Magmatic Resources Limited
ABN 32 615 598 322
Annual report
for the year ended 30 June 2019
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
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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
Andrew Viner – Non-Executive Director
Company Secretary
David Berrie (appointed 1 June 2019)
Ildiko Wowesny (resigned 31 May 2019)
Registered Office and Principal Place of
Business
Suite 8, 1297 Hay Street
West Perth WA 6005
Share Registry
Auditors
Solicitors
ASX Code
Telephone:
Email:
Website:
+61 8 9322 6009
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, Quoted Options: MAGO, MAGOA,
Unquoted Options: MAGAG, MAGAJ
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Magmatic Resources Limited
ABN 32 615 598 322
Chairman’s Letter
Dear shareholder,
I am pleased to present the company’s third annual report since listing on the ASX in May 2017. As with our first
complete year of exploration, the Company has been busy trying to add value to its extensive portfolio. We
continued to drill our copper-gold targets through a variety of sole funding and via our Joint Venture with the
Japanese government resource agency Japan Oil and Gas National Corporation (“JOGMEC”) along with other
transactions in an attempt to build shareholder value.
In October 2018, we raised a further $994,365 through a rights issue and with the capital markets being so tight
have managed, through sound fiscal management and careful allocation of resources, to continue to advance
the existing portfolio. We also added to the Yamarna Project which is located alongside the Gruyere Project
(5.88M oz) owned by Gold Fields Limited (“Gold Fields”) and Gold Road Resources Limited (“Gold Road”).
Significant work was carried out by our team located in our exploration office in Orange, NSW on the existing
tenement package in the East Lachlan, including a Porphyry Copper Gold Analysis on our Myall Project. This
analysis has enabled the Company to focus on several key prospects at Myall, including an end of hole anomaly
with significant copper in it (1m at 0.22% Cu). This work, released to the market in December 2017, will continue
to be evaluated and has put the Company in an excellent position to move on drill ready targets at Myall.
Magmatic is operator at our Parkes Project JV with JOGMEC, and we have made significant progress advancing
the porphyry opportunities at the project, which is only ~20km from the Northparkes porphyry copper-gold mine.
An IP Survey identifying at the Parkes East tenement identified eight new porphyry targets and three new
orogenic gold targets, which is exciting considering the regions prospectivity for large porphyry discoveries.
In late 2018, the Company took advantage of the weak capital markets to purchase a legacy Net Smelter Royalty
that had been granted to Clancy Exploration Limited (“Clancy”) by Gold Fields as part of the purchase
consideration when Gold Fields acquired the Clancy ground (“the NSR”). The NSR covered all of the projects
held by Magmatic in the East Lachlan and ranged from 2-2.5%. Magmatic had identified the NSR as an
impediment in dealing with its tenure. Because of the proximity of the Company’s projects to the large Cadia
Valley and Northparkes mines, attracting well-funded partners to its projects was being impacted by the NSR.
Its purchase has led to an increased interest.
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
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Magmatic Resources Limited
ABN 32 615 598 322
Review of Operations
It has been an eventful couple of years 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. Magmatic successfully joint ventured Parkes to
JOGMEC and that JV is in the final year of the three year $3M JV.
In addition to its exploration advancement strategy for its NSW projects, Magmatic moved in the past 18 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. In June 2019, we have further advanced our WA gold
portfolio by entering into a binding sale and purchase agreement to acquire three gold and copper gold projects,
of which one has near mining potential. These acquisitions are subject to a shareholder vote at an upcoming
General Meeting on 15th October 2019.
Figure 1: Magmatic has four advanced exploration projects in New South Wales and two target generation
projects in Western Australia. Plan also shows the proposed the three 2019 WA Gold and Copper Gold
acquisitions
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Magmatic Resources Limited
ABN 32 615 598 322
East Lachlan Exploration
The Company has four 100%-owned projects with no royalty agreements attached, covering an area of
1,049km2 – Myall, Moorefield, Wellington North and our Parkes JV (with JOGMEC) – comprising eight licences
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 Mining Limited’’s Cadia Valley (48.7Moz Au and 6.5Mt Cu),
China Molybdenum Company Limited’s “(CMOC”) – Sumitomo Group’s (“Sumitomo”) Northparkes
(3.8Moz Au and 3.4Mt Cu),
Evolution Mining Limited’s (“Evolution”) Cowal (8.35Moz Au).
Alkane Resources Limited’s (“Alkane”) Tomingley gold mine (800koz Au)
Other advanced projects in the region include Regis Resources Limited’s McPhillamys (2.2Moz Au) and
Sandfire Resources NL’s Temora (2.1Moz Au and 0.8Mt Cu). Alkane has recently announced some exciting
results south of their Tomingley Mine and, with Evolution aggressively exploring at Cowal, and other majors
now exploring here as well, the East Lachlan continues to be an exciting place to be exploring.
Figure 2: Location of Magmatic’s East Lachlan Projects
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Magmatic Resources Limited
ABN 32 615 598 322
Wellington North Gold and Copper-Gold Project (100% MAG)
Targeting: Porphyry Copper Gold and Gold deposits
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) 110km to the South.
Wellington North is a core focus project for Magmatic. The project is under thin-to-no cover and has delivered
outstanding results 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. Drilling this year at
Bodangora confirmed high grade mineralisation and identified a new area of near surface gold mineralisation.
Results from near Bodangora Mines included 2m @ 5.3g/t Au from 14m and 2m @ 2.7g/t Au from 21m and
complemented previous exploration results near historical 230,000oz @ 26 g/t Au gold mine. The Company
was also highly encouraged by the results from the new area of near surface mineralisation at Bodangora
South, where a mineralised vein identified under cover returned an intersection of 3m @ 1.3g/t Au from 18m.
The drilling had the dual goals of confirming the grade and tenor of previously identified mineralised veins at
the Bodangora Mines and testing a new area of interpreted mineralisation at the Bodangora South target –
with both aspects of the program proving successful. Future work being planned will include mapping and
sampling of surface veins, and targeted follow-up drilling.
Figure 3: Magmatic’s Wellington North Project.
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Magmatic Resources Limited
ABN 32 615 598 322
Parkes JV Copper-Gold and Gold Project (100% MAG)
Targeting: Porphyry Copper Gold and Gold deposits
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-sulphation epithermal Gold deposit. It is within structurally-prominent
stratigraphy East of Northparkes porphyry Copper Gold deposit, and along the strike to the South from Alkane’s
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). This JV is now
in the third year of the three year $3M JV.
Magmatic believe the best intercept at Buryan (135m at 0.29% Cu, 0.17 g/t Au, including 28m at 0.50% Cu,
0.28g/t Au) has the following features which are strong indicators of being in a mineralised porphyry Copper
Gold system:
Laminated magnetite-pyrite bearing veins and quartz-carbonate-pyrite±chalcopyrite veins
Multiple mineralisation events recorded in structural features
Broadly follows typical metal and alteration assemblage zonation with an outer carbonate-base-
metal-gold veins on periphery (propylitic alteration), becoming more pyritic (phyllic alteration), and
pyritic-chalcopyritic in the central mineralised section (potassic alteration)
The high-grade zone at Buryan is of similar grade to the CMOC/Sumitomo Northparkes Porphyry Copper Gold
mine (3.4Mt Cu and 3.8M oz Au) with a published resource grade of 0.56% Cu and 0.18g/t Au.
