown is a full time employee of Inca Minerals Limited and consents to the report being issued
in the form and context in which it appears.
Page 11 | ANNUAL REPORT 2015
Corporate Governance Statement
Corporate Governance Statement
The Board of Directors of Inca Minerals Limited (Inca or
Company) is responsible for the corporate governance
of the Company. In developing its corporate governance
policies Inca has referred to recommendations within
the ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendations 3rd
edition (CGPR) and developed the following policies
which can be found on the Company’s website at
www.incaminerals.com.au under the section titled
“Corporate/Corporate Governance”:
Corporate Governance Policy
Continuous Disclosure Policy
Code of Conduct & Securities Trading Policy
Diversity Policy
The Company’s corporate governance practices during
the financial year ended 30 June 2015 (Reporting
Period) are reported below. Where the Company’s
corporate governance practices follow the CPGR the
Board has provided appropriate statements reporting
on the adoption of the CPGR. In compliance with the
“if not, why not” reporting framework, where the
Company’s corporate governance practices differ from
the relevant CPGR, the Board has explained its reasons
for doing so and any alternative practice the Company
may have adopted.
CORPORATE GOVERNANCE PRINCIPLES
& RECOMMENDATIONS
ADOPTED / NOT ADOPTED AND COMMENT
Principle 1: Lay solid foundations for management and oversight
1.1
1.2
1.3
1.4
1.5
Companies should disclose the roles and
responsibilities of its board and management,
those expressly reserved to the board and those
delegated to management.
Companies should undertake appropriate checks
prior to the appointment or election of a director
and provide shareholders with information
relevant to the election of the director.
Companies should have written agreements
as to the appointment of directors and senior
executives.
The company secretary should be accountable
directly to the board, through the chairman, as to
the proper functioning of the board.
Companies should have and disclose a diversity
policy setting measurable objectives for achieving
gender diversity and annually assess and disclose
the objectives and progress towards their
achievement.
A
A
A
The Company has formalised and disclosed on its website
(at www.incaminerals.com.au) the functions reserved to
the Board and those delegated to management within its
Corporate Governance Policy.
The Company undertakes appropriate checks before
appointing a person or putting forward to shareholders
a candidate for election or re-election as a Director and
provides shareholders with all material information in its
possession relevant to a decision on whether to elect or
re-elect a Director.
The Company has set out the terms of appointment
with each Director and senior executive in written
agreements.
NA The Company Secretary is accountable directly to
the Board as to the proper functioning of the Board.
However, the Board did not appoint a Company Chairman
during the Reporting Period.
NA The Company has disclosed its Diversity Policy on
its website (at www.incaminerals.com.au). The
Company’s Diversity Policy does not mandate setting
measurable objectives for achieving gender diversity
as it is impractical to do so at this time. The proportion
of women across the whole organisation, in senior
executive positions, and on the Board, as at the date of
this statement, is as follows:
• Whole organisation – 33%
• Senior Executive Positions – 40%
• Board – 0%
For the purposes of this statement and the Company’s
gender diversity, “senior executive” means a person who
reports directly to the Board or Managing Director and/or
who makes or participates in making decisions that could
significantly affect the Company’s operations.
Legend: A = Adopted. NA = Not Adopted.
Page 12 | ANNUAL REPORT 2015
Corporate Governance Statement
CORPORATE GOVERNANCE PRINCIPLES
& RECOMMENDATIONS
ADOPTED / NOT ADOPTED AND COMMENT
Principle 1: Lay solid foundations for management and oversight (Ctd)
1.6
Companies should have and disclose processes
for evaluating board, committee and director
performance and disclose any performance
evaluation undertaken.
1.7
Companies should have and disclose the process
for evaluating senior executive performance and
disclose any performance evaluation undertaken.
Principle 2: Structure the Board to add value
2.1
(a)
The Board should establish a nomination
committee of at least three non-executive
directors (a majority of whom are
independent) chaired by an independent
director and disclose:
• The committee charter
• The committee members
• The frequency and attendees of the
committee’s meetings; or
2.2
2.3
(b) If a nomination committee is not established
then disclose its processes that ensure board
succession, skills, knowledge, experience,
independence and diversity.
Companies should have and disclose a board skills
matrix setting out the mix of skills and diversity
that the board currently has or is looking to
achieve in its membership.
Companies should disclose the names of directors
considered by the board to be independent
directors, any interest, position or association
that the board considers does not compromise
independence and why, and the length of each
directors service.
Legend: A = Adopted. NA = Not Adopted.
A
A
A
A
A
The Company’s processes for evaluating the performance
of the Board and its Directors are disclosed on the
Company’s website (at www.incaminerals.com.au) in
the Company’s Corporate Governance Policy. During
the Reporting Period these evaluations took place in
accordance with the process outlined in the Corporate
Governance Policy.
The Company’s processes for evaluating its Managing
Director and key executives are disclosed on the
Company’s website (at www.incaminerals.com.au) in
the Company’s Corporate Governance Policy. During the
Reporting period the Board evaluated the performance
of its Managing Director in accordance with the process
outlined in its Corporate Governance Policy and this
involved determining and agreeing key performance
outcomes (consistent with the Company’s strategic and
operational objectives) against which performance was
both monitored and measured by the Board. A similar
process, with respect to certain key executives, was
completed by the Managing Director.
The Company has a small Board consisting of three
Directors inclusive of the Managing Director. The Board
considers it desirable to use the full complement of
knowledge, expertise and experience of all its Directors
in making decisions and performing the functions usually
associated with a Nomination Committee. The Company’s
Corporate Governance Policy and Diversity Policy disclose
(on the Company’s website at www.incaminerals.com.
au) processes pertaining to board succession, skills,
knowledge, experience, independence and diversity.
The Company has, in its Corporate Governance Policy
and Diversity Policy, disclosed on its website (at
www.incaminerals.com.au) the mix of skills and diversity
the Board currently has and considers desirable in its
membership given the Company’s stage of development.
Two current Directors hold shares in Inca either directly
or beneficially and a third Director is a part owner of
the Company’s Corporate Advisor meaning none of the
current three Directors are considered independent.
The Company has disclosed the names of its Directors,
their position, relevant interests or associations and their
length of service in the Company’s 2015 Annual Financial
Report for the Reporting Period.
Page 13 | ANNUAL REPORT 2015
Corporate Governance Statement
CORPORATE GOVERNANCE PRINCIPLES
& RECOMMENDATIONS
Principle 2: Structure the Board to add value (Ctd)
2.4 A majority of the board should be independent
directors.
2.5
The Chairperson should be an Independent
Director and, in particular, should not be the same
person as the CEO of the entity.
ADOPTED / NOT ADOPTED AND COMMENT
NA As discussed above, none of the Company’s Directors are
considered independent directors. As either shareholders
or commercial advisors, the interests of Inca’s Directors
should, in their judgements and decisions, be directly
aligned with those of all other shareholders.
NA The Company operated without a Chairperson during the
Reporting Period.
2.6 Companies should have an induction program
A
for new directors and provide professional
development opportunities for directors to
develop and maintain the skills and knowledge to
perform their role as directors effectively.
The Company has a stable board comprised of Directors
who have been with the Company since 2012. An
induction program will be provided to any new directors
if and when a new director is appointed. Professional
development opportunities are provided to the Directors
as and when needed.
Principle 3: Act ethically and responsibly
3.1 A company should have a code of conduct for its
directors, senior executives and employees and
disclose that code or a summary of it.
A
The Company has disclosed its Code of Conduct &
Securities Trading Policy on the Company’s website
(at www.incaminerals.com.au).
Principle 4: Safeguard integrity in corporate reporting
4.1
Companies should:
(a) Have an audit committee which:
(1) Has at least three members, all of
whom are non-executive directors and
a majority of whom are independent
directors; and
Is chaired by an independent director,
who is not the chair of the board, and
disclose:
(2)
(3) The charter of the committee;
(4) The relevant qualifications and
experience of the members of the
committee; and
(5) In relation to each reporting period, the
number of times the committee met
throughout the period and the individual
attendances of the members at those
meetings; or
(b) If it does not have an audit committee,
disclose that fact and the processes it
employs that independently verify and
safeguard the integrity of its corporate
reporting, including the processes for the
appointment and removal of the external
auditor and the rotation of the audit
engagement partner.
NA The Company has a small Board consisting of two
Directors and the Managing Director. At this stage,
the Company has not established an Audit Committee
and the Board considers it desirable to use the full
complement of knowledge, expertise and experience
of all its Directors in making decisions regarding the
Company’s audit and the Company’s external auditors.
All three Directors are financially literate. One of the
Directors has previously worked as an external auditor,
holds three tertiary qualifications in accounting/auditing
including a PhD and is a Fellow of CPA Australia. On behalf
of the Board, this Director communicates directly and
works with the Company’s auditors during the half-year
and full year audits. This Director chairs the Company’s
Board meetings and the Board’s deliberations on matters
pertaining to functions which could be delegated to an
Audit Committee and reports through to the Board on all
matters pertaining to the half-year and full-year external
audits. In June 2012 the Company engaged its current
accountant – a person with considerable experience
as both an external auditor and group accountant in
mineral exploration companies. The Company’s external
auditors were appointed in November 2012. Prior to their
appointment the Board sought and obtained proposals
from reputable audit firms and appointed the Company’s
current auditor after considering their experience with
listed exploration companies operating in foreign and
domestic jurisdictions, the experience and quality of
personnel involved with the Company’s audit, their
internal quality control measures, their approach and
methodology in conducting the audit, references, and
their awareness of professional requirements attaching
to accounting and auditing standards including those
pertaining to independence, confidentiality and conflicts
of interest. At this stage, the Board intends to address
rotation of the audit engagement partner in 2017.
