Annual Report
2015 C O N T E N T S
Company Directory
Chairman’s Report
Directors’ Review of Activities
Corporate Governance Statement
Directors’ Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to the Financial Statements
Directors’ Declaration
Declaration of Auditor’s Independence
Independent Auditor’s Report
Shareholder Information
Tenement Listing
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Web
www.legendmining.com.au
Email
legend@legendmining.com.au
ASX Code
LEG – ordinary shares
ACN 060 966 145
C OM PA N Y D I R E C T O R Y
A C N 0 6 0 9 6 6 1 4 5
Directors
Bankers
Share Registry
Michael William Atkins
(Chairman)
Mark William Wilson
(Managing Director)
Derek William Waterfield
(Executive Director-Technical)
Secretary
Dennis Wilkins
Registered Office
Level 1
8 Kings Park Road
WEST PERTH WA 6005
Telephone:
Facsimile:
(08) 9212 0600
(08) 9212 0611
Australian and New Zealand
Banking Group Ltd
1275 Hay Street
WEST PERTH WA 6005
Advanced Share Registry Services
150 Stirling Highway
NEDLANDS WA 6009
Telephone:
Facsimile:
(08) 9389 8033
(08) 9389 7871
Lawyers
Hilary Macdonald
Suite 23, 18 Stirling Highway
NEDLANDS, WA 6000
Auditors
Ernst & Young
11 Mounts Bay Road
PERTH WA 6000
Home Exchange
Australian Securities Exchange
2 The Esplanade
PERTH WA 6000
L E G E N D M I N I N G L IM I T E D
1
C H A I RM A N ’ S R E P O R T
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
It gives me great pleasure to report that Legend is well on the way to realising its vision of becoming
a successful Fraser Range explorer and hopefully a project developer.
As reported in the 2014 Annual Report, Legend has completed the sale of its Cameroon iron ore project, and now has
only one payment of $3million outstanding from the initial sale proceeds of $12million, which is due for payment in
December 2016. It is worth noting that this $3million is earning interest of 4%pa.
In July 2015, Legend acquired a very important package of tenements (The Rockford Project) in the Fraser Range,
from Mr Mark Creasy, who also sold the tenements to Sirius Resources Limited that put the Fraser Range onto the
world map. Legend spent many months reviewing the Rockford tenements, and following our confidential due
diligence considers them to be some of the most prospective tenements in the Fraser Range.
Since completion of the Purchase and Joint Venture Agreement in September 2015 (on similar terms and conditions
to the Sirius/Creasy agreement) Legend has commenced its exploration activities with extensive new and innovative
moving loop electromagnetic surveys over six initial areas. This resulted in the identification of seven conductors
in three separate areas. A follow up RC drilling program commenced in late February 2016 to test five of the seven
conductors. These will be the first RC drill holes in the entire 3000 km2 of the Rockford Project area and will give a
geological perspective to compliment the gravity and aeromag data sets.
Our focus is to systematically explore the entire project area.
It is also important to note that, as an active explorer for nickel-copper in the now famous Fraser Range, Legend is
also well funded. As at the date of this letter Legend had a treasury of circa $12million (being cash - $6million, shares
held for sale - $3million and Cameroon sale receivable -$3million) which will cover 3 – 4 years of exploration activity at
current rates of expenditure.
It is indeed an exciting time for Legend, and given the quality of our managerial and technical team, led by Mark
Wilson, we look forward to the next year with great anticipation. Your Board thanks you the shareholders for your
support over the last couple of years as we prosecuted this change of direction.
Michael Atkins
Chairman
4 March 2016
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2 0 1 5 A N N U A L R E P O R T
D I R E C T O R S ’ R E V I EW O F A C T I V I T I E S
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
ROCKFORD PROJECT – Fraser Range District (Nickel-Copper, Gold)
On 2 July 2015 Legend signed a Purchase and Joint Venture Agreement for a 70% JV interest
in a 2,530km2 package of tenements from the Creasy Group in the highly prospective Fraser
Range District of Western Australia, see Figure 1. The purchase was settled on 23 September
2015. Legend now controls a 2,939km2 land package (409km2 existing tenure) comprising eight
contiguous granted exploration licences located 120km northeast of the Nova-Bollinger nickel-copper
deposit. These tenements are collectively known as the Rockford Project.
Figure 1: Rockford Project Location on Regional Aeromagnetic Image
L E G E N D M I N I N G L IM I T E D
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D I R E C T O R S ’ R E V I EW O F A C T I V I T I E S
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
The Rockford Project covers a strike length
of 100km over a regional gravity high “ridge”
associated with dense mafic/ultramafic intrusive
rocks of the Fraser Zone, within the larger Albany-
Fraser Orogen. Independence Group’s Nova-
Bollinger deposit, which lies within the Fraser
Zone, is situated on a similar tenor gravity ridge to
that of the Rockford Project, see Figure 2.
As part of ongoing reviews of project opportunities
during 2015, Legend identified the prospectivity of
the Creasy JV tenements through the assessment
of regional aeromagnetic/gravity data, along with
extensive publically available datasets covering the
entire Fraser Range district.
4
Following the signing of a Confidentiality
Agreement with the Creasy Group, Legend was
then able to further assess the prospectivity
utilising the Creasy database of recently acquired
high resolution aeromagnetic and gravity data,
reconnaissance aircore drill traverse information
and comprehensive geochemical sample data.
This assessment of the geophysical data and the
presence of favourable nickel hosting lithologies in
the aircore drilling confirmed Legend’s perception
of the high prospectivity of the Rockford Project.
TRANSACTION SUMMARY
As part of the Rockford transaction, Legend
received an extensive exploration data package
from the Creasy Group including:
• Project wide high resolution aeromagnetic data
at 50m line spacing,
• Detailed gravity data over an 800m/400m x
100m grid, comprising 35,600 stations,
• Aircore drilling with multi-element analysis of
bottom-of-hole samples,
• Detailed petrological descriptions of bottom-of-
hole aircore samples,
• Project wide soil and calcrete geochemical
sampling over an 800m x 400m grid.
These high quality datasets have proven
extremely valuable (and will continue to be
so) in the identification of areas for follow up
exploration. The selection of areas initially
involved the interpretation of these individual
datasets, then their full integration to assist
in the ranking and prioritisation process. The
selection has comprised:
• Aeromagnetic data interpretation to provide a
regional structural framework,
• Assessment of geological information from
aircore drilling,
• Petrological descriptions of bottom-of-hole
aircore samples to identify favourable nickel
host rocks,
• 3D aeromagnetic inversion modelling to assist
in identifying intrusive bodies,
• 3D gravity inversion modelling to assist in
identifying intrusive bodies,
• Assessment of the surface geochemical data.
2015 ANNUAL REPORT D I R E C T O R S ’ R E V I EW O F A C T I V I T I E S
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
The Key Terms of the Tenement Sale and Exploration Joint Venture Agreement are as follows.
• Legend to sole fund exploration and free carry
Creasy Group’s 30% interest through to the
signing of Mining Venture Agreements.
• Legend to acquire 70% interest in tenements
(E28/2188-2192, E28/1718 & E28/1727) for:
- $2.5M cash payment,
- 71.5M Legend shares at deemed price of
$0.007 ($500,500),
- 150M five year Legend options exercisable
at $0.04.
FIRST PROGRAMMES
An extensive moving loop electromagnetic (“MLEM”) survey commenced on 24 September 2015
focussing on six targets, namely Areas A Central, B, C, D, E & F, see Figure 2. This new and
innovative MLEM surveying comprised 82 traverses, 1,978 stations and covered 189.9 line km.
Figure 2: Rockford Project Target Areas on Regional Gravity
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LEGEND MINING LIMITED
D I R E C T O R S ’ R E V I EW O F A C T I V I T I E S
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
The results from the MLEM survey were highly
encouraging with the identification of five
conductors at Area D and single conductors at both
Area E and Area F. Detailed geophysical modelling
and interpretation of these conductors resulted in
five conductors being selected for RC drill testing,
four at Area D and one at Area F. The drilling
programme to test these conductors is scheduled
for late February 2016. Area D is considered a high
priority target and described in more detail below.
Area D has a discrete 1.5km x 1km gravity high (4mgal)
with an associated magnetic signature suggestive
of a structural fold closure or intrusive feature. The
MLEM survey identified five highly to moderately
conductive bedrock conductors at relatively shallow
depth. Figure 3 shows the location of the five
conductors with respect to the discrete gravity high
and the four proposed RC drillholes.
Conductors 1, 2 and 3 are characterised by very high
conductances (~9,000-17,000S), large areal extent
and represent conductive bedrock sources situated
on the SE margin of the discrete gravity high and
appear related to local aeromagnetic units, see
Figure 3. These high conductive responses are
consistent with the signature of well-developed
sulphidic/graphitic bodies. Conductor 4 represents
a moderate strength, localised (~300x200m)
conductor positioned within the central zone of
the gravity high.
The high conductance of Conductors 1-3 and the
location of Conductor 4 with respect to the gravity
feature make these conductors quality RC drill
targets.
Figure 3: Rockford Project Area D Conductor Plates on Residual Gravity Image with Proposed Drillholes
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2015 ANNUAL REPORT D I R E C T O R S ’ R E V I EW O F A C T I V I T I E S
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
CORPORATE
Independence Group NL – Sirius Resources NL; Acquisition/Demerger
Court approval for the Schemes of Arrangement regarding the acquisition of Sirius by Independence,
and the demerger of Sirius’ Polar Bear and Scandinavian assets into new company S2R was given on 9
September 2015. As a result of these transactions, Legend’s previous holding of 1.5M Sirius shares is
now as follows:
• 990K IGO shares after conversion of 1.5M SIR shares (0.66 IGO shares per SIR share)
• Received $780K cash ($0.52 per SIR share)
• Received $24,750 IGO dividend on 15 October 2015 ($0.025 per IGO share)
• Received 750K shares in new company S2R (1 S2R share for 2 SIR shares)
Cameroon Project Sale
A rescheduled debt payment regarding the sale of Legend’s Cameroon Iron Ore Project to Jindal
Mining and Exploration Limited was announced to the ASX on 28 July 2015. A summary of the total
A$17.5M consideration under the sale agreement is given below:
• A $6M received at completion 5 August 2014
• A $3M received 15 September 2015
• A $3M payable on or before 15 December 2016, with interest of 4% payable quarterly in arrears on
this $3M amount from 15 September 2015. ($30,000 received 16 December 2016)
• A$5.5M to be paid upon the first commercial shipment of iron ore from the Project.
The information in this report that relates to Exploration Results is based on information compiled by Mr Derek Waterfield, a Member of
the Australian Institute of Geoscientists and a full time employee of Legend Mining Limited. Mr Waterfield has sufficient experience that
is relevant to the styles of mineralisation and types of deposit under consideration, and to the activity being 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” (JORC Code). Mr Waterfield consents to the inclusion in the report of the matters based on his information in the form and context
in which it appears
77
LEGEND MINING LIMITED CORPORATE GOVERNANCE STATEMENT
Legend Mining Limited and the Board are committed to achieving and demonstrating the highest
standards of corporate governance. Legend Mining Limited has reviewed its corporate governance
practices against the Corporate Governance Principles and Recommendations (3rd edition) published by
the ASX Corporate Governance Council.
The 2015 Corporate Governance Statement was approved by the Board on 1 March 2016 and is current
as at 4 March 2016. A description of the Group’s current corporate governance practices is set out in the
Group’s Corporate Governance Statement which can be viewed at www.legendmining.com.au
8
2015 ANNUAL REPORT
DIRECTORS’ REPORT
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
The Directors submit their report for the year ended 31 December 2015.
1.
DIRECTORS
The names and details of the Company’s directors in office during the financial year and until the date of this report are as
below. Directors were in office for this entire period unless otherwise stated.
Michael Atkins (Chairman, Non-Executive Director)
Mark Wilson (Managing Director)
Derek Waterfield (Executive Director - Technical)
2.
INFORMATION ON DIRECTORS AND COMPANY SECRETARY
Michael Atkins is a Fellow of the Australian Institute of Company Directors.
Mr Atkins was a founding partner of a national Chartered Accounting practice from 1979 to 1987 and was a Fellow of the
Institute of Chartered Accountants in Australia between 1984 and 2012.
Between 1987 and 1998 he was involved in the executive management of several publicly listed resource companies with
operations in Australia, USA, South East Asia and Africa. From 1990 to 1995 he was managing director and later a non-executive
director of Claremont Petroleum NL and Beach Petroleum NL during their reconstruction, and then remained as a non-
executive director until 1995. He was also founding executive chairman of Gallery Gold Ltd until 1998, and remained a non-
executive director until 2000.
Since February 2011 Mr Atkins has been a Director – Corporate Finance at Patersons Securities Limited where he advises on
the formation of, and capital raising for, emerging companies in the Australia resources sector.
He is currently non-executive chairman of Australian listed company Azumah Resources Ltd and non-executive director of SRG
Limited.