The Parkes JOGMEC JV completed two diamond holes during the year with drillhole 19ATDD013 (930.05m)
at Buryan Porphyry Copper Gold target intersected porphyry Copper Gold mineralisation with best results of:
10m at 0.49 g/t Au (from 448m), incl. 2m at 1.67 g/t Au (from 456m)
57m at 0.17% Cu, 0.11 g/t Au (from 822m), and
79m at 0.11% Cu, 0.06 g/t Au (from 545m)
Towards the end of the previous financial year, Magmatic completed a detailed aeromagnetic survey focussing
along EL7676. The interpretation of the survey has highlighted 12 new targets (9 Cu-Au, 3 Au-only) with no
previous drilling and little sampling. Under the JOGMEC JV, Copper targets were prioritise for drilling and two
targets Blackridge (Cu Target 9) and Kaoru (Cu Target 3) were prioritised for work. An IP survey and RC
drilling programme was completed at Blackridge, and an AC and RC program was completed at Kaoru. There
were no significant results.
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Magmatic Resources Limited
ABN 32 615 598 322
Figure 4: Magmatic’s Parkes JV licence area straddles the highly prospective Parkes Fault Zone
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Magmatic Resources Limited
ABN 32 615 598 322
Myall Gold-Copper Project (100% MAG)
Targeting: porphyry Copper Gold deposits
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 within the Junee-Narromine Volcanic Belt which hosts
CMOC/Sumitomo’s Northparkes porphyry Copper Gold deposits. The licence covers one of the largest
volcano-intrusive complexes in the East Lachlan, being a similar age to Newcrest’s Cadia Valley and
Northparkes porphyry Copper Gold systems. The Narromine Intrusive Complex is one of three intrusive
complexes in the Junee-Narromine Volcanic Belt and the only complex not currently producing gold.
Magmatic believe that the Myall project has the geological features and unexplored space available to identify
a Northparkes style porphyry Copper Gold deposit. Extensive lithogeochemical analysis completed by
Magmatic’s consultants identified possible Wombin Volcanics equivalent (host rocks to, and age equivalent of
Northparkes mineralisation) in Myall’s Narromine Igneous Complex (NIC) for the first time which Magmatic
consider a major milestone for the project. Magmatic completed petrography which confirmed that the
conclusions of the lithogeochemical study; that is, that the Narromine Igneous Complex contains Wombin
Volcanics, and particularly quartz monzonite porphyry, which are considered a pre-requisite for Northparkes-
style mineralisation.
Additionally, the Greater Kingswood area copper anomaly (figure below) shows similar dimensions and tenor
to Northparkes copper anomaly. Previous intercepts at Myall include:
121m at 0.4% Cu, 0.09 g/t Au, including 70m at 0.54 Cu, 0.15 g/t Au, at Kingswood.
Magmatic are working with potential joint venture partners to progress this project.
Figure 5: Myall Project: Greater Kingswood area copper anomaly at 500ppm Cu and 1000ppm Cu versus
Northparkes copper geochemistry at the same scale. Shows similar anomaly dimensions
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Magmatic Resources Limited
ABN 32 615 598 322
Moorefield Gold and Base Metals Project (100% MAG)
Targeting: Gold and Base Metal deposits
The Moorefield Project is located 25km Northeast 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 Limited’s and CleanTeQ Holding Limited’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 gold and skarn
mineralisation in the Girilambone Group, and also host gold occurrences and VMS mineralisation in the
Derriwong Group.
An aeromagnetic survey was flown at 50m line spacing over most of the Moorefield licence (EL7675) and part
of the Derriwong licence (EL8669) in March 2018 targeting the Ghost Hill skarn and the Boxdale-Carlisle Reefs
gold trend, where earlier drilling by Magmatic returned a best result of 30m @ 1.60g/t Au from 80m (MFRC013),
including 11m at 2.68 g/t Au (from 95m). Interpretation and targeting of the survey was completed during the
period and shown in the figure below.
Figure 6: Moorefield interpreted aeromagnetic image and target (1VD rtp TMI)
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Magmatic Resources Limited
ABN 32 615 598 322
Western Australian Projects
Magmatic are very excited with our potential new additions to our Western Australian exploration projects,
Western Australian exploration projects, which, if the merger and demerger are approved will result in the
formation of a gold-focussed junior explorer with the potential to be producing gold in a short period of time.
Magmatic have also been pegging new ground in the Yamarna - Mt Venn region and now have five exploration
licences, of which two new licences were granted during the period taking the granted licences to four.
Magmatic are looking forward to completing on-ground work on these projects, or alternatively identifying a
suitable JV partner to take these projects forward. These strategic ground positions are in a proven mineralised
district of Western Australia which adds the in-demand commodities of Gold, Cobalt and Nickel to the
Company’s pipeline of targets.
Figure 7: Magmatic’s Yamarna and Mt Venn projects
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Magmatic Resources Limited
ABN 32 615 598 322
Mt Venn Copper, Nickel and Cobalt (100% MAG)
Targeting: Mt Venn-style Copper Nickel Cobalt deposits
Mt Venn is located 120km east of Laverton in Western Australia. It consists of 2 tenements (E38/2961 and
E38/3351) for ~87km2 which covers 60% of the Mt Venn Intrusion, where Great Boulder Resources (“GBR”)
recently discovered Copper Nickel Cobalt mineralisation at its Mt Venn Project. GBR 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.
Magmatic identified undrilled EM conductors at its Mt Venn Copper Nickel Cobalt Project following the
acquisition and interpretation of previous VTEM and ground EM datasets. One of the larger conductors,
MVVA2, is along strike from a previous drilling intercept which may indicate a repeat of GBR’s Mt Venn
mineralisation on Magmatic’s tenement. Magmatic completed a reconnaissance field program at the Mt Venn
Copper-Nickel-Cobalt Project, completing initial soil and rock chip sampling and confirmed the EM anomalies
are under shallow cover.
An additional exploration licence application (Mt Venn North E38/3351) was made immediately north of Mt
Venn E38/2961 and was granted during the year. This tenement was applied for because it has an undrilled
EM anomaly. EM anomalies within the belt are found to consistently host massive sulphides, of which, some
also have Copper and Nickel sulphides.
Yamarna Gold Project (100% MAG)
Targeting: Gruyere-style gold mineralisation
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 applied for a further exploration tenement
this year (E38/3327) to add to the prospective tenements E38/2918 and E38/3312 (under application). The
project covers about 355km2. The Yamarna Project is 15km northwest of the Gruyere (5.88Moz) gold mine
under construction (Gold Fields/ Gold Road JV). Gruyere gold mine is expected to commence production in
mid-2019.
Magmatic completed the acquisition of Landslide Investments Pty Ltd, holder of Exploration Licence E38/2918,
which forms part of the Company’s Yamarna Gold Project.
Major international gold producer Gold Fields has recognised the potential of the Yamarna greenstone belt as
being a long term, high margin production opportunity for its portfolio, opting to participate in a 50% joint venture
partnership with Australian explorer Gold Road to develop the Gruyere mine and continue to explore the
associated tenements. Gold Fields has also invested in a strategic 10% corporate shareholding of Gold Road.