Legend: A = Adopted. NA = Not Adopted.
Page 14 | ANNUAL REPORT 2015
Corporate Governance Statement
CORPORATE GOVERNANCE PRINCIPLES
& RECOMMENDATIONS
ADOPTED / NOT ADOPTED AND COMMENT
Principle 4: Safeguard integrity in corporate reporting (Ctd)
4.2 The board of a listed entity should, before it
A
approves the entity’s financial statements for
a financial period, receive from its CEO and
CFO a declaration that, in their opinion, the
financial records of the entity have been properly
maintained and that the financial statements
comply with the appropriate accounting
standards and give a true and fair view of the
financial position and performance of the entity
and that the opinion has been formed on the
basis of a sound system of risk management and
internal control which is operating effectively.
4.3 Companies should ensure that its external
A
auditor attends its AGM and is available to answer
questions from security holders relevant to the
audit.
Principle 5: Make timely and balanced disclosure
5.1
Companies should have a written policy for
complying with its continuous disclosure
obligations under the Listing Rules and disclose
that policy or a summary of it.
Principle 6: Respect the rights of security holders
6.1
Companies should provide information about
itself and its governance via its website.
6.2 Companies should design and implement an
investor relations program to facilitate effective
two-way communication with investors.
A
A
A
6.3 Companies should disclose the policies and
A
processes it has in place to facilitate and
encourage participation at meetings of security
holders.
Prior to approving the financial statements for the half-
year ended 31 December 2014 and the full year ended
30 June 2015 Inca’s Board received from the Managing
Director and Chief Financial Officer declarations that,
in their opinion, the financial records of the entity
have been properly maintained and that the financial
statements comply with the appropriate accounting
standards and give a true and fair view of the financial
position and performance of the entity and that the
opinion has been formed on the basis of a sound system
of risk management and internal control which is
operating effectively.
During the Reporting Period and prior to the Company’s
AGM the Company contacted its external auditors who
agreed to host the Company’s AGM in their offices and
attend the AGM. In accordance with section 250S of the
Corporations Act the external auditor attended the AGM
and the Chair expressly provided the opportunity for
shareholders attending the meeting to ask questions
relevant to the audit. Had there been any written
questions submitted to the auditor (there were none) the
Chair would also have ensured the opportunity for the
external auditor to answer questions as required under
section 250PA of the Corporations Act.
The Company has established written policies for
complying with continuous disclosure obligations under
the ASX Listing Rules which are disclosed within the
Company’s Continuous Disclosure Policy on the Company’s
website (at www.incaminerals.com.au).
The Company provides information about itself
and its governance to investors via its website
(at www.incaminerals.com.au).
The Company has designed and implemented an investor
relations program to facilitate effective two-way
communication with investors. The program is set out in
the Company’s Corporate Governance Policy (in the section
entitled “Shareholder Communication Policy”) and the
Company’s Continuous Disclosure Policy as disclosed on its
website (at www.incaminerals.com.au).
Refer above – the Company’s Corporate Governance Policy
(containing its “Shareholder Communication Policy”)
and the Company’s Continuous Disclosure Policy are
disclosed on the Company’s website
(at www.incaminerals.com.au).
6.4 Companies should provide security holders with
the option to receive communications from, and
send communications to the entity and its share
registry electronically.
Legend: A = Adopted. NA = Not Adopted.
A
Shareholders are given the option to receive
communications from, and send communications to the
Company and its share registry electronically.
Page 15 | ANNUAL REPORT 2015
Corporate Governance Statement
CORPORATE GOVERNANCE PRINCIPLES
& RECOMMENDATIONS
Principle 7: Recognise and manage risk
ADOPTED / NOT ADOPTED AND COMMENT
7.1
The Company’s Board should:
(a) Have a committee or committees to oversee
A
risk, each of which:
(1) Has at least three members, a majority of
whom are independent directors; and
Is chaired by an independent director, and
disclose:
(2)
(3) The charter of the committee;
(4) The members of the committee; and
(5) As at the end of each reporting period,
the number of times the committee met
throughout the period and the individual
attendances of the members at those
meetings; or
(b) If it does not have a risk committee or
committees that satisfy (a) above, disclose
that fact and the processes it employs for
overseeing the entity’s risk management
framework.
The Company’s Board or a committee of the
Board should review the entity’s risk management
framework at least annually to satisfy itself that it
continues to be sound and disclose, in relation to
each reporting period, whether such a review has
taken place.
Companies should disclose if they have an internal
audit function, how the function is structured and
what role it performs or, if it does not have an
internal audit function, that fact and the processes
it employs for evaluating and continually improving
the effectiveness of its risk management and
internal control processes.
7.2
7.3
Given the size and composition of the current Board
it believes that no efficiencies are to be gained by
establishing a separate Risk Committee. During the
Reporting Period, responsibility for overseeing the
Company’s risk management rested with the Board.
The Company’s Risk Management Policy is disclosed
within its Corporate Governance Policy on the Company’s
website (at www.incaminerals.com.au). During the
Reporting Period the full Board reviewed and where
necessary amended its risk management matrix and
in so doing identified or confirmed business risks,
assessed the likelihood and materiality of these risks,
developed and implemented measures to mitigate these
risks and during the Reporting Period the Managing
Director reported on and confirmed that the Company’s
economic, social and environmental risks are being
managed effectively.
A
Refer above.
A
The Company does not have an internal audit function.
Refer above (7.1) for further discussion.
7.4 Companies should disclose whether they have any
A
material exposure to economic, environmental
and social sustainability risks and, if it does, how it
manages or intends to manage those risks.
The Company faces economic, social and environmental
risks that are largely inherent to the global and domestic
economies, the industry, capital markets and the
jurisdictions in which it operates. During the Reporting
Period these risks were disclosed on the ASX portal 25
June 2015 in the Company’s Prospectus. The Board has
considered these risks in relation to a “material exposure
threshold”, as required under the CPGR, and put in place
measures to reduce these risks to tolerable levels and,
as defined in CPGR, there does not appear to be “a real
possibility that the risk could substantively impact the
Company’s ability to create or preserve value for security
holders …” in the foreseeable future.
Legend: A = Adopted. NA = Not Adopted.
Page 16 | ANNUAL REPORT 2015
Corporate Governance Statement
CORPORATE GOVERNANCE PRINCIPLES
& RECOMMENDATIONS
Principle 8: Remunerate fairly and responsibly
ADOPTED / NOT ADOPTED AND COMMENT
8.1
Companies should:
(a) Have a remuneration committee which:
A
(1) Has at least three members, a majority of
whom are independent directors; and
Is chaired by an independent director,
and disclose:
(2)
(3) The charter of the committee;
(4) The members of the committee; and
(5) As at the end of each reporting period,
the number of times the committee met
throughout the period and the individual
attendances of the members at those
meetings; or
(b) If it does not have a remuneration committee,
disclose that fact and the processes it
employs for setting the level and composition
of remuneration for directors and senior
executives ensuring that such remuneration is
appropriate and not excessive.
Given the size and composition of the current Board
it believes that no efficiencies are to be gained by
establishing a separate Remuneration Committee.
During the Reporting Period the Board followed the
Company’s Remuneration Policy as disclosed in the
Corporate Governance Policy on the Company’s website
(at www.incaminerals.com.au) and in the Director’s
Report on p. 6 of the Company’s Annual Financial Report
for the year ended 30 June 2015. In doing so the Board
employed policies and processes designed to ensure
equitable and responsible levels and composition of
remuneration to Directors and senior executives.
8.2 Companies should separately disclose their
A
policies and practices regarding the remuneration
of non-executive directors and the remuneration
of executive directors and other senior executives
During the Reporting Period the Board followed the
Company’s Remuneration Policy which is disclosed in the
Corporate Governance Policy on the Company’s website (at
www.incaminerals.com.au) and in the Director’s Report
on p.6 of the Company’s Annual Financial Report for the
year ended 30 June 2015.
8.3 Companies which have an equity-based
remuneration scheme should have a policy on
whether participants are permitted to enter
into transactions (whether through the use of
derivatives or otherwise) which limit the economic
risk of participating in the scheme and disclose
that policy or a summary of it.
Legend: A = Adopted. NA = Not Adopted.
A
The Company does not presently have an equity based
remuneration scheme.
Page 17 | ANNUAL REPORT 2015
Annual Financial Report
Directors’ Report
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Auditor’s Independence Declaration
Independent Auditor’s Report
19
27
28
29
30
31
55
56
57
porphyry exploration in Peru
porphyry exploration in Peru
Directors’ Report
The Directors of Inca Minerals Limited (“Inca” or “the Company”) present their financial report on the Company and
its controlled entities for the year ended 30 June 2015.
DIRECTORS
The names of directors in office at any time during or since the end of the financial year are listed hereunder.
Directors were in office since the start of the financial year to the date of this report unless otherwise stated.
Ross Brown, Managing Director
Justin Walawski, Director and Company Secretary
Gareth Lloyd, Director
INFORMATION ON DIRECTORS
ROSS BROWN B.Sc (Hons), M.Aus.IMM.
Managing Director
A geologist by profession, Mr Brown has over 30 years’ experience in mineral exploration in Australia, Asia, Africa
and South America and he has worked in a broad range of commodities, including gold, base metals, uranium,
phosphate and diamonds. Mr Brown has a rare ability in recognising the commercial potential of exploration
projects and geological process, and has a proven track record of bringing technical-based exploration concepts
and projects to market.
In 2009 Mr Brown co-founded the gold/copper exploration company, Mystic Sands Pty Ltd, which was established for
the purposes of conducting exploration in Chile, South America. With the assistance of other technical management
Mr Brown was responsible for the composition of the initial project portfolio. Mystic Sands was purchased by an
Australian-listed explorer White Star Minerals Ltd. As part of the transaction, Sandfire Resources NL became a
shareholder of White Star Minerals Ltd.