During the past three years, Mr Atkins has also served as a director of Westgold Resources Ltd (resigned October 2012) and
Enterprise Uranium Limited (resigned March 2014), both publicly listed companies
Mark Wilson is a Member of the Institution of Engineers, Australia and a Chartered Professional Engineer with an Associateship
in Civil Engineering from Curtin University in Western Australia. He has an extensive business background, mainly in corporate
management and project engineering. This has included site management of remote construction projects, ten years of
commercial construction as a founding proprietor of a Perth based company and the past twenty years in executive, non-
executive, consulting and owner roles in resource focused companies. Mr Wilson is presently a non-executive director of
Australian listed company Tanga Resources Limited (appointed 20 June 2014). Mr Wilson has not held any former public
company directorships in the last 3 years.
Derek Waterfield is a Member of the Australian Institute of Geoscientists and a graduate of the University of Queensland (B.Sc.
Hons). He has over 25 years’ experience in gold, base metals, iron ore, nickel and uranium exploration throughout Australia
and Cameroon.
He started his career with CRA Exploration Pty Ltd and has held senior exploration leadership positions with Normandy Mining
and Newmont Australia, and led the team that discovered the Moolart Well gold deposit in the Duketon Belt 350km north of
Kalgoorlie. He was Exploration Manager at Legend Mining for five years managing Legend’s WA and Cameroon projects. More
recently he has been Exploration Manager for Enterprise Metals Ltd, responsible for gold, iron ore, uranium and base metal
exploration in WA. Mr Waterfield has not held any former public company directorships in the last 3 years.
Dennis Wilkins (Company Secretary) is the founder and principal of DWCorporate Pty Ltd a leading privately held corporate
advisory firm servicing the natural resources industry.
Since 1994 he has been a director of, and involved in the executive management of, several publicly listed resource companies
with operations in Australia, PNG, Scandinavia and Africa. From 1995 to 2001 he was the Finance Director of Lynas Corporation
Ltd during the period when the Mt Weld Rare Earths project was acquired by the group. He was also founding director and
advisor to Atlas Iron Limited at the time of Atlas’ initial public offering in 2006.
Since July 2001 Mr Wilkins has been running DWCorporate Pty Ltd where he advises on the formation of, and capital raising
for, emerging companies in the Australian resources sector.
He is currently a non-executive director of Australian listed company Key Petroleum Ltd.
9
LEGEND MINING LIMITED
DIRECTORS’ REPORT
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
3.
EARNINGS PER SHARE
Basic loss per share:
Diluted loss per share:
4.
DIVIDENDS
0.066 cents
0.066 cents
No dividend has been paid or recommended during the financial year.
5.
CORPORATE INFORMATION
Corporate Structure
Legend Mining Limited is a company limited by shares that is incorporated and domiciled in Australia. Legend Mining Limited
has prepared a consolidated financial report incorporating the entities that it controlled during the financial year, which are
outlined in the following illustration of the group’s corporate structure.
Legend Mining Limited
100%
100%
Gibson Metals Pty Ltd
Legend Cameroon Pty Ltd
Nature of Operations and Principal Activities
The principal activities during the year of the entities within the consolidated entity were:
exploration for nickel and copper, deposits in Australia.
(cid:31)
Employees
The consolidated entity had a staff of 4 employees at 31 December 2015 (2014: 4 employees).
6. OPERATING AND FINANCIAL REVIEW
Results of Operations
The net loss after income tax of the consolidated entity for the year was $1,311,284 (2014: $2,618,326).
Review of Operations
The Directors’ Review of Activities for the year ended 31 December 2015 is contained on pages 3 to 7 of the Annual Report.
Summarised Operating Results
Impairment of Deferred Exploration Costs: There was nil impairment of deferred expenditure expensed to the income
statement during the year (2014: $1,105,212).
Deferred Exploration Costs: Total acquisition costs and deferred expenditure on tenements capitalised during the year
amounted to $5,092,136 (2014: $326,339).
1 0
2015 ANNUAL REPORT
DIRECTORS’ REPORT
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
7.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
During 2015 Legend has:
(i) Entered into a Tenement Sale and Exploration Joint Venture Agreement (“Creasy Agreement”) with the Creasy Group in
the Fraser Range district of Western Australia. Legend acquired a 70% interest in tenements (E28/2188-2192, E28/1718
and E28/1727) for the following consideration:
(cid:31)
(cid:31)
(cid:31)
$2.5 million cash payment;
71.5 million Legend shares, for accounting purposes valued at a deemed price of $0.011 ($786,500); and
150 million five year Legend options exercisable at $0.04, for accounting purposes valued at a deemed price of $0.0039
($585,000).
Legend is to sole fund exploration and free carry Creasy Group’s 30% interest through to the signing of Mining Venture
Agreements.
(ii) Rescheduled the payment terms under the Jindal Agreement with the key amendments as follows:
(cid:31)
(cid:31)
(cid:31)
The $6 million payment originally scheduled for 5 August 2015 is now to be paid in two tranches, $3 million on 15
September 2015 (received) and a further $3 million on or before 15 December 2016;
Interest of 4% payable quarterly in arrears will be payable on the second $3 million; and
The $5.5 million payable under the Jindal Agreement upon the grant of a Mining Convention at the Cameroon Iron
Ore Project (“Project”) is now rescheduled to be paid upon the first commercial shipment of iron ore from the Project.
8.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The consolidated entity’s operations are subject to various environmental regulations under both Commonwealth and State
legislation in Australia. The Directors have complied with these regulations and are not aware of any breaches of the legislation
during the financial year which are material in nature.
9.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Likely developments in the operations of the consolidated entity, and expected results of those operations in subsequent
financial years have been discussed, where appropriate, in the Chairman’s Report and Review of Activities.
10. SHARE OPTIONS
Unissued shares
As at the date of this report, there were 150,000,000 unissued ordinary shares under options. Refer to note 18 for further
details of the options outstanding.
Option holders do not have any right, by virtue of the option, to participate in any share issue of the company or any related
body corporate.
Shares issued as a result of the exercise of options
There were no shares issued as a result of the exercise of options during the financial year.
11. SIGNIFICANT EVENTS AFTER THE BALANCE DATE
No matter or circumstance has arisen since the end of the financial year which has significantly affected, or may significantly
affect the operations of the Group, the result of those operations, or the state of affairs of the Group in subsequent financial
years.
12.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has not, during or since the financial year, in respect of any person who is or has been an officer of the Company
or a related body corporate:
(i)
(ii)
indemnified or made any relevant agreement for indemnifying against a liability incurred as an officer, including costs
and expenses in successfully defending legal proceedings; or
paid or agreed to pay a premium in respect of a contract insuring against a liability incurred as an officer for the costs
or expenses to defend legal proceedings.
13.
INDEMNIFICATION OF AUDITORS
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young Australia, as part of the terms
of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment
has been made to indemnify Ernst & Young during or since the financial year.
1 1
LEGEND MINING LIMITED
DIRECTORS’ REPORT
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
14. REMUNERATION REPORT (AUDITED)
The compensation arrangements in place for key management personnel of Legend are set out below:
Details of key management personnel
Directors
M Atkins
M Wilson
D Waterfield
Chairman (non-executive)
Managing Director
Executive Director - Technical
Compensation Philosophy
The performance of the Company depends upon the quality of its directors and executives. To prosper, the Company must
attract, motivate and retain highly skilled directors and executives.
The Company embodies the following principle in its compensation framework:
Provide competitive rewards to attract high-calibre executives.
(cid:31)
Group Performance
The Group’s financial performance for the last five years has been as follows:
Revenue
Net profit/(loss) after tax
Basic earnings/(loss) per share (cents
per share)
Diluted earnings/(loss) per share
(cents per share)
Net assets
Share price (at balance date)
December
2015
$575,162
($1,311,284)
(0.066)
December
2014
$371,332
($2,618,326)
(0.128)
December
2013
$280,734
($38,412,494)
(1.769)
December
2012
$602,416
$2,215,446
0.112
December
2011
$780,553
($4,250,169)
(0.241)
(0.066)
(0.128)
(1.769)
0.112
(0.214)
$17,127,502
$0.008
$17,067,286
$0.007
$22,354,576
$0.008
$51,900,776
$0.02
$49,575,238
$0.03
As the Group is currently in exploration and evaluation phases, historical earnings are not yet an accurate reflection of Group
performance and cannot be used as a long term incentive measure. Consideration of the Group’s earnings will be more relevant
as the Group matures.
Remuneration Committee
Due to the size of Legend, remuneration is considered by the full Board. The Board reviews remuneration packages and policies
applicable to the directors and senior executives. Remuneration levels are competitively set to attract the most qualified and
experienced directors and senior executives.
Compensation Structure
In accordance with best practice corporate governance, the structure of non-executive director and senior manager
remuneration is separate and distinct.
Objective of Non-Executive Director Compensation
The Board seeks to set aggregate compensation at a level that provides the company with the ability to attract and retain
directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
Structure of Non-Executive Director Compensation
The Constitution and the ASX Listing Rules specify that the aggregate compensation of non-executive directors shall be
determined from time to time by a general meeting. An amount not exceeding the amount determined is then divided between
the directors as agreed. The latest determination was at the Annual General Meeting held on 16 May 2012 when shareholders
approved the aggregate remuneration of $300,000 per year.
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2015 ANNUAL REPORT
DIRECTORS’ REPORT
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
14.
REMUNERATION REPORT (CONTD)
The amount of aggregate compensation sought to be approved by shareholders and the manner in which it is apportioned
amongst directors is reviewed annually. The Board considers the fees paid to non-executive directors of comparable companies
when undertaking the annual review process.
Objective of Senior Management and Executive Director Compensation
The company aims to reward executives with a level and mix of compensation commensurate with their position and
responsibilities within the company and so as to:
reward executives for company and individual performance against targets set by reference to appropriate benchmarks;
align the interests of executives with those of shareholders; and
(cid:31)
(cid:31)
(cid:31)
Structure of Senior Management and Executive Director Compensation
ensure total compensation is competitive by market standards.
In determining the level and make-up of executive compensation, the Board may engage external consultants to provide
independent advice. No external advice was obtained during the 2015 year.
It is the Board’s policy that an employment contract is entered into with key executives.
Compensation consists of a fixed compensation element and the issue of options from time to time at the directors’ discretion
under the Employee Share Option Plan. Any issue of options to directors under the Employee Share Option Plan requires prior
shareholder approval.
Fixed Compensation
Fixed compensation is reviewed annually by the Board. The process consists of a review of company and individual performance,
relevant comparative compensation in the market and internally and, where appropriate, external advice on policies and
practices. No external advice was obtained during the 2015 year.
Structure
Senior managers are given the opportunity to receive their fixed (primary) compensation in a variety of forms including cash
and fringe benefits. It is intended that the manner of payment chosen will be optimal for the recipient without creating undue
cost for the Company.
Employment Contracts
The Managing Director, Mr Mark Wilson, is employed under contract. The current contract commenced on 1 July 2011 and is
effective until terminated in accordance with the contract. The significant terms of the contract are:
(cid:31) Mr Wilson receives remuneration of $320,000 per annum exclusive of superannuation;
(cid:31) Mr Wilson may resign from his position and thus terminate his contract by giving one month written notice;
(cid:31)
The company may terminate Mr Wilson’s employment contract by providing six months’ written notice if the position has
become redundant, or three months’ written notice in all other circumstances; and
The Company may terminate Mr Wilson’s contract at any time without notice if serious misconduct has occurred.
(cid:31)
Mr Michael Atkins, is employed under contract. The current contract commenced on 1 July 2012 and is effective until
terminated in accordance with the contract. The significant terms of the contract are:
(cid:31) Mr Atkins receives remuneration of $80,000 per annum exclusive of superannuation;
(cid:31) Mr Atkins’ agreement provides for engagement of consultancy services outside of the scope of the ordinary duties of a
non-executive chairman. In addition to the director’s fees above, Mr Atkins is paid $2,000 per day (inclusive of
superannuation) for the provision of these consultancy services.
(cid:31) Mr Atkins’ appointment is contingent upon satisfactory performance and successful re-election by shareholders of the
Company;
(cid:31) Mr Atkins may resign from his position and thus terminate his contract by giving written notice; and
(cid:31)
The Company may terminate Mr Atkins’ contract by way of resolution of the Company.
1 3
LEGEND MINING LIMITED
DIRECTORS’ REPORT
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
14.
REMUNERATION REPORT (CONTD)
Mr Derek Waterfield, is employed under contract. The current contract commenced on 1 November 2012 and is effective
until terminated in accordance with the contract. The significant terms of the contract are:
(cid:31) Mr Waterfield receives remuneration of $220,000 per annum exclusive of superannuation;
(cid:31) Mr Waterfield may resign from his position and thus terminate his contract by giving one month written notice;
(cid:31)
The company may terminate Mr Waterfield’s employment contract by providing three months’ written notice if the
position has become redundant, or one months’ written notice in all other circumstances; and
The Company may terminate Mr Waterfield’s contract at any time without notice if serious misconduct has occurred.
(cid:31)
Employee Share Option Plan
The Board has in place an Employee Share Option Plan allowing share options to be issued to eligible employees in order to
provide them with an incentive to provide growth and value to all shareholders.
At a General Meeting on 4 December 2009 shareholders approved the implementation of Employee Share Option Plan No 3.