Magmatic acquired its advanced New South Wales project portfolio from Gold Fields prior to listing in May
2017 and Gold Fields also continues to maintain a strategic 15% shareholding in Magmatic.
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.
Future WA Project Acquisitions
Targeting Gold and Copper Gold deposits
Magmatic has entered into agreements to acquire three Western Australian gold and copper assets to
complement its existing WA Yamarna and Mt Venn projects. Magmatic has signed binding sale and purchase
agreements to acquire 100% of the issued share capital of each of Kokoda Exploration Pty Ltd, Ashburton
Metals Group Pty Ltd and North Iron Cap Pty Ltd, in respect of the Calyerup, Ashburton, and North Ironcap
Projects. The binding sale and purchase agreements are to acquire 100% of the issued share capital of Kokoda
Exploration Pty Ltd, Ashburton Metals Group Pty Ltd and North Iron Cap Pty Ltd who hold the the Calyerup,
Ashburton and North Ironcap projects respectively. The proposed acquisition is conditional upon the Company
receiving shareholder approval of both the transaction and the demerger of its East Lachlan, N.S.W Exploration
Projects by way of an in-specie distribution to existing Magmatic shareholders. Shareholders will vote at a
General Meeting on the 15 October 2019.
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Magmatic Resources Limited
ABN 32 615 598 322
Calyerup
Targeting: Archaean Gold deposits
Calyerup covers a sequence of Archaean layered mafic granulites of metasedimentary origin. There are small
shallow historical gold workings with production recorded and modern exploration has confirmed the potential
for small gold deposits.
Ashburton
Targeting: Proterozoic Copper Gold deposits
The Ashburton project covers the Proterozoic Morrissey Metamorphic suite within the Capricorn Orogen. Gold
mineralisation is within narrow quartz veins with associated minor Copper mineralisation hosted within schists
and gneisses, and adjacent to and within dolerite dykes. Nine prospects have been identified.
North Ironcap
Targeting: Archaean Gold deposits – potential small Gold mining operation
North Iron Cap Pty Ltd is the owner of the Gold Rights for the North Iron Cap tenement, which is held by
Western Areas Ltd. North Ironcap is within the Archaean Forrestania Greenstone Belt south of the Marvel Loch
Gold Mine. It is one of several moderate-sized, low-grade laterite/ supergene Gold deposits on the western
edge of the Forrestania Greenstone Belt. The gold mineralisation is stratigraphically controlled in a gossanous
metasedimentary package within a meta-mafic package. The mineralised sequence sub-crops and is generally
continuous over about 1km of strike with 50-100m long pods varying in width from 1m to 13m.
Previous explorers have completed extensive exploration and development drilling which is likely to allow for
early estimates of Mineral Resources and commencement of Mining studies.
MAG ASX release dates used in Operations Report
WA Project acquisitions: 7/6/2019
Wellington North: 17/5/2019, 20/8/2018
Parkes: 29/1/2019, 31/7/2019
Myall: 31/1/2019
Moorefield: 17/10/2019
Competent Persons Statement
Information in this report which relates to Exploration Results for the Calyerup, Ashburton and North Ironcap
projects is based on information compiled by Andrew Viner, a Member of the Australasian Institute of Mining
and Metallurgy. Mr Viner has sufficient experience which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity which they are 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 Viner consents to the inclusion in the report of the matters based on this
information in the form and context in which it appears. Mr Viner is a shareholder of Magmatic Resources
Limited
The information in this document that relates to Exploration Results for the East Lachlan, Yamarna and Mt
Venn projects 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, both Mr Viner and 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.
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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 subsidiaries
Modeling Resources Pty Ltd (“Modeling”), Landslide Investments Pty Ltd (“Landslide”) and Australia Gold and
Copper Ltd (“AGC”). 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
Andrew Viner – Non-Executive Director (appointed 16 September 2019)
Company Secretary
David Berrie (appointed 1 June 2019)
Ildiko Wowesny (appointed 1 December 2017, resigned 31 May 2019)
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 $1,993,025 after income tax for the financial year (2018: loss of $2,533,870).
As at 30 June 2019, the Group had net assets of $1,196,256 (30 June 2018: $2,205,562), including cash and cash
equivalents of $233,431 (30 June 2018: $553,484).
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 short form prospectus dated 13 September 2019 offering to transfer on 18 October 2019
117,242,568 shares in its fully owned subsidiary Australian Gold and Copper Ltd (AGC) on an in-specie distribution
basis to the shareholders on record on 17 October 2019 in exchange for the Company’s New South Wales based
exploration licences. The general meeting of shareholders at which this offer will be put to a vote is scheduled for
15 October 2019 and full details of this proposed transaction are contained in the notice of that meeting which was
released to the market on 13 September 2019. On 16 September 2019 Andrew John Viner was appointed a
Director of the Company. Subsequent to year end, the Company received $350,000 as a result of unsecured
Director and major shareholder loans made to the Company.
Other than those, 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.
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Magmatic Resources Limited
ABN 32 615 598 322
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.
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)
Company Secretary (appointed 01 June 2019)
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: Summit Resources Limited
Former directorships in the last 3 years: Hylea Metals Limited (appointed 6 February 2018, resigned 2 January
2019)
Special responsibilities: Non-Executive Chairman
Interests in shares and options at the date of this report:
12,669,044 ordinary shares (indirectly held) and 919,375 options (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:
37,962,571 ordinary shares (indirectly held) and 5,121,875 options (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: Nil
Special responsibilities: Nil
Interests in shares and options at the date of this report:
750,000 options (directly held).
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Magmatic Resources Limited
ABN 32 615 598 322
Andrew Viner; B. App Sc (Geology) Non-Executive Director (appointed 16 September 2019)
Experience and expertise
Mr. Andy Viner is a geologist with over 35 years technical, managerial and corporate experience in mineral
exploration and development. During his career he has generated and managed projects for a number of
commodities, with a particular focus on precious metals, in Australia, Asia and South America. Andy was the
founding Managing Director of Jackson Gold Limited from 2002 to 2007 and Executive Director of Matsa Resources
Limited from 2008 to 2010 before joining Alloy Resources Limited in 2011 where he has been Executive Chairman
since 2014.
The Board considers Mr. Viner 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: Alloy Resources Limited, Eskay Resources Pty Ltd
Former directorships in the last 3 years: Nil
Special responsibilities: Nil
Interests in shares and options at the date of this report:
10,000 ordinary shares (directly held) and 5,000 options (directly held)
30,000 ordinary shares (indirectly held) and 15,000 options (indirectly held).
Meetings of directors
During the financial year there were five 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
A Viner
Shares under option
Directors’ meetings held Directors’ meetings
attended
5
5
5
N/A
5
5
5
N/A
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
30 August 2018
7 May 2019
17 May 2020
11 May 2020
30 August 2021
29 May 2024
$0.30
$0.20*
$0.10
$0.03
17,980,613
2,500,000 (Tranche 3)
26,859,141
2,000,000
*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.