Mr Brown turned his attention to Peru in 2009 and through his network of Peruvian-based businessmen and
geologists assessed the potential of more than a hundred projects. Mr Brown recognised the great potential of
mineral discovery in that country and recognised the potential of Inca’s lead project, Chanape, from being a known
polymetallic deposit to being that of a potentially large copper-molybdenum-silver-gold porphyry deposit.
Mr Brown was the co-founder and Managing Director of Urcaguary Pty Ltd, the Company’s fully owned subsidiary
(formerly called Inca Minerals Limited) and he became the Company’s Managing Director after its takeover of
Urcaguary. As at 30 June 2015, and in addition to his position with the Company, Mr Brown remains a Director
of Urcaguary and the Company’s other subsidiary companies. In the previous 3 years, Mr Brown has not been a
director of any other ASX listed companies.
Mr Brown has been a member of AusIMM since 1988, and is also a member of GSA, SEG and AICD.
Page 19 | ANNUAL REPORT 2015
Directors’ Report
INFORMATION ON DIRECTORS (CONTINUED)
JUSTIN WALAWSKI BBus.,P.Grad.Dip., PhD, FCPA, MAICD
Director and Company Secretary
As at 30 June 2015, in addition to his position with Inca, Mr Walawski was also a Director and Company Secretary
of Inca’s subsidiary companies, Chairman of FAB Industries Pty Ltd (a private equity investment company) and
Facilitator for the AICD’s Company Directors course in areas of financial literacy and financial strategy.
Mr Walawski has previously held positions as Chairman, Deputy Chairman and Chief Executive of the North West
Iron Ore Alliance, Chief Executive of the Association of Mining & Exploration Companies, Chairman of Special
Olympics Australia (WA) and Director of CPA Australia (WA). He is a former member of the ASX’s Supervisory Liaison
Committee, the Federal Australian Government’s Mineral Exploration Action Implementation Committee and the
West Australian Government’s State Tax Reference Committee. In the previous 3 years Mr Walawski has been a
director of one other ASX listed company being IFS Construction Services Limited (appointed 31 August 2012 to
present).
Mr Walawski is a Fellow of CPA Australia, a Member of the AICD and holds undergraduate, post-graduate and
doctoral degrees in accounting/auditing.
GARETH LLOYD B.Sc (Hons)
Director
As at 30 June 2015, in addition to his position with Inca, Mr Lloyd was also a Director of Inca’s subsidiary companies.
Mr Lloyd has over 30 years’ experience with mining and exploration companies and brings considerable technical,
commercial and capital raising expertise to the Company. A mining engineer by training, he has operating experience
in gold, base metals and coal operations in Australia, South Africa and the United Kingdom.
Mr Lloyd is a part owner of the Element group, a Perth-based boutique advisory and funds management group
focused on the resources sector through which Mr Lloyd provides strategic advice and fund raising services to both
listed and unlisted companies (predominantly mining and exploration companies) using both equity and mezzanine
instruments.
Prior to establishing Element (in 2008), Mr Lloyd was an Associate Director at the Rothschild Group where he helped
establish the Golden Arrow Funds I and II, the latter fund becoming the ASX-listed LinQ Resources Fund. At the
time of his departure from LinQ, the fund was one of Australia’s largest listed resource funds with funds under
management of over $475m. He has held a number of senior positions at Australian resource-focused stockbroking
firms including Research Director at Hartleys and Resources Analyst at Eyres Reed. In the previous 3 years, Mr Lloyd
has not been a director of any other ASX listed companies.
Page 20 | ANNUAL REPORT 2015
Directors’ Report
OPERATING AND FINANCIAL REVIEW
PRINCIPAL ACTIVITIES
The Company’s principal activities during the year were conducting exploration and evaluation work on existing
tenements. Inca Minerals Limited is a Western Australian and Peruvian focused exploration company whose aims
are to find, develop and/or demonstrate the potential of projects to others. Inca will continue to seek opportunities
for acquiring or farming in to new tenements, and to divest or joint venture where there is benefit to shareholders.
OPERATING RESULTS
The operating loss after income tax of the Company for the year ended 30 June 2015 was $4,503,572 (2014: loss of
$2,952,310).
REVIEW OF OPERATIONS
The Company’s current exploration position and other activities appear in announcements released to the Australian
Securities Exchange throughout the year ended 30 June 2015 (report period) and should be read in conjunction
with this report.
During the reporting period the Company continued to focus on the exploration and evaluation of its Peruvian
projects and in particular, the Company’s flagship Chanape Project (Chanape). Exploration throughout the reporting
period and unsolicited interest from major diversified mining companies continued to confirm the importance of
Chanape’s standout exploration results (few better than a 55 metre down hole interval @ 2.3% copper, 0.60g/t
gold and 42.90g/t silver from 155 metres) and Chanape’s potential as a dual-resource project hosting a near-surface
copper, gold and silver resource as well as deeper porphyry and porphyry-related copper-molybdenum-silver±gold
mineralisation.
During the report period the Company’s exploration efforts delivered and refined new and highly prospective drill
targets including very high grades of gold, silver and lead in channel sampling in the summit and southern areas
of Chanape (eg peak values of two-metre channel samples included 12.65g/t gold, 746g/t silver and 14.95% lead –
refer ASX announcement 22 October 2014), and a new breccia with peak values from rock chip sampling including
5.5% copper, 2.2g/t gold and 51.1g/t silver (refer ASX announcement 22 October 2014). During the report period the
Company applied for and secured its Semi-Detailed Environmental Impact Assessment (sdEIA) permit which allows up
to 22,500 metres of drilling and approximately 60 drill platforms on the Chanape project area. At the time of writing
the 2015 drill campaign is underway with the initial drilling results to be reported in the September 2015 quarter.
The Company’s exploration and permitting success underpinned its ability to raise capital throughout the reporting
period with the completion of a $3.2million placement (before broker commissions) to investors in July 2014, and a
$3 million rights issue and placement (before broker commissions) successfully completed in July 2015.
FINANCIAL POSITION
The net assets of the Group were $9,047,284 as at 30 June 2015 ($10,603,260 as at 30 June 2014).
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
The Company raised $3,200,000 (before broker commissions) in capital during the financial year via the issuance of
139,130,432 fully paid ordinary shares. In addition to this, the Company issued a further 2,288,793 fully paid ordinary
shares for non-cash proceeds of $43,600. There were no other significant changes in the state of affairs of the Group
during the financial year.
DIVIDENDS PAID OR RECOMMENDED
The directors do not recommend the payment of a dividend and no dividends have been paid or declared since the
start of the financial year.
Page 21 | ANNUAL REPORT 2015
Directors’ Report
OPERATING AND FINANCIAL REVIEW (continued)
SIGNIFICANT EVENTS AFTER REPORTING DATE
The Company completed a capital raising in July 2015 raising $3,004,454 (before broker commissions and other
costs of the capital raising) through the issue of 300,445,453 fully paid ordinary shares. In August 2015 the Company
completed a placement of 130,000,000 fully paid ordinary shares to one of the world’s largest specialist resources
funds – Resource Capital Funds VI L.P. raising $1,300,000. No other matters or circumstances have arisen since the
end of the financial year which significantly affected or may significantly affect the operations of the Company or the
state of affairs of the Company in future financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Company expects to maintain the present status and level of operation and hence there are no likely unwarranted
developments in the entity’s operations.
ENVIRONMENTAL ISSUES
The Company is subject to environmental regulation in respect of its exploration activities in Australia and Peru. The
Company ensures the appropriate standard of environmental care is achieved and, in doing so, that it is aware of
and is in compliance with all environmental legislation. The directors of the Company are not aware of any breach
of environmental legislation for the year.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of the Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for
all or any part of those proceedings. The Company was not a party to any such proceedings during the year.
INDEMNIFICATION OF OFFICERS AND INSURANCE PREMIUMS
The consolidated entity has paid premiums to insure the directors against liabilities for costs and expenses incurred
by them in defending legal proceedings arising from their conduct while acting in the capacity of director of the
consolidated entity, other than conduct involving a wilful breach of duty in relation to the consolidated entity.
The premiums paid in respect of Directors’ and Officers’ insurance during the year amounted to $14,554 (2014: $17,116).
OPTIONS
At the date of this report, there were no unissued ordinary shares of Inca Minerals Limited under option.
RISK MANAGEMENT
The Board is responsible for ensuring that risks and opportunities are identified in a timely manner and that activities
are aligned with the risks and opportunities identified by the Board.
MEETINGS OF DIRECTORS
During the financial year, 12 meetings of directors were held. Attendances by each director during the year were as
follows:–
No. of meetings eligible to attend
Number attended
Board Meetings
Mr Justin Walawski
Mr Ross Brown
Mr Gareth Lloyd
12
12
12
12
12
11
Page 22 | ANNUAL REPORT 2015
Directors’ Report
REMUNERATION REPORT (AUDITED)
This report outlines the remuneration arrangements in place for directors and executives of the Company.
REMUNERATION POLICY
The remuneration policy of Inca Minerals Limited aligns director and executive objectives with shareholder and
business objectives by providing a fixed remuneration component and, where the Board believes it appropriate,
may also include specific long-term incentives based on key performance areas affecting the Company’s ability to
attract and retain the best executives and directors to run and manage the Company.
The remuneration policy setting out the terms and conditions for the executive directors and other senior executives
was developed by the Board. All executives receive a base salary (which is based on factors such as ability and
experience). The Board reviews executive packages annually by reference to the economic entity’s performance,
executive performance, and comparable information from industry sectors and other listed companies in similar
industries. The performance of the executive directors is measured against the objective of promoting growth in
shareholder value.
