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Yandal Resources LimitedA N N U A L R E P O R T 2 0 1 8
Middle Island
RESOURCES LIMITED
E X P L O R I N G G O L D E N F R O N T I E R S
Con tent s
Managing Director’s Overview
Operations Overview
Directors’ Report
Auditors Independence Declaration
Corporate Governance Statement
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 Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional Information
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Co rp or at e D irec tory
DIRECTORS
Peter Thomas
(Non-Executive Chairman)
Richard Yeates
(Managing Director)
Beau Nicholls
(Non-Executive Director)
Dennis Wilkins
(Alternate for Beau Nicholls)
COMPANY SECRETARY
Dennis Wilkins
REGISTERED OFFICE
Suite 2, 11 Ventnor Avenue
West Perth WA 6005
PRINCIPAL PLACE OF BUSINESS
Suite 1, 2 Richardson Street
West Perth WA 6005
POSTAL ADDRESS
PO Box 1017
West Perth WA 6872
SOLICITORS
Williams and Hughes
28 Richardson Street
West Perth WA 6005
SHARE REGISTER
Security Transfer Registrars Pty Ltd
770 Canning Highway
Applecross WA 6153
AUDITORS
Greenwich & Co
Level 2, 35 Outram Street
West Perth WA 6005
EMAIL
info@middleisland.com.au
INTERNET ADDRESS
www.middleisland.com.au
STOCK EXCHANGE LISTING
Middle Island Resources Limited
shares are listed on the Australian
Securities Exchange (ASX code: MDI).
Ma na ging Direc tor’s Ov erview
Dear Fellow Shareholders,
Significant progress has been made at the Company’s wholly-owned Sandstone gold project in Western Australia during
the 2018 Financial Year. There has been a clear focus on extending (identifying tonnes) and enhancing (identifying
higher grades) the production profile with a view to recommissioning our on-site 600,000tpa gold processing plant at
the first logical opportunity. This process is taking longer than desired, being limited by access to available funding
during what has proved a somewhat volatile period. Investor sentiment towards gold stocks has generally been more
subdued over the period, necessitating a measured, staged approach to exploration to ensure the limited available
funding is spent prudently.
Highlights of 2018 include the estimation of an Exploration Target of 24Mt to 34Mt at 1.1g/t to 1.4g/t Au (900,000oz to
1.5Moz gold) for Sandstone’s Two Mile Hill tonalite deeps deposit, underpinned by an exceptional intercept in MSDD156
of 508.3m at 1.38g/t Au. This result serves to demonstrate the extraordinary gold endowment of the Sandstone project
and confirms the Two Mile Hill tonalite intrusive as a substantial and well-mineralised body that has the potential to
considerably extend the mine life.
Other highlights include significant positive progress with ore sorting trials on the Two Mile Hill deposit; a doubling of
the Wirraminna open pit Mineral Resource; proof of concept work at the Davis prospect, where four cohesive gold-
arsenic anomalies were defined within 1km of the processing plant at the first ‘weights of evidence’ target to be tested;
and consolidation of tenure via the Dandaraga option agreement and Ned’s acquisition.
Equally, a meaningful divestment of the Reo gold project in Burkina Faso in West Africa, allowing your Company to
focus on the Sandstone project, must also be considered a highlight.
I, again, sincerely thank the very small, but effective, team that is MDI. This includes the Directors, administration, and
the first class contractors and consultants who have individually and collectively made significant contributions to our
progress in 2018.
I believe the outlook for gold remains stronger than ever and the settings are now in place for a significant shift in
investor sentiment and positive market re-rating for gold pre-development stocks such as Middle Island. I remain very
confident that the multi-faceted exploration and consolidation strategy we are successfully pursuing in WA will
ultimately lead your Company to a decision to resume gold mining and processing at Sandstone.