17
Magmatic Resources Limited
ABN 32 615 598 322
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 2019. 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
Andrew Viner – Non-Executive Director
(ii) Executives
Michael Franklin - Chief Financial Officer (appointed 1 June 2019)
Ildiko Wowesny – Chief Financial Officer and Company Secretary (appointed 01 December 2017, resigned 31
May 2019)
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.
18
Magmatic Resources Limited
ABN 32 615 598 322
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 2019, exclusive of superannuation guarantee the annual cash remuneration for the
Non-Executive Director was $40,000 with the Chairman receiving $60,000.
The non-executive directors fee pool approved by shareholders is $250,000 per annum.
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.
Executive pay
The executive pay and rewards framework has the following components:
base pay and benefits such as superannuation where appropriate
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 2019.
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:
2019
2018
2017
Net loss
Share price at year end (cents)
Loss per share (cents)
$1,993,025
1.8
1.76
$2,533,870
6.1
3.1
$3,794,220
12.0
6.6
19
Magmatic Resources Limited
ABN 32 615 598 322
B
Details of remuneration
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 2019 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.
Year ended 30 June 2019
Name
Director
D Berrie
D Richardson
M Norris
Key Management Personnel
M Franklin (appointed 1 June 2019)
I Wowesny (appointed 1 December 2017,
resigned 31 May 2019)
Year ended 30 June 2018
Name
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
180,000
40,000
10,256
137,500
427,756
Salary /
Fees
$
60,000
150,000
40,000
70,334
46,640
Post-
employment
benefits
Superannuation
Salary /
Fees
$
$
Share-
based
payments
$
Other*
Total
$
$
5,700
17,100
3,800
-
15,438
42,038
-
-
-
-
-
-
-
-
-
-
65,700
197,100
43,800
10,256
25,000
177,938
25,000
494,794
Post-
employment
benefits
Superannuation
$
Share-based
payments
$
Other
$
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
* Other benefits include termination benefits paid to Ms Wowesny in 2019. Refer to note 17 for details.
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
Michael Franklin
Chief Financial Officer
2 years
3 months
N/A
N/A
D
Share-based compensation
$180,000
$100,000
N/A
N/A
There was no share-based compensation given during the year ended 30 June 2019.
Key management personnel equity holdings
2019
Ordinary shares
Directors
D Berrie
D Richardson
M Norris
Other Key management personnel
M Franklin (appointed 1 June 2019)
I Wowesny (resigned 31 May 2019)
Options
Directors
D Berrie
D Richardson
M Norris
Other Key management personnel
M Franklin (appointed 1 June 2019)
I Wowesny (resigned 31 May 2019)
Performance shares
Directors
D Berrie
D Richardson
M Norris
Other Key management personnel
M Franklin (appointed 1 June 2019)
I Wowesny (resigned 31 May 2019)
Balance at
beginning of year
Net movement
during the year
Balance at the end
of year
11,994,044
32,952,571
675,000
5,000,000
12,669,044
37,962,571
-
-
-
Balance at
beginning of year
-
-
-
-
-
Net movement
during the year
-
Balance at the end
of year
244,375
121,875
750,000
-
-
675,0001
5,000,0001
-
-
-
1,360,000
4,480,000
(1,360,000)
(4,480,000)
-
-
-
-
-
-
919,375
5,121,875
750,000
-
-
-
-
-
-
-
1 Options attached to each share subscribed for in the Company’s August 2018 renounceable entitlement issue.
No remuneration consultants have been used. Other than disclosed above, there are no other transactions
with key management personnel.
21
Magmatic Resources Limited
ABN 32 615 598 322
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 $703. 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 $0 (2018: $3,506). Fees of $18,612 (2018: $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 2018 Annual General Meeting
Magmatic Resources Ltd received more than 98% of “yes” votes on its remuneration report for the 2019
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 2019.
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
Consolidated
2019
$
2018
$
28,077
28,077
33,765
33,765
Total auditor’s remuneration
28,077
33,765
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.
22
Magmatic Resources Limited
ABN 32 615 598 322
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: 26 September 2019
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 DEAN JUST TO THE DIRECTORS OF MAGMATIC RESOURCES
LIMITED
As lead auditor of Magmatic Resources Limited for the year ended 30 June 2019, 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.
Dean Just
Director
BDO Audit (WA) Pty Ltd
Perth, 26 September 2019
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.
24
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 2019 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 – 100% men;
whole organisation – 100% 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 2019
Consolidated
Note
2019
$
2
3
3
4
Continuing Operations
Other income
Corporate administration expenses
Exploration expenditure incurred
Exploration asset impairments
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:
2018
$
225,608
225,608
(1,138,923)
(1,620,554)
-
-
-
(2,759,477)
97,289
97,289
(1,129,482)
(471,707)
(445,000)
(42,898)
(1,227)
(2,090,314)
(1,993,025)
(2,533,870)
-
-
(1,993,025)
(2,533,870)
-
-
-
-
(1,993,025)
(2,533,870)
(1,993,025)
(2,533,870)
Loss per share attributable to the members of
Magmatic Resources Limited
Loss per share (dollars)
5
$0.176
$0.031
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 2019
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
2019
$
2018
$
7
8
9
10
11
12
12
13
14
233,431
108,561
553,484
89,551
341,992
643,035
36,420
91,300
1,628,350
75,419
101,300
2,043,350
1,756,070
2,220,069
2,098,062
2,863,104
901,806
531,015
901,806
531,015
-
-
126,527
126,527
901,806
657,542
1,196,256
2,205,562
6,733,855
3,156,749
(8,694,348)
5,838,182
3,068,703
(6,701,323)
1,196,256
2,205,562
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 2019
Consolidated
Share
Based
Payments
Reserved
$
Capital
Restructure
Reserve
$
Issued
Capital
$
Accumulated
Losses
$
Total
Equity
$
Balance at 1 July 2017
3,763,182
4,668,453
250
(4,167,453)
4,264,432
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
-
-
-
-
-
-
1,600,000
475,000
(1,600,000)
-
2,075,000
(1,600,000)
-
-
-
-
-
(2,533,870)
(2,533,870)
-
-
(2,533,870)
(2,533,870)
-
475,000
475,000
-
-
Balance at 30 June 2018
5,838,182
3,068,453
250
(6,701,323)
2,205,562
Balance at 1 July 2018
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
Total transactions with owners
recorded directly in equity
5,838,182
3,068,453
250
(6,701,323)
2,205,562
-
-
-
42,898
-
42,898
1,004,365
(108,692)
-
45,148
895,673
45,148
-
-
-
-
-
(1,993,025)
(1,950,127)
-
-
(1,993,025)
(1,950,127)
-
-
1,004,365
(63,544)
940,821
Balance at 30 June 2019
6,733,855
3,156,499
250
(8,694,348)
1,196,256
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 2019
Cash flows from operating activities
Payments to suppliers and employees
Payments for exploration expenditure
Proceeds from earn-in partner
Interest received
Consolidated
Note
2019
$
2018
$
(971,330)
(1,253,997)
1,000,000
4,452
(876,134)
(2,796,915)
1,482,965
9,238
Net cash used in operating activities
19(a)
(1,220,875)
(2,180,846)
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
-
-
(30,000)
(66,035)
(30,000)
(250,000)
(30,000)
(346,035)
-
-
994,365
(63,544)
930,821
-
-
-
-
-
Net increase/(decrease) in cash and cash equivalents
(320,053)
(2,526,881)
Cash and cash equivalents at the beginning of the year
553,484
3,080,365
Cash and cash equivalents at the end of the year
7
233,431
553,484
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 2019
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)
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. The adoption of these Accounting Standards and Interpretations did not have any material impact
on the financial performance or position of the Group.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have
not been early adopted.