The new plan differs from the previous plans in that there is no 12 month vesting period on any new options received under
plan No 3. There is a significant change in the context of recent proposals by the Federal Government to change the tax
treatment of options issued under incentive schemes. Removal of the vesting period requirement allows the Board maximum
flexibility to make offers of options on the terms of the plans appropriate at the time, having regard for the tax environment
which the proposed participants find themselves in when an offer of options is received from the company.
Compensation of Key Management Personnel for Year Ended 31 December 2015
Name
Year
Short term
Salary and
Fees(1)
Director
M Atkins
M Wilson
D Waterfield
Total
2015
2014
2015
2014
2015
2014
2015
2014
$
80,000
80,000
340,102
349,949
228,462
222,538
648,564
652,487
Post-
Employment
Super-
annuation
$
Share based
payments
options
Total
$
$
% of
compen-
sation
granted as
options
% of
performance
related
remuneration
7,600
7,500
35,077
30,000
20,900
20,625
63,577
58,125
-
-
-
-
-
-
-
-
87,600
87,500
375,179
379,949
249,362
243,163
712,141
710,612
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1) Short term salary and fees includes net movements in leave provisions.
Option holdings of Key Management Personnel(1)
Options held in Legend Mining Limited (number) during the year ended 31 December 2015
Name
Balance at
beginning
of year
1 Jan 2015
Granted as
Remuneration
Exercised
during
the year
Net Change
Other
Balance at
end
of year
31 Dec 2015
Not Vested
& Not
Exercisable
Vested &
Exercisable
Directors
M Atkins
M Wilson
D Waterfield
Total
5,000,000
55,000,000
-
60,000,000
-
-
-
-
-
-
-
-
(2) (5,000,000)
(2) (55,000,000)
-
(60,000,000)
-
-
-
-
-
-
-
-
-
-
-
-
(1) Includes options held directly, indirectly and beneficially by KMP.
(2) Options expired unexercised.
1 4
2015 ANNUAL REPORT
DIRECTORS’ REPORT
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
14.
REMUNERATION REPORT (CONTD)
Shareholdings of Key Management Personnel(1)
Shares held in Legend Mining Limited (number) during the year ended 31 December 2015
On exercise
of options
Granted as
remuneration
Balance
1 Jan 15
Name
Net change
other
Balance
31 Dec 15
Directors
M Atkins
(Windamurah P/L), (Alkali Exploration P/L)
M Wilson
(Chester Nominees WA P/L)
D Waterfield
Total
4,558,334
70,000,000
1,000,000
75,558,334
Includes options held directly, indirectly and beneficially by KMP.
(1)
(2) On-market purchases made during the year.
END OF REMUNERATION REPORT
15. DIRECTORS’ MEETINGS
-
-
-
-
-
-
-
-
-
4,558,334
(2)10,000,000
80,000,000
-
10,000,000
1,000,000
85,558,334
The number of Meetings of Directors held during the year and the number of Meetings attended by each Director was as
follows:
Name
No. of Meetings
Attended
No. of Meetings
Held Whilst A Director
Attended by:
Michael Atkins
Mark Wilson
Derek Waterfield
16. DIRECTORS’ INTERESTS
8
8
8
8
8
8
The relevant interest of each director in the shares and options issued by the company in accordance with the Corporations
Act 2001, at the date of signing this report is as follows:
Name
Ordinary shares
M Atkins
(Windamurah P/L), (Alkali Exploration P/L)
M Wilson
(Chester Nominees WA P/L)
D Waterfield
4,558,334
80,000,000
1,000,000
17. AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
Non-audit services
Options over
ordinary shares
-
-
-
There were no non-audit services provided by the Company’s auditor, Ernst & Young during the 2015 financial year.
We have received the Declaration of Auditor Independence from Ernst & Young, the Company’s Auditor. This is available for
review on page 50 and forms part of this report.
SIGNED in accordance with a Resolution of the Directors on behalf of the Board
__________________________
Mark Wilson
Managing Director
Dated this 4th day of March 2016
1 5
LEGEND MINING LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
Note
4(a)
4(b)
4(c)
4(d)
4(e)
4(f)
4(g)
6
Continuing operations
Finance revenue
Other income
Employee benefits expense
Impairment of deferred exploration costs
Loss on remeasurement of receivables
Other expenses
Corporate and administration expenses
Net loss before income tax
Income tax benefit
Net loss for the year
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Exchange differences realised on disposal of foreign operations
Items that will not be reclassified to profit or loss
Non-controlling interest in exchange differences on translation of
foreign operations
Other comprehensive loss for the year, net of tax
2015
$
2014
$
575,162
115,659
(622,393)
-
(201,590)
(565,174)
(612,948)
(1,311,284)
-
(1,311,284)
-
-
-
-
371,332
874,340
(888,997)
(1,105,212)
-
(1,080,108)
(816,039)
(2,644,684)
26,358
(2,618,326)
(920,688)
(2,576,839)
(102,395)
(3,599,922)
(6,218,248)
Total comprehensive loss for the year
(1,311,284)
Net loss attributable to:
Members of Legend Mining Limited
Non-controlling interest
Total comprehensive loss attributable to:
Members of Legend Mining Limited
Non-controlling interest
EARNINGS PER SHARE (cents per share)
Basic loss per share
Diluted loss per share
(1,311,284)
-
(1,311,284)
(2,507,805)
(110,521)
(2,618,326)
(1,311,284)
-
(1,311,284)
(6,005,332)
(212,916)
(6,218,248)
5
5
(0.066)
(0.066)
(0.128)
(0.128)
The accompanying notes form part of these financial statements
1 6
2015 ANNUAL REPORT
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
A s a t 3 1 D e c e m b e r 2 0 1 5
Notes
2015
$
2014
$
ASSETS
Current Assets
Cash and cash equivalents
Trade & other receivables
Other financial assets
Total Current Assets
Non-current Assets
Other financial assets
Property, plant & equipment
Deferred exploration costs
Total Non-current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade & other payables
Provisions
Total Current Liabilities
Non-current Liabilities
Provisions
Total Non-current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Equity attributable to equity holders of the parent
Contributed Equity
Reserves
Accumulated losses
TOTAL EQUITY
8
9
10
10
12
13
14
15
15
16
17
6,251,185
2,926,177
2,760,600
11,937,962
50,000
44,486
5,485,454
5,579,940
17,517,902
6,937,339
5,797,098
4,161,900
16,896,337
50,000
47,920
393,318
491,238
17,387,575
225,665
107,613
333,278
140,105
130,229
270,334
57,122
57,122
390,400
17,127,502
49,955
49,955
320,289
17,067,286
60,588,031
23,002,578
(66,463,107)
17,127,502
59,801,531
22,417,578
(65,151,823)
17,067,286
The accompanying notes form part of these financial statements
1 7
LEGEND MINING LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
CASH FLOWS FROM OPERATING ACTIVITIES
Note
Receipts from customers
Payments to suppliers and employees
Payments for exploration expenditure not capitalised
Interest received
Income taxes refunded
Payments for cancellation of performance options
2015
$
90,909
2014
$
-
(1,244,765)
(1,773,675)
(221,719)
225,266
-
-
-
168,492
22,003
(1,000,000)
(2,583,180)
Net cash flows used in operating activities
21(ii)
(1,150,309)
CASH FLOWS FROM INVESTING ACTIVITIES
Receipt of Jindal receivable
Proceeds on sale of subsidiaries
Purchase of property, plant & equipment
Payment for the purchase of investments
Proceeds from the sale of investments
Payments for deferred exploration costs
Dividends received
Net cash flows from investing activities
9(a)
11
12
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of year
Cash and cash equivalents at end of year
21(i)
The accompanying notes form part of these financial statements
3,000,000
-
-
5,775,000
(10,300)
(1,979,796)
3,051,377
(3,621,876)
24,750
464,155
(686,154)
6,937,339
6,251,185
(10,316)
(67,258)
137,079
(966,121)
-
4,868,384
2,285,204
4,652,135
6,937,339
1 8
2015 ANNUAL REPORT
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
Contributed
Equity
$
Foreign
Currency
Translation
Reserve
$
Share
Option
Premium
Reserve
$
Accumulated
Losses
Non-
controlling
interests
Total Equity
$
$
$
At 1 January 2014
59,818,890
3,497,527
22,417,578
(62,644,018)
(735,401)
22,354,576
-
-
-
-
(3,497,527)
(3,497,527)
Loss for the year
Other comprehensive
income
Total comprehensive
expense for the year
Cost of issue of share
capital
Non-controlling interests
eliminated on disposal of
subsidiaries
At 31 December 2014
(17,359)
-
59,801,531
At 1 January 2015
59,801,531
Loss for the year
Total comprehensive
expense for the year
-
-
Shares issued during the
year
Share-based payments
At 31 December 2015
786,500
-
60,588,031
-
-
-
-
(2,507,805)
(110,521)
(2,618,326)
-
(102,395)
(3,599,922)
(2,507,805)
(212,916)
(6,218,248)
-
-
(17,359)
-
22,417,578
-
(65,151,823)
948,317
-
948,317
17,067,286
22,417,578
(65,151,823)
-
-
(1,311,284)
(1,311,284)
-
585,000
23,002,578
-
-
(66,463,107)
-
-
-
-
-
-
17,067,286
(1,311,284)
(1,311,284)
786,500
585,000
17,127,502
-
-
-
-
-
-
-
-
-
The accompanying notes form part of these financial statements
1 9
LEGEND MINING LIMITED
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 1:
CORPORATE INFORMATION
The consolidated financial statements of Legend Mining Limited and its subsidiaries (collectively, the Group) for the year ended
31 December 2015 were authorised for issue in accordance with a resolution of the Directors on 4 March 2016.
Legend Mining Limited (the Company or the parent) is a for profit company limited by shares incorporated in Australia whose
shares are publicly traded on the Australian Securities Exchange.
The nature of the operations and principal activities of the Group are described in note 3.
NOTE 2:
SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the
Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting
Standards Board. The financial report has also been prepared on a historical cost basis, except for certain financial assets carried
at fair value and the disposal group classified as held for sale which was measured at the lower of cost and fair value less costs
to sell.
The financial report is presented in Australian dollars and all values are expressed as whole dollars.
The consolidated financial statements have been prepared on a going concern basis which assumes the continuity of normal
business activity and the realisation of assets and settlement of liabilities in the ordinary course of business.
Compliance with IFRS
The financial report also complies with International Financial Reporting Standards (‘IFRS’) as issued by the International
Accounting Standards Board.
Changes in accounting policy, disclosures, standards and interpretations
The accounting policies adopted are consistent with those of the previous financial year except as follows:
(i)
New and amended standards and interpretations
The Group has adopted all new and amended Australian Accounting Standards and AASB Interpretations effective as of 1 January
2015, including:
(cid:31) AASB 2014-1 Amendments to Australian Accounting Standards (including Part A: Annual Improvements 2010-2012 and
2011-2013 Cycles and Part B: Defined Benefit Plans: Employee Contributions – Amendments to AASB 19)
The adoption of these amendments has resulted in minor changes to disclosures in the Group’s financial statements. Other than
that, the adoption of these amendments did not have any impact on the current period or any prior period and is not likely to
affect future periods.
(ii)
Accounting Standards and Interpretations issued but not yet effective
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective and
have not been adopted by the Group for the annual reporting period ending 31 December 2015 are outlined below:
AASB 9 Financial Instruments (applicable for annual reporting periods commencing on or after 1 January 2018).
AASB 9 (December 2014) is a new Principal standard which replaces AASB 139. This new Principal version supersedes AASB 9
issued in December 2009 (as amended) and AASB 9 (issued in December 2010) and includes a model for classification and
measurement, a single, forward-looking ‘expected loss’ impairment model and a substantially-reformed approach to hedge
accounting.
AASB 9 is effective for annual reporting periods beginning on or after 1 January 2018. However, the Standard is available for
early adoption. The own credit changes can be early applied in isolation without otherwise changing the accounting for financial
instruments.
The final version of AASB 9 introduces a new expected-loss impairment model that will require more timely recognition of
expected credit losses. Specifically, the new Standard requires entities to account for expected credit losses from when financial
instruments are first recognised and to recognise full lifetime expected losses on a more timely basis.
Amendments to AASB 9 (December 2009 & 2010 editions)(AASB 2013-9) issued in December 2013 included the new hedge
accounting requirements, including changes to hedge effectiveness testing, treatment of hedging costs, risk components that
can be hedged and disclosures.
AASB 9 includes requirements for a simpler approach for classification and measurement of financial assets compared with the
requirements of AASB 139.
2 0
2015 ANNUAL REPORT
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
The main changes are described below.
(a)
(b)
(c)
Financial assets that are debt instruments will be classified based on (1) the objective of the entity’s business model for
managing the financial assets; (2) the characteristics of the contractual cash flows.
Allows an irrevocable election on initial recognition to present gains and losses on investments in equity instruments
that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return
on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument.
Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing so
eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets
or liabilities, or recognising the gains and losses on them, on different bases.
(d)
Where the fair value option is used for financial liabilities the change in fair value is to be accounted for as follows:
(cid:31)
(cid:31)
The change attributable to changes in credit risk are presented in other comprehensive income (OCI)
The remaining change is presented in profit or loss
AASB 9 also removes the volatility in profit or loss that was caused by changes in the credit risk of liabilities elected to be measured
at fair value. This change in accounting means that gains caused by the deterioration of an entity’s own credit risk on such liabilities
are no longer recognised in profit or loss.
