Magmatic Resources Limited
ABN 32 615 598 322
Annual report
for the year ended 30 June 2018
Magmatic Resources Limited
ABN 32 615 598 322
Contents
Corporate Information
Review of operations
Directors’ report
Auditor’s independence declaration
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
Directors’ declaration
Independent auditor’s report to the members
ASX additional information
3
5
15
24
29
30
31
32
33
51
52
2
Magmatic Resources Limited
ABN 32 615 598 322
Corporate Information
Directors
David Berrie – Non-Executive Chairman
David Richardson – Managing Director
Malcolm Norris – Non-Executive Director
Company Secretary
Ildiko Wowesny (appointed 1 December 2017)
Ian Hobson (resigned 1 December 2017)
Registered Office and Principal Place of
Business
Level 1, 11 Lucknow Place
West Perth WA 6005
Share Registry
Auditors
Solicitors
ASX Code
Telephone:
Email:
Website:
+61 8 6102 2709
info@magmaticresources.com
www.magmaticresources.com
Computershare Investor Services Pty Ltd
Level 11, 172 St George’s Terrace
Perth WA 6000
Telephone:
Telephone:
1300 850505
+61 8 9415 4000
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008
Steinepreis Paganin
Level 4, The Read Building
16 Milligan Street
Perth WA 6000
Magmatic Resources Limited is listed on the
Australian Securities Exchange
Shares: MAG, Options: MAGO
3
Magmatic Resources Limited
ABN 32 615 598 322
Chairman’s Letter
Dear shareholder,
I am pleased to present the company’s second annual report since listing on the ASX on 17/5/2017. Our first
complete year of exploration has been an eventful and successful year for Magmatic across its portfolio. Five
targets were drilled to advance our copper-gold targets and four targets were drilled on our near-surface gold
targets. Importantly all our tenements in the East Lachlan acquired from Gold Fields were renewed 100%
without relinquishment.
We completed near surface gold exploration programmes at Moorefield Projects Carlisle Reefs target,
Wellington North Projects Lady Ilse target and Parkes JV Projects MacGregors and MacGregors South targets,
and our 2018/19 exploration will continue to focus on advancing these targets.
We delivered a separate drilling programme at our Myall Project, co-funded by the Government of New South
Wales, which we believe has put us in a better position to advance this project with possible joint venture (JV)
partners, in line with our strategy of joint venturing our deeper porphyry copper-gold projects and self-funding
exploration on the near surface gold targets across our project portfolio.
At our Parkes JV we were able to drill several targets and identified 12 new drill-ready targets in the reporting
period. Our JV partner JOGMEC (Japanese Government Resources Agency) have committed a further $1m
to fund exploration in the coming year.
Other field work completed included geochemical sampling on our near surface gold targets at Wellington
North and Parkes JV, with exciting rock chip results reported from our gold and copper-gold targets at
Wellington North.
We have also made exciting and strategic tenement acquisitions in Western Australia, with our Mt Venn
Copper-Nickel-Cobalt Project and Yamarna Gold Project tenement acquisitions, taking advantage of free-
pegging opportunities to diversify our portfolio in terms of geography and commodity in a proven exploration
belt.
We look forward to advancing our near surface gold targets and corporately we hope to announce further joint
ventures in the near future, designed to progress our deeper porphyry targets.
I want to take this opportunity to thank our personnel across the business for their contributions to the
successful execution of both exploration and corporate activities in the reporting period and acknowledge our
loyal shareholders for their continued support of the Company.
Sincerely
David Berrie
Chairman
4
Magmatic Resources Limited
ABN 32 615 598 322
Review of Operations
It has been an eventful year since Magmatic Resources Limited (“Magmatic” or the “Company”) (ASX: MAG) listed
on the ASX in May 2017. Magmatic listed on the back of acquiring a 100% interest in four large gold and copper
exploration projects in New South Wales from the world’s seventh largest gold producer, Gold Fields Limited; and
the Company’s initial strategy was to focus exploration on near surface gold targets at the Wellington North,
Moorefield and Parkes JV projects, and to identify JV partners for the larger copper-gold porphyry targets at the
Myall and Wellington North Projects.
In addition to its exploration advancement strategy for its NSW projects, Magmatic moved in the past 12 months to
acquire two strategic Western Australian projects: the Yamarna Gold Project and nearby Mt Venn Copper-Nickel-
Cobalt Project, located 150km east of Laverton.
Figure 1: Magmatic has four advanced exploration projects in New South Wales and two target generation
projects in Western Australia.
5
Magmatic Resources Limited
ABN 32 615 598 322
East Lachlan Exploration
The Company has four 100%-owned projects covering an area of 1,049km2 – Myall, Moorefield, Wellington North
and Parkes JV (with JOGMEC) – comprising eight tenements in the East Lachlan, NSW. This province is host to
major gold and copper mining operations within the Ordovician Macquarie Arc, with significant metal endowments
such as:
• Newcrest’s Cadia Valley (48.7Moz Au and 6.5Mt Cu),
• China Moly – Sumitomo’s Northparkes (3.8Moz Au and 3.4Mt Cu),
• Evolution’s Cowal (8.35Moz Au).
Other mines and advanced projects in the region include Regis’ McPhillamys (2.2Moz Au), Sandfire’s Temora
(2.1Moz Au and 0.8Mt Cu), and Alkane’s Tomingley (0.8Moz Au).
On the regulatory front, seven of Magmatic’s eight NSW licences have had 100% renewals issued for a further three
years. Magmatic is very pleased with this outcome, which was a focus of the Company’s work programme in the
past 12 months, where we committed to completing early, aggressive exploration campaigns across the portfolio
and Magmatic now looks forward to completing more targeted future programmes on these licences.
Figure 2: East Lachlan projects and geology showing volcanic belts and major igneous complexes
6
Magmatic Resources Limited
ABN 32 615 598 322
Wellington North Gold and Copper-Gold Project (100% MAG)
The Wellington North Project is located just north of the town of Wellington in the East Lachlan region of NSW. The
Project consists of three licences (EL6178, EL7440 and EL8357) covering 176.7km2. Wellington North is in the
Molong Volcanic Belt which hosts Newcrest’s Cadia Valley porphyry copper-gold deposits (48.7Moz Au and 6.5Mt
Cu).
Wellington North is a core focus project for Magmatic. The project is under thin-to-no cover and has delivered
outstanding results this year from the newly discovered Lady Ilse prospect and at the historical Bodangora mines
which have a recorded previous production of 230,000oz with an average grade of 26g/t Au.
Figure 2: Magmatic’s Wellington North Project has been a core focus of exploration activity Financial Year
2018.
7
Magmatic Resources Limited
ABN 32 615 598 322
Exploration commenced with aircore drilling at Lady Ilse (30 holes for 392m) where an old regional (500m spaced)
aircore hole with an intersection of of 3m at 0.6g/t Au had not been followed up. The aircore anomaly sat coincident
with an aeromagnetic anomaly making this a priority target for Magmatic. The aircore program delivered promising
results with five holes ending in mineralisation, including an intersection of 20m at 0.66g/t Au at end-of-hole (eoh).
Magmatic followed up the aircore drilling with RC drilling (14 holes for 1,360m), which identified intrusion related
gold-copper mineralisation under thin transported cover. Strongly magnetite altered and possibly skarn related rocks
may indicate association with a porphyry copper-gold system. Drill intercepts included 22m at 0.54g/t Au and 18m
at 0.48g/t Au.
Figure 3: Cross section of significant intercepts from drilling at the Lady Ilse prospect at Wellington North.
Previous close-spaced aeromagnetic data at Lady Ilse has been interpreted to display a circular feature, possibly
intrusion-related, with the centre at the Lady Ilse target. Three-dimensional interpretation and remodelling of the data
has shown that the source of the anomaly is likely to be deeper than the recently completed Magmatic drilling.
Deeper drilling is planned next year to target the magnetic feature, as well as the extent of the saprolite anomaly
which has not yet been fully defined.
Magmatic pegged the EL8357 licence in 2015, separately to the transaction with Gold Fields, and that decision has
reaped the Lady Ilse prospect as a reward to date.
Magmatic has started work at the old Bodangora Mines, with a mapping and sampling programme to improve
understanding of the mineralisation in this area. The rock chip samples collected returned up to 92.8g/t Au from the
old mine area at Dicks Reward and up to 2.2g/t Au from the untested and unmined Bodangora South target, 2.5km
to the south. Magmatic is planning RC drilling at Bodangora and Bodangora South to target high-grade near surface
mineralisation.
8
Magmatic Resources Limited
ABN 32 615 598 322
Rose Hill is a porphyry copper-gold target at Wellington North, which is a high-priority copper-gold porphyry target
for Magmatic, which the Company has scheduled for testing in the 2019 Financial Year, preferably through the
potential introduction of a joint venture partner.
Parkes JV Copper-Gold and Gold Project (100% MAG)
The Parkes JV Project is located just north of the town of Parkes in the East Lachlan region of NSW and consists of
two licences (EL7676 and EL7424) covering 159km2.
The project is within the Junee-Narromine Volcanic belt of the Ordovician Macquarie Arc, which hosts porphyry
copper-gold deposits at Northparkes and Temora as well as the Cowal low-sulphidation epithermal gold deposit. It
is within structurally prominent stratigraphy east of Northparkes Cu-Au porphyry deposit, and along the strike from
the Tomingley Gold Mine and Peak Hill Gold Mine.
In line with the Company’s strategy of joint venturing the larger copper-gold porphyry projects, we successfully joint
ventured out Parkes with JOGMEC (Japanese National government resources agency). In the first year they have
funded more than $1M on advancing this project and have committed to another $1M for the 2019 Financial Year.
Figure 4: Magmatic’s Parkes JV licence area straddles the highly prospective Parkes Fault Zone.
9
Magmatic Resources Limited
ABN 32 615 598 322
The work completed has included diamond drilling at Magmatic’s Buryan and Brolgan porphyry copper-gold
prospects as well as RC drilling at the MacGregors and MacGregors South gold targets (23 holes for 1,852m). The
drilling at MacGregors and MacGregors South has opened up a 2km gold corridor in the Parkes Fault Zone, with
assays including 10m at 1.25g/t Au within a broader zone of 19m at 0.8g/t Au.
Towards the end of the financial year, Magmatic completed a detailed aeromagnetic survey focussing along the
Parkes Fault Zone, based on the success of drilling here at the MacGregors and MacGregors South prospects. The
interpretation of the survey has highlighted 11 new targets with no known previous drilling and little sampling.
Magmatic has commenced sampling and mapping which will help the Company prioritise and focus drilling in the
2019 Financial Year. Magmatic is enthusiastic about a second full year of exploration at the Parkes JV and is boosted
by the confidence of a highly experienced JV partner that increased funding during the first year of exploration to
$1.3M.
Myall Gold-Copper Project (100% MAG)
The Myall Project is located 18km southwest of Narromine in the East Lachlan Province, NSW. The project consists
of one licence (EL6913) of 244km2. Myall is also within the Junee-Narromine Volcanic Belt which hosts the
Northparkes porphyry copper deposits. The licence covers one of the largest volcano-intrusive complexes in the
East Lachlan, being a similar age to the Cadia Valley and Northparkes copper-gold porphyry systems. The
Narromine Intrusive complex is one of three major intrusive complexes in the Junee-Narromine Volcanic Belt and
the only major complex not currently producing gold or copper.
The Company completed a 22 aircore and watercore drill program with diamond tails (2,394m) over the Barina,
Gemini and Kingswood targets. The drilling was co-funded by the NSW Government, and successfully confirmed
and extended the gold and copper anomalies that remain untested at depth.
Figure 5: Myall Project magnetics and geological setting showing Magmatic’s priority targets.