The Board may exercise discretion in relation to approving incentives, bonuses, and options. The policy is designed
to attract the highest calibre of executives and reward them for performance that results in long-term growth in
shareholder wealth. Executives may, where the Board believes it appropriate, participate in employee share and
option arrangements.
The Board policy is to remunerate directors at market rates for comparable companies for time, commitment and
responsibilities. The Board determines payments to directors and reviews their remuneration annually based on
market practice, duties and accountability. Independent external advice is sought when required. The maximum
aggregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders in a
general meeting (currently $240,000 per annum).
PERFORMANCE BASED REMUNERATION
There was nil performance based remuneration for the year ended 30 June 2015.
KEY MANAGEMENT PERSONNEL SERVICE AGREEMENTS
Details of the key conditions of service agreements for key management personnel are as follows:
Commencement
Date
Notice Period
Base Salary
Base Salary
Ross Brown
1 March 2012
6 months
$220,000 per annum
Gareth Lloyd
14 September 2012
Nil
$50,000 per annum director fees.
Justin Walawski
21 May 2012
3 months
$5,400* per month for company
secretary / consultancy fees plus
$50,000 per annum director fees.
Termination
Payments
Provided**
None
None
None
*Mr Walawski has an agreement with the Company whereby he receives a minimum retainer of $5,400 per month
(excluding GST) for consulting services provided up to, and including, 32 hours per month. Mr Walawski is then paid
an additional hourly rate of $200 (excluding GST) in the event the Company requires his consulting services over and
above 32 hours per month.
**Other than statutory entitlements.
There are no other agreements with key management personnel.
Page 23 | ANNUAL REPORT 2015
Directors’ Report
REMUNERATION REPORT (AUDITED) (continued)
KEY MANAGEMENT PERSONNEL REMUNERATION
(a) Key management personnel compensation
2015
Short-term benefits
Post-employment benefits
Cash
salary and
fees
Perfor-
mance
Bonus
Non-
monetary
benefits
Super-
annuation
Retire-
ment
benefits
Other
Total
Name
Directors
Ross Brown
Gareth Lloyd
220,000
50,000
Justin Walawski
218,363
Executives
David Bent*
Totals
52,915
541,278
$
$
$
$
$
$
$
–
–
–
–
–
–
–
–
–
–
20,900
4,750
–
–
25,650
–
–
–
–
–
3,600
244,500
–
–
–
54,750
218,363
52,915
–
–
–
–
3,600
570,528
0.0%
*Ceased to be key management personnel during the year.
2014
Short-term benefits
Post-employment benefits
Cash
salary and
fees
Perfor-
mance
Bonus
Non-
monetary
benefits
Super-
annuation
Retire-
ment
benefits
Other
Total
Name
Directors
Ross Brown
Gareth Lloyd
216,812
50,000
Justin Walawski
249,741
Executives
David Bent
Totals
144,669
661,222
$
$
$
$
$
$
$
38,325
–
–
–
38,325
–
–
–
–
–
20,388
4,625
–
–
25,013
–
–
–
–
–
3,600
279,125
13.7
–
–
–
54,625
249,741
144,669
–
–
–
3,600
728,160
5.2%
Performance
related
compen-
sation as
% of total
remuner-
ation
Performance
related
compen-
sation as
% of total
remuner-
ation
b) Options and rights granted as remuneration
No options or rights were granted as remuneration during the year (2014: $nil).
Page 24 | ANNUAL REPORT 2015
Directors’ Report
REMUNERATION REPORT (AUDITED) (continued)
KEY MANAGEMENT PERSONNEL REMUNERATION (CONTINUED)
c) Share Based Payments
During the year ended 30 June 2014, Ross Brown earned a performance related share based bonus of $15,000. The
amount was unpaid and accrued as at 30 June 2014. The shares were subsequently approved by shareholders for
issue on 28 November 2014, and 988,793 fully paid ordinary shares were issued on 3 December 2014 in satisfaction
of the $15,000.
DIRECTORS’ RELEVANT INTERESTS
The relevant interest of each director in the capital of the Company at the date of this report is as follows:
Director
Ross Brown
Gareth Lloyd
Justin Walawski
No of Ordinary Shares
No of Options over Ordinary Shares
24,274,508
–
2,002,000
–
–
–
END OF REMUNERATION REPORT
NON-AUDIT SERVICES
The Directors are satisfied that the provision of non-audit services during the year is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the
services disclosed below did not compromise the external auditor’s independence for the following reasons:
all non-audit services are reviewed and approved by the Board of Directors prior to commencement to ensure
they do not adversely affect the integrity and objectivity of the auditor; and
the nature of the services provided does not compromise the general principles relating to auditor independence
in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and
Ethical Standards Board.
No non-audit services were provided by the entity’s auditor, Stantons International, as shown at Note 15.
Page 25 | ANNUAL REPORT 2015
Directors’ Report
AUDITOR’S INDEPENDENCE DECLARATION
We have obtained an Auditor’s Independence Declaration. Please refer to “Auditor’s Independence Declaration”
included on page “Auditor’s Independence Declaration” on page 56 of the financial statements.
The Directors’ Report, incorporating the Remuneration Report, is signed in accordance with a resolution of the
Board of Directors.
Justin Walawski
Director
Dated at Perth this 23rd day of September 2015
Page 26 | ANNUAL REPORT 2015
Consolidated Statement of Profit or
Loss and Other Comprehensive Income
for the year ended 30 June 2015
Revenue
Management and directors’ fees
Wages and salaries
Administrative expenses
Advertising and promotional costs
Professional fees
Listing and share registry expenses
Depreciation
Impairment of loans
Share based payments expense
Foreign exchange gain / (loss)
Carrying value of assets sold
Exploration and evaluation expenditure written off
Impairment of exploration and evaluation expenditure
Plant and equipment written off
(Loss) before income tax
Income tax benefit
(Loss) after income tax
Other comprehensive income
Items that will not be reclassified to profit or loss
Items that may be reclassified subsequently to profit or loss
Note
2
2015
$
2014
$
33,899
54,482
(84,939)
(78,362)
(849,111)
(16,895)
(381,458)
(51,694)
(15,616)
(9,800)
–
(9,625)
–
(445,069)
(2,592,640)
(2,262)
(125,967)
(70,946)
(1,307,174)
(30,287)
(367,379)
(64,878)
(12,733)
(1,400)
(16,425)
8,029
(8,278)
(131,098)
(893,583)
–
(4,503,572)
(2,967,637)
–
15,327
(4,503,572)
(2,952,310)
–
–
6
5
7
7
3
Exchange differences on translation of foreign operations, net of tax
(51,279)
(415,263)
Total comprehensive (loss)
(4,554,851)
(3,367,573)
(Loss) for the year attributable to members of Inca Minerals Limited
(4,503,572)
(2,952,310)
Total comprehensive (loss) attributable to members of Inca Minerals
Limited
(4,554,851)
(3,367,573)
Basic and diluted (loss) per share (cents)
12
(0.71)
(0.67)
The accompanying notes form an integral part of these financial statements.
Page 27 | ANNUAL REPORT 2015
Consolidated Statement of
Financial Position
as at 30 June 2015
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Total Current Assets
Non-Current Assets
Plant and equipment
Exploration and evaluation expenditure
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Accumulated losses
Foreign currency translation reserve
Note
13(b)
5
6
7
8
2015
$
2014
$
208,810
479,496
688,306
580,880
349,916
930,796
129,367
8,517,647
8,647,014
51,362
9,973,665
10,025,027
9,335,320
10,955,823
288,036
288,036
352,563
352,563
288,036
352,563
9,047,284
10,603,260
9
25,092,164
22,093,289
(15,632,473)
(11,128,901)
(412,407)
(361,128)
TOTAL EQUITY
9,047,284
10,603,260
The accompanying notes form an integral part of these financial statements.
Page 28 | ANNUAL REPORT 2015
Consolidated Statement
of Changes in Equity
for the year ended 30 June 2015
2014
Balance at 1 July 2013
Total comprehensive loss for the year
Shares issued during the year
Cost of equity issue
Contributed
Equity
$
Accumulated
Losses
$
Foreign
Currency
Translation
Reserve
$
Total
$
20,447,096
–
1,768,903
(122,710)
(8,176,591)
(2,952,310)
54,135
12,324,640
(415,263)
(3,367,573)
–
–
–
–
1,768,903
(122,710)
Balance at 30 June 2014
22,093,289
(11,128,901)
(361,128)
10,603,260
2015
Balance at 1 July 2014
22,093,289
(11,128,901)
(361,128)
10,603,260
Total comprehensive loss for the year
–
(4,503,572)
(51,279)
(4,554,851)
Shares issued during the year
Cost of equity issue
3,243,600
(244,725)
–
–
–
–
3,243,600
(244,725)
Balance at 30 June 2015
25,092,164
(15,632,473)
(412,407)
9,047,284
The accompanying notes form an integral part of these financial statements.
Page 29 | ANNUAL REPORT 2015
Consolidated Statement
of Cash Flows
for the year ended 30 June 2015
Cash flows from operating activities
Payments to suppliers and employees
ATO R&D income tax rebate received
Interest received
Peruvian VAT credit received
Note
2015
$
2014
$
(761,156)
(890,156)
–
23,899
101,215
15,327
24,482
–
Net cash (used) in operating activities
13 (a)
(636,042)
(850,347)
Cash flows from investing activities
Payments for exploration expenditures
Payments for plant and equipment
Proceeds from sale of plant and equipment
Payments for security deposits
Proceeds from sale of tenements
Net cash (used) in investing activities
Cash flows from financing activities
Proceeds from issue of shares (net of share issue costs)
Net cash provided by financing activities
Net (decrease) in cash held
Cash and cash equivalents at the beginning of the financial year
Effect of exchange rate changes on cash and cash equivalents
(2,649,902)
(3,636,064)
(76,186)
10,000
(4,107)
–
(68,031)
20,000
(7,531)
10,000
(2,720,195)
(3,681,626)
2,977,625
2,977,625
1,646,193
1,646,193
(378,612)
(2,885,780)
580,880
3,468,841
6,542
(2,181)
Cash and cash equivalents at the end of the financial year
13 (b)
208,810
580,880
The accompanying notes form an integral part of these financial statements.