Consequential amendments were also made to other standards as a result of AASB 9, introduced by AASB 2009-11 and superseded
by AASB 2010-7, AASB 2010-10 and AASB 2014-1 – Part E.
AASB 2014-7 incorporates the consequential amendments arising from the issuance of AASB 9 in December 2014.
AASB 2014-8 limits the application of the existing versions of AASB 9 (AASB 9 (December 2009) and AASB 9 (December 2010))
from 1 February 2015 and applies to annual reporting periods beginning on or after 1 January 2015.
The effect of this amendment on the Group’s financial statements has yet to be determined.
AASB 2014-3 Amendments to Australian Accounting Standards – Accounting for Acquisitions of Interests in Joint Operations
[AASB 1 & AASB 11] (applicable for annual reporting periods commencing on or after 1 January 2016).
AASB 2014-3 amends AASB 11 to provide guidance on the accounting for acquisitions of interests in joint operations in which
the activity constitutes a business. The amendments require:
a)
The acquirer of an interest in a joint operation in which the activity constitutes a business, as defined in AASB Business
Combinations, to apply all of the principles on business combinations accounting in AASB 3 and other Australian Accounting
Standards except for those principles that conflict with the guidance in AASB 11; and
b)
The acquirer to disclose the information required by AASB 3 and other Australian Accounting Standards for business
combinations.
The Standard also makes editorial correction to AASB 11. There will be no impact on the Group’s financial position or
performance.
AASB 2014-4 Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to AASB 116 and AASB 138)
(applicable for annual reporting periods commencing on or after 1 January 2016).
AASB 116 and AASB 138 both establish the principle for the basis of depreciation and amortisation as being the expected pattern
of consumption of the future economic benefits of an asset. The IASB has clarified that the use of revenue-based methods to
calculate the depreciation of an asset is not appropriate because revenue generated by an activity that includes the use of an
asset generally reflects factors other than the consumption of the economic benefits embodied in the asset. The amendment
also clarified that revenue is generally presumed to be an inappropriate basis for measuring the consumption of the economic
benefits embodied in an intangible asset. This presumption, however, can be rebutted in certain limited circumstances. There
will be no impact on the Group’s financial position or performance.
2 1
LEGEND MINING LIMITED
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
AASB 15 Revenue from Contracts with Customers (applicable for annual reporting periods commencing on or after 1 January
2017).
In May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers, which replaces IAS 11 Construction Contracts, IAS
18 Revenue and related interpretations (IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of
Real Estate, IFRIC 18 Transfers of Assets from Customers and SIC-31 Revenue-Barter Transactions Involving Advertising Services).
The core principle of IFRS 15 is that an entity recognises 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 those goods
or services. An entity recognises revenue in accordance with that core principle by applying the following steps:
a)
b)
c)
d)
e)
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation
Early application of this standard is permitted. AASB 2014-5 incorporates the consequential amendments to a number of
Australian Accounting Standards (including Interpretations) arising from the issuance of AASB 15.
There will be no impact on the Group’s financial position or performance.
AASB 2014-9 Amendments to Australian Accounting Standards – Equity Method in Separate Financial Statements (applicable
for annual reporting periods commencing on or after 1 January 2016).
AASB 2014-9 amends AASB 127 Separate Financial Statements, and consequentially amends AASB 1 First-time Adoption of
Australian Accounting Standards and AASB 128 Investments in Associates and Joint Ventures, to allow entities to use the equity
method of accounting for investments in subsidiaries, joint ventures and associates in their separate financial statements.
AASB 2014-9 also makes editorial corrections to AASB 127. Early adoption is permitted.
There will be no impact on the Group’s financial position or performance.
AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture (applicable for annual reporting periods commencing on or after 1 January 2016).
AASB 2014-10 amends AASB 10 Consolidated Financial Statements and AASB 128 to address an inconsistency between the
requirements in AASB 10 ad those in AASB 128 (August 2011) in dealing with the sale or contribution of assets between an
investor and its associate or joint venture. The amendments require:
a) A full gain or loss to be recognised when a transaction involves a business (whether it is housed in a subsidiary or not); and
b) A partial gain or loss to be recognised when a transaction involves assets that do not constitute a business, even if these
assets are housed in a subsidiary.
AASB 2014-10 also makes editorial correction to AASB 10. Early adoption is permitted.
There will be no impact on the Group’s financial position or performance.
AASB 2015-1 Amendments to Australian Accounting Standards Annual Improvements to IFRSs 2012-2014 Cycle (applicable for
annual reporting periods commencing on or after 1 January 2016).
Amendments to clarify minor points in various accounting standards, including AASB 5, AASB 7, AASB 119 and AASB 134. There
will be no impact on the Group’s financial position or performance.
AASB 2015-2 Disclosure Initiative – Amendments to AASB 101 (applicable for annual reporting periods commencing on or
after 1 January 2016).
The amendments are designed to further encourage companies to apply professional judgement in determining what
information to disclose in the financial statements. For example, the amendments make clear that materiality applies to the
whole of the financial statements and that the inclusion of immaterial information can inhibit the usefulness of financial
disclosures. The amendments also clarify that companies should use professional judgement in determining where and in what
order information is presented in the financial disclosures. The effect of this amendment on the Group’s financial statements
has yet to be determined.
2 2
2015 ANNUAL REPORT
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
AASB 2015-3 Amendments to Australian Accounting Standards arising from the Withdrawal of AASB 1031 Materiality
(applicable for annual reporting periods commencing on or after 1 July 2015).
This standard completes the AASB’s project to remove Australian guidance on materiality from Australian Accounting Standards.
There will be no impact on the Group’s financial position or performance.
IFRS 16 Leases (applicable for annual reporting periods commencing on or after 1 January 2019).
The key features of IFRS 16 are as follows:
Lessee accounting
(cid:31)
(cid:31)
(cid:31)
Lessees are required to recognise assets and liabilities for all leases with a term of more than 12 months, unless the
underlying asset is of low value.
A lessee measures right-of-use assets similarly to other non-financial assets and lease liabilities similarly to other financial
liabilities.
Assets and liabilities arising from a lease are initially measured on a present value basis. The measurement includes non-
cancellable lease payments (including inflation-linked payments), and also includes payments to be made in optional
periods if the lessee is reasonable certain to exercise an option to extend the lease, or not to exercise an option to terminate
the lease.
IFRS 16 contains disclosure requirements for lessees.
(cid:31)
Lessor accounting
(cid:31)
(cid:31)
IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17. Accordingly, a lessor continues to classify
its leases as operating leases or finance leases, and to account for those two types of leases differently.
IFRS 16 also requires enhanced disclosures to be provided by lessors that will improve information disclosed about a lessor’s
risk exposure, particularly to residual value risk.
IFRS 16 supersedes:
a)
b)
c)
d)
IAS 17 Leases
IFRIC 4 Determining whether an Arrangement contains a Lease
SIC-15 Operating Leases – Incentives
SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease
The new standard will be effective for annual periods beginning on or after 1 January 2019. Early adoption is permitted, provided
the new revenue standard, IFRS 15 Revenue from Contracts with Customers, has been applied, or is applied at the same date as
IFRS 16.
The effect of this amendment on the Group’s financial statements has yet to be determined.
(d)
(i)
Summary of significant accounting policies
Basis of consolidation
The consolidated financial statements comprise the financial statements of Legend Mining Limited and its subsidiaries (‘the
Group’) as at 31 December 2015. Control is achieved when the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the
Group controls an investee if and only if the Group has:
Exposure, or rights, to variable returns from its involvement with the investee; and
Power over the investee (ie existing rights that give it the current ability to direct the relevant activities of the investee);
(cid:31)
(cid:31)
(cid:31)
(cid:31) When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts
The ability to use its power over the investee to affect its returns.
and circumstances in assessing whether it has power over an investee, including:
The contractual arrangement with the other vote holders of the investee;
(cid:31)
(cid:31) Rights arising from other contractual arrangements; and
(cid:31)
The Group’s voting rights and potential voting rights.
2 3
LEGEND MINING LIMITED
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
(cid:31) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one
or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the statement of comprehensive income from the date the Group gains
control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of
the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When
necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the
Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions
between members of the Group are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the
Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest
and other components of equity while any resultant gain or loss is recognised in profit or loss. Any investment retained is
recognised at fair value.
(ii)
Significant accounting judgements, estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events.
The key estimate and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain
assets and liabilities within the next annual reporting period are:
Held for trading investments
The Group has classified equity investments as held for trading. This classification requires significant judgements on the
intentions of the Group in relation to the investments held.
Share-based payment transactions
The Group measures the cost of equity-settled share-based payments at fair value at the grant date using a Black-Scholes formula
taking into account the terms and conditions upon which the instruments were granted.
Impairment of capitalised exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including
whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration
and evaluation asset through sale.
Factors which could impact the future recoverability include the level of proved, probable and inferred mineral resources, future
technological changes which could impact the cost of mining, future legal changes (including changes to environmental
restoration obligations) and changes to commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, this will
reduce profits and net assets in the period in which the determination is made.
In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet reached a stage
which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. To the extent that
it is determined in the future that this capitalised expenditure should be written off, this will reduce profits and net assets in the
period in which this determination is made.
(iii)
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is calculated on a straight line basis over the useful life of the asset from the time the asset is held ready for use.
The depreciation rates used for each class are:
Buildings
10%
Plant and equipment
7.5% - 50%
2 4
2015 ANNUAL REPORT
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
Impairment
The carrying values of property, plant and equipment are reviewed for impairment at each reporting date, with recoverable
amount being estimated when events or changes in circumstances indicate the carrying value may not be recoverable.
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-
generating unit to which the asset belongs.
If any indication of impairment exists and where the carrying values exceed the estimated recoverable amount, the assets or
cash-generating units are written down to their recoverable amounts.
The recoverable amount of property, plant and equipment is the greater 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.
Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to
arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the item) is included in the income statement in the period the
item is derecognised.
(iv)
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs
are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in
connection with the borrowing of funds.
(v)
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand, short-term deposits with an
original maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined
above, net of outstanding bank overdrafts.
(vi)
Trade and other receivables
Trade receivables, which generally have 30-90 day terms, are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method, less an allowance for any uncollectible amounts.
Collectability of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off
when identified. An allowance for doubtful debts is raised when there is objective evidence that the Group will not be able to
collect the debt.
(vii) Other Financial Assets
Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial
assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale investments,
as appropriate. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments
not at fair value through profit or loss, directly attributable transactions costs. The Group determines the classification of its
financial assets after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial year-
end.
All regular way purchases and sales of financial assets are recognised on the trade date i.e. the date that the Group commits to
purchase the asset. Regular way purchases or sales are purchases or sales of financial assets under contracts that require delivery
of the assets within the period established generally by regulation or convention in the marketplace.
Financial assets at fair value through profit or loss
Financial assets classified as held for trading are included in the category ‘financial assets at fair value through profit or loss’.
Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. Derivatives are
also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on investments
held for trading are recognised in profit or loss.
2 5
LEGEND MINING LIMITED
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in profit
or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process.
(viii) Operating Segments
An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur
expenses (including revenues and expenses relating to transactions with other components of the same entity), whose operating
results are regularly reviewed by the entity's chief operating decision maker to make decisions about resources to be allocated
to the segment and assess its performance and for which discrete financial information is available. This includes start-up
operations which are yet to earn revenues. Management will also consider other factors in determining operating segments
such as the existence of a line manager and the level of segment information presented to the board of directors.
Operating segments have been identified based on the information provided to the chief operating decision makers – being the
executive management team.
Operating segments that meet the quantitative criteria as prescribed by AASB 8 are reported separately. However, an operating
segment that does not meet the quantitative criteria is still reported separately where information about the segment would be
useful to users of the financial statements.
Information about other business activities and operating segments that are below the quantitative criteria are combined and
disclosed in a separate category for “all other segments”.
(ix) Deferred exploration costs
Deferred exploration and evaluation costs
Exploration and evaluation expenditure is stated at cost and is accumulated in respect of each identifiable area of interest.
Such costs are only carried forward to the extent that they are expected to be recouped through the successful development of
the area of interest (or alternatively by its sale), or where activities in the area have not yet reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves, and active operations are continuing.
Accumulated costs in relation to an abandoned area are written off to the income statement in the period in which the decision
to abandon the area is made.
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.
Impairment
The carrying values of exploration and evaluation costs are reviewed for impairment when facts and circumstances indicate the
carrying value may not be recoverable.
The recoverable amount of exploration and evaluation costs is the greater of fair value less costs to sell and value in use. In
assessing the 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 fair value of money and the risks specific to the asset.
Accumulated costs in relation to an abandoned area are written off in full against the income statement in the year in which the
decision to abandon the area is made. 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. Each area of interest is limited to the size related to
known or probable mineral resources capable of supporting a mining operation.
(x)
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable
that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can
be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at
a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to
the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
2 6
2015 ANNUAL REPORT
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
(xii) Revenue
Revenue is recognised and measured at the fair value of consideration received or receivable to the extent that it is probable
that economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition
criteria must also be met before revenue is recognised:
Sale of goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and the costs
incurred or to be incurred in respect of the transaction can be measured reliably. Risks and rewards of ownership are considered
passed to the buyer at the time of delivery of the goods to the customer.