10
Magmatic Resources Limited
ABN 32 615 598 322
Magmatic integrated the new drilling data into the database and completed a comprehensive review including the
inspection of RC chip trays and previous core. Magmatic was able to outline four priority target areas at Myall which
has put the Company in a better position to joint venture the Myall project. The targets include the Kingswood
porphyry system where the area north of MYACD001 (e.g. 52m at 0.67% Cu, 0.2 g/t Au, from 144m) is untested for
more than 250m and open towards early reconnaissance hole NACD089 (14m at 0.14% Cu, 0.05g/t Au from 130m),
with only a single DD hole following up (NACD156: e.g. 22m at 0.21% Cu and 0.2g/t Au, from 374m).
Magmatic hopes to progress this project in the next 12 months by forming a joint venture, as the Company believes
all the ingredients of a major porphyry copper-gold system are present. This includes intersected grades, proximal
epidote alteration and the presence of “M” veins and Northparkes-style porphyry veins at Kingswood.
Moorefield Gold and Base Metals Project (100% MAG)
The Moorefield Project is located 25km northeast of the town of Condobolin in the East Lachlan region of NSW.
Moorefield consists of two tenements (EL7675 and EL8669) covering 478km2. The project is immediately adjacent
to Australian Mines’ and CleanTeQ’s nickel-cobalt-scandium projects.
Moorefield is located in a north-trending belt of Ordovician metasediments (Girilambone Group) and Siluro-Devonian
volcanics and sediments (Derriwong Group). The area is prospective for near surface epithermal gold and skarn
mineralisation in the Girilambone Group, which hosts numerous gold occurrences and VMS mineralisation in the
Derriwong Group. Late Ordovician mafic‐ultramafic intrusions occur along a major north‐west trending crustal
structure extending from Condobolin to Bourke, which are host to the Flemington, Syerston and Sopresa nickel-
cobalt-scandium deposits.
Figure 6: Carlisle Reef cross section of significant drill intercepts at the Moorefield Project.
Magmatic has identified and focused exploration on a 15km gold trend running from north of Boxdale to south of
Carlisle Reefs. Previous RC drill results at Boxdale include 19m at 1.28g/t Au. In 2017, Magmatic completed a
11
Magmatic Resources Limited
ABN 32 615 598 322
second round of RC drilling at its Carlisle Reefs prospect after a successful first round of drilling in June 2017, shortly
after listing on the ASX. The results included 30m at 1.6g/t Au, including 3m at 2.70g/t Au and 11m at 2.68g/t Au.
Magmatic was granted a new exploration licence in October 2017 which covers the interpreted southern extent of
the Boxdale-Carlisle Reefs trend. Magmatic subsequently flew a 50m line-spaced magnetic survey to test the trend
and assist with targeting. The survey results have been processed and interpretation is under way. Magmatic is
excited to release these results in the 2019 Financial Year and get on the ground to follow up these promising
targets.
Figure 7: Regional setting and magnetic imagery of the Moorefield Project and surrounds.
12
Magmatic Resources Limited
ABN 32 615 598 322
Western Australian Project Acquisitions
Magmatic acquired new exploration ground over the Mt Venn intrusion in WA, prospective for copper-nickel and
cobalt mineralisation in March 2018 as well as ground in the under-explored Yamarna Greenstone Belt. The highly
promising early stage Yamarna Gold Project compliments the Mt Venn Copper-Nickel-Cobalt Project acquired in
March 2018, 40km west of the new project area, and diversifies Magmatic’s substantial portfolio of projects in the
East Lachlan region of New South Wales. These strategic ground positions in a proven mineralised district of
Western Australia adds the in-demand commodities of cobalt and nickel to the Company’s pipeline of targets.
Figure 8: Magmatic’s strategic acquisitions in WA form part of a diversification and target generation strategy.
13
Magmatic Resources Limited
ABN 32 615 598 322
Mt Venn Copper, Nickel and Cobalt (100% MAG)
Mt Venn is located 120km east of Laverton in Western Australia. It consists of 1 tenement (E38/2961) for 60km2
which covers 60% of the Mt Venn Intrusion, where Great Boulder Resources recently discovered copper-nickel-
cobalt mineralisation at its Mt Venn target. Intercepts included 48m at 0.75% Cu, 0.2% Ni and 0.07% Co and 61m
at 0.51% Cu, 0.19% Ni and 0.06% Co (GBR ASX release 13/11/2017).
Rock chip sampling at Magmatic’s Mt Venn Project, by previous explorers, was completed along 7km of strike length
and identified copper-bearing gossans with assays up to 24% Cu, 1.89% Ni and 0.18% Co. Detailed ground EM and
heliborne VTEM surveys by previous explorers identified multiple conductors, which remain untested or with minimal
follow-up.
Magmatic intends to commence field work at its Mt Venn Project as soon as practicable with field reconnaissance,
reprocessing of EM and VTEM data and an RC drill program scheduled for the 2019 Financial Year.
Yamarna Gold Project (100% MAG)
The Yamarna Project is 150km northeast of Laverton in the underexplored Yamarna Greenstone Belt of WA, 40km
northeast of the Company’s Mt Venn Project. Magmatic has acquired and applied for three exploration tenements
this year (E38/2918 and applications E38/3312 and E38/3327) covering 355km2.
The Yamarna Project is just 15km northwest of the Gruyere (5.88Moz) gold mine under construction (Gold Fields/
Gold Road JV).
The Magmatic exploration team have identified a large scale regional structure transecting the Company’s new
tenements, interpreted to be prospective for gold. Previous exploration is limited and includes minor shallow RAB
and AC drilling, which Magmatic plans to assess with on the ground work in the 2018 field season.
Competent Persons Statement
The information in this document that relates to Exploration Results, Mineral Resources or Ore Reserves is based
on information compiled by Mr Steven Oxenburgh who is a Member of the AusIMM (CP) and a Member of the
Australian Institute of Geoscientists. Mr Oxenburgh is a full-time employee of Magmatic Resources Limited and has
sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to
the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the
“Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Oxenburgh
consents to the inclusion in the report of the matters based on his information in the form and context in which it
appears.
Additionally, Mr Oxenburgh confirms that the entity is not aware of any new information or data that materially affects
the information contained in the ASX releases referred to in this report.
14
Magmatic Resources Limited
ABN 32 615 598 322
Directors’ Report
Your directors present their annual financial report on the consolidated entity (referred to hereafter as the “Group”)
consisting of Magmatic Resources Limited (the “Company” or “parent entity”) and its wholly owned subsidiary
Modeling Resources Pty Ltd (“Modeling”). In order to comply with the provisions of the Corporations Act, the directors
report as follows:
Directors
The names of the directors of the Company during or since the end of the year are noted below. Directors were in
office for the entire period unless otherwise stated:
David Berrie – Non-Executive Chairman
David Richardson – Managing Director
Malcolm Norris – Non-Executive Director
Company Secretary
Ildiko Wowesny (appointed 1 December 2017)
Ian Hobson (appointed 20 January 2017, resigned 1 December 2017)
Principal activities
The principal activity of the Group during the financial year was mineral exploration.
Dividends
No dividend has been paid or declared since the start of the financial year and the directors do not recommend the
payment of a dividend in respect of the financial year.
Review of operations
Information on the operations of the Group is set out in the Review of Operations report on pages 5 to 14 of this
Annual Report.
Financial review
The Group incurred a loss of $2,533,870 after income tax for the financial year (2017: loss of $3,794,220).
As at 30 June 2018, the Group had net assets of $2,205,652 (30 June 2017: $4,264,431), including cash and cash
equivalents of $553,484 (30 June 2017: $3,080,365).
Significant changes in the state of affairs
There have been no significant changes in the state of affairs of the Group to the date of this report.
Matters subsequent to the end of the financial year
The Company issued a renounceable rights issue Prospectus dated 30 July 2018 to raise up to $1,226,939 on a one
new share for three existing shares basis at $0.04 per share. The company announced on 28 August 2018 that it
raised $994,366 (before costs as at 30 August 2018. The board is working with the Lead Broker to place the
remainder of the shortfall under the terms of the Prospectus.
Other than that, there has not been any matter or circumstance that has arisen after reporting date that has
significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the
state of affairs of the Group in future financial periods.
Likely developments and expected results
Additional comments on expected results of certain operations of the Group are included in the Review of Operations.
Environmental legislation
The Group is subject to significant environmental legal regulations in respect to its exploration and evaluation
activities. The group is compliant with the NGER Act 2007. There have been no known breaches of these regulations
and principles.
15
Magmatic Resources Limited
ABN 32 615 598 322
Indemnification and insurance of directors and officers
During the financial year the Company has paid premiums in respect of insuring directors and officers of the Company
against liabilities incurred as directors or officers. The amount paid is confidential under the terms of the terms of
the insurance policy. The Company has no insurance policy in place that indemnifies the Company’s auditors.
Information on directors
David Berrie; LLB Non-Executive Chairman (appointed 28 October 2016)
Experience and expertise
Mr. David Berrie has over 30 years’ experience in the mining industry. Mr Berrie worked as a solicitor in the mining
team at Clayton Utz before joining the international mining house Western Mining Corporation in 1987 with much of
that time spent in the exploration division before transitioning over to BHP Billiton. Mr Berrie has extensive public
company experience . Mr Berrie has a Bachelor of Laws and a Bachelor of Juris prudence from the University of
Western Australia.
Mr Berrie is not considered to be independent due to his interest in the securities of the Company.
Other current directorships
Hylea Metals Limited (appointed 6 February 2018)
Summit Resources Limited
Former directorships in the last 3 years: Nil
Special responsibilities
Non-Executive Chairman
Interests in shares and options at the date of this report
12,669,044 ordinary shares (indirectly held), 1,360,000 class B performance shares (indirectly held).
David Richardson; B. Comm MBA Managing Director (appointed 28 October 2016)
Experience and expertise
Mr. David Richardson is an experienced international Executive and has worked in strategic partnerships,
international business development and fund-raising in the Asia-Pacific region for over 25 years. He has lived and
worked in Asia extensively, speaks fluent Japanese and is a founding board member of the Telethon Adventurers
charity for childhood cancer research. David holds a Masters of Business Administration from the University of
Southern California in Los Angeles and undertook post graduate Japanese studies at Keio University in Tokyo.
Mr Richardson is not considered to be independent due to his executive role as Managing Director of the Company
and interest in the securities of the Company.
Other current directorships: Nil
Former directorships in the last 3 years: Nil
Special responsibilities
Managing Director
Interests in shares and options at the date of this report
37,962,573 ordinary shares (indirectly held), 4,480,000 class B performance shares (indirectly held).
Malcolm Norris; MSc, MAppFin Non-Executive Director (appointed 20 December 2016)
Experience and expertise
Mr. Malcolm Norris is a geologist with extensive experience in business management, asset transactions and
exploration with a focus on porphyry discovery. He is currently the managing director of Sunstone Metals Limited
(ASX:STM). Previously chief executive officer and managing director of SolGold Plc, Mr Norris holds a Bachelor of
Science (Geology, Hons 1) from the University of Queensland, a Master of Science from the University of Western
Ontario and a Master of Applied Finance (Kaplan).
The Board considers Mr. Norris to be an independent Director as he is not a member of management and is free of
any interest, position, association or relationship that might influence, or reasonably be perceived to influence, in a
material respect his capacity to bring an independent judgement to bear on issues before the Board.
Other current directorships
Sunstone Metals Limited
Former directorships in the last 3 years
Afranex Gold Limited
Special responsibilities: Nil
Interests in shares and options at the date of this report
16
Magmatic Resources Limited
ABN 32 615 598 322
750,000 unlisted options exercisable at 30 cents on or before 19 May 2020.
Meetings of directors
During the financial year there were four formal directors’ meetings. All other matters that required formal Board
resolutions were dealt with via written circular resolutions. In addition, the directors met on an informal basis at
regular intervals during the financial year to discuss the Group’s affairs.
The Company has no separate Audit committee or Remuneration committee as is not of a sufficient size to warrant
these. All matters usually dealt with by these committees are dealt with by the whole Board.