AASB 9 Financial Instruments
The consolidated entity has adopted AASB 9 from 1 July 2018. The standard introduced new classification
and measurement models for financial assets. A financial asset shall be measured at amortised cost if it is
held within a business model whose objective is to hold assets in order to collect contractual cash flows
which arise on specified dates and that are solely principal and interest. A debt investment shall be
measured at fair value through other comprehensive income if it is held within a business model whose
objective is to both hold assets in order to collect contractual cash flows which arise on specified dates that
are solely principal and interest as well as selling the asset on the basis of its fair value. All other financial
assets are classified and measured at fair value through profit or loss unless the entity makes an irrevocable
election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading
or contingent consideration recognised in a business combination) in other comprehensive income ('OCI').
Despite these requirements, a financial asset may be irrevocably designated as measured at fair value
through profit or loss to reduce the effect of, or eliminate, an accounting mismatch. For financial liabilities
designated at fair value through profit or loss, the standard requires the portion of the change in fair value
that relates to the entity's own credit risk to be presented in OCI (unless it would create an accounting
mismatch). New simpler hedge accounting requirements are intended to more closely align the accounting
treatment with the risk management activities of the entity. New impairment requirements use an 'expected
credit loss' ('ECL') model to recognise an allowance. Impairment is measured using a 12-month ECL method
unless the credit risk on a financial instrument has increased significantly since initial recognition in which
case the lifetime ECL method is adopted. For receivables, a simplified approach to measuring expected
credit losses using a lifetime expected loss allowance is available.
(b)
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(u).
(c)
Going Concern
For the year ended 30 June 2019 the entity recorded a net loss of $1,993,025 (2018: $2,533,870), had net
cash outflows from operating activities of $1,220,875, cash balance of $233,431 and future exploration
commitments of $264,599 (Refer to Note 16). The ability of the entity to continue as a going concern is
33
Magmatic Resources Limited
ABN 32 615 598 322
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 Company received $350,000 as a result of unsecured
Director and major shareholder loans made to the company while it finalises a planned $1,500,000 capital
raising.
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.
(d)
(e)
(f)
(g)
Statement of compliance
The financial report was authorised by the Board of directors for issue on 19 September 2019.
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 subsidiaries; Modeling Resources Pty Ltd, Landslide
Investments Pty Ltd and Australian Gold and Copper 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.
34
Magmatic Resources Limited
ABN 32 615 598 322
(h)
(i)
(j)
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.
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.
(k)
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.
(l)
(m)
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.
(n)
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
35
Magmatic Resources Limited
ABN 32 615 598 322
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:
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).
Asset acquisition policy
The Group has determined that the acquisition of the Yamarna project through the acquisition of Landslide
Investments Pty Ltd 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 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.
Share based payments
Equity-settled share-based payment transactions to Directors and seed capitalists for services are
measured in reference to the fair value of equity instruments granted.
Equity-settled share-based payments in return for goods and services are measured at fair value of the
goods and services received, except where the fair value cannot be estimated reliably, in which case they
are measured at the fair value of the equity instruments.
The fair value of options and performance rights with non-vesting conditions and no service conditions
attached issued to Directors, seed capitalists and suppliers, are valued with a Black-Scholes pricing model.
The fair value is measured at the grant date of the equity instrument and is recognised in equity in the share-
based payment reserve. The number of instruments expected to vest is estimated based on the non-market
vesting conditions. The total expense is recognised at the date of grant of the options and rights.
(o)
(p)
(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.
36
Magmatic Resources Limited
ABN 32 615 598 322
(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
The Group has adopted the new and revised Standards and Interpretations AASB 9 and AASB 15 issued
by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective
for the current year. The adoption of AASB 9 had no impact except for accounting policy changes and the
adoption of AASB 15 had no impact as no revenue was earned from contracts with customers during the
financial 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.
Reference and
title
AASB 16
Leases
Summary
Application date
of standard*
Application date
for Group *
1 January 2019
1 July 2019
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
(u)
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 technica
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(n)), 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(n), 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(n). The carrying amounts of exploration and evaluation assets are set out in
Note 11. During the year, an impairment of $445,000 was recognised in the statement of profit or loss and other
comprehensive income in relation to the Mt Venn exploration assets in order to reduce the carrying value down to
the recoverable amount.
Share-based payments
The Group measures the cost of equity-settled transactions by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value is determined by using the Black-Scholes model taking into
account the terms and conditions upon which the instruments were granted. The accounting estimates and
assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of
assets and liabilities within the next annual reporting period but may impact profit or loss and equity. Refer to note
(p).
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
2019
$
92,492
4,452
345
97,289
2018
$
100,370
9,237
116,001
225,608
40,706
39,821
21,834
146,674
40,124
553,827
73,663
212,833
1,129,482
35,149
26,980
6,338
9,140
62,052
432,576
117,257
322,904
126,527
1,138,923
1,622,795
(1,151,088)
471,707
2,858,131
(1,237,577)
1,620,554
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
At the statutory income tax rate of 27.5% (2018: 27.5%)
Add
- Share based payments
- Deductible equity costs
- Tax loss not brought to account
Income tax (benefit) reported in the statement of
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 issues & capital costs
Exploration expenditure
Losses available for offset against future income – revenue
Deferred tax liabilities comprise:
Prepayments
Capitalised expenditure deductible for tax purposes
Consolidated
2019
$
2018
$
(1,993,025)
(548,082)
(2,533,870)
(696,814)
11,797
(28,186)
576,471
-
(24,691)
721,505
-
-
19,668
16,560
125,276
49,708
1,508,435
1,719,647
866
6,015
6,881
6,188
13
101,237
18,407
1,126,920
1,252,765
732
10,949
11,681
Net unrecognised deferred tax assets
1,712,766
1,241,084
Deferred tax assets have not been recognised in respect of these items because it is not certain that future taxable
profit will be available against which the Group can utilise the benefit thereof.