Page 30 | ANNUAL REPORT 2015
Notes to the Financial Statements
for the year ended 30 June 2015
Note 1: Statement of Significant Accounting
Policies
The financial report covers the Company of Inca Minerals Limited, a listed public company incorporated and
domiciled in Australia, and its controlled entities.
The financial report was authorised for issue on 23 September 2015 by the Board of Directors.
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.
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.
In the year ended 30 June 2015, the Company has reviewed all of the new and revised Australian Accounting
Standards and Interpretations issued by the AASB that are relevant to its operations and effective for the current
annual reporting period. It has been determined by the Company that there is no impact, material or otherwise,
of the new Standards and Interpretations on its business and therefore, no changes are required to its accounting
policies. Material accounting policies adopted in preparation of this financial report are presented below and have
been consistently applied unless otherwise stated.
The financial report has been prepared on an accruals basis and is based on historical costs, modified, where
applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.
GOING CONCERN
The financial statements have been prepared on the going concern basis, which contemplates continuity of normal
business activities and the realisation of assets and discharge of liabilities in the normal course of business.
For the year ended 30 June 2015, the consolidated entity incurred after tax losses of $4,503,572 (2014: loss of
$2,952,310) and the consolidated entity had net cash outflows of $378,612 (2014: net cash inflows of $2,885,780).
The Directors believe that it is reasonably foreseeable that the Company and consolidated entity will continue as
going concerns and that it is appropriate to adopt the going concern basis in the preparation of the financial report
after consideration of the following factors:
The consolidated entity has cash at bank at the reporting date of $208,810, net working capital of $400,270 and
net assets of $9,047,284;
The Company completed a capital raising in July 2015 raising $3,004,454 (before broker commissions and other
costs of the capital raising) through the issue of 300,445,453 fully paid ordinary shares;
The Company completed a placement of 130,000,000 million shares raising $1,300,000 in August 2015;
The ability of the Group to raise capital by the issue of additional shares under the Corporation Act 2001; and
The ability to curtail administration and operational cash out flows as required.
Page 31 | ANNUAL REPORT 2015
Note 1: Statement of Significant Accounting
Policies (continued)
ACCOUNTING POLICIES
a) Principles of Consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent, Inca Minerals
Limited and all of the subsidiaries. Subsidiaries are entities the parent controls. The parent controls an entity when
it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect
those returns through its power over the entity. A list of the subsidiaries is provided in Note 20.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group
from the date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from
the date that control ceases. Intercompany transactions, balances and unrealised gains or losses on transactions
between Group entities are fully eliminated on consolidation. Accounting policies of subsidiaries have been changed
and adjustments made where necessary to ensure uniformity of the accounting policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “non-controlling
interests”. The Group initially recognises non-controlling interests that are present ownership interests in subsidiaries
and are entitled to a proportionate share of the subsidiary’s net assets on liquidation at either fair value or at the
non-controlling interests’ proportionate share of the subsidiary’s net assets. Subsequent to initial recognition, non-
controlling interests are attributed their share of profit or loss and each component of other comprehensive income.
Non-controlling interests are shown separately within the equity section of the statement of financial position and
statement of comprehensive income.
b) Revenue Recognition
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the
financial asset.
Income Tax
c)
The income tax expense / (revenue) for the year comprises current income tax expense (income) and deferred tax
expense / (income). Current income tax expense charged to the profit of loss is the tax payable on taxable income
calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax
liabilities (assets) are therefore measured at the amounts expected to be paid to (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.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of profit or loss
when the tax related to items that are credited or charged directly to equity.
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 substantially 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.
Page 32 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015 Note 1: Statement of Significant Accounting
Policies (continued)
c) Income Tax (continued)
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.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures,
deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference
can be controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a largely 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 related 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.
d) Mining Tenements and Exploration and Development Expenditure
Mining tenements are carried at cost, less accumulated impairment losses.
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area
of interest. These costs are only carried forward to the extent that they are expected to be recouped through the
successful development and/or sale of the area or where activities in the area have not yet reached a stage that
permits reasonable assessment of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit or loss in the year in which
the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over the life of
the area according to the rate of depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest.
Costs of site restoration are provided for over the life of the facility from when exploration commences and are
included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant,
equipment and building structures, waste removal, and rehabilitation of the site in accordance with clauses of
the mining permits. Such costs are determined using estimates of future costs, current legal requirements and
technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted for on a prospective basis. In determining the costs of site
restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations
and future legislation. Accordingly the costs have been determined on the basis that the restoration will be
completed within one year of abandoning the site.
Page 33 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015 Note 1: Statement of Significant Accounting
Policies (continued)
e) Financial Instruments
Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity becomes
a party to the contractual provisions of the instrument. Trade date accounting is adopted for financial assets that
are delivered within timeframes established by marketplace convention.
Financial instruments are initially measured at fair value plus transactions costs where the instrument is not classified
as at fair value through profit or loss. Transaction costs related to instruments classified as at fair value through
profit or loss are expensed to profit or loss immediately. Financial instruments are classified and measured as set
out below.
Derecognition
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 expire. The difference between the carrying value of the financial liability extinguished or
transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or
liabilities assumed, is recognised in profit or loss.
Classification and Subsequent Measurement
i. Financial assets at fair value through profit or loss
Financial assets are classified at fair value through profit or loss when they are held for trading for the purpose of
short term profit taking, where they are derivatives not held for hedging purposes, or designed as such to avoid
an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key
management personnel on a fair value basis in accordance with a documented risk management or investment
strategy. Realised and unrealised gains and losses arising from changes in fair value are included in profit or loss in
the period in which they arise.
ii. Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market and are subsequently measured at amortised cost using the effective interest rate method.
iii. Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable
payments, and it is the Company’s intention to hold these investments to maturity. They are subsequently measured
at amortised cost using the effective interest rate method.
iv. Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either designated as such or that are
not classified in any of the other categories. They comprise investments in the equity of other entities where there
is neither a fixed maturity nor fixed or determinable payments.
v. Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost
using the effective interest rate method.
Page 34 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015 Note 1: Statement of Significant Accounting
Policies (continued)
e) Financial Instruments (continued)
Fair value
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis,
depending on the requirements of the applicable Accounting Standard. Fair value is the price the Group would
receive to sell an asset or would have to pay to transfer a liability in an orderly (ie unforced) transaction between
independent, knowledgeable and willing market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used to
determine fair value. Adjustments to market values may be made having regard to the characteristics of the specific
asset or liability. The fair values of assets and liabilities that are not traded in an active market are determined
using one or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of
observable market data. To the extent possible, market information is extracted from either the principal market for
the asset or liability (ie the market with the greatest volume and level of activity for the asset or liability) or, in the
absence of such a market, the most advantageous market available to the entity at the end of the reporting period
(ie the market that maximises the receipts from the sale of the asset or minimises the payments made to transfer
the liability, after taking into account transaction costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant’s ability to use the
asset in its highest and best use or to sell it to another market participant that would use the asset in its highest and
best use. The fair value of liabilities and the entity’s own equity instruments (excluding those related to share-based
payment arrangements) may be valued, where there is no observable market price in relation to the transfer of such
financial instruments, by reference to observable market information where such instruments are held as assets.
Where this information is not available, other valuation techniques are adopted and, where significant, are detailed
in the respective note to the financial statements.
Valuation Techniques
In the absence of an active market for an identical asset or liability, the Group selects and uses one or more valuation
techniques to measure the fair value of the asset or liability. The Group selects a valuation technique that is appropriate
in the circumstances and for which sufficient data is available to measure fair value. The availability of sufficient and
relevant data primarily depends on the specific characteristics of the asset or liability being measured. The valuation
techniques selected by the Group are consistent with one or more of the following valuation approaches:
Market approach: valuation techniques that use prices and other relevant information generated by market
transactions for identical or similar assets or liabilities.
Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a
single discounted present value.
Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service
capacity.
Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when
pricing the asset or liability, including assumptions about risks. When selecting a valuation technique, the Group
gives priority to those techniques that maximise the use of observable inputs and minimise the use of unobservable
inputs. Inputs that are developed using market data (such as publicly available information on actual transactions)
and reflect the assumptions that buyers and sellers would generally use when pricing the asset or liability are
considered observable, whereas inputs for which market data is not available and therefore are developed using
the best information available about such assumptions are considered unobservable.
Page 35 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015 Note 1: Statement of Significant Accounting
Policies (continued)
e) Financial Instruments (continued)
Fair value hierarchy
AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which categorises fair
value measurements into one of three possible levels based on the lowest level that an input that is significant to
the measurement can be categorised into as follows:
Level 1
Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity
can access at the measurement date.
Level 2
Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly or indirectly.
Level 3
Measurements based on unobservable inputs for the asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more
valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market
data. If all significant inputs required to measure fair value are observable, the asset or liability is included in Level 2.
If one or more significant inputs are not based on observable market data, the asset or liability is included in Level 3.
The Group would change the categorisation within the fair value hierarchy only in the following circumstances:
(i) if a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3) or vice versa; or
(ii) if significant inputs that were previously unobservable (Level 3) became observable (Level 2) or vice versa.