The number of meetings of the Company’s board of directors attended by each director were:
D Berrie
D Richardson
M Norris
Shares under option
Directors’ meetings held Directors’ meetings
attended
4
4
4
4
4
4
Outstanding share options at the date of this report are as follows:
Grant date
Date of expiry
Exercise price
Number of options
11 May 2017
11 May 2017
11 May 2017
11 May 2017
30 August 2018
17 May 2020
17 May 2020
11 May 2019
11 May 2020
30 August 2021
$0.30
$0.30
$0.20*
$0.20*
$0.10
8,480,613
9,500,000
2,500,000 (Tranche 2)
2,500,000 (Tranche 3)
26,859,141
*Unlisted options exercisable at a price which is greater of $0.20 or a 5% discount to the 20-day weighted average
price of shares on ASX.
No option holder has any right under the options to participate in any other share issue of the Company or any other
controlled entity.
Shares issued on the exercise of options
There have been no shares issued upon the exercise of options.
Remuneration Report (Audited)
This report outlines the remuneration arrangements in place for the key management personnel of Magmatic
Resources Limited (the “Company” or “Parent”) for the financial year ended 30 June 2018. The information provided
in this remuneration report has been audited as required by Section 308(3C) of the Corporations Act 2001.
The remuneration report details the remuneration arrangements for key management personnel (“KMP”) who are
defined as those persons having authority and responsibility for planning, directing and controlling the major activities
of the Company and the Group, directly or indirectly, including any director (whether executive or otherwise) of the
parent company, and includes all executives in the Parent and the Group receiving the highest remuneration.
Key Management Personnel
(i) Directors
David Berrie - Non-Executive Chairman
David Richardson – Managing Director
Malcolm Norris – Non-Executive Director
17
Magmatic Resources Limited
ABN 32 615 598 322
(ii) Executives
Ildiko Wowesny - Chief Financial Officer and Company Secretary (appointed 1 December 2017)
Ian Hobson – Chief Financial Officer and Company Secretary (appointed 20 January 2017, resigned 1 December
2017)
Details of directors’ and executives’ remuneration are set out under the following main headings:
A
B
C
D
Principles used to determine the nature and amount of remuneration
Details of remuneration
Employment contracts/Consultancy agreements
Share-based compensation
Principles used to determine the nature and amount of remuneration
A
The objective of the Company’s executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aims to align executive reward with the creation of value for
shareholders. The key criteria for good remuneration governance practices adopted by the Board are:
•
•
•
•
•
competitiveness and reasonableness
acceptability to shareholders
performance incentives
transparency
capital management
The framework provides a mix of fixed salary, consultancy, agreement based remuneration and share based
incentives.
The broad remuneration policy for determining the nature and amount of emoluments of Board members and senior
executives of the Company is governed by the full board. Although there is no separate remuneration committee,
the Board’s aim is to ensure the remuneration packages properly reflect directors’ and executives’ duties and
responsibilities. The Board assesses the appropriateness of the nature and amount of emoluments of such officers
on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring
maximum stakeholder benefit from the retention and motivation of a high quality Board and executive team.
The current remuneration policy adopted is that no element of any director or executive package is directly related
to the Company’s financial performance. Indeed there are no elements of any director or executive remuneration
that are dependent upon the satisfaction of any specific condition however the overall remuneration policy framework
is structured to advance and create shareholder wealth.
Non-executive directors
Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of,
the directors. Non-executive directors’ fees and payments are reviewed annually by the Board and are intended to
be in line with the market. Non-executive directors receive a board fee and fees for chairing or participating on board
committees. They do not receive performance-based pay or retirement allowances.
For the year ended 30 June 2018, exclusive of superannuation guarantee the annual cash remuneration for the Non-
Executive Director was $45,000 with the Chairman receiving $60,000.
Directors’ fees
On appointment to the Board, all non-executive directors enter into a service agreement with the Company in the form
of a letter of appointment. The letter summarises the Board policies and terms, including remuneration relevant to the
office of director.
The Board policy is to remunerate non-executive directors at commercial market rates for comparable companies for
their time, commitment and responsibilities. Non-executive directors receive a Board fee but do not receive fees for
chairing or participating on Board committees. Board members are allocated superannuation guarantee contributions as
required by law, and do not receive any other retirement benefits. From time to time, some individuals may choose to
sacrifice their salary or consulting fees to increase payments towards superannuation.
Fees for non-executive directors are not linked to the performance of the Group.
Retirement allowances for directors
Apart from superannuation payments paid on salaries there are no retirement allowances for directors.
18
Magmatic Resources Limited
ABN 32 615 598 322
Executive pay
The executive pay and reward framework has the following components:
•
•
base pay and benefits such as superannuation
long-term incentives through participation in employee equity issues
Base pay
All executives are either full time employees or consultants who are paid on an agreed basis that has been formalised
in a consultancy agreement.
Benefits
Apart from superannuation paid on executive salaries there are no additional benefits paid to executives.
Short-term incentives
There are no current short term incentive remuneration arrangements.
Performance based remuneration
To ensure that the Company has appropriate mechanisms in place to continue to attract and retain the services of
suitable directors and employees, the Company has, in the past, issued options and performance rights to some key
personnel.
No options or performance rights were issued during the year ended 30 June 2018.
Company performance, shareholder wealth and directors’ and executives’ remuneration
No relationship exists between shareholder wealth, director and executive remuneration and Company
performance due to the nature of the Company’s operations being a non-producing resources exploration
company.
The table below shows the losses and earnings per share of the Company for the last three financial years:
Net loss
Share price at year end
(cents)
Loss per share (cents)
2018
$2,533,870
6.1c
3.1
2017
$3,794,220
12
6.6
2016
n/a
n/a
Details of remuneration
B
Amounts of remuneration
Details of the remuneration of the directors and other key management personnel (as defined in AASB 124 Related
Party Disclosures) of the Company and the Group for the year ended 30 June 2018 are set out in the following tables.
The key management personnel of the Group comprise the directors of the Company and persons who have the
authority and responsibility for planning, directing and controlling the activities of the Group. Given the size and
nature of the Group, there are no other employees who are required to have their remuneration disclosed in
accordance with the Corporations Act 2001. No cash remuneration is linked to performance however performance
rights were issued during the year as discussed below.
19
Magmatic Resources Limited
ABN 32 615 598 322
Year ended 30 June 2018
Name
Salary / fees
Director
D Berrie
D Richardson
M Norris
Key Management Personnel
I Wowesny (appointed 1 December 2017)
I Hobson (appointed 20 January 2017,
resigned 1 December 2017)
$
60,000
150,000
40,000
70,334
46,640
Post-
employment
benefits
Superannuation
$
Share-based
payments
Total
$
$
5,700
14,250
3,800
6,757
-
-
-
-
-
-
-
65,700
164,250
43,800
77,091
46,640
397,481
366,974
30,507
Year ended 30 June 2017
Name
Salary / fees
Director
D Berrie (appointed 28 October
2016)
D Richardson (appointed 28
October 2016)
M Norris (appointed 20 Dec
2016)
R Komatsuzaki (appointed 28
Oct 2016, resigned 20
December 2016)
A Gibson (appointed 28 October
2016, resigned 25 November
2016)
Key Management Personnel
I Hobson (appointed 20 January
2017)
S Cranswick (28 October 2016,
resigned 20 January 2017
$
45,572
35,238
5,000
-
-
63,900
51,095
Post-
employment
benefits
Superannuation
$
Share-based
payments
$
Total
$
4,323
3,348
459,680
509,575
1,514,240
1,552,826
-
-
-
-
-
89,661*
94,661
-
-
-
-
41,842*
-
105,742
51,095
* Issued as an incentive at the time of IPO. There are no performance criteria attached to these options.
200,805
7,671
2,105,423
2,313,899
C
Employment contracts/Consultancy agreements
On appointment to the Board, all Non-Executive Directors enter into a service agreement with the Company in the
form of a letter of appointment.
Remuneration of the Managing Director and other executives are formalised in letters of appointment and
employment agreements. These agreements provide details of the salary and employment conditions relating to
each employee.
20
Magmatic Resources Limited
ABN 32 615 598 322
Name
Term of agreement
and notice period
Base salary (excl
superannuation)
Termination
payments
David Richardson
Managing Director
Ildiko Wowesny
CFO/Company
Secretary
2 years
3 months
2 years
3 months
D
Share-based compensation
$150,000
$137,000
N/A
N/A
There was no share based compensation given during the year ended 30 June 2018.
Key management personnel equity holdings
I Hobson (resigned 1 December 2017)
30,000
(30,000)
2018
Ordinary shares
Directors
D Berrie
D Richardson
M Norris
Other Key management personnel
I Wowesny (appointed 1 December 2017)
Options
Directors
D Berrie
D Richardson
M Norris
Other Key management personnel
I Wowesny (appointed 1 December 2017)
I Hobson (resigned 1 December 2017)
Performance shares
Directors
D Berrie
D Richardson
M Norris
Other Key management personnel
I Wowesny (appointed 1 December 2017)
I Hobson (resigned 1 December 2017)
Balance at
beginning of year
Net movement
during the year
Balance at the end
of year
10,524,044
27,952,573
1,470,000
5,010,000
11,994,044
32,962,573
-
-
-
-
-
-
-
Balance at
beginning of year
Net movement
during the year
Balance at the end
of year
-
-
750,000
-
350,000
244,3752
121,8752
-
-
5,0002
244,375
121,875
750,000
-
355,000
2,720,000
8,960,000
(1,360,000)1
(4,480,000)1
1,360,000
4,480,000
-
-
-
-
-
-
-
-
-
21
1 Class A Performance Shares that converted into fully paid ordinary shares upon completion of performance hurdles
Magmatic Resources Limited
ABN 32 615 598 322
2 Loyalty shares issued to all eligible shareholders in the IPO (in the 2017 financial year) that vested in July 2018
No remuneration consultants have been used. Other than disclosed above, there are no other transactions
with key management personnel.
Loans to Key Management Personnel
There were no loans to individuals or members of key management personnel during the financial year.
Transactions with Key Management Personnel
Mr David Richardson (Managing Director)
During the financial year the son of Mr Richardson provided casual administrative services to the Company to
the value of $887.50. These services were provided on normal commercial terms and conditions.
Mr David Berrie (Non-Executive Chairman)
During the financial year, the daughter of Mr Berrie provided casual administrative services to the Company to
the value of $3,506.25. Fees of $3,300 provided by Mr Berrie’s related entity, Hylea Metals Limited were
incurred during the year. All services were provided on normal commercial terms and conditions
Other than described above, there were no transactions with key management personnel during the financial
year or the previous financial year
E
Voting and comments made at the Company’s 2017 Annual General Meeting
Magmatic Resources Ltd received more than 98% of “yes” votes on its remuneration report for the 2017
financial year. The Company did not receive any specific feedback at the AGM or throughout the year on its
remuneration practices.
End of audited remuneration report.
Auditor’s independence and non-audit services
Section 307C of the Corporations Act 2001 requires our auditors, BDO Audit (WA) Pty Ltd to provide the directors of
the Company with an Independence Declaration in relation to the audit of the annual report. This Independence
Declaration is set out on page 24 and forms part of this directors’ report for the year ended 30 June 2018.
Non-audit services
The Company may decide to employ the auditors on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the Company and/or the consolidated entity are important. The Company has
considered the position and is satisfied that the provision of the non-audit services is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001. Details of remuneration paid to the
auditors are:
Assurance services
BDO Audit (WA) Pty Ltd
Audit and review of financial statements
Total remuneration for audit services
Other services
BDO Advisory (WA) Pty Ltd- Investigating
Accountant’s Report
Total auditor’s remuneration
Consolidated
2018
$
2017
$
33,765
33,765
24,162
24,162
-
28,478
33,765
52,640
22
Magmatic Resources Limited
ABN 32 615 598 322
Proceedings on behalf of Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
Insurance of Directors and Officers
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be
brought against the officers in their capacity as officers of the Company, and any other payments arising from liabilities
incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from
conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of
information to gain advantage for themselves or someone else or to cause detriment to the company. It is not possible
to apportion the premium between amounts relating to the insurance against legal costs and those relating to other
liabilities.