Yours faithfully,
Rick Yeates
Managing Director
M I D D L E I S L A N D R E S O U R C E S L I M I T E D A N N U A L R E P O R T 2 0 1 8
1
Opera tions Overvie w
CORPORATE
Finance
Gold project developer, Middle Island Resources Limited (ASX: MDI, Middle Island or the Company), had a cash balance of
A$1.55 million as at 30 June 2018.
The 30 June balance includes A$186,000 in cash proceeds derived from the Sandstone mill gold clean-up residues, along
with initial cash proceeds of A$244,000 received from Tajiri Resources Corp. (TSX-V:TAJ) under the Reo gold project Option
Agreement. Five million TAJ ordinary shares, with a value of A$848,000 as at 30 June 2018, were also issued to MDI in
FY18, bringing cash and liquid investments to A$2.38 million.
Middle Island completed a Placement on 20 December 2017 to institutional and sophisticated shareholders of 111,617,647
fully paid ordinary shares at A$0.017 (1.7c) per share to raise $1,897,500 before costs.
In July 2017, the Company entered into a Controlled Placement Agreement (CPA) with Acuity Capital, whereby MDI may
(if, when and at a price or prices in one or more tranches), at its sole discretion, raise up to $2 million prior to 31 December
2019. There is no requirement for MDI to utilise the CPA, which it may terminate at any time without cost or penalty. The
CPA does not contractually restrict MDI’s ability to otherwise raise capital. Each time MDI elects to utilise the CPA, it will
(in its sole discretion) set a floor price. The final issue price will be the greater of the floor price and a discount of 10% to
the Volume Weighted Average Price on market sale price realised by Acuity over a period nominated by MDI.
Strategy
During FY2018, Middle Island made substantial progress in advancing its multi-faceted strategy at the Company’s wholly-
owned Sandstone gold project in WA, being to extend and enhance the proposed gold production profile in order to
recommission its on-site processing plant.
In terms of extending the proposed production profile, the focus has been on the Two Mile Hill tonalite deeps deposit. This
now comprises a substantial Exploration Target, the economic significance of which was progressively advanced via resource
definition diamond drilling, ore sorting trials and geotechnical studies during FY18.
In terms of enhancing the production profile, infill resource definition drilling, resource estimation and pit optimisation
studies resulted in a doubling of contained gold at the Wirraminna deposit. This was supplemented by the discovery of
four coincident gold-arsenic anomalies beneath transported cover at the Davis prospect, all located within 1km of the
processing plant.
Further local vicinity consolidations comprising the Dandaraga option agreement and Ned’s acquisition, add to the broader
Sandstone exploration acreage and offer additional gold prospects proximal to the Sandstone project. Initial exploration
commenced on both these properties late in the reporting year. Further potential consolidations, either at the corporate or
asset level, remain under active review and negotiation.
The Company remains confident that continuing this strategic approach will ultimately lead to plant recommissioning
and gold production at Sandstone.
At the Reo gold project in Burkina Faso, West Africa, the Company’s objective was realised, with consummation of a
satisfactory project divestment to Tajiri Resources Corp. The transaction structure provides on-going exposure to the asset
for MDI shareholders, whilst also permitting the Company to focus its resources on the Sandstone gold project.
Shareholder Meetings
The 2017 Annual General Meeting of Middle Island was held in Perth on 22 November 2017. All resolutions were
overwhelmingly supported by shareholders, with in excess of 99% affirmative votes recorded in each case.
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MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018 Oper ations O vervie w
SANDSTONE GOLD PROJECT (100%) – WESTERN AUSTRALIA
The Sandstone gold project is shown in Figure 1 below.
Figure 1. Sandstone Gold Project.
Two Mile Hill Tonalite Deeps Deposit
The Two Mile Hill tonalite deeps deposit is located 4km north (via an existing haul road) of the Company’s 600,000tpa
Sandstone gold processing plant (Figure 1).