When a change in the categorisation occurs, the Group recognises transfers between levels of the fair value
hierarchy (ie transfers into and out of each level of the fair value hierarchy) on the date the event or change in
circumstances occurred.
Impairment of Assets
f)
At each reporting date, the entity 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 profit or loss.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset for which the estimates of future
cash flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the
asset is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately, unless the
relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease. Where
an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of
its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised for the asset in prior years. A
reversal of an impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair
value, in which case the reversal of the impairment loss is treated as a revaluation increase.
Page 36 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015 Note 1: Statement of Significant Accounting
Policies (continued)
g) Plant and Equipment
Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated depreciation
and any accumulated impairment. In the event the carrying amount of plant and equipment is greater than the
estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable
amount and impairment losses are recognised either in profit or loss or as a revaluation decrease if the impairment
losses relate to a revalued asset.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the
recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash
flows that will be received from the asset’s employment and subsequent disposal. The expected net cash flows
have been discounted to their present values in determining recoverable amounts.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Company and
the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of
comprehensive income during the financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets, is depreciated on a straight-line basis over the asset’s useful life to the
Company commencing from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Class of fixed asset
Plant and equipment
Motor vehicles
IT equipment
Leasehold improvements
Depreciation rate
20–33%
20–33%
33%
20%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting
period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and
losses are included in the profit or loss.
h) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and deposits held at call with banks.
i) Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred
is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial
position are shown inclusive of GST. 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.
Page 37 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015 Note 1: Statement of Significant Accounting
Policies (continued)
j) Contributed Equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction,
net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the
acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.
k) Earnings per Share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation
to dilutive potential ordinary shares.
l) Leases
Leases of fixed assets, where substantially all the risks and benefits incidental to the ownership of the asset, but not
the legal ownership that are transferred to the economic entity, are classified as finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value
of the leased property or the present value of the minimum lease payments, including any guaranteed residual
values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for
the period.
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease
term. Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are
charged as expenses in the periods in which they are incurred.
m) Employee Benefits
Provision is made for the Company’s liability for employee benefits arising from services rendered by employees to
reporting 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, plus related on-costs. Employee benefits payable later than one year
have been measured at the present value of the estimated future cash outflows to be made for those benefits.
n) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of Directors.
o) Trade and Other Receivables
Trade and other receivables include amounts due from customers for goods sold and services performed in the
ordinary course of business. Receivables expected to be collected within 12 months of the end of the reporting
period are classified as current assets. All other receivables are classified as non-current assets.
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method, less any provision for impairment.
Page 38 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015 Note 1: Statement of Significant Accounting
Policies (continued)
p) Trade and Other Payables
Trade and other payables represent the liabilities for goods and services received by the entity that remain unpaid
at the end of the reporting period. The balance is recognised as a current liability with the amounts normally paid
within 30 days of recognition of the liability.
q) Foreign Currency Transactions Balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements are presented in Australian
dollars, which is the parent entity’s functional currency.
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date
of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary
items measured at historical cost continue to be carried at the exchange rate at the date of the transaction.
Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were
determined.
Exchange differences arising on the translation of monetary items are recognised in profit or loss, except where
deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive
income to the extent that the underlying gain or loss is recognised in other comprehensive income; otherwise the
exchange difference is recognised in profit or loss.
Group companies
The financial results and position of foreign operations, whose functional currency is different from the Group’s
presentation currency, are translated as follows:
assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations with functional currencies other than Australian
dollars are recognised in other comprehensive income and included in the foreign currency translation reserve in
the statement of financial position. These differences are recognised in profit or loss in the period in which the
operation is disposed of.
r) Critical Accounting Estimates and Other Accounting Judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
The Company is of the view that there are no critical accounting estimates and judgements in this financial report,
other than accounting estimates and judgements in relation to the carrying value of mineral exploration expenditure.
Key judgements
Deferred exploration and evaluation expenditure
Exploration and evaluation costs are carried forward where right of tenure of the area of interest is current. These
costs are carried forward in respect of an area that has not at reporting date reached a stage that permits reasonable
assessment of the existence of economically recoverable reserves, or alternatively, are expected to be sold. Refer
to the accounting policy stated in Note 1(d).
Page 39 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015 Note 1: Statement of Significant Accounting
Policies (continued)
s) New Standards and Interpretations Adopted in 2014/15 Financial Year
The Group has applied the following standards and amendments for the first time in their annual reporting period
commencing 1 July 2014:
Investment Entities – Amendments to AASB 10, AASB 12 and AASB 127
These amendments provide an exception to the consolidation requirement for entities that meet the definition
of an investment entity under AASB 10 Consolidated Financial Statements and must be applied retrospectively,
subject to certain transition relief. The exception to consolidation requires investment entities to account for
subsidiaries at fair value through profit or loss. These amendments have no impact on the Group, since none of
the entities in the Group qualifies to be an investment entity under AASB 10.
AASB 2013-3 Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets
The amendments include the requirement to disclose additional information about the fair value measurement
when the recoverable amount of impaired assets is based on fair value less costs of disposal. This amendment
has resulted in increased disclosures in the Group’s financial statements.
Offsetting Financial Assets and Financial Liabilities – Amendments to AASB 132
These amendments clarify the meaning of ’currently has a legally enforceable right to set-off’ and the criteria
for non-simultaneous settlement mechanisms of clearing houses to qualify for offsetting and is applied
retrospectively. These amendments have no impact on the Group, since none of the entities in the Group has
any offsetting arrangements.
AASB 2014-1 Amendments to Australian Accounting Standards
The adoption of AASB 2014-1 has required additional disclosures in our segment note. Other than that, the
adoption of these standards did not have any impact on the current period or any prior period and is not likely to
affect future periods.
t) New Standards and Interpretations Not Yet Adopted
A number of new standards, amendments to standards and interpretations issued by the AASB which are not yet
mandatorily applicable to the Group have not been applied in preparing these consolidated financial statements.
Those which may be relevant to the Group are set out below. The Group does not plan to adopt these standards
early.
AASB 9 Financial Instruments and associated Amending Standards (applicable for annual reporting period
commencing 1 January 2018).
The Standard will be applicable retrospectively (subject to the comment on hedge accounting below) and includes
revised requirements for the classification and measurement of financial instruments, revised recognition and
derecognition requirements for financial instruments and simplified requirements for hedge accounting.
Key changes made to this standard that may affect the Group on initial application include certain simplifications to
the classification of financial assets, simplifications to the accounting of embedded derivatives, and the irrevocable
election to recognise gains and losses on investments in equity instruments that are not held for trading in other
comprehensive income.
Although the directors anticipate that the adoption of AASB 9 may have an impact on the Group’s financial
instruments it is impractical at this stage to provide a reasonable estimate of such impact.
AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods commencing on or
after 1 January 2017).
Page 40 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015 Note 1: Statement of Significant Accounting
Policies (continued)
t) New Standards and Interpretations Not Yet Adopted (continued)
When effective, this Standard will replace the current accounting requirements applicable to revenue with a single,
principles-based model. Except for a limited number of exceptions, including leases, the new revenue model in
AASB 15 will apply to all contracts with customers as well as non-monetary exchanges between entities in the same
line of business to facilitate sales to customers and potential customers.
identify the contract(s) with a customer;
identify the performance obligations in the contract(s);
The core principle of the Standard is that an entity will recognise revenue to depict the transfer of promised goods
or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in
exchange for the goods or services. To achieve this objective, AASB 15 provides the following five-step process:
–
–
– determine the transaction price;
– allocate the transaction price to the performance obligations in the contract(s); and
– recognise revenue when (or as) the performance obligations are satisfied.
This Standard will require retrospective restatement, as well as enhanced disclosures regarding revenue.
Although the directors anticipate that the adoption of AASB 15 may have an impact on the Group’s financial
statements, it is impracticable at this stage to provide a reasonable estimate of such impact.
Other standards not yet applicable
There are no other standards that are not yet effective and that would be expected to have a material impact on
the entity in the current or future reporting periods and on foreseeable future transactions.
u) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
Note 2: Revenue
Interest Received
Sale of assets
Sundry income
Consolidated
2015
$
2014
$
23,899
10,000
–
33,899
24,482
20,000
10,000
54,482
Page 41 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015 Note 3: Income Tax
(a) Income tax recognised in profit
No income tax is payable by the Company as it recorded losses for income tax purposes for the year.
(b) Numerical reconciliation between income tax expense and the loss before income tax.
Loss before income tax
Income tax at 30%
Tax effect of:
Deferred tax asset not recognised
Tax effect of permanent differences
ATO R&D income tax rebate received
Income tax benefit
(c) Unrecognised deferred tax balances
Tax losses available to the Company
Potential tax benefit at 30%
Consolidated
2015
$
2014
$
(4,503,572)
(2,967,637)
(1,351,071)
(890,291)
1,351,261
890,291
(190)
–
–
–
15,327
15,327
13,359,976
11,436,550
4,007,992
3,430,965
A deferred tax asset attributable to income tax losses has not been recognised at reporting date as the probability
criteria disclosed in Note 1(c) is not satisfied and such benefit will only be available if the conditions of deductibility,
also disclosed in Note 1(c), are satisfied.
Note 4: Dividends
No dividends were paid or declared since the start of the financial year. No recommendation for payment of
dividends has been made.
Note 5: Trade and Other Receivables
Current
Other receivables
GST and VAT
Loans (ii)
Less: provision for impairment
Consolidated
2015
$
2014
$
30,137
429,759
239,480
(219,880)
479,496
97,636
222,880
239,480
(210,080)
349,916
(i) None of the trade and other receivables are past due date.
(ii) Loans consist of interest-free loans given to former senior executives in order to purchase shares in the Company.