This report is made in accordance with a resolution of the directors.
D Berrie
Chairman
PERTH, Western Australia
Dated: 20 September 2018
23
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY NEIL SMITH TO THE DIRECTORS OF MAGMATIC RESOURCES
LIMITED
As lead auditor of Magmatic Resources Limited for the year ended 30 June 2018, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Magmatic Resources Limited and the entities it controlled during the
period.
Neil Smith
Director
BDO Audit (WA) Pty Ltd
Perth, 20 September 2018
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for
the acts or omissions of financial services licensees
Magmatic Resources Limited
ABN 32 615 598 322
Corporate Governance Statement
ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations – 3rd edition
As at 30 June 2018 and approved by the Board
The Company is committed to high standards of corporate governance designed to enable the Company to meet its
performance objectives and better manager its risks.
The Company has adopted a comprehensive governance framework in the form of a formal corporate governance charter
together with associated policies, protocols and related instruments.
A full copy of the Company’s corporate governance charter and associated policies, protocols and related instruments is
available on the Company’s website at: www.magmaticresources.com.
The Company intends to follow the ASX CGC P&R in all respects other than as specifically provided below.
The independent director of the Company is Mr Norris. When determining the independent status of a Director the Board
used the Guidelines detailed in the ASX Corporate Governance Council’s Principles of Good Corporate Governance and
Best Practice Recommendations.
Recommendation
Current Practice
1.1
A listed entity should disclose:
a. The respective roles and responsibilities of its
Satisfied. The functions reserved for the Board and
delegated to senior executives have been established.
1.2
1.3
1.4
1.5
board and management; and
b. Those matters expressly reserved to the board
and those delegated to management.
A listed entity should:
a. Undertake appropriate checks before appointing a
person, or putting forward to security holders a
candidate for election, as a director; and
b. Provide security holders with all material
information in its possession relevant to a
decision on whether or not to elect or re-elect a
director
A listed entity should have a written agreement with
each director and senior executive setting out the
terms of their appointment.
Satisfied. Appropriate checks have been undertaken.
Satisfied. Agreements are in place.
The company secretary of a listed entity should be
accountable directly to the board, through the chair, on
all matters to do with proper functioning of the board.
Satisfied. This practice is in place.
A listed entity should:
a. Have a diversity policy;
b. Disclose that policy or a summary of it;
c. Disclose the measurable objectives for achieving
gender diversity and the its progress towards
achieving them; and
d. The respective proportions of men and women.
Satisfied.
Satisfied, see corporate governance section of website.
Not satisfied. The measurable objectives are yet to be
set.
Board – 100% men; Senior Executives – 50% men;
whole organisation – 80% men.
25
Magmatic Resources Limited
ABN 32 615 598 322
A listed entity should:
1.6
a. Have and disclose a process for periodically
evaluating the performance of the board, its
committees and individual directors; and
b. Disclose whether performance evaluations
were undertaken.
1.7
A listed entity should:
Satisfied, see process in corporate governance policies.
Not satisfied. No evaluations have been undertaken to
date
a. Have and disclose a process for periodically
Satisfied, see process in corporate governance policies.
evaluating the performance of senior
management; and
b. Disclose whether performance evaluations
were undertaken.
2.1
A listed entity should have a nomination committee
which:
- Consists of at least 3 members, a majority of
whom are independent directors;
Is chaired by an independent director;
-
And disclose:
-
-
-
The charter of the committee;
The members of the committee
The number of times the committee met and
individual attendance at those meetings
Not satisfied. No evaluations have been undertaken to
date.
Not Satisfied.
The board has not established a nomination committee
as the company is not of sufficient size to warrant such a
committee. The role of the committee is undertaken by
the full board.
2.2
2.3
If it does not have a nomination committee disclose
that fact and the process it follows to address that role.
To be developed as the Company’s size increases
A listed entity should have and disclose a board skills
matrix.
Satisfied. See corporate governance section of website.
A listed entity should disclose:
-
The names of the directors considered by the
board to be independent directors and length of
service.
If a director has an interest / association /
relationship that meets the factors of assessing
independence.
-
Satisfied. Mr Norris is the Non-Executive independent
director as defined in ASX guidelines.
N/A
2.4
A majority of the board should be independent
directors.
Not satisfied, only one of the three directors is an
independent director. The Company is not of sufficient
size to warrant a larger board.
2.5
The chair should be an independent director.
Not Satisfied. Mr David Berrie is not an independent
Non-Executive Director.
The roles of Chair and Chief Executive Officer should
not be exercised by the same individual.
Satisfied.
2.6
A listed entity should have a program for inducting
new directors.
Not Satisfied.
3.1
A listed entity should:
- have a code of conduct; and
- disclose the code or a summary of it.
The board has not established this process due to the
Company’s size.
Satisfied.
The Code of Conduct is available at in the Corporate
Governance Section on the Company’s website.
26
Magmatic Resources Limited
ABN 32 615 598 322
4.1
4.2
4.3
5.1
The board of a listed entity should have an audit
committee which:
- Has at least three members all of whom are non-
executive directors and a majority of independent
directors; and
Is chaired by an independent chair, who is not
chair of the board.
-
Disclose:
-
-
-
The charter of the committee;
The relevant member qualifications;
The number of times the committee met and
individual attendance at those meetings
Not Satisfied.
The board has not established an audit committee as it
would comprise the same 3 members. The role of the
committee is undertaken by the full board.
The audit committee charter is available at
www.magmaticresources.com in the Corporate
Governance Section.
The board should receive declarations for CEO & CFO
in accordance with S.295A of corporations act before
approving financial statements.
Satisfied.
A listed entity should ensure its external auditor
attends its AGM.
Satisfied.
A listed entity should:
- Have a written policy for complying with its
continuous disclosure obligations under the
Listing Rules; and
disclosure that policy or a summary of it.
-
Satisfied.
Continuous disclosure policy is available at
www.magmaticresources.com
Satisfied - in the Corporate Governance Section.
6.1
A listed entity should provide information about itself
and its governance to investors via its website.
Satisfied.
6.2
6.3
6.4
7.1
A listed entity should design and implement an
investor relations program to facilitate effective two-
way communication with investors.
Satisfied. See www.magmaticresources.com in the
Corporate Governance Section.
See www.magmaticresources.com in the Corporate
Governance Section.
A listed entity should disclose the policies and
processes it has in place to facilitate and encourage
participation at meetings of security holders.
Satisfied. See communication policy at
www.magmaticresources.com in the Corporate
Governance Section.
A listed entity should give security holders the option
to receive communications from, and send
communication to, the entity and its security registry
electronically.
The board of a listed entity should have a committee
to oversee risk, which:
- Has at least three members all of whom are non-
executive directors and a majority of independent
directors; and
Is chaired by an independent chair, who is not
chair of the board.
-
Disclose:
Satisfied. See welcome pack to investors.
The board has not established a risk committee as it
would comprise the same 3 board members. The role
of the committee will be undertaken by the full board.
The company has established policies for the oversight
and management of material business risks.
27
Magmatic Resources Limited
ABN 32 615 598 322
-
-
-
The charter of the committee;
The members of the committee; and
The number of times the committee met and
individual attendance at those meetings
If it does not have a risk committee disclose that fact
and the process it follows to address that role.
Risk management program is available at
www.magmaticresources.com in the Corporate
Governance Section.
7.2
The board or a committee of the board should:
- Review the entity’s risk management framework
Not satisfied.
at least annually to satisfy itself that it continues to
be sound; and
- Disclose whether such a review has taken place.
7.3
7.4
8.1
8.2
8.3
A listed entity should disclose:
-
-
If has an internal audit function, how the function
is structured and what role it performs;
If it does not have an internal audit function,
disclose that fact and the process it follows to
address that function.
Not satisfied. The entity does not have an internal audit
function. The function is performed by the full board.
The entity should disclose whether it has any material
exposure to economic, environmental and social
sustainability risks, and if it does, how it manages
those risks.
The entity does not have material exposure in these
areas.
The board of a listed entity should:
-
have a remuneration committee which has at
least three members all of whom are non-
executive directors and a majority of independent
directors; and
Is chaired by an independent director; and
Not Satisfied.
The board has not established a remuneration and
nomination committee as it would comprise the same 3
board members. The role of the committee is
undertaken by the full board.
-
Disclose:
-
-
-
The charter of the committee;
The members of the committee; and
The number of times the committee met and
individual attendance at those meetings
If it does not have a remuneration committee disclose
that fact and the process it follows to address that role.
Companies should clearly distinguish the structure of
non-executive directors’ remuneration from that of
executive directors and senior executives.
Satisfied.
The structure of Directors’ remuneration is disclosed in
the annual report.
A listed entity which has an equity-based remuneration
scheme should:
- Have a policy on whether participants are
permitted to enter into transactions which limit the
economic risk of participating in the scheme;
- Disclose that policy or a summary of it.
There is no broad policy.
Further information about the Company’s corporate governance practices is set out on the Company’s website at
www.magmaticresources.com
28
Magmatic Resources Limited
ABN 32 615 598 322
Consolidated Statement of Profit or Loss and Other
Comprehensive Income for the year ended 30 June 2018
Consolidated
Note
2018
$
2
3
3
4
Continuing Operations
Other income
Corporate administration expenses
Exploration expenditure incurred
Share based payment expense
Finance costs
Loss before tax
Income tax
Net loss for the period
Other comprehensive income, net of tax
Items that will not be classified subsequently to profit or
loss
Items that may be reclassified subsequently to profit or loss
Total comprehensive loss for the year
Total comprehensive loss for the period attributable to
the members of Magmatic Resources Limited:
2017
$
10,510
10,510
(682,650)
(595,719)
(2,342,832)
(183,529)
(3,804,730)
225,608
225,608
(1,138,923)
(1,620,554)
-
-
(2,759,477)
(2,533,870)
(3,794,220)
-
-
(2,533,870)
(3,794,220)
-
-
-
-
(2,533,870)
(3,794,220)
(2,533,870)
(3,794,220)
Loss per share attributable to the members of
Magmatic Resources Limited
Loss per share (dollars)
5
$0.031
$0.066
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in
conjunction with the accompanying notes.
29
Magmatic Resources Limited
ABN 32 615 598 322
Consolidated Statement of Financial Position
as at 30 June 2018
Current Assets
Cash and cash equivalents
Other receivables
Total Current Assets
Non-Current Assets
Plant and Equipment
Security Bonds
Exploration assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Total Current Liabilities
Non-Current Liabilities
Trade and other payables
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
Consolidated
Note
2018
$
2017
$
7
8
9
10
11
12
12
13
14
553,484
89,551
3,080,365
84,737
643,035
3,165,102
75,419
101,300
2,043,350
44,531
71,300
1,368,350
2,220,069
1,484,181
2,863,104
4,649,283
531,015
384,852
531,015
384,852
126,527
126,527
-
-
657,542
384,852
2,205,562
4,264,431
5,838,182
3,068,703
(6,701,323)
3,763,182
4,668,702
(4,167,453)
2,205,562
4,264,431
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying
notes.