Interest income
Interest revenue is recognised as it accrues, using the effective interest rate method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net
carrying amount of the financial asset.
Rental Income
Rental income is accounted for on a straight line basis over the lease term.
All revenue is stated net of the amount of goods and services tax (GST).
(xiii)
Income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from
or paid to the taxation authorities. The tax rates and tax law used to compute the amount are those that are enacted or
substantively enacted by the reporting date.
Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences:
(cid:31)
(cid:31)
Except where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss; and
In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures, except where the timing of the reversal of the temporary differences can be controlled and it is probable that the
temporary differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and
unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences, and the carry-forward of unused tax assets and unused tax losses can be utilised:
(cid:31)
(cid:31)
Except where the deferred income tax asset relating to the deductible temporary differences arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss; and
In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse
in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amounts of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred income tax assets to be utilised.
Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become
probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are
recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.
2 7
LEGEND MINING LIMITED
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation
authority.
(xiv) Other taxes
Revenue, expenses and assets are recognised net of the amount of GST except:
(cid:31) Where the amount of the GST incurred is not recoverable from the Australian Taxation Office. In these circumstances the
GST is recognised as part of the cost of acquisition of the asset or as part of the expense.
(cid:31) Receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the Statement of
Financial Position. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
Cash flows are included in the Consolidated Statement of Cash Flows on a gross basis. The GST components of cash flows arising
from investing or financing activities which are recoverable from, or payable to, the ATO are classed as operating cash flows.
(xv) Business Combinations
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate
of the consideration transferred measured at acquisition date fair value and the amount of any non-controlling interests in the
acquiree. For each business combination, the Group elects whether to measure the no n-controlling interests in the acquiree at
fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as
incurred and included in administrative expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and
designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition
date. This includes the separation of embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, any previously held equity interest is re-measured at its acquisition date fair
value and any resulting gain or loss is recognised in profit or loss.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Contingent
consideration classified as an asset or liability that is a financial instrument and within the scope of AASB 139 Financial
Instruments: Recognition and Measurement is measured at fair value with changes in fair value recognised either in profit or loss
or as a change to OCI. If the contingent consideration is not within the scope of AASB 139, it is measured in accordance with the
appropriate AASB. Contingent consideration that is classified as equity is not re-measured and subsequent settlement is
accounted for within equity.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount
recognised for non-controlling interests, and any previous interest held, over the identifiable net assets acquired and liabilities
assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses
whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used
to measure the amounts to be recognised at the acquisition date. If the re-assessment still results in an excess of the fair value
of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment
testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-
generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the
acquiree are assigned to those units.
Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the
goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain
or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation
and the portion of the cash-generating unit retained.
2 8
2015 ANNUAL REPORT
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
(xvii) Trade and or other payables
Liabilities for trade creditors and other amounts are carried at amortised cost and represent liabilities for goods and services
provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make
future payments in respect of these goods and services. The amounts are unsecured and are usually paid within 30 days.
(xviii) Interest bearing loans and borrowings
All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable
transaction costs.
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective
interest method. Amortised cost is calculated by taking into account any issue costs, and any discount or premium on settlement.
(xix) Share based payment transactions
The Group provides benefits to employees (including directors) of the Group and to the providers of services to the Group in the
form of share based payment transactions, whereby employees or service providers render services in exchange for shares or
rights over shares (‘equity-settled transactions’).
There are currently three scenarios in place to provide these services:
(a) ‘Employees Share Option Plan’, which provides benefits to eligible persons;
(b) Capital raising costs, which provide payment to stockbrokers and finance institutions for capital raising services and
commissions; and
(c) Other grants of options to directors on an ad hoc basis.
The cost of the equity-settled transactions with stockbrokers and finance institutions is measured by reference to the fair value
of the service received at the date they are granted.
For transactions with employees (including directors), the cost of these equity-settled transactions is measured by reference to
the fair value of the options provided. The fair value is determined by an external valuer using a Black-Scholes model.
The cost of these equity-settled transactions with employees is recognised, together with a corresponding increase in equity,
over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employee becomes
fully entitled to the award (‘vesting date’).
In valuing these equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to
the price of the shares of Legend Mining Limited (market conditions) if applicable.
The cumulative expense recognised for these equity-settled transactions at each reporting date until vesting date reflects (i) the
extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity instruments that will
ultimately vest. No adjustment is made for the likelihood of market conditions being met as the effect of these conditions is
included in the determination of fair value at grant date. The income statement charge or credit for a period represents the
movement in cumulative expenses recognised as at the beginning and end of the period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a
market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been
modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based
payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet
recognised for the award is recognised immediately. However , if a new award is substituted for the cancelled award and
designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a
modification of the original award, as described in the previous paragraph.
For transactions with other service providers, the cost of these equity-settled transactions is measured by reference to the value
of the services provided. The cost of these equity-settled transactions is recognised, together with a corresponding increase in
equity, at the time the services are provided unless they are transaction costs arising on the issue of ordinary shares, in which
case the transaction costs are recognised directly in equity as a reduction of the proceeds received on the issue of shares.
2 9
LEGEND MINING LIMITED
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
(xxi)
Contributed Equity
Issued and paid up capital is recognised at the fair value of the consideration received by the Company. Any transaction costs
net of tax arising on the issue of ordinary shares are recognised directly in equity as a reduction of the proceeds received.
(xxii) Employee Benefits
Provision is made for employee benefits accumulated as a result of employee services up to the reporting date. These employee
benefits include wages, salaries, annual leave and include related on-costs such as superannuation and payroll tax.
The Group does not expect its long service leave or annual leave benefits to be settled wholly within 12 months of each reporting
date. The Group recognises a liability for long service leave and annual leave measured as the present value of expected future
payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit
method. Consideration is given to expected future wage and salary levels, experience of employee departures, and periods of
service.
Expected future payments are discounted using market yields at the reporting date on national government bonds with terms
to maturity and currencies that match, as closely as possible, the estimated future cash outflows.
No provision is made for non-vesting sick leave, as the anticipated pattern of future sick leave taken indicates that accumulated
non-vesting sick leave will never be paid.
The liability for long service leave is recognised and measured as the present value of expected future payments to be made in
respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is
given to expected future wage and salary levels, experience of employee departures, and period of service. Expected future
payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and
currencies that match, as closely as possible, the estimated future cash outflow.
Contributions to employee superannuation funds of choice are expensed as incurred.
(xxiii) Earnings per share
Basic earnings per share (EPS) is calculated as net profit or loss attributable to members, adjusted to exclude costs of servicing
equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted for any bonus element.
Diluted EPS is calculated as net profit or loss attributable to members, adjusted for:
(a) Costs of servicing equity (other than dividends).
(b) The after tax effect of dividends and interest associated with the dilutive potential ordinary shares that have been
recognised as expenses; and
(c) Other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential
ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus
element.
(xxiv) Foreign currency translation
(a) Functional and presentation currency
The Group’s consolidated financial statements are presented in Australian dollars, which is also the Company’s functional
currency. For each entity, the Group determines the functional currency and items included in the financial statements of each
entity are measured using that functional currency.
(b) Transactions and balances
Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot rates
at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rates of
exchange at the reporting date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchanges rates
at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items
measured at fair value is treated in line with the recognition of gain or loss on change in fair value of the item (ie translation
differences on items whose fair value gain or loss is recognised in other comprehensive income or profit or loss are also
recognised in other comprehensive income or profit or loss respectively).
3 0
2015 ANNUAL REPORT
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTD)
(c) Group Companies
On consolidation, the assets and liabilities of foreign operations are translated into Australian dollars at the rate of exchange
prevailing at the reporting date and their statements of profit or loss are translated at average rates for the reporting period.
The exchange differences arising on translation for consolidation purposes are recognised in other comprehensive income. On
disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is
recognised in profit or loss.
(xxv) Non-current assets held for sale
The Group classifies non-current assets and disposal groups as held for sale if their carrying amounts will be recovered principally
through a sale rather than through continuing use. Such non-current assets or disposal groups classified as held for sale are
measured at the lower of their carrying amount and fair value less costs to sell.
The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset or disposal
group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such
assets. For the sale to be highly probable management must be committed to a plan to sell the asset, and an active program to
locate a buyer and complete the plan must have been initiated. In addition, the sale should be expected to qualify for recognition
as a completed sale within one year from the date of classification and actions required to complete the plan should indicate
that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
Property, plant and equipment and intangible assets are not depreciated or amortised once classified as held for sale.
Assets and liabilities classified as held for sale are presented separately as current items in the statement of financial position.
(xxvi) Current versus non-current classification
The Group presents assets and liabilities in the statement of financial position based on current/non-current classification. An
asset is current when it is:
Expected to be realised or intended to be sold or consumed in the Group’s normal operating cycle;
(cid:31)
(cid:31) Held primarily for the purpose of trading;
(cid:31)
(cid:31) Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after
Expected to be realised within twelve months after the reporting period; or
the reporting period.
The Group classifies all other assets as non-current.
A liability is current when:
It is held primarily for the purpose of trading;
It is expected to be settled in the Group’s normal operating cycle;
It is due to be settled within twelve months after the reporting period; or
(cid:31)
(cid:31)
(cid:31)
(cid:31)
The Group classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and
liabilities.
There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
NOTE 3: NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
The principal activities during the year of the entities within the consolidated entity were exploration for nickel and copper
deposits in Australia.
3 1
LEGEND MINING LIMITED
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 4:
REVENUE AND EXPENSES
Revenues and expenses from continuing operations
a)
Finance Revenue
Bank interest received and receivable
Interest on Jindal receivable
Receivables – unwinding of discount
b) Other Income
Fair value gain on investments held for trading
Gain on disposal of subsidiaries
Other
c)
Employee Benefits Expense
Salaries & on-costs
Other employee benefits
d)
Impairment of Deferred Exploration Costs
Impairment of deferred exploration costs
e)
Loss on remeasurement of Receivables
Loss on remeasurement of Jindal receivable
f) Other Expenses
Depreciation
Loss on disposal of property, plant & equipment
Fair value loss on investments held for trading
Performance Options cancellation fee
Exploration expenditure not capitalised
Note
9
11
9
(i)
19(b)
(i) Loss on disposal of property, plant & equipment comprises:
Proceeds on sale
Carrying value of assets disposed
g)
Corporate and administration expenses
Fees – Audit/Tax
Fees – ASX
Fees – Share registry
Consultancy Fees
Office rent
Legal expenses
Travel expenses
Other expenses
2015
$
2014
$
190,833
35,000
349,329
575,162
-
-
115,659
115,659
602,369
20,024
622,393
178,287
-
193,045
371,332
504,671
369,669
-
874,340
876,031
12,966
888,997
-
1,105,212
201,590
-
13,735
-
329,720
-
221,719
565,174
-
-
-
93,681
31,102
21,706
110,207
70,474
18,536
37,841
229,401
612,948
17,858
7,162
-
1,000,000
55,088
1,080,108
10,316
(17,478)
(7,162)
95,215
30,411
21,727
200,181
70,876
125,870
101,587
170,172
816,039
3 2
2015 ANNUAL REPORT
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 5:
EARNINGS PER SHARE
(a)
Reconciliation of earnings to net loss:
Net loss
Loss used in the calculation of basic earnings per share
2015
$
2014
$
(1,311,284)
(1,311,284)
(2,507,805)
(2,507,805)
(b) Weighted average number of shares on issue during the financial year
used in the calculation of basic loss per share
1,982,243,952
1,962,850,801
Weighted average number of ordinary shares on issue used in the
calculation of diluted loss per share
1,982,243,952
1,962,850,801
(c)
Information on classification of options
As the Group has made a loss for the year ended 31 December 2015, all options on issue are considered antidilutive and
have not been included in the calculation of diluted earnings per share. These options could potentially dilute basic
earnings per share in the future.