Tax Losses
As at 30 June 2019, the Consolidated Entity has $5,485,218 (2018: $4,091,444) 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
2019
$
2018
$
0.0176
0.031
(1,993,025)
(2,533,870)
112,920,483
82,871,804
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 Modeling Resources Pty Ltd, Landslide Investments Pty
Ltd and incorporated Australian Gold and Copper 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
2019
$
2018
$
233,431
233,431
553,484
553,484
(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
2019
$
2018
$
98,409
10,152
108,561
79,518
10,033
89,551
Consolidated
2019
$
2018
$
10,241
(10,241)
-
66,811
(52,264)
14,548
53,822
(31,950)
21,872
10,241
(6,259)
3,982
65,103
(33,480)
31,623
53,822
(14,008)
39,814
Total property, plant and equipment
36,420
75,419
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
2018
Consolidated
Balance at the beginning of the year
Acquisitions
Depreciation expense
Disposals
Carrying amount at the end of the year
2019
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
7,396
-
(3,414)
-
3,982
37,135
12,214
(17,726)
-
31,623
-
53,822
(14,008)
-
39,814
Office equipment
Information
Technology
Exploration
equipment
3,982
-
(3,982)
-
-
31,623
1,709
(18,784)
-
14,548
39,814
-
(17,942)
-
21,872
Office bond
Tenement bonds
Note 11: Exploration project acquisition costs
Opening balance
Project acquisition costs
Impairment of acquired exploration projects*
Acquisition costs in respect of areas of
interest in the exploration phase
Consolidated
2019
$
2018
$
1,300
90,000
91,300
1,300
100,000
101,300
Consolidated
2019
$
2018
$
2,043,350
30,000
(445,000)
1,368,350
675,000
-
1,628,350
2,043,350
*$445,00 has been impaired during the period in relation to the Mt Venn area of interest in order to bring the carrying
value of the exploration asset down to the recoverable amount based on an independent valuation report
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 $30,000 in the 2019 financial year were in relation to the acquisition of Landslide
Investments Pty Ltd, the owner of the Yamarna South tenement. In consideration for the acquisition of E38/2918 the
Company has agreed to the following payment structure with Landslide Investment’s shareholder (the seller):
Consideration
•
Payment of A$20,000 in cash and A$10,000 worth of ordinary fully paid MAG shares;
The above transaction was completed on 9 October 2018. The Company paid $20,000 in cash, and satisfied the
share based payment of A$10,000 MAG shares by the issue of 362,942 fully paid ordinary shares at $0.0276 per
share. The number of issued shares was arrived at by calculation based on a 30-day Volume Weighted Average
Price during the 30 days preceding 23 March 2018, the date the offer to purchase was made and accepted, to the
value of $40,000 as per the Agreement and was agreed by both Magmatic and the seller.
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.
•
•
•
On 18 April 2019, the Group signed an amendment with Montezuma by which the above A$500,000 minimum
expenditure clause would be removed and the Group would allot 2,000,000 options to the seller, exercisable at $0.03
expiring 5 years from the date of allotment. Refer to Note 13 for further details.
Note 12: Trade and other payables
Current Trade and other payables
Trade creditors *
Other creditors
Goods and services tax payable
JOGMEC – Funds Received in Advance**
Consolidated
2019
$
224,713
625,452
4,448
47,193
901,806
2018
$
160,301
75,527
4,412
290,774
531,015
* Trade payables are non-interest bearing and are normally paid on 30 day terms.
** JOGMEC can earn up to a 51% interest in two exploration tenements EL7427 and EL7676 owned by the
Company, located in East Lachlan NSW known as the Parkes Project by funding up to $3,000,000 of exploration
expenditure. See Note 23 for details.
Non-Current Trade and other payables
Stamp Duty Payable
Consolidated
2019
$
-
-
2018
$
126,527
126,527
42
Magmatic Resources Limited
ABN 32 615 598 322
Note 13: Issued capital
(a) Ordinary shares issued
Consolidated
2019
$
2018
$
117,242,568 (2018: 92,020,485) ordinary shares
6,733,855
5,838,182
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.
(b) Movements in ordinary share capital:
Details
Date
Balance as at 30 June 2017
4 August 2017
29 March 2018
2 May 2018
Issue of shares
Conversion of “A” class performance shares
Issue of shares
Number of
shares
80,000,000
250,000
8,000,000
3,770,485
$
3,763,182
50,000
1,600,000
425,000
Balance as at 30 June 2018
92,020,485
5,838,182
31 August 2018
8 October 2018
Renounceable entitlements issue
Landslide Investments Vendor Consideration
Capital Raising Expenses
24,859,141
362,942
994,365
10,000
(108,692)
Balance as at 30 June 2019
117,242,568
6,733,855
(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 the 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
Number of performance shares
2019
2018
-
-
-
-
8,000,000
-
(8,000,000)
-
Number of performance shares
2019
2018
8,000,000
-
(8,000,000)
8,000,000
-
-
-
8,000,000
43
Magmatic Resources Limited
ABN 32 615 598 322
(e) Movements in share options
2019
Weighted
average
exercise price
2018
Weighted
average
exercise price
Number of
Options
Number of
Options
Listed Options to acquire ordinary fully
paid shares at $0.30 on or before 17 May
2020:
Beginning of the financial year
Converted from Listed
Issued during the year
Expired during the year
Balance at end of financial year
17,980,613
-
-
17,980,613
Listed Options to acquire ordinary fully
paid shares at $0.10 on or before
30 August 2021:
Beginning of the financial year
***Issued during the year
Expired during the year
Balance at end of financial year
-
26,859,141
-
26,859,141
2019
0.30
-
-
0.30
-
0.10
-
0.10
17,980,613
-
-
17,980,613
-
-
-
-
2018
0.30
-
-
0.30
-
-
-
-
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
Balance at end of financial year
*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
Balance at end of financial year
**Unlisted Options to acquire ordinary
fully paid shares on or before
29 May 2024:
Beginning of the financial year
Issued during the year
Expired during the year
Balance at end of financial year
-
-
-
-
-
-
-
-
2,500,000
-
(2,500,000)
-
2,500,000
-
(2,500,000)
-
2,500,000
-
-
2,500,000
-
2,000,000
-
2,000,000
0.20
-
0.20
-
0.205
-
-
0.205
-
0.03
-
0.03
2,500,000
-
-
2,500,000
2,500,000
-
-
2,500,000
-
-
-
-
0.20
-
0.20
-
0.20
-
-
0.20
0.205
-
-
0.205
-
-
-
-
44
Magmatic Resources Limited
ABN 32 615 598 322
*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. These options have expired.
Tranche 2: 20 cents (20 cents was the higher of the two) Monte valuation = 19.7 cents. These options have expired.
Tranche 3: 20.5 cents (5% discount to the 20 Day VWAP was higher of the two)
** During the year, the Group issued options with the fair value of $42,898 to Element 25 Limited (formerly
Montezuma) as described in Note 11 which vested immediately. The options were valued using a Black-Scholes
option pricing model using the following inputs:
Expected
volatility
Fair value per
option
Grant date
share price
Dividend
Yield
Exercise
Price
Interest
Rate
Option
Life
7 May 2019
$0.03
95%
5.12 years
0.00%
1.07%
$0.0214
***During the year the announced a rights issue where 1 free attaching option would be issued for every one share
subscribed for, resulting in 24,859,141 free attaching options issued.
In addition to this, 2,000,000 options were issued to the broker as part of the transaction. The fair value of the
service provided was not able to be estimated, therefore a Black-Scholes model was used to fair value these
options using the following inputs:
Grant date
share price
Exercise
Price
Expected
volatility
Option
Life
Dividend
Yield
30 July 2018
$0.10
95%
3.09 years
0.00%
Interest
Rate
0.96%
Fair value per
option
$0.022
The share-based payment expense of $45,148 has been offset against issued capital as a capital raising cost.
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
Consolidated
2019
$
2018
$
250
-
250
250
-
250
Consolidated
2019
$
2018
$
3,068,452
-
42,898
45,148
4,668,452
(1,600,000)
-
-
3,156,749
3,068,452
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 to the vending shareholders of the Mt Venn project
who were issued options in consideration for their waiver of the Company’s minimum exploration expenditure
commitments.