30
Magmatic Resources Limited
ABN 32 615 598 322
Consolidated Statement of Changes in Equity for the year
ended 30 June 2018
Consolidated
Balance at 1 July 2016
Loss after income tax expense for
the year
Other comprehensive income for the
year, net of tax
Total comprehensive loss for the
year
Transactions with owners
recorded directly in equity
Issue of ordinary shares
Capital raising expenses
Restructure reserve on acquisition of
subsidiary
Options issued during the year
Total transactions with owners
recorded directly in equity
Balance at 30 June 2017
Balance at 1 July 2017
Loss after income tax expense for
the year
Other comprehensive income for the
year, net of tax
Total comprehensive loss for the
year
Transactions with owners
recorded directly in equity
Conversion of “A” Class
Performance shares
Issue of ordinary shares
Total transactions with owners
recorded directly in equity
Issued
capital
$
250
-
-
-
5,223,529
(1,460,597)
-
-
Share
Based
Payments
Reserved
$
-
-
-
-
-
-
-
4,668,452
Capital
Restructure
Reserve
Accumulate
d losses
Total equity
$
$
$
-
(373,233)
(372,983)
-
(3,794,220)
(3,794,220)
-
-
250
-
-
-
(3,794,220)
(3,794,220)
-
-
-
-
-
5,223,529
(1,460,597)
250
4,668,452
8,431,634
3,762,932
4,668,452
250
3,763,182
4,668,452
250
(4,167,453)
4,264,431
3,763,182
4,668,452
250
(4,167,453)
4,264,431
-
-
-
-
-
-
1,600,000
475,000
(1,600,000)
-
475,000
-
-
(2,533,870)
(2,533,870)
-
-
-
-
-
-
(2,533,870)
(2,533,870)
-
-
-
475,000
475,000
Balance at 30 June 2018
5,838,182
3,068,452
250
(6,701,323)
2,205,562
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying
notes.
31
Magmatic Resources Limited
ABN 32 615 598 322
Consolidated Statement of Cash Flows
for the year ended 30 June 2018
Cash flows from operating activities
Payments to suppliers and employees
Payments for exploration expenditure
Proceeds from earn-in partner
Interest received
Consolidated
2018
$
2017
$
Note
(876,134)
(2,796,915)
1,482,965
9,238
(520,148)
(652,508)
208,783
4,780
Net cash used in operating activities
19(a)
(2,180,846)
(959,093)
Cash flows from investing activities
Payments for property, plant & equipment
Tenement security bonds
Payment for tenements
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Proceeds from the issue of shares
Payment of capital raising costs
Net cash from financing activities
Net increase/(decrease) in cash and cash
equivalents
Cash and cash equivalents at the beginning of
the year
Cash and cash equivalents at the end of the
year
(66,035)
(30,000)
(250,000)
(31,781)
(61,300)
-
(346,035)
(93,081)
-
-
-
-
-
973,220
(373,566)
4,000,011
(512,686)
4,086,979
(2,526,881)
3,034,805
3,080,365
45,560
7
553,484
3,080,365
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
32
Magmatic Resources Limited
ABN 32 615 598 322
Notes to the consolidated financial statements for the year
ended 30 June 2018
Note 1: Statement of significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
(a)
(b)
New, revised or amending Accounting Standards and Interpretations adopted
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting
period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have
not been early adopted.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian
Accounting Standards and Interpretations issued by the Australian Accounting Standards Board and the
Corporations Act 2001. Magmatic Resources Limited is a for-profit entity for the purpose of preparing the
financial statements.
Historical cost convention
The financial statements have been prepared under the historical cost convention.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the company's accounting
policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the financial statements, are disclosed in note 1(t).
(c)
Going Concern
For the year ended 30 June 2018 the entity recorded a net loss of $2,533,870 (2017: $3,794,220), had net
cash outflows from operating activities of $2,180,846, cash balance of $553,484 and future exploration
commitments of $1,827,475 (Refer to Note 16). The ability of the entity to continue as a going concern is
dependent on securing additional funding through capital raising or joint venture of projects to continue to
fund its exploration and marketing activities.
These conditions indicate a material uncertainty that may cast a significant doubt about the entity’s ability to
continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its
liabilities in the normal course of business.
Management believe there are sufficient funds to meet the entity’s working capital requirements as at the
date of this report. Subsequent to year end the entity received $994,365 (before costs) as a result of a
renounceable rights issue.
The financial statements have been prepared on the basis that the entity is a going concern, which
contemplates the continuity of normal business activity, realisation of assets and settlement of liabilities in
the normal course of business as the directors are confident the Group will raise funds through capital raising
events or joint venture projects as and when required.
Should the entity not be able to continue as a going concern, it may be required to realise its assets and
discharge its liabilities other than in the ordinary course of business, and at amounts that differ from those
stated in the financial statements and that the financial report does not include any adjustments relating to
the recoverability and classification of recorded asset amounts or liabilities that might be necessary should
the entity not continue as a going concern.
33
Magmatic Resources Limited
ABN 32 615 598 322
(d)
(e)
(f)
(g)
(h)
(i)
(j)
Statement of compliance
The financial report was authorised by the Board of directors for issue on 19 September 2018.
The financial report complies with Australian Accounting Standards and International Financial Reporting
Standards (IFRS).
Principles of consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent entity
(Magmatic Resources Limited) and its controlled entity Modelling Resources Pty Ltd. The parent controls
an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has
the ability to affect those returns through its power over the entity.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the
Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is
discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains
or losses on transactions between group entities are fully eliminated on consolidation. Accounting policies
of subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the
accounting policies adopted by the Group.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based
on the applicable income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior
periods, where applicable.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is current when it is expected to be realised or intended to be sold or consumed in normal operating
cycle; it is held primarily for the purpose of trading; it is expected to be realised within twelve months after
the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used
to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-
current.
A liability is current when: it is expected to be settled in normal operating cycle; it is held primarily for the
purpose of trading; it is due to be settled within twelve months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other
short-term, highly liquid investments with original maturities 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.
The Group accounts for long term restricted security deposits as ‘other’ non-current assets.
Other receivables
Other receivables are recognised at amortised cost, less any provision for impairment.
Plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical
cost includes expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and
equipment (excluding land) over their expected useful lives as follows:
Plant and equipment
3-7 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at
each reporting date.
34
(k)
(l)
(m)
(n)
(o)
Magmatic Resources Limited
ABN 32 615 598 322
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful
life of the assets, whichever is shorter.
An item of plant and equipment is derecognised upon disposal or when there is no future economic benefit
to the company. Gains and losses between the carrying amount and the disposal proceeds are taken to
profit or loss.
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the
arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the
use of a specific asset or assets and the arrangement conveys a right to use the asset.
Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a
straight-line basis over the term of the lease.
Impairment of non-financial assets
Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by
which the asset's carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-
in-use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount
rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have
independent cash flows are grouped together to form a cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
financial period and which are unpaid. Due to their short-term nature they are measured at amortised cost
and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure
purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date; and assumes that
the transaction will take place either: in the principle market; or in the absence of a principal market, in the
most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or
liability, assuming they act in their economic best interest. For non-financial assets, the fair value
measurement is based on its highest and best use. Valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair value, are used, maximising the
use of relevant observable inputs and minimising the use of unobservable inputs.
Exploration expenditure
Exploration expenditure is expensed to the statement of profit or loss as incurred and acquisition costs are
capitalised as noncurrent assets. 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. Where uncertainty
exists as to the future viability of certain areas, the value of the area of interest is written off or provided
against. Due to the speculative nature, when exploration assets have been acquired through equity
instruments, the fair value of the asset cannot be measure reliably, therefore the fair value of the equity
instrument is used to determine the fair value of the asset.
Impairment testing of exploration and evaluation expenditure
Exploration and evaluation expenditure is assessed for impairment if sufficient data exists to determine
technical feasibility and commercial viability or facts and circumstances suggest that the carrying amount
exceeds the recoverable amount.
Exploration and evaluation expenditure is tested for impairment when any of the following facts and
circumstances exist:
35
Magmatic Resources Limited
ABN 32 615 598 322
• The term of exploration licence in the specific area of interest has expired during the reporting period or
will expire in the near future, and is not expected to be renewed;
• Substantive expenditure on further exploration for and evaluation of mineral resources in the specific
area are not budgeted nor planned;
• Exploration for and evaluation of mineral resources in the specific area have not led to the discovery of
commercially viable quantities of mineral resources and the decision was made to discontinue such
activities in the specified area; or
• Sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the
carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful
development or by sale.
Where a potential impairment is indicated, an assessment is performed for each area of interest. The Group
performs impairment testing in accordance with accounting policy note 1(l).
(p)
Asset acquisition policy
The Group has determined that the acquisition of the Mt Venn project is not deemed a business acquisition.
In assessing the requirements of IFRS 3 Business Combinations, the Group has determined that the asset
acquired does not constitute a business. The asset acquired consists of a a granted mineral exploration
tenement in the Mt Venn region of Western Australia. When an asset acquisition does not constitute a
business combination, the assets and liabilities are assigned a carrying amount based on their relative fair
values in an asset purchase transaction and no deferred tax will arise in relation to the acquired asset and
assumed liabilities as the initial recognition exemption for deferred tax under AASB 112 applies. No
goodwill will arise on the acquisition and transaction costs of the acquisition.
(q)
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
(r)
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the
acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount
of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables
in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to the tax authority, are presented as operating
cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to,
the tax authority.
(s)
Deferred tax
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of deferred income 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 asset to be utilised.
Unrecognised deferred income 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.
(t)
Amendments to AASBs and the new Interpretation that are mandatorily effective for the current
reporting period
36
Magmatic Resources Limited
ABN 32 615 598 322
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian
Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current
year.
Standards issued but not yet effective
A number of new standards, amendment of standards and interpretations have recently been issued but are
not yet effective and have not been adopted by the Group as at the financial reporting date.
The Group has reviewed these standards and interpretations, and with the exception of the items listed
below for which the final impact is yet to be determined, not of the new or amended standards will significantly
affect the Group’s accounting policies, financial position or performance.
Application date
of standard*
Application date
for Group *
1 January 2018
1 July 2018
1 January 2018
1 July 2018
Reference and title
Summary
AASB 9
Financial Instruments
AASB 15
Revenue from Contracts
with Customers
forward-looking
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
loss’
single,
impairment model and a substantially-
reformed approach to hedge accounting
Changes in relation to the expected credit loss
model for calculating impairment on financial
assets does not have a material impact on the
group’s receivables as this is comprised
principally of GST receivables and tenement
bonds. Due to high credit quality these
receivables default risk is deemed very low.
‘expected
for
accounting
AASB 15 provides a single, principles-based
five-step model to be applied to all contracts
with customers. Guidance is provided on
topics such as the point at which revenue is
recognised,
variable
consideration, costs of fulfilling and obtaining
a contract and various related matters. New
revenue are also
disclosures
introduced.
Based on an initial impact assessment, the
new standard is not expected to significantly
impact revenue recognition as there is no
revenue from customers being earnt at 30
June 2018.
regarding
1 January 2019
1 July 2019
AASB 16
Leases
This Standard introduces a single lessee
accounting model and requires a lessee 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 is
required to recognise a right-of-use asset
representing its right to use the underlying
leased asset and a lease liability representing
its obligation to make lease payments. The
Group is yet to assess the impact of AASB16
at this stage.
* designates the beginning of the applicable annual reporting period
37
Magmatic Resources Limited
ABN 32 615 598 322
(t)
Critical accounting estimates and judgements
The preparation of these financial statements requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process of applying the Group’s accounting
policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions
and estimates are significant to the financial statements are:
Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its property,
plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical
innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are
less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold
will be written off or written down.
Impairment of Exploration and Evaluation Asset
Determining the recoverability of exploration and evaluation expenditure capitalised in accordance with the Group’s
accounting policy (refer Note 1(o)), requires judgements as to future events and circumstances, in particular,
whether successful development and commercial exploitation, or alternatively sale, of the respective areas of
interest will be achieved. If, after having capitalised the expenditure under accounting policy 1(o), a judgement is
made that recovery of the expenditure is unlikely, an impairment loss is recorded in the income statement in
accordance with accounting policy 1(l). The carrying amounts of exploration and evaluation assets are set out in
Note 11.