NOTE 6:
INCOME TAX
The major components of income tax expense are:
Income Statement
Current income tax
Current income tax benefit
Over provision of prior tax year
Deferred income tax
Relating to origination and reversal of temporary differences
Income tax benefit reported in the income statement
2015
$
2014
$
-
-
-
-
-
(8,999)
(17,359)
(26,358)
A reconciliation between tax benefit and the product of accounting loss before
income tax multiplied by the Group’s applicable income tax rate is as follows:
Accounting loss before tax from ordinary activities
Accounting loss before income tax
(1,311,284)
(1,311,284)
(2,644,684)
(2,644,684)
At the Group’s statutory income tax rate of 30%
Expenditure not allowed for income tax purposes
Utilisation of unrecognised capital losses
Movement in unrecognised temporary differences
Conversion of franking credits to tax losses
Other assessable income
Current year tax losses not recognised
Current year capital losses not recognised
In respect of sale of subsidiaries
Non-assessable income
Over provision of prior tax year
Deductible equity raising costs
Income tax benefit reported in the consolidated income statement
Income tax expensed directly to equity
Relating to equity costs
Deferred tax expense recognised in equity
Current Income Tax Asset
(393,385)
63,875
(222,244)
(44,322)
(10,607)
8,656
606,966
-
-
-
-
(8,939)
-
-
-
-
(793,405)
745,162
-
-
-
-
133,004
84,054
(110,901)
(57,914)
(8,999)
(17,359)
(26,358)
17,359
17,359
13,004
3 3
LEGEND MINING LIMITED
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 6:
INCOME TAX (CONTD)
Deferred Income Tax
Deferred income tax at 31 December related to the following:
Consolidated
Recognised deferred tax liabilities
Capitalised exploration and evaluation expenditure
Investments
Other
Amounts disclosed as deferred tax liability
Set-off of deferred tax assets
Net deferred tax liabilities recognised
Recognised deferred tax assets
Tax losses available to offset against future taxable income
Other provisions
Property, plant & equipment
Share based costs on equity
Other future blackhole deductions
Gross deferred tax assets
Set-off of deferred tax assets
Net deferred tax assets recognised
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the
following as the statutory requirements for recognising those deferred
tax assets have not been met
Deductible temporary differences
Tax revenue losses
Tax capital losses
2015
$
2014
$
(455,058)
(98,686)
(7,598)
(561,343)
561,343
-
292,922
58,421
-
-
210,000
561,343
(561,343)
-
(117,995)
(414,373)
(8,734)
(541,102)
541,102
-
463,135
64,555
1,073
12,339
-
541,102
(541,102)
-
34,498
973,532
3,102,748
4,110,778
-
189,805
6,681,901
6,871,706
Tax Consolidation
Legend Mining Limited and its 100% owned Australian resident subsidiaries formed a tax consolidated group with effect from 1
July 2004. Legend Mining Limited is the head entity of the tax consolidated group. Members of the group have entered into a
tax sharing agreement in order to allocate the income tax liabilities between the entities within the Group should the head entity
default on its tax payment obligations. At the balance date, the possibility of default is remote.
Tax effect accounting by members of the tax consolidated group
Tax expense / income, deferred tax liabilities and deferred tax assets arising from temporary differences are recognised in the
separate financial statements of the members of the tax consolidated group using the separate taxpayer within a group method.
Current tax liabilities and assets and deferred tax assets arising from unused tax losses and tax credits of the members of the tax
consolidated group are recognised by the Company (as head entity in the tax consolidated group).
Members of the tax consolidated group have not entered into a tax funding agreement. As a result, the aggregate of the current
tax liability or asset and any deferred tax asset arising from unused tax losses and tax credits in respect of that period, assumed
by the Company, are recognised as a contribution from (or distribution to) equity participants. There were no contributions (or
distributions) made during the year ended 31 December 2015.
3 4
2015 ANNUAL REPORT
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 7:
SEGMENT INFORMATION
Operating Segments
AASB 8 requires operating segments to be identified on the basis of internal reports that are used by the chief operating decision
maker (“CODM”) in order to allocate resources to the segment and to assess its performance. The CODM of the Group is the
Board of Directors.
The Group has identified its operating segments based on the internal reports that are provided to the CODM on a regular basis.
The Group had two reportable operating segments, being exploration and evaluation activities in Australia and West Africa, until
completion of the sale of the African operations (refer note 11). Following completion of the sale the Group now has only one
reportable segment being exploration and evaluation activities in Australia.
The accounting policies applied for internal reporting purposes are consistent with those applied in the preparation of this
financial report.
Australia
West Africa
Total
2015
$
2014
$
2015
$
2014
$
2015
$
2014
$
Revenue
Segment Result
Segment Assets
Segment Liabilities
575,162
(1,311,284)
17,517,902
(390,400)
371,332
(1,882,783)
17,387,575
(320,289)
-
-
-
-
-
(735,543)
-
-
575,162
(1,311,284)
17,517,902
(390,400)
371,332
(2,618,326)
17,387,575
(320,289)
Segment revenues and expenses are those directly attributable to the segments and include those expenses incurred by head
office where a reasonable basis of allocation exists. Segment assets include all assets used by a segment and consist principally
of cash and cash equivalents, receivables, property, plant and equipment, investments in listed entities and capitalised
exploration. Segment liabilities consist principally of payables, employee benefits, accrued expenses and provisions.
NOTE 8:
CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Deposits
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Deposits at call earn interest on a 30, 60 and 90 day term basis at bank deposit rates.
NOTE 9:
TRADE AND OTHER RECEIVABLES
Current
Receivable from Jindal Mining & Exploration Limited (a)
Other receivables (b)
2015
$
251,185
6,000,000
6,251,185
2015
$
2,901,340
24,837
2,926,177
2014
$
1,437,339
5,500,000
6,937,339
2014
$
5,748,601
48,497
5,797,098
Terms and conditions relating to the above financial instruments:
(a) The receivable from Jindal Mining & Exploration Limited (“Jindal”) shown at 31 December 2014 was for the second tranche
of $6 million due on 5 August 2015 following the sale of the Cameroon Project (refer note 11). The repayment terms of this
amount were renegotiated on 28 July 2015, with the key amendments being:
(cid:31) The $6 million payment is now to be paid in two tranches; $3 million on 15 September 2015 (received) and a further $3
million on or before 15 December 2016;
Interest of 4% payable quarterly in arrears will be payable on the second $3 million; and
(cid:31)
(cid:31) The $5.5 million payable under the Jindal Agreement upon the grant of a Mining Convention at the Cameroon Iron Ore
Project (“Project”) is now rescheduled to be paid upon the first commercial shipment of iron ore from the Project.
3 5
LEGEND MINING LIMITED
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 9: TRADE AND OTHER RECEIVABLES (CONTD)
As at 31 December 2015 the remaining balance of $3m receivable on or before 15 December 2016 is recognised at
amortised cost, with the gross proceeds being discounted at 8% from the due date. Upon recognition of the fair value of
the receivable calculated using the amended terms, a loss of $201,590 was recorded in the profit or loss to reconcile to the
amortised cost of the original receivable at the time of the renegotiation.
(b) Other receivables are non-interest bearing and have repayment terms of between 30 and 60 days.
Trade and other receivables are not past due and no impairment is required.
NOTE 10: OTHER FINANCIAL ASSETS
Current
Shares in Independence Group NL – at fair value (a)
Shares in S2 Resources Ltd – at fair value (b)
Shares and options in Nemex Resources Ltd – at fair value (c)
Shares in Artemis Resources Ltd – at fair value (d)
Shares in Sirius Resources Ltd – at fair value (e)
Non-current
Performance and other bonds (f)
Terms and conditions relating to the above financial instruments:
2015
$
2,514,600
120,000
66,000
60,000
-
2,760,600
2014
$
-
-
141,900
180,000
3,840,000
4,161,900
50,000
50,000
(a) Shares in Independence Group NL – 990,000 shares were on hand at 31 December 2015. The shares had a market value of
$2.54 each (2014: N/A).
(b) Shares in S2 Resources Ltd – 750,000 shares were on hand at 31 December 2015. The shares had a market value of $0.16
each (2014: N/A).
(c) Shares and options in Nemex Resources Ltd – 3,300,000 shares were on hand at 31 December 2015. The shares had a
market value of $0.02 each (2014: 3,300,000 shares at $0.043).
(d) Shares in Artemis Resources Ltd – 60,000,000 shares were on hand at 31 December 2015. The shares had a market value
of $0.001 each at 31 December 2015 (2014: 60,000,000 shares at $0.003).
(e) Shares in Sirius Resources Ltd – Nil shares were on hand at 31 December 2015 (2014: 1,500,000 shares at $2.56).
(f) Performance bonds – bank deposit held as security for credit cards. At 31 December 2015, this deposit is held on a 6 month
term deposit with an interest rate of 3.05% per annum (31 December 2014, 6 months at 3.55%pa).
The equity investments are all classified as held for trading. The market value of all equity investments represent the fair value
based on quoted prices on active markets (ASX) as at the reporting date without any deduction for transaction costs. These
investments are classified as Level 1 financial instruments. There have been no transfers between levels of the fair value
hierarchy used in measuring the fair value of these financial instruments, or changes in its classification as a result of a change
in the purpose or use of these assets.
The fair value of the above equity investments at the date of signing this report has increased to $2,790,300.
3 6
2015 ANNUAL REPORT
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 11: DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE
Net assets – at fair value less costs to sell
Cash
Receivables
Prepayments
Inventory
Property, plant & equipment
Deferred exploration costs
Payables
Reserves attributable to disposal group classified as held for sale
Foreign currency translation reserve
Consideration received or receivable
Cash
Transaction fees
Proceeds on sale of subsidiaries per the Statement of Cash Flows
Present value of amount due on 22 July 2015
Total disposal consideration
Carrying amount of net assets and reserves sold
Non-controlling interests eliminated
Exchange differences realised on disposal of foreign operations
Gain on disposal of subsidiaries included in other income (note 4(b))
At Date of Disposal
22 July 2014
$
17,474
67
18,499
2,563
588,302
11,984,175
(21,574)
12,589,506
2,576,839
6,000,000
(225,000)
5,775,000
5,555,556
11,330,556
(12,589,506)
(948,220)
2,576,839
369,669
On 20 November 2013 Legend announced that it had entered into a Share Sale and Debt Assignment Agreement (“Agreement”)
for the sale of Legend’s 90% interest in Camina SA, the holding company of the Ngovayang Project in the Republic of Cameroon
(the “Transaction”). The sale was implemented by the sale of 100% of Legend’s wholly-owned British Virgin Islands subsidiary,
Legend Iron Limited (“Company”), and transfer of intercompany debts by Legend Cameroon Pty Ltd (“Seller”) to Jindal Mining &
Exploration Limited (“Purchaser”).
Pursuant to the Agreement, Legend has or shall receive cash consideration of:
(i)
$6 million upon completion of the Transaction;
(ii) $6 million twelve months after completion; and
(iii) $5.5 million within 10 business days of the execution of a Mining Convention between the purchaser and the Government
of Cameroon.
The contingent consideration of $5.5 million is dependent upon the execution of a mining convention between the purchaser and
the government of Cameroon. Given the probability and time risk of the mining convention being executed, the directors have
taken a conservative view and assigned a nil fair value to the contingent consideration.
Completion occurred on 22 July 2014 and the first tranche of $6 million was received on 5 August 2014.
Prior to disposal, the fair value of the disposal group, classified as level 3 in the fair value hierarchy, was determined by reference
to the estimated fair value of the consideration receivable. In determining fair value, the first tranche of $6 million has been valued
at its face value given the expected short term maturity thereof. The second tranche of $6 million due to be received on 22 July
2015 was been discounted at 8% over this period.
The carrying value of the Group’s projects in West Africa was reviewed, and impairment of $1,105,212 recognised during the 2014
year, in light of the sale agreement entered into. The carrying value was determined by reference to the fair value of the proceeds
to be received in accordance with the sale agreement.
3 7
LEGEND MINING LIMITED
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 12: PROPERTY, PLANT AND EQUIPMENT
Plant and equipment
At 1 January 2015
Net of accumulated depreciation
Additions
Disposals
Depreciation expense
At 31 December 2015
Net of accumulated depreciation
At 1 January 2015
Cost
Accumulated depreciation
Net carrying amount
At 31 December 2015
Cost
Accumulated depreciation
Net carrying amount
NOTE 13: DEFERRED EXPLORATION COSTS
Deferred exploration costs
Deferred exploration and evaluation costs
At 1 January, at cost
Acquired during the year
Expenditure incurred during the year
At 31 December, at cost
Note:
Note
13(i)
13(ii)
2015
$
2014
$
47,920
10,300
-
(13,734)
62,624
10,316
(7,162)
(17,858)
44,486
47,920
129,237
(81,317)
47,920
139,537
(95,051)
44,486
2015
$
5,485,454
393,318
3,871,500
1,220,636
5,485,454
250,488
(187,864)
62,624
129,237
(81,317)
47,920
2014
$
393,318
66,979
-
326,339
393,318
(i) During the year Legend entered into a Tenement Sale and Exploration Joint Venture Agreement (“Creasy Agreement”) with
the Creasy Group in the Fraser Range district of Western Australia. Legend acquired a 70% interest in tenements (E28/2188-
2192, E28/1718 and E28/1727) for the following consideration:
(cid:31)
(cid:31)
(cid:31)
$2.5 million cash payment;
71.5 million Legend shares, for accounting purposes valued at a deemed price of $0.011 ($786,500); and
150 million five year Legend options exercisable at $0.04, for accounting purposes valued at a deemed price of $0.0039
($585,000).
Legend is to sole fund exploration and free carry Creasy Group’s 30% interest through to the signing of Mining Venture
Agreements.
(ii) The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors,
including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related
exploration and evaluation asset through sale.
3 8
2015 ANNUAL REPORT
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 14: TRADE AND OTHER PAYABLES
Current – unsecured
Trade payables
Other payables and accruals
Terms and conditions relating to the above financial instruments
(i)
Trade payables are non-interest bearing and normally settled on 30 day terms.
(ii) Other payables are non-interest bearing and normally settled as they fall due.
(iii) There are no trade payables past due for payment.