Drilling at the Two Mile Hill deeps deposit confirms the presence of a substantial and ubiquitously mineralised system
measuring 250m in strike and up to 90m in width and that is mineralised to at least 713m depth and remains open
beneath this level (Figure 2). Substantial recent drill intercepts, along with encouraging results derived from recent
metallurgical, geotechnical, mineralogical and ore sorting testwork, enhance the potential for bulk underground mining
beneath the proposed open-pit cutback at Two Mile Hill.
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MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018 Opera tions Overvie w
Figure 2. An isometric model of the Two Mile Hill tonalite deposit (green)
and adjacent BIF-hosted deposit (red), looking southeast.
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MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018 Oper ations O vervie w
Figure 3. Two Mile Hill diamond drill section 6,892,620N showing MSDD156.
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MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018 Opera tions Overvie w
Diamond Drilling
Following completion of a 231m diamond core extension to hole MSDD156 (to a final depth of 730m), a revised gold
intercept of 508.3m at 1.38g/t Au was intersected (ASX Release – 14 November 2017). MSDD156 is mineralised from the
start of coring to 592m depth, including an intercept of 160m at 2.31g/t Au (from 432m to 592m depth), as shown in
Figure 3. The intercept in MSDD156 is entirely consistent with previous diamond drilling at Two Mile Hill, including
intersections of 372.7m at 1.52g/t, 230.4m at 1.62g/t, 353.3m at 1.04g/t, 141.0m at 2.30g/t and 156.3m at 1.14g/t Au.
Exploration Target
An Exploration Target of 24Mt to 34Mt at 1.1g/t to 1.4g/t Au, comprising between 0.9Moz & 1.5Moz of gold, has been
estimated between 140m (base of quantified open pit Mineral Resources) and 700m depth for the Two Mile Hill tonalite
deeps deposit (ASX Release – 29 November 2017).
The potential quantity and grade of an Exploration Target is conceptual in nature, as there has been insufficient exploration
to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.
The Exploration Target follows the incorporation of results from diamond core hole MSDD156, along with all previous
diamond drilling. Within the Exploration Target, broader, sub-horizontal zones of higher grade mineralisation include
approximate true width intercepts of 160m at 2.31g/t, 22m at 5.95g/t, 37m at 4.46g/t, 50m at 2.71g/t, 13m at 6.39g/t
and 11m at 6.89g/t Au.
Stage 1 RC pre-collared, resource definition, diamond drilling on the Two Mile Hill tonalite deeps deposit was completed in
the June quarter 2018. This program was focussed exclusively on the upper half of the deeps deposit and comprised 7
holes for 2,109.2m, including 994m of RC pre-collar drilling and 1,115.2m of NQ diamond core tails, optimising the
existing drill pattern to the maximum extent possible.
In addition to quantifying the upper half of the current Exploration Target as a formal Mineral Resource, the holes were
designed to optimise the number of intercepts of the upper two banded iron formation (BIF) units, proximal to the tonalite
contacts, which are known to host high grade gold associated with massive to semi-massive pyrite replacement
mineralisation.
The results of this program were received and reported post-financial year end.
This program will provide a higher-resolution block model which, along with additional geotechnical data and ore sorting
results, will inform an updated underground mining concept study in FY19.
Ore Sorting
Initial ore sorting trials demonstrated that the Two Mile Hill tonalite deeps deposit is amenable to pre-concentration, with a
high selectivity of gold mineralisation using X-ray (XRT) and Optical (Colour) sensors (Figure 4). The initial testwork
indicated that sorting could deliver a 185%-257% increase in grade, with gold recoveries in excess of 93%, and up to 64%
of the sorter feed material being rejected (refer ASX Release of 15 January 2018), delivering significant benefits, including
reduced haulage and process operating costs, and tailings disposal and water requirements.