45
Magmatic Resources Limited
ABN 32 615 598 322
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
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 2019, if interest rates had changed by + 50 basis points and all other variables were held constant, the
Group’s loss would have been $1,514 (2018: $43) lower 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 $1,514 (2018: $43).
(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.
2019
Weighted
Average
Interest
Rate
Less than
1 month
1-3
months
3 months
– 1 year
5 + years
Financial assets
Cash and cash equivalents – non - interest bearing
Cash and cash equivalents – interest bearing
Trade and other receivables
n/a
0.03%
n/a
$
132,343
101,088
108,561
341,992
$
-
-
-
-
$
-
-
-
-
Financial liabilities
Trade and other payables
n/a
406,020
406,020
396,575
396,575
99,212
99,212
$
-
-
-
-
-
-
46
Magmatic Resources Limited
ABN 32 615 598 322
2018
Financial assets
Cash and cash equivalents – non - interest bearing
Cash and cash equivalents – interest bearing
Trade and other receivables
n/a
0.05%
n/a
Weighted
Average
Interest
Rate
$
75,525
477,959
89,551
643,035
Financial liabilities
Trade and other payables
Borrowings
n/a
531,015
531,015
Less than
1 month
1-3
months
3 months
– 1 year
$
-
-
-
-
-
-
$
-
-
-
-
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 over the life of the
licenses, 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 commitment for the granted tenements are $264,599 (2018: $278,839).
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
2019
$
2018
$
42,391
222,208
-
264,599
20,000
-
-
284,599
33,975
244,264
-
278,839
11,776
-
-
290,615
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 11), 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
47
Magmatic Resources Limited
ABN 32 615 598 322
Event
Consideration
Relevant condition (if any)
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
A Viner – Non-Executive Director
There were no changes of the key management personnel after the reporting date and the date the financial report
was authorised for issue, other than the appointment of Andrew Viner listed above.
(b) Key management personnel
At the date of this report the other Key management personnel of the Company are:
M Franklin (appointed 1 June 2019), Chief Financial Officer
I Wowesny (appointed 1 December 2017, resigned 31 May 2019)) Chief Financial Officer and Company Secretary
(c) Key management personnel compensation
Short-Term
Post-employment
Share-based payments
Termination benefits
Consolidated
2019
$
427,756
42,038
-
25,000
494,794
2018
$
366,974
30,507
-
-
397,481
Detailed remuneration disclosures of directors and key management personnel are in pages 19 to 20 of this
report.
Note 18: Subsidiaries
Name of entity
Country of
incorporation
Class of shares
Equity holding
Modeling Resources Pty Ltd
Landslide Investments Pty Ltd
Australian Gold and Copper Ltd
Australia
Australia
Australia
Ordinary
Ordinary
Ordinary
2019
%
100
100
100
2018
%
100
-
-
48
Magmatic Resources Limited
ABN 32 615 598 322
There were no transactions between Magmatic Resources Limited and its controlled entities during the financial year
other than intercompany loan funding to support Landslide Investments Pty Ltd of $30,000 (2018: $2,420,000 to
support Modelling Resources operations).
There were no loans to individuals or members of key management personnel during the financial year or the
previous financial year.
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
(1,993,025)
(2,533,870)
Consolidated
2019
$
2018
$
Share based payment expense
Finance cost (equity)
Share issue costs
Depreciation
Exploration asset impairments
Movements in working capital
(Increase) in other receivables
(Increase) in prepayments
Increase in trade and other payables
42,898
-
-
40,706
445,000
(95,773)
(3,150)
322,469
50,000
-
-
35,149
-
75,099
(2,661)
195,337
Net cash outflows from operating activities
(1,240,875)
(2,180,846)
b) Non-cash financing and investing activities
During the financial year ended 30 June 2019, the Group acquired Landslide Investments Pty Ltd including its
Yamarna project for $30,000 cash and $10,000 in Magmatic Resources shares (as per note 11). The share
consideration component of this transaction 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
2019
$
122,150
1,628,300
1,750,451
2018
$
171,895
5,392,112
5,564,007
347,542
347,542
89,246
89,246
1,402,909
5,474,761
6,693,380
3,196,974
(8,487,445)
5,837,932
3,068,703
(3,431,874)
1,402,909
5,474,761
49
Magmatic Resources Limited
ABN 32 615 598 322
Financial performance
Loss for the year
Other comprehensive income/(loss)
Total comprehensive income/(loss)
Note 21: Events after the reporting date
(1,022,528)
(487,898)
(1,510,426)
(717,448)
-
(717,448)
The Company issued a short form prospectus dated 13 September 2019 offering to transfer on 18 October 2019
117,242,568 shares in its fully owned subsidiary Australian Gold and Copper Ltd (AGC) on an in-specie distribution
basis to the shareholders on record on 17 October 2019 in exchange for the Company’s New South Wales based
exploration licences. The general meeting of shareholders at which this offer will be put to a vote is scheduled for 15
October 2019 and full details of this proposed transaction are contained in the notice of that meeting which was
released to the market on 13 September 2019. On 16 September 2019 Andrew John Viner was appointed a Director
of the Company. Subsequent to year end, the Company received $350,000 as a result of unsecured Director and
major shareholder loans made to the Company.
Other than those, 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.
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
Total auditor’s remuneration
Consolidated
2019
$
2018
$
28,077
28,077
28,077
33,765
33,765
33,765
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.
b.
c.
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 2019 and of its performance
for the financial year then ended; and
ii. complying with Accounting Standards, Corporations Regulations 2001, professional reporting
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 2019.
This declaration is signed in accordance with a resolution of the Board of Directors.
D Berrie
Chairman
Perth, Western Australia
26 September 2019
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 2019, 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 2019 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.
52
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 2019 the carrying value of the capitalised
Our procedures included, but were not limited to:
exploration and evaluation assets was disclosed in Note 11.
(cid:127)
Obtaining a schedule of the areas of interest held
As the carrying value of the capitalised exploration and
by the Group and assessing whether the rights to
evaluation assets represents a significant asset of the Group,
tenure of those areas of interest remained current
we considered it necessary to assess whether any facts or
at balance date;
circumstances exist to suggest that the carrying amount of
this asset may exceed its recoverable amount.
(cid:127)
Considering the status of the ongoing exploration
programmes in the respective areas of interest by
Judgement is applied in determining the treatment of
holding discussions with management, and
exploration expenditure in accordance with Australian
reviewing the Group’s exploration budgets, ASX
Accounting Standard AASB 6 Exploration for and Evaluation of
announcements and director’s minutes;
Mineral Resources. In particular:
·
·
·
Whether the conditions for capitalisation are
satisfied;
Which elements of exploration and evaluation
expenditures qualify for recognition; and
Whether facts and circumstances indicate that the
exploration and expenditure assets should be tested
for impairment.
(cid:127)
(cid:127)
(cid:127)
Considering whether any such areas of interest had
reached a stage where a reasonable assessment of
economically recoverable reserves existed;
Considering whether any facts or circumstances
existed to suggest impairment testing was
required; and
Assessing the adequacy of the related disclosures
in Notes 1(u) and 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 2019, 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.