Note 2: Other income
JV management fee
Interest income
Other
Note 3: Expenses
Corporate and administration expenses
Depreciation
Consulting Fees
Investor Relations
Legal Fees
Travel
Employee Expenses
Rental Expense
Other
Stamp Duty
Exploration and evaluation expenses
Exploration expenses incurred
Less: reimbursement from JV partner
Net exploration and evaluation expense
Consolidated
2018
$
100,370
9,237
116,001
225,608
2017
$
-
-
10,510
10,510
35,149
26,980
6,338
9,140
62,052
432,576
117,257
322,904
126,527
1,138,923
14,275
84,463
28,054
56,274
78,650
214,412
78,518
128,004
682,650
2,858,131
(1,237,577)
1,620,554
653,016
(57,297)
595,719
14,275
84,463
28,054
38
Magmatic Resources Limited
ABN 32 615 598 322
Note 4: Income tax
(a) Income tax benefit
The prima facie income tax expense on pre-tax accounting result
from operations reconciles to the income tax benefit in the financial
statements as follows
Accounting loss from continuing operations before income tax
Tax expense/(benefit) calculated at 27.5%
Add
Non-deductible expenses
Deductible equity costs
Tax loss not brought to accounts
Income tax (benefit) reported in the statement of
profit or loss and other comprehensive income
(b) Unrecognised deferred tax balances
The following deferred tax assets have not been brought to
account
Deferred tax assets comprise:
Accruals
Employee entitlements
Share issue costs
Exploration expenditure
Losses available for offset against future income – revenue
Deferred tax liabilities comprise:
Prepayments
Capitalised expenditure deductible for tax purposes
Consolidated
2018
$
2017
$
(2,533,870)
(696,814)
(3,794,220)
(1,043,411)
-
(24,691)
721,505
743,897
(39,641)
339,155
-
-
6,188
13
101,237
18,407
1,126,920
1,252,765
732
10,949
11,681
4,950
4,200
134,983
-
436,435
580,568
1,502
-
1,502
Net unrecognised deferred tax assets
1,241,084
579,066
Deferred tax assets have not been recognised in respect of these items because it is not that future taxable profit
will be available against which the Group can utilise the benefit thereof.
As at 30 June 2018, the Consolidated Entity has $4,091,444 (2017: $1,587,038) of taxable losses that are available
for offset against future taxable profits of the consolidated entity, subject to the loss recoupment requirements in the
Income Tax Assessment Act 1997. No deferred tax assets have been recognised in the Statement of Financial
Position in respect of the amount of these losses, as it is not presently probable future taxable profits will be available
against which the company can utilise the benefit.
Note 5: Loss per share
Total basic loss per share
The loss and weighted average number of ordinary shares used in the
calculation of basic loss per share is as follows:
Net loss for the period
The weighted average number of ordinary shares
The diluted loss per share is not reflected as the result is anti-dilutive.
Consolidated
2018
$
2017
$
0.031
0.066
(2,533,870)
(3,794,220)
82,871,804
57,459,631
39
Magmatic Resources Limited
ABN 32 615 598 322
Note 6: Segment information
AASB 8 requires operating segments to be identified on the basis of internal reports about components of the
Consolidated Entity that are regularly reviewed by the chief operating decision maker in order to allocate resources
to the segment and to assess its performance.
AASB 8 “Operating Segments’” states that similar operating segments can be aggregated to form one reportable
segment. Following incorporation, the Company acquired Modelling Resources Pty Ltd. The Group has one
reportable operating segment being gold exploration projects in Australia.
Note 7: Cash and cash equivalents
Cash at bank and on hand
Consolidated
2018
$
2017
$
553,484
553,484
3,080,365
3,080,365
(Refer to Note 15 (f) which contains risk exposure analysis for cash and cash equivalents)
Note 8: Other receivables
Goods and services tax receivable
Other
No receivables are past their due date and therefore no impairment recognised.
Note 9: Property, plant and equipment
Office equipment
- At cost
- Accumulated depreciation
Total office equipment
Information Technology
- At cost
- Accumulated depreciation
Total Information Technology
Exploration equipment
- At cost
- Accumulated depreciation
Total exploration equipment
Consolidated
2018
$
2017
$
79,518
10,033
89,551
79,276
5,461
5,947
84,737
17,800
Consolidated
2018
$
2017
$
10,241
(6,259)
3,982
65,103
(33,480)
31,623
53,822
(14,008)
39,814
10,241
(2,845)
7,396
52,890
(15,755)
37,135
-
-
-
Total property, plant and equipment
75,419
44,531
40
Magmatic Resources Limited
ABN 32 615 598 322
Movement in carrying amounts
Movements in the carrying amounts for each class of property, plant and equipment between the beginning and
the end of the year
2017
Consolidated
Balance at the beginning of the year
Acquisitions
Depreciation expense
Disposals
Carrying amount at the end of the year
2018
Consolidated
Balance at the beginning of the year
Acquisitions
Depreciation expense
Disposals
Carrying amount at the end of the year
Note 10: Security Bonds
Office equipment
Information
Technology
Exploration
equipment
-
10,241
(2,845)
-
7,396
27,533
21,540
(11,938)
-
37,135
-
-
-
-
-
Office equipment
Information
Technology
Exploration
equipment
7,396
-
(3,414)
-
3,982
37,135
12,214
(17,726)
-
31,623
-
53,822
(14,008)
-
39,814
Office bond
Tenement bonds
Note 11: Exploration project acquisition costs
Opening balance
Project acquisition costs
Acquisition costs in respect of areas of
interest in the exploration phase
Consolidated
2018
$
2017
$
1,300
100,000
101,300
1,300
70,000
71,300
Consolidated
2018
$
2017
$
1,368,350
675,000
50
1,368,300
2,043,350
1,368,350
Exploration expenditure is expensed to the statement of profit or loss as incurred and acquisition costs are
capitalised as non-current assets. 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. Where uncertainty exists as
to the future viability of certain areas, the value of the area of interest is written off or provided against.
The carrying value of capitalised exploration expenditure is assessed for impairment at each area of interest
whenever facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable
amounts.
An impairment exists when the carrying amount of an asset or area of interest exceeds its estimated recoverable
amount. The asset or area of interest is then written down to its recoverable amount. Any impairment losses are
recognised in the profit or loss account.
41
Magmatic Resources Limited
ABN 32 615 598 322
Project acquisition costs
The project acquisition costs of $675,000 in the 2018 financial year were in relation to the acquisition of the Mt Venn
tenement. In consideration for the acquisition of E38/2961 the Company has agreed the following payment structure
with Montezuma (the seller):
Consideration
•
Contingent Consideration
•
Payment of A$250,000 in cash and A$425,000 in ordinary fully paid MAG shares on acquisition;
Should Magmatic define a JORC 2012 Mineral Resource of 20Mt @ >= 1% CuEq at E38/2961, Magmatic
will pay to Montezuma A$350,000 in cash and A$350,000 in ordinary fully paid MAG shares;
Should Magmatic make a Decision to Mine at E38/2961, Magmatic will pay to Montezuma A$350,000 in
cash and A$350,000 in ordinary fully paid MAG shares;
Montezuma will retain a 2.0% Net Smelter Royalty (“NSR”) on production at E38/2961. Magmatic has been
granted a buyback option over the NSR which can be exercised at any time in return for an A$5,000,000
cash payment to Montezuma.
Magmatic must expend a minimum of A$500,000 on exploration at E38/2961 within the first 18 months
following acquisition. Should Magmatic not reach the required expenditure, Magmatic can elect to pay to
Montezuma the difference between actual incurred expenditure and A$500,000 or Montezuma will regain
tenure at E38/2961.
•
•
•
The above transaction was completed on 2 May 2018. The Company paid $250,000 in cash and satisfied the share
based payment of A$425,000 MAG shares by the issue of 3,770,485 fully paid ordinary shares at $0.1124 per share.
The number of issued shares was arrived at by calculation based on a 30-day Volume Weighted Average Price as
per the Agreement and was agreed by both Magmatic and Montezuma. The contingent consideration is disclosed
as a contingent liability as at reporting date as the achievement of these milestones are within the control of the
entity and the probability of achievement is assessed as nil at reporting date. The minimum spend of A$500,000 has
been disclosed within Note 16 as a commitment relating to exploration expenditure.
Note 12: Trade and other payables
Current Trade and other payables
Trade creditors *
Other creditors
Other creditor – settled as share base payment
Goods and services tax payable
JOGMEC – Funds Received in Advance
* Trade payables are non-interest bearing and are normally paid on 30 day terms.
Non-Current Trade and other payables
Stamp Duty Payable *
* Stamp Duty incurred on Mt Venn asset acquisition (refer to Note 11).
Note 13: Issued capital
(a) Ordinary shares issued
Consolidated
2018
$
160,301
75,527
-
4,412
290,774
531,015
2017
$
106,297
80,260
50,000
2,539
145,756
384,852
Consolidated
2018
$
126,527
126,527
2017
$
-
-
Consolidated
2018
$
2017
$
92,020,485 (2017: 80,000,000) ordinary shares
5,838,182
3,763,182
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote
per share at shareholders’ meetings. In the event of winding up of the parent entity, ordinary shareholders rank after
all creditors and are fully entitled to any proceeds on liquidation.
42
Magmatic Resources Limited
ABN 32 615 598 322
(b) Movements in ordinary share capital:
Details
Date
Balance as at 30 June 2016
28 October 2016
11 May 2017
11 May 2017
11 May 2017
11 May 2017
Incorporation
Share Split*
Share Issue – IPO
Conversion of loans
Conversion of notes
Capital raising expenses
Number of
shares
500
500
53,881,853
20,000,000
3,176,471
2,941,176
-
$
250
250
-
4,000,011
635,294
588,235
(1,460,597)
Balance as at 30 June 2017
80,000,000
3,763,182
4 August 2017
29 March 2018
2 May 2018
Issue of shares
Conversion of “A” class
performance shares
Issue of shares
250,000
50,000
8,000,000
3,770,485
1,600,000
425,000
Balance as at 30 June 2018
92,020,485
5,838,182
(c) Movements in Class A Performance shares
Class A Performance shares
Beginning of the financial year
Issued during the year
Converted to fully paid ordinary shares during
year
Balance at end of financial year
(d) Movements in Class B Performance shares
Class B Performance shares
Beginning of the financial year
Issued during the year
Expired during year
Balance at end of financial year
(e) Movements in share options
Number of performance shares
2018
2017
8,000,000
-
-
8,000,000
(8,000,000)
-
-
8,000,000
Number of performance shares
2018
2017
8,000,000
-
-
-
8,000,000
-
8,000,000
8,000,000
Number of
Options
2018
Weighted
average
exercise price
Number of
Options
2017
Weighted
average
exercise price
Listed Options to acquire ordinary fully
paid shares at $0.30 on or before 17
May 2020:
Beginning of the financial year
Issued during the year
Expired during the year
10,000,000
-
-
Balance at end of financial year
10,000,000
-
0.30
-
-
0.30
-
10,000,000
-
10,000,000
0.30
-
0.30
43
Magmatic Resources Limited
ABN 32 615 598 322
Unlisted Options to acquire ordinary
fully paid shares at $0.30 on or before
17 May 2020:
Beginning of the financial year
Issued during the year
Expired during the year
Balance at end of financial year
9,500,000
-
-
9,500,000
0.30
-
-
0.30
-
9,500,000
-
9,500,000
-
0.30
-
0.30
2018
2017
Number of
Options
Weighted
average
exercise price
Number of
Options
Weighted
average
exercise price
*Unlisted Options to acquire ordinary
fully paid shares on or before
11 May 2018:
Beginning of the financial year
Issued during the year
Expired during the year
2,500,000
-
(2,500,000)
0.20
-
0.20
-
2,500,000
-
Balance at end of financial year
-
-
2,500,000
*Unlisted Options to acquire ordinary
fully paid shares on or before
11 May 2019:
Beginning of the financial year
Issued during the year
Expired during the year
Balance at end of financial year
*Unlisted Options to acquire ordinary
fully paid shares on or before
11 May 2020:
Beginning of the financial year
Issued during the year
Expired during the year
2,500,000
-
-
2,500,000
0.20
-
-
0.20
-
2,500,000
-
2,500,000
2,500,000
-
-
0.205
-
-
-
2,500,000
-
Balance at end of financial year
2,500,000
0.205
2,500,000
-
0.20
-
0.20
-
0.20
-
0.20
-
0.205
-
0.205
*Unlisted Options exercisable at a price which is the greater of $0.20 or a 5% discount to the 20 day volume weighted
average price of shares on ASX. On the assumption that the Options will be exercised on expiry, a Monte Carlo
simulation has been prepared in order to assess the higher of the 5% discount to the 20 VWAP or 20 cents for the
Options at expiry for the Tranche I, Tranche 2 and Tranche 3 Options. The following exercise prices result:
Tranche 1: 20 cents (20 cents was the higher of the two) Monte valuation =19.3 cents
Tranche 2: 20 cents (20 cents was the higher of the two) Monte valuation = 19.7 cents
Tranche 3: 20.5 cents (5% discount to the 20 Day VWAP was higher of the two)
44
Magmatic Resources Limited
ABN 32 615 598 322
Consolidated
2018
$
2017
$
250
-
250
-
250
250
4,668,452
(1,600,000)
-
-
-
1,368,300
2,342,832
957,320
3,068,452
4,668,452
Note 14: Reserves
Capital Restructure reserve
Opening balance
Expense for the year
Closing balance
Option reserve
Opening balance
Share based acquisition cost
Share based expense for year
Share based capital raising costs
Closing balance
Nature of reserves:
(a) Capital restructure reserve
The capital restructure reserve arises from the acquisition of Modeling Resources Pty Ltd
(b) Option reserve
The option reserve represents share compensation used to record the value of equity benefits provided to
consultants and directors as part of their remuneration and the cost of acquisition of tenements.