In order to confirm this outcome, a series of four primary (fresh) composites were selected from HQ and PQ diamond core
derived from MSDD261, drilled in the March quarter 2018 (refer ASX Release of 26 March 2018). The composites comprise
broad, single, continuous intervals of half core over three grade ranges (high grade - HG, medium grade - MG and low
grade - LG). The HG composite, derived from half PQ and HQ core, was crushed into two fractions at -45mm/+15mm and
-30mm/+10mm to assess the impact of crush size on sorting, while the MG and LG composites were derived from half HQ
core and crushed at -30mm/+10mm.
The composites were provided to Steinert for initial sighter and scoping trials using its commercial-scale unit in Perth.
Based on the sighter test results, a combination of XRT (to detect and separate higher density sulphides associated with
gold) and Optical (to detect and isolate quartz, which hosts the vast majority of gold, on the basis of colour) sensors were
confirmed to yield the optimum result.
Especially given the coarse, particulate nature of the majority of gold mineralisation, the various product fractions derived
from each composite (along with the fines) were assayed via five 2kg bottle rolls (with residue assays) to determine an
average calculated head grade in each case.
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MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018 Oper ations O vervie w
While the priority remains on establishing the sorting characteristics of the primary (fresh) material, a partially oxidised
composite of half PQ diamond core was also been submitted for sorting at a -45/+15mm crush size, in order to assess ore
sorting on material derived from the planned Two Mile Hill open pit.
A further scoping trial was undertaken at the Tomra facility in Sydney, prior to selection of the optimum processing route
and unit to undertake the main ore sorting trial, with an Optical (Colour) sensor appearing to provide the optimum
outcome. Based on the results from the scoping trials, Tomra was selected to undertake the bulk composite trials at the
end of the June 2018 quarter. This work has been completed and all fractions returned to Perth for assay, with each
product fraction being assayed via 5 x 2kg bottle rolls.
Figure 4. Mineralised quartz (8.2kg) product (left) and
waste tonalite - 50kg (right) derived from initial colour ore sorting trial.
Petrology
Petrography was undertaken on a suite of samples comprising all visual variants of tonalite derived from the Two Mile Hill
deeps deposit to better understand the nature of gold mineralisation for planning and interpreting ore sorting campaigns.
The polished sections confirm that the vast majority of gold occurs within quartz veins in close association with galena (lead
sulphide), as shown in Figure 5.
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MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018 Opera tions Overvie w
Figure 5. Coarse gold (yellow) associated with galena (pale grey) within quartz veins (dark grey) comprises
the vast majority of mineralisation within the Two Mile Hill tonalite deeps deposit.
A very limited quantity of gold is also associated with localised pyritic variants of the tonalite, occurring as extremely fine
grained (1-2 micron) particles that are partially or totally occluded within coarser euhedral pyrite (and/or galena within the
pyrite) as shown in Figure 6.
Figure 6. Limited, ultra-fine gold (bright yellow), again associated with galena (pale grey) and
chalcopyrite (pale yellow), occluded within euhedral pyrite (beige) within a pyritic variant of the
tonalite host at the Two Mile Hill deposit.
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MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018 Oper ations O vervie w
Based on 50g fire assaying of the tonalite off-cuts, the gold grades are low, consistent with the 0.15g/t Au average grade
of the tonalite derived from the original mineralogical testwork.
The study also identified that chloritic variants of the tonalite appear to represent a weaker phase of the same (sericite-
carbonate) alteration event, rather than a separate earlier metamorphic or later retrograde event.
The other key finding is that the tonalite appears to represent the original intrusive composition, rather than an alteration
product of a precursor granitoid rock.
Geotechnical Assessment
Prior to cutting the core, a preliminary geotechnical analysis of MSDD261 was undertaken by external geotechnical
consultants, Peter O’Bryan & Associates (O’Bryan), in order to assess the physical properties of the primary Two Mile Hill
tonalite for a range of possible underground mining methods.
Although no dedicated rock strength testing was done, the fresh tonalite is deemed to be consistently strong, and is
expected to have a uniaxial compressive strength of >150MPa.