53
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 18 to 22 of the directors’ report for the
year ended 30 June 2019.
In our opinion, the Remuneration Report of Magmatic Resources Limited, for the year ended 30 June
2019, 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
Dean Just
Director
Perth, 26 September 2019
54
Magmatic Resources Limited
ABN 32 615 598 322
Additional Shareholder Information
The following additional information is current as at 24 September 2019.
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
12,669,044
27.45%
15.01%
10.81%
Ordinary Shares:
Holdings Ranges
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 -
Totals
Holders
17
21
97
179
77
391
Total Units
3,907
85,541
901,243
7,482,490
108,769,387
117,242,568
%
0.00
0.07
0.77
6.38
92.77
100.00
There are 58 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
1 BILLINGUAL SOFTWARE PTY LTD
GOLD FIELDS AUSTRALIA PTY LTD
DAVTHEA PTY LTD
MR DAVID RICHARDSON + MRS RYOKO RICHARDSON
MR NEVRES CRLJENKOVIC
ELEMENT 25 LIMITED
SANCOAST PTY LTD
SERCA SUPERFUND PTY LTD
MR ALAN JOHN TATE
DUERDEN INVESTMENTS PTY LIMITED
EXECUTIVE RISK SOLUTIONS PTY LTD
THOMAS ASSET DISCOVERY LIMITED
GECKO RESOURCES PTY LTD
GOSOJO PTY LTD
MR ALAN GOODFELLOW
MR PETER BENJAMIN DUERDEN + MRS EMMA LOUISE
DUERDEN
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Shares Held
32,188,823
17,600,000
12,669,044
5,448,751
5,025,000
3,770,485
3,000,000
3,000,000
2,317,572
1,704,750
1,470,588
1,107,059
1,000,000
1,000,000
900,000
835,531
%
27.45
15.01
10.81
4.65
4.29
3.22
2.56
2.56
1.98
1.45
1.25
0.94
0.85
0.85
0.77
0.71
55
Magmatic Resources Limited
ABN 32 615 598 322
17
18
19
20
CRLJENKOVIC SUPER FUND PTY LTD
SHOWCITY PTY LTD
ERIC MCKENZIE NOMINEES PTY LTD
MR ALAN SCHWARTZ
Total
Total remaining holders
823,250
800,000
784,313
500,000
95,945,166
21,297,402
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
1
97
24
106
35
263
5
482,500
164,059
3,389,779
13,944,270
17,980,613
There are 239 shareholders with less than a marketable parcel.
THE TOP 20 HOLDERS OF LISTED OPTIONS EXPIRING 17 MAY 2020 ARE:
1
2
3
3
5
6
7
8
8
10
10
12
13
14
15
16
16
16
16
16
16
16
16
16
Holder
MELSHARE NOMINEES PTY LTD
SERCA SUPERFUND PTY LTD
MR MALCOM NORRIS
SERCA SUPERFUND PTY LTD
ZENIX NOMINEES PTY LTD
MR IAN STUART FISHER
MR THISARA SAHAN ADIKARI
ELSTREE CAPITAL PTY LTD
JASPER HILL RESOURCES PTY LTD
MR IAN RICHARD HOBSON
MR GORDON JAMES
MR MICHAEL CARABOTT
MR PETER ALAN LAWSON
BLU BONE PTY LTD
MR CHRISTOPHER LESLIE LAWSON
BEIRNE TRADING PTY LTD
CONTINENTAL GLOBAL INVESTMENT LIMITED
GOSOJO PTY LTD
HANWOOD LODGE PTY LTD
KAHALA HOLDINGS PTY LTD
SANCOAST PTY LTD
MR ALAN SCHWARTZ
WALLCLIFFE COTTAGES PTY LTD
WYTHENSHAWE PTY LTD
Total
Total remaining holders
Holding
2,837,496
1,500,000
750,000
750,000
500,000
428,627
385,000
375,000
375,000
350,000
350,000
329,997
300,000
256,900
255,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
0.70
0.68
0.67
0.43
81.83
18.17
0.00
2.68
0.91
18.85
77.55
100.00
%
15.78
8.34
4.17
4.17
2.78
2.38
2.14
2.09
2.09
1.95
1.95
1.84
1.67
1.43
1.42
1.39
1.39
1.39
1.39
1.39
1.39
1.39
1.39
1.39
11,993,020
5,987,593
66.70
33.30
56
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
6
17
10
34
39
106
1,515
53,868
79,562
1,497,580
25,226,616
26,859,141
0.01
0.20
0.30
5.58
93.92
100.00
There are 58 shareholders with less than a marketable parcel.
THE TOP 20 HOLDERS OF LISTED OPTIONS EXPIRING 30 AUGUST 2021 ARE:
Holder
MR NEVRES CRLJENKOVIC
MR DAVID RICHARDSON + MRS RYOKO RICHARDSON
SERCA SUPERFUND PTY LTD
CRLJENKOVIC SUPER FUND PTY LTD
1,250,000
1
2
3
4
5
5
7
8
9
MR DANIEL ELLIDGE
FIRST INVESTMENT PARTNERS PTY LTD
DAVTHEA PTY LTD
MR PETER RAYMOND MURRELL
ACTIVEST CAPITAL PTY LTD
10
BULL EQUITIES PTY LTD
11 MR GABRIEL HEWITT
12 MR GRAHAM ROBERT FOREMAN
12 GECKO RESOURCES PTY LTD
12 GOSOJO PTY LTD
15 MR MARIO IERARDI + MRS POPPY IERARDI
16 MS CHUNYAN NIU
17 MR ALAN GOODFELLOW
18 CEDAR RIDGE PTY LTD
19 MR PAUL JOSEPH MASSARA
20 MR MICHAEL DICKSON
20 MR RICHARD PIEKARSKI + MRS WANDA PIEKARSKI
Holding
5,000,000
%
18.62
4,918,751
18.31
1,500,000
1,000,000
1,000,000
675,000
611,186
600,000
575,000
526,666
500,000
500,000
500,000
483,000
454,545
450,000
422,000
380,000
300,000
300,000
5.58
4.65
3.72
3.72
2.51
2.28
2.23
2.14
1.96
1.86
1.86
1.86
1.80
1.69
1.68
1.57
1.41
1.12
1.12
Total
Total remaining holders
21,946,148
81.71
4,912,993
18.29
57
Magmatic Resources Limited
ABN 32 615 598 322
UNQUOTED EQUITY SECURITIES
Number
Number of
Holders
+Class
Escrow
Period
Holders of more than 20%
2,500,000
2,000,000
1
1
Unlisted options*
N/A
Gold Fields Aust. Pty Ltd
(2,500,000 options)
Unlisted options**
N/A
Element 25 Limited (formerly Montezouma)
(2,000,000 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 and expiring as follows:
2,500,000 options expiring 11 May 2020.
**Exercisable at $0-03 on or before 29 May 2024.
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
Yamarna
Yamarna
Mt Venn
Tenement Details
% Held
EL6178
EL6913
EL7424
EL7440
EL7675
EL7676
EL8357
EL8669
E38/2918
E38/3327
E38/3351
E38/2961
100
100
100 (subject to 51% JV earn in)
100
100
100 (subject to 51% JV earn in)
100
100
100
100
100
100
58