Note 15: Financial instruments
(a) Capital risk management
Prudent capital risk management implies maintaining sufficient cash and marketable securities to ensure continuity
of tenure to exploration assets and to be able to conduct the Group’s business in an orderly and professional
manner. The Board monitors its future capital requirements on a regular basis and will when appropriate consider
the need for raising additional equity capital or to farm-out exploration projects as a means of preserving capital.
The Board currently has a policy of not entering into any debt arrangements.
(b) Categories of financial instruments
The Group’s principal financial instruments comprise of cash and short-term deposits. 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 receivables and trade payables, which arise directly from its operations. It is, and has been
throughout the year, the Group’s policy that no trading in financial instruments shall be undertaken during the year.
(c) Financial risk management objectives
The Group is exposed to market risk (including interest rate risk and equity price risk), credit risk and liquidity risk.
The main risks arising from the Group’s financial instruments are interest rate risk and credit risk. The Board
reviews and agrees policies for managing each of these risks and they are summarised below.
(d) Market risk
Equity price risk sensitivity analysis
There has been no change to the Group’s exposure to market risks or the manner in which it manages and
measures the risk from the previous period.
(i) Interest rate risk management
All cash balances attract a floating rate of interest. Excess funds that are not required in the short term are placed
on deposit for a period of no more than 3 months. The Group’s exposure to interest rate risk and the effective
interest rate by maturity periods is set out below.
Interest rate sensitivity analysis
45
Magmatic Resources Limited
ABN 32 615 598 322
As the Group has no interest bearing borrowings its exposure to interest rate movements is limited to the amount
of interest income it can potentially earn on surplus cash deposits.
At 30 June 2018, if interest rates had changed by + 50 basis points and all other variables were held constant, the
Group’s loss would have been $43 (2017: $1,500) higher as a result of higher interest income on cash and cash
equivalents. If interest rates dropped on average – 50 basis points then the Group may not have earned any interest
income which would have increased the Group’s loss by $43 (2017: $1,500).
(e) Credit risk management
Credit risk relates to the risk that counterparties will default on their contractual obligations resulting in financial
loss to the Group. The Group has adopted a policy of only dealing with credit worthy counterparties and obtaining
sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from any
defaults.
(f) Liquidity risk management
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities to ensure
continuity of tenure to exploration assets and to be able to conduct the Group’s business in an orderly and
professional manner. Cash deposits are only held with major financial institutions.
Less than
1 month
1-3
months
3 months
– 1 year
5 + years
Weighted
Average
Interest
Rate
2018
Financial assets
Cash and cash equivalents – non - interest
bearing
Cash and cash equivalents – interest bearing
Trade and other receivables
Financial liabilities
Trade and other payables
2017
Financial assets
Cash and cash equivalents – non - interest
bearing
Cash and cash equivalents – interest bearing
Trade and other receivables
Financial liabilities
Trade and other payables
Borrowings
$
n/a
75,525
0.05%
n/a
n/a
477,959
89,551
643,035
531,015
531,015
$
n/a
167,170
0.06%
n/a
2,913,195
84,737
3,165,102
n/a
0%
384,852
384,852
r
$
-
-
-
-
126,527
126,527
$
-
-
-
-
-
-
$
-
-
-
-
-
-
$
-
-
-
-
-
-
$
-
-
-
-
-
-
$
-
-
-
-
-
-
The directors consider that the carrying value of the financial assets and financial liabilities are recognised in the
consolidated financial statements approximate their fair values.
Note 16: Commitments and contingencies
In order to maintain an interest in the exploration tenements in which the Group is involved, the Group is committed
to meet the conditions under which the tenements were granted. The timing and amount of exploration expenditure
commitments and obligation of the Group are subject to the minimum expenditure commitments required as per the
Mining Act 1978, as amended, and may vary significantly from the forecast based upon the results of the work
performed which will determine the prospectivity of the relevant area of interest. Currently, the minimum expenditure
46
Magmatic Resources Limited
ABN 32 615 598 322
commitment for the granted tenements are $1,827,475 (2017: $2,241,225) per annum. Of this amount $807,708 will
be met by the Company’s joint venture partner JOGMEC as part of their earn-in obligations.
Exploration Commitments:
Within one year
After one year but not more than 5 years
More than 5 years
Lease Commitments – West Perth head office:
Within one year
After one year but not more than 5 years
More than 5 years
Contingent liabilities
2018
$
2017
$
1,827,475
-
-
2,241,225
-
-
11,776
-
-
1,839,251
8,327
-
-
2,249,552
From time to time the Company may be party to claims from suppliers and service providers arising from operations
in the ordinary course of business.
As at the date of this report there are no claims or contingent liabilities that are expected to materially impact, either
individually or in aggregate, the Company’s financial position or results from operations, other than as set out below.
Mt Venn project
Pursuant to the Purchase agreement (details refer Note 10), the Group has the following deferred consideration
obligations with respect to the Mt Venn project:
Event
Consideration
Relevant condition (if any)
Performance hurdle 1
Performance hurdle 2
$350,000 cash; and
$350,000 in ordinary fully paid
Magmatic shares
$350,000 cash; and
$350,000 in ordinary fully paid
Magmatic shares
Magmatic defining a JORC 2012 Mineral
Resource of 20Mt @>= 1% CuEq
Magmatic making a Decision to Mine
Royalty payment
2% Net Smelter Royalty (NSR) on
production
Magmatic has been granted a buyback
option over the NSR in return of a payment
of $5,000,000
The consideration will become due and payable in the event that the relevant conditions are met. As at the
reporting date, the conditions in respect of each of the items have not been met and therefore the amounts are
recognised as contingent liabilities.
In order to maintain rights to tenure to its mineral tenements, the Company is required to complete minimum
exploration expenditure, which if not completed in the calendar year then continued tenure to the projects could be in
jeopardy.
Note 17: Key management personnel disclosures
(a) Directors
At the date of this report the directors of the Company are:
D Berrie – Non-Executive Chairman
D Richardson – Managing Director
M Norris – Non executive Director
47
Magmatic Resources Limited
ABN 32 615 598 322
There were no changes of the key management personnel after the reporting date and the date the financial report
was authorised for issue.
(b) Key management personnel
At the date of this report the other Key management personnel of the Company are:
I Wowesny (appointed 1 December 2017), Chief Financial Officer and Company Secretary
I Hobson (appointed 20 January 2017, resigned 1 December 2017)) Chief Financial Officer and Company Secretary
(c) Key management personnel compensation
Short-Term
Post-employment
Share-based payments
Note 18: Subsidiaries
Consolidated
2018
$
2017
$
366,974
30,507
-
397,481
200,805
7,671
2,105,423
2,313,899
Detailed remuneration disclosures of directors and key management personnel are in pages 19 to 20 of this report.
Name of entity
Country of
incorporation
Class of shares
Equity holding
Modelling Resources Pty Ltd
Australia
Ordinary
2018
%
2017
%
100
100
There were no transactions between Magmatic Resources Limited and its controlled entity during the financial year
other than intercompany loan funding to support operations of $2,420,000 (2017: $1,601,299).
There were no loans to individuals or members of key management personnel during the financial year or the
previous financial year.
48
Magmatic Resources Limited
ABN 32 615 598 322
Note 19: Reconciliation of loss after income tax to net cash outflow from operating activities
a) Reconciliation of loss from ordinary activities after income
tax to net cash outflow from operating activities
Net loss for the year after income tax
(2,533,870)
(3,794,220)
Consolidated
2018
$
2017
$
Share based payment expense
Finance cost (equity)
Share issue costs
Depreciation
Movements in working capital
(Decrease in other receivables
(Increase) in prepayments
Increase in trade and other payables
50,000
-
-
35,149
2,342,832
183,529
9,399
14,783
75,099
(2,661)
195,337
66,937
-
217,647
Net cash outflows from operating activities
(2,180,846)
(959,093)
b) Non cash financing and investing activities
During the financial year ended 30 June 2018, the Group acquired the Mt Venn project for $250,000 cash and
$425,000 in Magmatic Resources shares (as per note 10). The share consideration is not reflected in the statement
of cashflows
Note 20: Parent Entity Disclosures
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Financial performance
Loss for the year
Other comprehensive income/loss
Total comprehensive income/loss
2018
$
171,895
5,392,112
5,564,007
2017
$
2,864,955
1,516,821
4,381,776
89,246
89,246
117,345
117,345
5,474,761
4,264,431
5,837,932
3,068,703
(3,431,874)
4,949,406
3,482,227
(4,167,202)
5,474,761
4,264,431
(717,448)
-
(4,167,202)
-
(717,448)
(4,167,202)
49
Magmatic Resources Limited
ABN 32 615 598 322
Note 21: Events after the reporting date
On 30 July the Company issued a Renounceable Rights Issue Prospectus to raise up to $1.22m. The company
announced on 28 August 2018 it has raised $994,366 (before costs) and is working with the Lead Broker to place
the remaining Shortfall. There has been no other matter or circumstance that has arisen after reporting date that has
significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the
state of affairs of the Group in future financial periods.
Note 22: Auditor’s remuneration
The auditors of the Group are BDO Audit (WA) Pty Ltd
Assurance services
BDO Audit (WA) Pty Ltd
Audit and review of financial statements
Total remuneration for audit services
Other services
BDO Advisory (WA) Pty Ltd- Investigating
Accountant’s Report
Total auditor’s remuneration
Consolidated
2018
$
2017
$
33,765
33,765
24,162
24,162
-
33,765
28,478
52,640
Note 23: Interest in jointly controlled operation
The Group entered into a Joint Venture (JV) with Japan Oil, Gas and Metals National Corporation (JOGMEC), which
commenced effective 30 March 2017.
JOGMEC can earn up to a 51% interest in two exploration tenements, EL7427 and EL7676, owned by the Company,
located in East Lachlan, NSW, Australia, known as the Parkes Project (Project) by funding up to $3,000,000 of
exploration expenditure. The Parkes JV is only the fifth JV JOGMEC has in Australia. The Project is prospective for
copper/gold porphyry.