Page 42 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015 Note 6: Plant and Equipment
Plant and
equipment
Motor
vehicles
IT equipment
$
3,468
45,888
$
11,325
(29,270)
$
9,701
6,358
(7,832)
17,945
(6,221)
Balance at 1 July 2013
Additions / (disposals)
Depreciation / writeback
on disposals
Balance at 30 June 2014
41,524
–
9,838
At cost
Accumulated depreciation
57,673
(16,149)
10,756
(10,756)
Balance at 30 June 2014
Balance at 1 July 2014
Additions / (disposals)
Depreciation / writeback on
disposals
Balance at 30 June 2015
At cost
Accumulated depreciation
41,524
41,524
90,714
(11,025)
121,213
137,180
(15,967)
–
–
–
–
–
1,124
(1,124)
21,760
(11,922)
9,838
9,838
(4,000)
(3,213)
2,625
17,760
(15,135)
Leasehold
Improve-
ments
$
Total
$
–
–
–
–
–
–
–
–
6,907
(1,378)
5,529
6,907
(1,378)
24,494
22,976
3,892
51,362
90,189
(38,827)
51,362
51,362
93,621
(15,616)
129,367
162,971
(33,604)
Balance at 30 June 2015
121,213
–
2,625
5,529
129,367
Page 43 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015 Note 7: Exploration and Evaluation Expenditure
Costs carried forward in respect of areas of interest in the following phases:
Exploration and Evaluation Phase – at cost
Balance at 1 July
Expenditure incurred (including exchange rate movements)
Impairment of exploration and evaluation expenditure
Expenditure written off
Balance at 30 June
Consolidated
2015
$
2014
$
9,973,665
1,581,691
(2,592,640)
(445,069)
8,829,955
2,168,391
(893,583)
(131,098)
8,517,647
9,973,665
The ultimate recoupment of costs carried forward for exploration and evaluation phases is dependent on the
successful development and commercial exploitation or sale of the respective mining areas.
Note 8: Trade and Other Payables (current)
Trade and other creditors
288,036
352,563
None of the payables are past due date.
Note 9: Contributed Equity
a) Paid up capital
646,336,363 ordinary shares (30 June 2014: 504,917,138 ordinary shares)
25,092,164
22,093,289
Consolidated
2015
$
2014
$
b) Movements in shares on issue
Balance at 30 June 2013
Issued 19 December 2013
Issued 2 May 2014
Transaction costs from issue of shares
Balance at 30 June 2014
Issued 6 August 2014
Issued 22 August 2014
Issued 3 December 2014
Transaction costs from issue of shares
Balance at 30 June 2015
No of shares
Paid up capital
$
420,487,615
20,447,096
14,657,190
69,772,333
513,001
1,255,902
–
(122,710)
504,917,138
22,093,289
139,130,432
3,200,000
1,300,000
988,793
28,600
15,000
–
(244,725)
646,336,363
25,092,164
Page 44 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015 Note 9: Contributed Equity (continued)
c) Movements in options on issue
There were nil options issued and nil outstanding options over unissued ordinary shares during the year.
d) Ordinary shares
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 and amounts paid up
on shares held.
Note 10: Interests of Key Management Personnel
a) Key management personnel compensation
Refer to the Remuneration Report contained in the Director’s Report for details of the remuneration paid to each
member of the Company’s key management personnel for the year ended 30 June 2015.
The totals of remuneration paid to key management personnel of the Company during the year are as follows:
Short-term employee benefits (i)
Performance bonus (ii)
Other payments (iii)
Post-employment benefits (iv)
Consolidated
2015
$
2014
$
541,278
–
3,600
25,650
570,528
661,222
38,325
3,600
25,013
728,160
(i) Includes payments for salaries, director fees and consulting fees.
(ii) During the year ended 30 June 2014, Mr Ross Brown earned a performance related cash bonus of $20,000 plus
superannuation and a performance related share based bonus of $15,000 plus superannuation.
(iii) Includes allowances.
(iv) Includes superannuation contributions.
Page 45 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015 Note 10: Interests of Key Management Personnel
(continued)
b) Key management personnel shareholdings
The number of ordinary shares in Inca Minerals Limited held by each key management personnel of the Company
during the financial year is as follows:
2015
Directors
Ross Brown
Gareth Lloyd
Justin Walawski
Executives
David Bent*
Totals
Balance
1 July 2014
At
Appointment
(if after 1 July
2014)
Acquired/
Disposed
At Resignation
Balance
30 June 2015
23,285,715
–
1,002,000
–
24,287,715
–
–
–
–
–
988,793
–
–
–
988,793
–
–
–
–
–
24,274,508
–
1,002,000
–
25,276,508
* Ceased to be key management personnel during the year. Shareholding is as at date of resignation.
2014
Directors
Ross Brown
Gareth Lloyd
Justin Walawski
Executives
David Bent
Totals
Balance
1 July 2013
At
Appointment
(if after 1 July
2013)
Acquired/
Disposed
At Resignation
Balance
30 June 2014
23,000,000
6,900,000
752,000
–
30,652,000
–
–
–
–
–
285,715
(6,900,000)*
250,000
–
(6,364,285)
–
–
–
–
–
23,285,715
–
1,002,000
–
24,287,715
* Mr Lloyd ceased to hold a relevant interest in the entity that held these shares. Mr Lloyd did not directly dispose
of these shares.
Page 46 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015 Note 11: Related Party Transactions
Other transactions and balances with directors and other key management personnel.
Corporate Advisory
During the financial year, $55,000 (2014: $44,000) was paid to Element Capital Pty Ltd, a company related to Mr
Gareth Lloyd, for the provision of corporate advisory services.
During the financial year, $59,221 (2014: $58,560) was paid to Element Capital Pty Ltd, a company related to Mr
Gareth Lloyd, for the provision of management and placement fees in relation to capital raising services.
Note 12: Loss Per Share
a) Basic Earnings Per Share
Consolidated
2015
$
2014
$
Loss used in calculating basic earnings per share
(4,503,572)
(2,952,310)
Weighted average number of ordinary shares on issue during the year used as
the denominator in calculating basic loss per share
631,621,356
439,516,123
Basic loss per share (cents)
(0.71)
(0.67)
b) Diluted loss per share (cents)
Diluted loss per share is the same as basic loss per share as there are no potential ordinary shares that are dilutive.
Page 47 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015 Note 13: Cash Flow Information
a) Reconciliation of the net loss after income tax to the net cash flows from operating activities
Net loss for the year
Depreciation
Impairment of loans receivable
Share based payments expense
Foreign exchange (gains) / losses
Exploration and evaluation expenditure written off
Exploration and evaluation expenditure impaired
Inca Minerales S.A.C. capitalised exploration expenditure
Carrying value of fixed assets sold
Plant and equipment written off
Changes in assets and liabilities
(Increase) / decrease in trade and other receivables
Increase / (decrease ) in trade and other creditors
Net cash outflow from operating activities
(b) Reconciliation of cash and cash equivalents
Cash balance comprises:
– cash assets
Consolidated
2015
$
2014
$
(4,503,572)
(2,952,310)
15,616
9,800
–
9,625
445,069
2,592,640
988,050
–
2,262
(129,580)
(65,952)
(636,042)
12,733
1,400
16,425
(8,029)
131,098
893,583
1,042,478
8,278
–
(188,007)
192,004
(850,347)
208,810
580,880
(c) Non-cash financing activities
There were no non cash financing activities during the year ended 30 June 2015 other than:
– On 22 August 2014, the Company issued 1,300,000 fully paid ordinary shares at an implied value of $0.10 per
share for the acquisition of six tenements integral to the Moquegua Project pursuant to a Mining Option, Mining
Assignment and Option of Future Asset Agreement.
– On 3 December 2014, the Company issued 988,793 fully paid ordinary shares at a value of $0.01517 per share to Mr
Ross Brown, a director, as performance based remuneration. The issue of shares was approved by shareholders
at the Company’s Annual General Meeting held on 28 November 2014.
Page 48 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015 Note 14: Expenditure Commitments
The Group has certain commitments to meet minimum expenditure requirements on the mineral exploration assets
in which it has an interest. These commitments are optional and only required if the Company wishes to maintain
its rights of earn-in or rights of tenure. Outstanding exploration commitments for not later than one year and for
between one and five years are as follows:
Not later than one year
Between one and five years
Consolidated
30 June
2015
$
Consolidated
30 June
2014
$
2,294,435
6,303,757
8,598,192
1,800,818
7,311,149
9,111,967
The exploration expenditure commitments above include commitments related to an agreement for the acquisition
of interests in mining concessions pertaining to the Group’s Chanape project in Peru. As at 30 June 2015 the Group
has met all of its obligations in respect of the agreement and all future exploration commitments are payable at the
Group’s discretion and dependent upon the Group acquiring the exclusive rights to the mining concessions. The key
terms of the agreement pertaining to the Chanape project are set out below.
1. Mining option and assignment agreements dated 24 June 2011 granting the Group the exclusive option to acquire
Minera Altas Cumbres S.A.C.’s (MAC) interest in 20 mining concessions over land totalling 805.346 hectares
referred to as the Chanape Project. The Group has the exclusive right to terminate at any time during the option
period and any unpaid amounts are not payable to the vendor. Other key terms are:
Option consideration
US$1,500,000 consisting of 60 payments of US$25,000 plus the applicable VAT
commencing one month after signing date i.e. 24 July 2011. (Term: 5 years)*
Purchase price
US$3,000,000.
Additional purchase
consideration
Exclusive option &
assignment fees
Shares in the Company to the Vendor’s major shareholder to the value of
US$500,000 at an issue price of no less than AUD$0.20 cents per share twelve
months after the Company lists.*
US$50,000*
Mining assignment period
5 years from the Commencement Date (i.e. 5 years from 31 December 2011).