NOTE 15: PROVISIONS
Current
Employee benefits
Non-Current
Employee benefits
Number of employees at year end
NOTE 16: CONTRIBUTED EQUITY
Ordinary shares
Issued and fully paid
Issue costs
Movement in ordinary shares on issue 2015
At 1 January 2015
Shares issued for tenement acquisition (refer note 13)
At 31 December 2015
Movement in ordinary shares on issue 2014
At 1 January 2014
At 31 December 2014
2015
$
31,672
193,993
225,665
2014
$
105,105
35,000
140,105
2015
$
2014
$
107,613
130,229
57,122
4
49,955
4
2015
$
63,862,164
(3,274,133)
60,588,031
No
1,962,850,801
71,500,000
2,034,350,801
No
1,962,850,801
1,962,850,801
2014
$
63,075,664
(3,274,133)
59,801,531
$
63,075,664
786,500
63,862,164
$
63,075,664
63,075,664
Effective 1 July 1998, the Corporations’ legislation in place abolished the concept of authorised share capital and par value
shares. Accordingly the Company does not have authorised capital nor par value in respect of its issued shares.
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
3 9
LEGEND MINING LIMITED
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 17: RESERVES
Movement in reserves
At 1 January 2014
Exchange differences on translation of foreign operations
Exchange differences realised on disposal of foreign operations
At 31 December 2014
Options issued for tenement acquisition (refer note 13)
At 31 December 2015
Share option premium reserve
Foreign
currency
translation
reserve
$
3,497,527
(920,688)
(2,576,839)
-
-
-
Share option
premium
reserve
$
22,417,578
-
-
22,417,578
585,000
23,002,578
The share option premium reserve is used to record the value of share based payments provided to employees, directors and
contractors, as part of their remuneration.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
statements of foreign subsidiaries.
NOTE 18: SHARE OPTIONS
Number
Exercise price
cents per share
Unlisted options – Expiry date 4 February 2015
At 1 January 2015
Expired on 4 February 2015
At 31 December 2015
Unlisted options – Expiry date 21 December 2015
At 1 January 2015
Expired on 21 December 2015
At 31 December 2015
Unlisted options – Expiry date 4 February 2015
At 1 January 2015
Expired on 4 February 2015
At 31 December 2015
Unlisted options – Expiry date 4 February 2015
At 1 January 2015
Expired on 4 February 2015
At 31 December 2015
Unlisted options – Expiry date 23 September 2020
At 1 January 2015
Options issued for tenement acquisition (refer note 13)
At 31 December 2015
191,250,000
(191,250,000)
-
30,000,000
(30,000,000)
-
199,750,000
(199,750,000)
-
14,400,000
(14,400,000)
-
-
150,000,000
150,000,000
4 cents
4 cents
6 cents
6 cents
4 cents
4 cents
5 cents
5 cents
4 cents
4 cents
4 0
2015 ANNUAL REPORT
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 19: SHARE-BASED PAYMENT PLANS
(a) Recognised share-based payment expenses
There was no expense recognised for services received during the current or prior year.
(b) Types of share-based payment plans
Employee Share Option Plan, ‘ESOP’
Share options are granted to Eligible Persons with more than 6 months service. Eligible Persons are determined by the Board
after taking into account the following considerations:
(i)
(ii)
the seniority of the Eligible Person and the position the Eligible Person occupies within the Group;
the length of service of the Eligible Person with the Group;
(iii) the record of employment of the Eligible Person with the Group;
(iv) the contractual history of the Eligible Person with the Group;
(v)
the potential contribution of the Eligible Person to the growth of the Group;
(vi) the extent (if any) of the existing participation of the Eligible Person in the Plan; and
(vii) any other matters which the Board considers relevant.
At a General Meeting on the 4 December 2009 shareholders approved the implementation of Employee Share Option Plan No
3. The new plan differs from the previous plans in that there is no 12 month vesting period on any new options received under
plan No 3. There is a significant change in the context of recent proposals by the Federal Government to change the tax
treatment of options issued under incentive schemes. Removal of the vesting period requirement allows the Board maximum
flexibility to make offers of options on the terms of the plans appropriate at the time, having regard for the tax environment
which the proposed participants find themselves in when an offer of options is received from the company.
Expense Share Option Plan, ‘ExSOP’
Share options were granted as opposed to cash payments for the following expenses:
(i)
capital raising costs – 14,400,000 options were granted to Azure Capital as compensation for the commission on the share
issue dated 24 November 2011. The options were not issued until 9 January 2012.
(ii) Tenement acquisition – 150,000,000 options were granted as part consideration for the tenement acquisition from the
Creasy Group, following shareholder approval at a general meeting on 17 September 2015. The options were issued on 23
September 2015.
Performance Options
A total of 800 million performance options, with a nil exercise price, were granted as part consideration for the acquisition of
Camina SA, expiring 5 years from final completion which occurred on 4 February 2010. The options were issued in two equal
tranches of 400 million each with the following vesting conditions:
Performance Options A - will vest once the Group has established that there is a 250 million tonnes inferred iron ore resource
which is in compliance with the JORC Code within the permit area, including a minimum of 50 million tonnes of direct shipping
ore.
Performance Options B - will vest once the Group has:
(i)
generated at least US$60 million in sales revenue from mining activity in the permit area; or
(ii) established that there is an inferred iron ore resource of at least 2 billion tonnes which is in compliance with the JORC Code
within the permit area, including a minimum of 200 million tonnes of direct shipping ore.
Following shareholder approval at a general meeting on 19 August 2014, the 800 million performance options were cancelled
on 28 August 2014 for payment of $1 million to the option holders. In accordance with AASB 2 this repurchase of equity
instruments can be treated as a deduction from equity, except to the extent that the payment exceeds the fair value of the
equity instruments, measured at the repurchase date. Any such excess shall be treated as an expense.
Management calculated the fair value of the performance options at the cancellation date to be nil as the likelihood of the
satisfaction of the performance conditions being met by 4 February 2015, the expiry date of the options, is nil. As a result, the
payment of $1 million was recognised as an expense in the profit and loss during the 2014 year.
4 1
LEGEND MINING LIMITED
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 19:
SHARE-BASED PAYMENT PLANS (CONTD)
(c) Summaries of options granted
ESOP: The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of, and movements in,
share options issued during the year:
Outstanding balance at the beginning of the year
Expired/lapsed during the year
Outstanding at the end of the year
Exercisable at the end of the year
2015
No.
60,000,000
2015
WAEP
($)
0.0400
2014
No.
69,000,000
(60,000,000)
0.0400
(9,000,000)
-
-
-
-
60,000,000
60,000,000
2014
WAEP
($)
0.0417
0.0530
0.0400
0.0400
ExSOP: The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of, and movements in,
share options issued during the year:
Outstanding balance at the beginning of the year
Granted during the year
Expired/lapsed during the year
Outstanding at the end of the year
Exercisable at the end of the year
2015
No.
2015
WAEP
175,650,000
150,000,000
(175,650,000)
150,000,000
150,000,000
0.044
0.040
0.044
0.040
0.040
2014
No.
175,650,000
2014
WAEP
0.044
-
-
175,650,000
175,650,000
-
-
0.044
0.044
The outstanding balance as at 31 December 2015 is represented by:
(i)
150,000,000 options over ordinary shares with an exercise price of $0.04 each, exercisable immediately and expiring on 23
September 2020.
NOTE 20: RELATED PARTIES
(i) Wholly-owned group transactions
Loans made by Legend Mining Limited to wholly-owned subsidiaries are repayable on demand and are not interest bearing.
(ii) Other related party transactions
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available
to other parties unless otherwise stated.
(iii) Ultimate parent
Legend Mining Limited is the ultimate parent company.
(iv) Compensation of key management personnel of the Group
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payment
Total compensation paid to Key Management Personnel
2015
$
648,564
63,577
-
-
-
712,141
2014
$
652,487
58,125
-
-
-
710,612
The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to key
management personnel.
4 2
2015 ANNUAL REPORT
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 21: CASH FLOW INFORMATION
(i) Reconciliation of Cash
For the purposes of the Cash Flow Statement, cash and cash equivalents includes cash on hand and at bank and short term
deposits at call, net of outstanding bank overdrafts. Cash as at the end of the financial year as shown in the Cash Flow Statement
is reconciled to the related items in the Statement of Financial Position as follows:
Cash on hand
Cash at bank
Deposits at call
Note
8
(ii) Reconciliation of net loss after income tax to net cash used in operating activities
Net loss after tax
Adjusted for:
Net loss on disposal of property, plant & equipment
Net gain on disposal of subsidiaries
Depreciation
Dividends received
Impairment of Jindal receivable
Unwinding of discount on receivables
Fair value loss/(gain) on investments
Deferred exploration costs impaired
Change in operating assets and liabilities:
Decrease/(increase) in receivables
(Decrease)/increase in provision for annual leave
Increase in provision for long service leave
(Decrease) in deferred tax liabilities
(Decrease) in payables
Net cash used in operating activities
Non-cash financing and investing activities
2015
$
500
250,685
6,000,000
6,251,185
2014
$
500
1,436,839
5,500,000
6,937,339
(1,311,284)
(2,618,326)
-
-
13,735
(24,750)
201,590
(349,329)
329,720
-
(1,140,318)
18,660
(22,616)
7,167
-
(13,202)
(1,150,309)
7,162
(369,669)
17,856
-
-
(193,045)
(504,671)
1,160,302
(2,500,391)
(16,017)
26,731
7,167
(17,359)
(83,311)
(2,583,180)
During the 2015 financial year, as part of the Creasy Agreement (refer to note 13) tenement acquisitions, Legend issued the
following non-cash consideration:
(cid:31)
(cid:31)
71.5 million Legend shares, for accounting purposes valued at a deemed price of $0.011 ($786,500); and
150 million five year Legend options exercisable at $0.04, for accounting purposes valued at a deemed price of $0.0039
($585,000).
Other than listed above there were no other non-cash financing or investing activities during the 2015 or 2014 years.
4 3
LEGEND MINING LIMITED
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 22:
COMMITMENTS
(a) Exploration expenditure commitments
In order to maintain current rights of tenure to exploration tenements, the Group will be required to outlay approximately
$1,964,518 (2014: $120,000) in the following twelve months in respect of tenement lease rentals and to meet minimum
expenditure requirements of the Department of Industry & Resources. These obligations are expected to be fulfilled in the normal
course of operations and have not been provided for in the financial report.
(b) Operating Lease commitments
The company has a lease commitment over its office premises located at 8 Kings Park Road, West Perth. The lease is for a period
of two years commencing 1 November 2015. The lease commitment is $55,367 for the first year increased for CPI in the second
year. There is an option to renew for a further 1 year, with a market rent review, at the conclusion of the term.
NOTE 23:
INVESTMENTS IN CONTROLLED ENTITIES
(a)
Details of subsidiaries
Set out below are the Group’s subsidiaries at 31 December 2015. All the subsidiaries as listed below have share capital consisting
solely of ordinary shares, which are held directly by the Group, and the proportion of ownership interests held equals to the
voting rights held by the Group. The country of incorporation or registration is also their principal place of business.
Name
Place of Business /
Country of
Incorporation
Ownership Interest Held by
the Group
Ownership Interest Held by
Non-Controlling Interests
Gibson Metals Pty Ltd
Legend Cameroon Pty Ltd
Australia
Australia
(b)
Non-controlling interests (NCI)
2015
%
100
100
2014
%
100
100
2015
%
-
-
2014
%
-
-
Set out below is summarised financial information for Camina SA, the former subsidiary of the Group that had non-controlling
interests during the 2014 financial year. The amounts disclosed are before inter-company eliminations.
2015
$
2014
$
Summarised Statement of Financial Position
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net (liabilities)/assets
Accumulated NCI
Summarised Statement of Comprehensive Income
Revenue
Loss for the year
Other comprehensive income
Total comprehensive income
Loss allocated to NCI
Dividends paid to NCI
Summarised Cash Flows
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase in cash and cash equivalents
4 4
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,105,212)
(3,886,237)
(4,991,449)
(110,521)
-
-
(612,625)
629,758
17,133
2015 ANNUAL REPORT
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 24: FINANCIAL INSTRUMENTS DISCLOSURE
The Group’s principal financial instruments comprise loans and borrowings, and cash and short-term deposits and investments
held for trading.
The main purpose of these financial instruments is to raise finance for the Group’s operations. The Group has various other
financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. It is, and has
been throughout the period under review, the Group’s policy that no trading in financial instruments shall be undertaken. The
main risks arise from the Group’s financial instruments are fair value interest rate risks, liquidity risk, credit risk and equity price
risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised in respect of each class of financial asset, financial
liability and equity instrument are disclosed in note 2 to the financial statements.
Fair value interest risk
The Group’s exposure to fair value interest risk is minimal.
Commodity price risk
The Group’s exposure to price risk is minimal as the group is still in an exploration phase and has no revenues from mining.
Credit risk
The Group trades only with recognised, creditworthy third parties.
It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures.
In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not
significant.
The only significant concentration of credit risk within the Group is the loan receivable from Jindal. Exposure to credit risk is
managed through regular analysis of Jindal’s ability and willingness to meet payment obligations. The carrying amount of
financial assets represents the maximum credit exposure. At 31 December 2015 the Group had a material credit risk exposure
to Jindal. The receivables recorded on the Group’s balance sheet contains an amount of $3 million (carrying amount $2,901,340)
due from Jindal under the SSDA for the sale of the shares in, and debts due from, Legend Iron Limited, as renegotiated as detailed
in note 9. It is expected the material credit exposure to Jindal will be completely removed during the financial year ended 31
December 2016. No collateral is held as security. Jindal’s obligations are supported by a guarantee from its parent entity.