Key terms of the JV are set out below:
•
•
JOGMEC has the right to earn a 51% interest in the Parkes Project by funding $3,000,000 of exploration
expenditure on the Project tenements over a period of up to 3 years.
JOGMEC is required to spend a minimum of $300,000 before withdrawing from the Agreement.
• MAG to act as Operator of the project on behalf of the parties during the JV until JOGMEC becomes a majority
owner at which point the Operator shall be appointed by JOGMEC.
• JOGMEC has the right to assign its interest in the agreement to Japanese company(s) (this is in line with
JOGMEC’s mission, which is to help source and de-risk opportunities for Japanese corporations).
50
Magmatic Resources Limited
ABN 32 615 598 322
Directors’ declaration
1.
In the opinion of the directors of Magmatic Resources Limited (the “Company”):
a.
the accompanying financial statements and notes are in accordance with the Corporations Act 2001
including:
i. giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its performance
for the financial year then ended; and
ii. complying with Accounting Standards, Corporations Regulations 2001, professional reporting
b.
c.
requirements and other mandatory requirements.
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
the financial statements and notes thereto are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
2. 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 year ended 30 June 2018.
This declaration is signed in accordance with a resolution of the Board of Directors.
D Berrie
Chairman
Perth, Western Australia
20 September 2018
51
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Magmatic Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Magmatic Resources Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2018, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1 in the financial report which describes the events and/or conditions which
give rise to the existence of a material uncertainty that may cast significant doubt about the group’s
ability to continue as a going concern and therefore the group may be unable to realise its assets and
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this
matter.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for
the acts or omissions of financial services licensees
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period.
These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to
the matter described in the Material uncertainty related to going concern section, we have
determined the matters described below to be the key audit matters to be communicated in our
report.
Recoverability of Exploration and Evaluation Assets
Key audit matter
How the matter was addressed in our audit
At 30 June 2018 the carrying value of the capitalised
Our procedures included, but were not limited to:
exploration and evaluation assets was disclosed in Note
10.
•
Obtaining a schedule of the areas of interest held by
the Group and assessing whether the rights to tenure
As the carrying value of the capitalised exploration and
of those areas of interest remained current at
evaluation assets represents a significant asset of the
balance date;
Group, we considered it necessary to assess whether
any facts or circumstances exist to suggest that the
carrying amount of this asset may exceed its
recoverable amount.
Judgement is applied in determining the treatment of
exploration expenditure in accordance with Australian
Accounting Standard AASB 6 Exploration for and
Evaluation of Mineral Resources. In particular:
•
Verifying exploration and evaluation expenditure
capitalised during the year against the supporting
documentation and checking for compliance with the
relevant accounting standards;
•
Considering the status of the ongoing exploration
programmes in the respective areas of interest by
holding discussions with management, and reviewing
the Group’s exploration budgets, ASX announcements
Whether the conditions for capitalisation are
and director’s minutes;
satisfied;
•
Considering whether any such areas of interest had
Which elements of exploration and evaluation
reached a stage where a reasonable assessment of
expenditures qualify for recognition; and
economically recoverable reserves existed;
Whether facts and circumstances indicate
•
Considering whether any facts or circumstances
that the exploration and expenditure assets
existed to suggest impairment testing was required;
should be tested for impairment.
and
•
Assessing the adequacy of the related disclosures in
Note 11 to the Financial Statements.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2018, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors 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 control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 17 to 22 of the directors’ report for the
year ended 30 June 2018.
In our opinion, the Remuneration Report of Magmatic Resources Limited, for the year ended 30 June
2018, complies with section 300A of the Corporations Act 2001.
Responsibilities
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.
BDO Audit (WA) Pty Ltd
Neil Smith
Director
Perth, 20 September 2018
Magmatic Resources Limited
ABN 32 615 598 322
Additional Shareholder Information
The following additional information is current as at 18 September 2018.
CORPORATE GOVERNANCE:
The Company’s Corporate Governance Statement is available on the company’s website at
www.magmaticresources.com/corporate-governance
SUBSTANTIAL SHAREHOLDERS:
Holder Name
BILLINGUAL SOFTWARE PTY LTD
GOLD FIELDS AUSTRALIA PTY LTD
DAVTHEA PTY LTD
Holding
% IC
32,188,823
17,600,000
9,588,677
27.54%
15.06%
8.20%
Ordinary Shares:
Holdings Ranges
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 -
Totals
Holders
10
24
104
174
74
386
Total Units
3,409
98,764
964,227
7,486,524
108,326,702
116,879,626
%
0.00
0.08
0.82
6.41
92.68
100.00
There are 160 shareholders with less than a marketable parcel.
VOTING RIGHTS
Each fully paid ordinary share carries voting rights of one vote per share.
THE TOP 20 HOLDERS OF ORDINARY SHARES ARE:
Ranking
Holder
BILLINGUAL SOFTWARE PTY LTD
GOLD FIELDS AUSTRALIA PTY LTDEX
DAVTHEA PTY LTD
MR DAVID RICHARDSON + MRS RYOKO RICHARDSON
MR NEVRES CRLJENKOVIC
ELEMENT 25 LIMITED
DAVTHEA PTY LTD
SERCA SUPERFUND PTY LTD
MR ALAN JOHN TATE
SANCOAST PTY LTD
EXECUTIVE RISK SOLUTIONS PTY LTD
ATLANTIS MG PTY LTD
MELSHARE NOMINEES PTY LTD
MR CHRISTOPHER LINDSAY BOLLAM
THOMAS ASSET DISCOVERY LIMITED
GECKO RESOURCES PTY LTD
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Shares Held
32,188,823
17,600,000
9,588,677
5,448,751
5,025,000
3,770,485
3,080,367
3,000,000
2,482,572
1,490,431
1,470,588
1,250,000
1,229,850
1,160,852
1,107,059
1,000,000
%
27.54
15.06
8.20
4.66
4.30
3.23
2.64
2.57
2.12
1.28
1.26
1.07
1.05
0.99
0.95
0.86
Magmatic Resources Limited
ABN 32 615 598 322
17
18
19
20
GOSOJO PTY LTD
MR ALAN GOODFELLOW
MR GABRIEL HEWITT
ERIC MCKENZIE NOMINEES PTY LTD
Total
Total remaining holders
1,000,000
900,000
831,367
784,313
94,409,135
22,470,491
LISTED OPTIONS EXERCISABLE AT $0.30 EXPIRING 17 MAY 2020:
Holdings Ranges
Holders
Total Units
%
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 -
Totals
0
104
25
105
19
253
0
517,500
174,059
3,142,892
4,646,162
8,480,613
THE TOP 20 HOLDERS OF LISTED OPTIONS EXPIRING 17 MAY 2020 ARE:
Holder
SERCA SUPERFUND PTY LTD
Holding
750,000
MELSHARE NOMINEES PTY LTD
MR PETER ALAN LAWSON
GOSOJO PTY LTD
HANWOOD LODGE PTY LTD
MR ALAN SCHWARTZ
WYTHENSHAWE PTY LTD
DAVTHEA PTY LTD
MR MIRKO ANDREW NIZICH
MR ALAN GOODFELLOW
ACTIVEST CAPITAL PTY LTD
T T NICHOLLS PTY LTD
MR IAN STUART FISHER
MR CONSTANTINE DIFFERDING + MRS TONIE MAREE
DIFFERDING
LIGHTFRAME HOLDINGS PTY LTD
MR TREVOR JOHN PITCHER + MRS FAY ROSEMARY PITCHER
MS SHIRLEY ELEANOR IN'T VELD
MR DAVID RICHARDSON + MRS RYOKO RICHARDSON
POT OF GOLD ENTERPRISES PTY LTD
MR BEN BARTLETT + MRS HOLLY MARIE BARTLETT
587,500
300,000
250,000
250,000
250,000
250,000
244,375
240,000
225,000
200,000
186,372
173,215
125,000
125,000
125,000
125,000
121,875
117,825
100,000
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
0.86
0.77
0.71
0.67
80.77
19.23
0.00
6.10
2.05
37.06
54.79
100.00
%
8.84
6.93
3.54
2.95
2.95
2.95
2.95
2.88
2.83
2.65
2.36
2.20
2.04
1.47
1.47
1.47
1.47
1.44
1.39
1.18
Total
4,746,162
55.96
Magmatic Resources Limited
ABN 32 615 598 322
LISTED OPTIONS EXERCISABLE AT $0.10 EXPIRING 30 AUGUST 2021:
Holdings Ranges
Holders
Total Units
%
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 -
Totals
10
24
103
174
74
385
3,409
98,764
955,440
7,524,022
108,297,991
116,879,626
THE TOP 20 HOLDERS OF LISTED OPTIONS EXPIRING 30 AUGUST 2021 ARE:
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Holder
BILLINGUAL SOFTWARE PTY LTD
GOLD FIELDS AUSTRALIA PTY LTD
DAVTHEA PTY LTD
MR DAVID RICHARDSON + MRS RYOKO RICHARDSON
MR NEVRES CRLJENKOVIC
ELEMENT 25 LIMITED
DAVTHEA PTY LTD
SERCA SUPERFUND PTY LTD
MR ALAN JOHN TATE
SANCOAST PTY LTD
EXECUTIVE RISK SOLUTIONS PTY LTD
ATLANTIS MG PTY LTD
MELSHARE NOMINEES PTY LTD
MR CHRISTOPHER LINDSAY BOLLAM
THOMAS ASSET DISCOVERY LIMITED
GECKO RESOURCES PTY LTD
GOSOJO PTY LTD
MR ALAN GOODFELLOW
MR GABRIEL HEWITT
ERIC MCKENZIE NOMINEES PTY LTD
Total
Holding
32,188,823
17,600,000
9,588,677
5,448,751
5,025,000
3,770,485
3,080,367
3,000,000
2,482,572
1,490,431
1,470,588
1,250,000
1,229,850
1,160,852
1,107,059
1,000,000
1,000,000
900,000
831,367
784,313
0.00
0.08
0.82
6.44
92.66
100.00
%
27.54
15.06
8.20
4.66
4.30
3.23
2.64
2.57
2.12
1.28
1.26
1.07
1.05
0.99
0.95
0.86
0.86
0.77
0.71
0.67
94,409,135
80.77
Magmatic Resources Limited
ABN 32 615 598 322
UNQUOTED EQUITY SECURITIES
Number
54,484,118
Number of
Holders
3
+Class
Escrow Period
Holders of more than 20%
Ordinary shares
19 May 2019
Billingual Software Pty Ltd
(32,188,823shares)
8,000,000
3
Class B performance
shares
19 May 2019 (7,440,000)
9,500,000
Unlisted options*
19 May 2019 (8,750,000)
5,000,000
Unlisted options**
19 May 2019
Billingual Software Pty Ltd
(4,480,000)
Gold Fields Aust. Pty Ltd
(1,600,000)
Melshare Nominees Pty Ltd
(2,000,000 options)
Gold Fields Aust. Pty Ltd
(5,000,000 options)
*Exercisable at 30 cents and expiring 17 May 2020
**Exercisable at a price which is the greater of $0.20 or a 5% discount to the 20 day volume weighted average
price of shares on ASX and expiring in three tranches as follows:
2,500,000 options expiring 11 May 2019;
2,500,000 options expiring 11 May 2020
Use of Funds
The entity has used the cash and assets in a form readily convertible into cash in a way that
is consistent with its business objectives.
There is no current buy-back.
Tenement Listing
Project Area
Wellington North
Myall
Parkes
Wellington North
Moorefield
Parkes
Wellington North
Moorefield
Yamarna
Mt Venn
Tenement Details
% Held
EL6178
EL6913
EL7424
EL7440
EL7675
EL7676
EL8357
EL8669
E38/2918
E38/2961
100
100
100 (subject to 51% JV earn in)
100
100
100 (subject to 51% JV earn in)
100
100
100
100