Exploration expenditure
committed
A minimum of US$3,600,000 plus applicable VAT on drilling as follows:
1 March 2012 to 31 December 2012 – US$350,000*;
1 January 2013 to 31 December 2013 – US$500,000*;
1 January 2014 to 31 December 2014 – US$750,000*;
1 January 2015 to 31 December 2015 – US$1,000,000;
1 January 2016 to 31 December 2016 – US$1,000,000
NSR Royalty
Cancellability
Upon the beginning of commercial production a US$20 per ounce of gold
equivalent net smelter royalty to be calculated in accordance with the terms and
conditions.
The Group has the exclusive right to terminate at any time during the option
period. Any unpaid amounts are not payable to the vendor.
* The Company has met all of its applicable commitments under the agreement with MAC.
Page 49 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015 Note 14: Expenditure Commitments (Continued)
In addition to exploration expenditure commitments the Group has certain operating commitments pertaining to
non-cancellable operating leases and other non-cancellable agreements contracted for but not recognised in the
financial statements:
Not later than one year
Between one and five years
Note 15: Auditor’s Remuneration
Statutory audit by auditor of the parent company
Audit and review of financial statements of parent entity
Audit and review of financial statements of subsidiary entity
Consolidated
30 June
2015
$
Consolidated
30 June
2014
$
92,330
21,620
113,950
66,170
–
66,170
24,035
950
24,985
28,093
950
29,043
Statutory audit by auditor of Inca Minerales SAC
11,056
6,744
Note 16: Segment Information
The Company has identified its operating segments 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 operates in the segments of mineral exploration within Peru and Australia.
The Company is domiciled in Australia. All revenue from external parties is generated from Australia only. Segment
revenues are allocated based on the country in which the party is located. Operating revenues of approximately Nil
(2014: Nil) are derived from a single external party.
All the assets are located in Peru and Australia. Segment assets are allocated to countries based on where the assets
are located.
Reportable segments:
Segment revenue
2015
2014
Segment result
2015
2014
Australia
$
Peru
$
Consolidated
$
33,899
54,482
–
–
33,899
54,482
(1,226,481)
(3,277,091)
(4,503,572)
(1,937,941)
(1,014,369)
(2,952,310)
Page 50 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015
Note 16: Segment Information (continued)
Reportable segments:
Segment assets
2015
2014
Segment liabilities
2015
2014
Depreciation and amortisation expense
2015
2014
Australia
$
Peru
$
Consolidated
$
560,330
1,472,345
8,774,990
9,483,478
9,335,320
10,955,823
(132,138)
(194,044)
(155,898)
(158,519)
(288,036)
(352,563)
(15,616)
(12,733)
–
–
(15,616)
(12,733)
Note 17: Financial Risk Management Objectives
and Policies
Interest rate risk
a)
The Company’s exposure to interest rate risk which is the risk that a financial instruments value will fluctuate as a
result of changes in market interest rates and the effective weighted average interest rate for each class of financial
assets and financial liabilities as set out below:
Weighted
average
interest rate
Floating
interest rate
Fixed interest
maturing
1 year or less
Fixed interest
maturing
1 to 5 years
Total
(%)
$
$
$
$
30 June 2015
Cash and cash equivalents
0.92
188,810
20,000
30 June 2014
Cash and cash equivalents
1.67
560,880
20,000
–
–
208,810
580,880
Interest rate sensitivity analysis
At 30 June 2015, if interest rates had changed by 25 basis points during the entire year with all other variables held
constant, profit for the year and equity would have been $987 higher/lower (2014: $5,062), mainly as a result of
higher/lower interest income from cash and cash equivalents.
A 25 basis point increase or decrease is used when reporting interest rate risk internally to key management
personnel and represents management’s assessment of the possible change in interest rates.
(b) Credit risk
The maximum exposure to credit risk at reporting date on financial assets of the Company is the carrying amount,
net of any provisions for doubtful debts, as disclosed in the statement of financial position and notes to the financial
statements.
Page 51 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015
Note 17: Financial Risk Management Objectives
and Policies (continued)
(c) Commodity price risk
The Company is not exposed to commodity price risk as the operations of the Company are not yet at the production
stage.
(d) Liquidity risk
The Company manages liquidity risk by monitoring forecast cash flows.
The table below analyses the entity’s financial liabilities into relevant maturity groupings based on the remaining
period from the statement of financial position date to the contractual maturity date. As the amounts disclosed in
the table are the contractual undiscounted cash flows, these balances will not necessarily agree with the amounts
disclosed in the statement of financial position.
Less than
6 months
$
6 months
to 1 year
$
1 to 5 years
Total
$
$
30 June 2015
Financial liabilities due for payment
Trade and other payables
Financial assets – cash flows realisable
Cash assets
Trade and other receivable
(288,036)
(288,036)
208,810
479,496
688,306
Net (outflow)/inflow on financial instruments
400,270
30 June 2014
Financial liabilities due for payment
Trade and other payables
Financial assets – cash flows realisable
Cash assets
Trade and other receivable
(352,563)
(352,563)
580,880
349,916
930,796
Net (outflow)/inflow on financial instruments
578,233
There were no Level 2 or Level 3 financial instruments.
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(288,036)
(288,036)
208,810
479,496
688,306
400,270
(352,563)
(352,563)
580,880
349,916
930,796
578,233
Page 52 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015 Note 17: Financial Risk Management Objectives
and Policies (continued)
(e) Foreign exchange risk
The Company is exposed to foreign exchange risk as certain transactions are denominated in United States Dollars
and Peruvian Nuevos Soles as a result of operating in Peru.
(f) Net fair value of financial assets and liabilities
The carrying amounts of financial instruments included in the statement of financial position approximate their fair
values due to their short terms of maturity.
Note 18: Events Subsequent to Reporting Date
The Company completed a capital raising in July 2015 raising $3,004,454 (before broker commissions and other
costs of the capital raising) through the issue of 300,445,453 fully paid ordinary shares. In August 2015 the Company
completed a placement of 130,000,000 fully paid ordinary shares to one of the world’s largest specialist resources
funds – Resource Capital Funds VI L.P. raising $1,300,000. There were no other events of significance subsequent to
30 June 2015.
Note 19: Contingent Liabilities
There are no contingent liabilities at reporting date.
Note 20: Controlled Entities
Subsidiaries of Inca Minerals Limited:
Urcaguary Pty Ltd
Inca Minerales S.A.C.
Hydra Minerals Ltd
Dingo Minerals Pty Ltd
Country of
Incorporation
Percentage Controlled (%)
2015
2014
Australia
Peru
Australia
Australia
100
100
100
100
100
100
100
100
Page 53 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015 Note 21: Parent Information
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
Equity
Issued capital
Accumulated Losses
Total equity
Financial performance
(Loss) for the year
Other comprehensive income
Total comprehensive income
2015
$
2014
$
200,925
8,978,497
9,179,422
470,593
10,326,711
10,797,304
(132,138)
(194,044)
–
–
(132,138)
(194,044)
9,047,284
10,603,260
25,092,164
22,093,289
(16,044,880)
(11,490,029)
9,047,284
10,603,260
(4,554,851)
(4,308,526)
–
–
(4,554,851)
(4,308,526)
There are no guarantees entered into by the parent entity in relation to the debts of its subsidiaries.
There are no contingent liabilities of the parent entity as at the reporting date.
There are no contractual commitments by the parent entity for the acquisition of property, plant and equipment as
at the reporting date.
Note 22: Company Details
The principal place of business of the Company is:
Inca Minerals Limited
Suite 1, 16 Nicholson Road
Subiaco, WA, 6008
Australia
Page 54 | ANNUAL REPORT 2015
Notes to the Financial Statements for the year ended 30 June 2015
Directors’ Declaration
Directors’ Declaration
The Directors of the Company declare that:
1. the financial statements and notes, as set out on pages 27 to 54, are in accordance with the Corporations Act
2001 and:
a. comply with Accounting Standards, which, as stated in accounting policy Note 1 to the financial statements,
constitutes explicit and unreserved compliance with International Financial Reporting Standards (IFRS);
b. give a true and fair view of the financial position as at 30 June 2015 and of the performance for the year ended
on that date of the consolidated entity;
2. the Directors have been given the declarations required by s295A of the Corporations Act 2001 that:
a. the financial records of the Company for the financial year have been properly maintained in accordance with
S286 of the Corporations Act 2001;
b. the financial statements and notes for the financial year comply with Accounting Standards;
c. the financial statements and notes for the financial year give a true and fair view;
3.
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.
This declaration is made in accordance with a resolution of the Board of Directors.
On behalf of the Directors:
Justin Walawski
Director
Dated at Perth this 23rd day of September 2015
Page 55 | ANNUAL REPORT 2015
Auditor’s Independence
Declaration
56
Independent Auditor’s Report
57
58
Shareholder Information
The shareholder information set out below is applicable as at 8 October 2015 unless otherwise stated.
Capital Structure
The Company currently has issued capital of 1,076,781,816 fully paid ordinary shares. The Company currently has no
other class of security or options on issue.
Voting Rights
The Company’s Constitution provides that at a meeting of shareholders and on a show of hands, each shareholder
present in person and each other person present as a proxy, attorney or representative of a shareholder has one
vote. On a poll, each shareholder present in person has one vote for each fully paid ordinary share held by the
shareholder and each person as a proxy, attorney or representative of a shareholder has one vote for each fully paid
ordinary share held by the shareholder that person represents.
Twenty Largest Shareholders
The names and details of the twenty largest quoted shareholdings are as follows:
Rank
Shareholder
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Resource Capital Fund VI
Zoric & Co Pty Ltd
Ross Brown*
Pathold No. 77 Pty Ltd
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