Jindal’s parent is a large industrial conglomerate listed on both the Bombay Stock Exchange and National Stock Exchange of
India. The credit rating and financial health of Jindal and its parent entity are monitored regularly as is Jindal’s exploration
activities in-country Cameroon.
With respect to credit risk arising from the other financial assets of the Group, which comprise cash and cash equivalents, the
Group’s exposure to credit risk arises from default of the counter party, with a maximum exposure equal to the carrying amount
of these instruments.
Since the Group only trades with recognised third parties, there is no requirement for collateral.
Liquidity risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of a mixture of long
and short term debt.
Equity price risk
Equity price risk is the risk that changes in equity prices will affect the fair value of the Group’s holdings of financial instruments.
The objective of equity price risk management is to manage and control the risk within acceptable parameters, while optimising
the return.
To minimise the risk the Group’s investments are of high quality and are publicly traded on the ASX. The investments are
managed on a day to day basis so as to pick up any significant adjustments to market prices.
4 5
LEGEND MINING LIMITED
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 24:
FINANCIAL INSTRUMENTS DISCLOSURE (CONTD)
(b)
Interest Rate Risk
The consolidated entity’s exposure to cashflow interest rate risk is as follows:
2015
Financial assets:
Cash and cash equivalents
Other financial assets
2014
2013
Financial assets:
Cash and cash equivalents
Other financial assets
Weighted
Average
Interest Rate
Floating
Interest
$
Fixed
Interest
$
Non-Interest
Bearing
$
2.87%
3.24%
3.05%
3.63%
250,685
-
250,685
6,000,000
50,000
6,050,000
1,436,839
-
1,436,839
5,500,000
50,000
5,550,000
500
-
500
500
-
500
Total
$
6,251,185
50,000
6,301,185
6,937,339
50,000
6,987,339
The maturity date for all financial instruments included in the above tables is 1 year or less from balance date.
A change of 100 basis points in interest rates would result in a net gain/loss before taxation of $66,443 (2014: $58,447). This is
based on the interest bearing financial assets as detailed above.
(c) Credit Risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum exposure
to credit risk at the reporting date was:
Cash and cash equivalents
Trade and other receivables
Performance bonds
Note
8
9
10
Carrying Amount
2015
$
6,251,185
2,926,177
50,000
9,227,362
2014
$
6,937,339
5,797,098
50,000
12,784,437
The Company’s maximum exposure to credit risk at the reporting date was $9,227,362 (2014: $12,784,437).
All group trade and other receivables are current and have not been impaired.
(d) Liquidity Risk
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the
impact of netting agreements:
31 December 2015
Non-derivative financial liabilities
Trade and other payables
31 December 2014
Non-derivative financial liabilities
Trade and other payables
Carrying
Amount
225,665
225,665
Carrying
Amount
140,105
140,105
Contractual cash
6 mths or less
flows
(225,665)
(225,665)
(225,665)
(225,665)
Contractual cash
6 mths or less
flows
(140,105)
(140,105)
(140,105)
(140,105)
4 6
2015 ANNUAL REPORT
NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 24:
FINANCIAL INSTRUMENTS DISCLOSURE (CONTD)
(e) Net Fair Value of Financial Assets and Liabilities
The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position,
are as follows:
Held for trading financial assets
Cash and cash equivalents
Performance and other bonds
Trade and other receivables
Trade and other payables
(f)
Equity price risk
31 December 2015
31 December 2014
Carrying
Amount
$
2,760,600
6,251,185
50,000
2,926,177
(225,665)
11,762,297
Fair Value
$
2,760,600
6,251,185
50,000
2,926,177
(225,665)
11,762,297
Carrying
Amount
$
4,161,900
6,937,339
50,000
5,797,098
(140,105)
16,806,232
Fair Value
$
4,161,900
6,937,339
50,000
5,797,098
(140,105)
16,806,232
The Group’s exposure to equity securities is considered high as the company has significant investments in other listed
investments totalling $2,760,600 at 31 December 2015. Such risk is managed through diversification of investments and daily
monitoring of price movements.
A change of 10% in the market price of the shares would result in a gain/loss before taxation of $276,060 (2014: $416,190).
(g)
Foreign Exchange risk
At balance date, the group had no material foreign currency denominated liabilities and receivables.
NOTE 25: FAIR VALUES
The carrying amounts of the Group’s financial assets and financial liabilities at 31 December 2015 and 31 December 2014 are
reasonable approximations of its fair value.
Management assessed that cash and cash equivalents, trade and other receivables, and trade and other payables approximate
their carrying amounts largely due to the short-term maturities of these instruments.
The following table provides the fair value measurement hierarchy of the Group’s assets measured at fair value:
Asset measured at fair value
Date of
valuation
Total
Quoted prices
in active
market
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
Quoted equity investments
(Note 10)
Recurring
31-Dec-2015
2,760,600
2,760,600
-
-
There have been no transfers between Level 1 and Level 2 during the year.
The fair value of the financial assets is included at the amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced or liquidation sale.
Fair value of the quoted equity instruments is based on price quotations at the reporting date.
4 7
LEGEND MINING LIMITED NOTES TO THE F INANCIAL STATEMENTS
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
NOTE 26:
INFORMATION RELATING TO LEGEND MINING LIMITED (“THE PARENT ENTITY”)
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Contributed equity
Accumulated losses
Share option premium reserve
2015
$
9,036,621
17,736,562
390,400
390,400
17,346,162
60,588,031
(66,244,447)
23,002,578
17,346,162
2014
$
11,147,736
17,638,976
270,335
320,290
17,318,686
59,801,531
(64,900,423)
22,417,578
17,318,686
Loss of the parent entity after tax
Total comprehensive loss of the parent entity
(1,344,024)
(1,344,024)
(3,593,871)
(3,593,871)
NOTE 27: AUDITOR’S REMUNERATION
The auditor of Legend Mining Limited is Ernst & Young Australia.
Amounts received or due and receivable by Ernst & Young Australia for:
- An audit or review of the financial report of the entity and any other entity in the
consolidated group
Consolidated
2015
$
2014
$
42,895
42,895
63,345
63,345
NOTE 28: CONTINGENT LIABILITIES
There are no contingent liabilities at the date of this report.
The consolidated entity’s activities in Australia are subject to the Native Titles Act and the Department of Environment.
Uncertainty associated with Native Title issues may impact on the Group’s future plans.
There are no unresolved Native Title issues and the consolidated entity is not aware of any other matters that may impact upon
its access to the land that comprises its project areas.
NOTE 29: EVENTS AFTER THE BALANCE SHEET DATE
No matter or circumstance has arisen since the end of the financial year which has significantly affected, or may significantly
affect the operations of the Group, the result of those operations, or the state of affairs of the Group in subsequent financial
years.
NOTE 30: DIVIDENDS PAID AND PROPOSED
No dividends were paid or proposed this financial year.
There are no franking credits available for future reporting periods.
4 8
2015 ANNUAL REPORT
DIRECTORS’ DECLARATION
In accordance with a resolution of the Directors of Legend Mining Limited, I state that:
In the opinion of the Directors:
(a)
the financial statements and notes on pages 16-48, and the remuneration disclosures that are contained in the
Remuneration report in the Directors report pages 12-15, of the consolidated entity, are in accordance with the
Corporations Act 2001, including;
i
Giving a true and fair view of the consolidated entity’s financial position as at 31 December 2015 and of its
performance for the year ended on that date; and
ii Complying with Australian Accounting Standards’ and the Corporations Regulations 2001; and
iii The financial statements and notes also comply with International Financial Reporting Standards as disclosed in
note 2(b); and
(b)
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable.
This declaration has been made after receiving the declarations required to be made to the directors in accordance with
section 295A of the Corporations Act 2001 for the financial year ended 31 December 2015.
On behalf of the Board.
Mark Wilson
Managing Director
Dated this 4th day of March 2016
4 9
LEGEND MINING LIMITED DECLARATION OF AUDITOR’S INDEPEN DENCE
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s Independence Declaration to the Directors of Legend Mining
Limited
As lead auditor for the audit of Legend Mining Limited for the financial year ended 31 December 2015, I
declare to the best of my knowledge and belief, there have been:
a)
b)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Legend Mining Limited and the entities it controlled during the financial
year.
Ernst & Young
Gavin Buckingham
Partner
4 March 2016
5 0
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
GB:EH:LEGEND:031
2015 ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor's report to the members of Legend Mining Limited
Report on the financial report
We have audited the accompanying financial report of Legend Mining Limited, which comprises the
consolidated statement of financial position as at 31 December 2015, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement
of cash flows for the year then ended, notes comprising a summary of significant accounting policies and
other explanatory information, and the directors' declaration of the consolidated entity comprising the
company and the entities it controlled at the year's end or from time to time during the financial year.
Directors' responsibility for the financial report
The directors of the company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal controls as the directors determine are necessary to enable the preparation of the financial
report that is free from material misstatement, whether due to fraud or error. In Note 2, the directors also
state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the
financial statements comply with International Financial Reporting Standards.
Auditor's responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor's judgment, including the assessment
of the risks of material misstatement of the financial report, whether due to fraud or error. In making
those risk assessments, the auditor considers internal controls relevant to the entity's preparation and fair
presentation of the financial report in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's
internal controls. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Independence
In conducting our audit we have complied with the independence requirements of the Corporations Act
2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a
copy of which is included in the director’s report.
5 1
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
GB:EH:LEGEND:030
LEGEND MINING LIMITED
INDEPENDENT AUDITOR’S REPORT
Opinion
In our opinion:
a.
the financial report of Legend Mining Limited is in accordance with the Corporations Act 2001,
including:
i.
ii.
giving a true and fair view of the consolidated entity's financial position as at 31 December 2015
and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001; and
b.
the financial report also complies with International Financial Reporting Standards as disclosed in
Note 2.
Report on the remuneration report
We have audited the Remuneration Report included in pages 12 to 15 of the directors' report for the year
ended 31 December 2015. The directors of the company are responsible for the preparation and
presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001.
Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Legend Mining Limited for the year ended 31 December 2015,
complies with section 300A of the Corporations Act 2001.
Ernst & Young
Gavin Buckingham
Partner
Perth
4 March 2016
5 2
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
GB:EH:LEGEND:030
2015 ANNUAL REPORT
SHAREHOLDER INFORMATION
F o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 1 5
The issued capital of the company as at 1 March 2016 is 2,034,350,801 ordinary fully paid shares.
Distribution of Share Holders as at 1 March 2016
Fully Paid Shares
1
1,001
5,001
10,001
100,001
-
-
-
-
1,000
5,000
10,000
100,000
and over
Number holding less than a marketable parcel
Top 20 Shareholders as at 1 March 2016
Name
YANDAL INVESTMENTS PTY LTD
AUSTRALIAN GOLD RESOURCES PTY LTD
CHESTER NOMINEES WA PTY LTD
MIKADO CORPORATION PTY LTD
PONTON MINERALS PTY LTD
MOTTE & BAILEY PTY LTD
BELLARINE GOLD PTY LTD
KARARI AUSTRALIA PTY LTD
CASTLE BAILEY PTY LTD
SIXTY-EIGHTH STOWAWAY PTY LTD
ROCKFORD METALS PTY LTD
MR MATTHEW MCLEISH
MR ALEXANDER JASON ELKS
TOPAZ PTY LTD
PHH PTY LIMITED
BONTOWN PTY LTD
SHAH NOMINEES PTY LTD
NEFCO NOMINEES PTY LTD
MR ANDREW NICHOLAS VUKOSAV
MR L P JUDD and MRS S H JUDD
Unlisted Option holders as at 1 March 2016
Class of options
23 September 2020 exercisable at 4.0 cents per share
TENEMENT LISTING
A s a t 1 M a r c h 2 0 1 6
Number of
Holders
92
125
307
1,748
1,347
3,619
1,435
Total Holdings
344,750,000
164,985,000
80,000,000
53,500,000
48,000,000
40,566,140
33,519,371
31,000,000
29,433,860
27,000,000
23,500,000
20,004,285
20,000,000
19,703,072
17,800,000
16,000,000
13,000,000
12,000,000
10,177,777
10,010,000
1,014,949,505
Number of Shares
26,381
471,661
2,591,921
82,794,276
1,948,466,562
2,034,350,801
24,677,607
% Issued Capital
16.95
8.11
3.93
2.63
2.36
1.99
1.65
1.52
1.45
1.33
1.16
0.98
0.98
0.97
0.87
0.79
0.64
0.59
0.50
0.49
49.89
Number
150,000,000
Number of
Holders
2
Tenement
Status
Percentage Interest
FRASER PROJECT
E28/1718
E28/1727
E28/2188
E28/2189
E28/2190
E28/2191
E28/2192
E28/2342
ELA28/2408
ELA28/2415
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Application
Application
70%
70%
70%
70%
70%
70%
70%
100%
N/A
N/A
L E G E N D M I N I N G L IM I T E D
5 3
legendmining.com.au