As expected, the logged defect orientations show the vast majority of quartz veins are sub-horizontal (Figure 7). Assuming
reasonably dry underground conditions, the local ground stress field will be benign and mining-induced stress changes can
be readily managed.
Applying designated rating values for the applicable characteristics of the Two Mile Hill tonalite indicates the preferred
mining method is sub-level stoping. Cut and fill stoping and sub-level caving methods may also be viable, but are ranked
geotechnically lower than sub-level stoping.
Figure 7. Imaged stereo-net of poles to oriented defect planes in diamond hole MSDD261 at Two Mile Hill,
demonstrating the overwhelmingly sub-horizontal attitude of quartz veins and fractures within the tonalite.
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MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018 Opera tions Overvie w
Wirraminna Gold Deposit
The Wirraminna gold deposit lies only 1km west of the Company’s 100%-owned, 600,000tpa Sandstone gold processing
plant (Figure 1).
Resource Definition Drilling
A programme of infill resource definition drilling, comprising 1,939m (24 holes) of RC and 175.9m of HQ3 diamond core tails
(in four holes), was completed at the Wirraminna deposit during the December quarter (ASX Release – 2 November 2017).
Drilling at the Wirraminna deposit returned results generally consistent with historic drilling, including higher grade
intercepts of 4m at 13.4g/t, 1m at 17.8g/t, 1m at 12.1g/t and 1m at 10.8g/t Au. However, diamond core tails failed to
validate several reported historic broad, higher grade intercepts and this generation of drilling was therefore excluded from
the updated resource estimate.
Resource Estimation
An updated estimate of the Mineral Resource for Wirraminna deposit was completed during the December quarter by
independent consultant, Ashmore Advisory Pty Ltd (refer ASX Release of 8 December 2017). The updated Mineral Resource,
estimated in accordance with the 2012 JORC Code guidelines, more than doubled to 550,000t at 1.3g/t Au for 23,000oz
gold (at a 0.5g/t lower cut-off grade) following verification, infill and extension drilling (Figure 8). Some 55% of the new
Wirraminna Mineral Resource is classified as Indicated, whilst the balance remains in the Inferred category.
Figure 8. An isometric model of the Wirraminna deposit, looking northeast.
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MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018 Oper ations O vervie w
The updated estimate compares with a previous Inferred Mineral Resource estimate (JORC 2004) of 106,300t at 2.07g/t Au
(10,674oz). The increase in tonnage reflects a higher degree of mineralised zone continuity demonstrated by infill and
extension drilling, and the application of a lower cut-off grade.
Pit Optimisation
The updated Wirraminna Mineral Resource estimate was optimised at a gold price of A$1,600/oz. The optimal pit shell
(Figure 8) includes 72,000t at 1.97 g/t gold at a strip ratio of 9:1.
Considerable opportunity remains to further expand the Wirraminna deposit via follow-up RC drilling, including confirming
the location of historic broader, higher grade intercepts, and otherwise infilling and extending the Mineral Resource.
Davis Prospect
Auger/Aircore Geochemical Drilling
A geochemical auger and aircore drilling programme was completed at the Davis prospect during the September quarter.
Davis represents the highest priority target generated by the ‘weights of evidence’ (WoE) targeting study completed in
2017. The Davis target lies in the south-western portion of the Sandstone project, beneath a thick veneer of transported
sheetwash. This initial programme was designed to establish the presence of anomalous gold geochemistry at the interface
between the transported and residual profiles, allowing more accurate drill targeting of saprolite mineralisation.
The results of this programme (refer ASX release dated 12 September 2017) define four significant new blind gold
anomalies, with peak values up to 688ppb Au (0.68g/t) and a strong coincident arsenic response. Individually the
anomalies have strike lengths of ~200m. However, some may prove to be linked over strike lengths of up to 600m (Figure
9). Each of the anomalies is consistent with those defining nearby, high grade, open pit deposits that have been mined and
processed. Importantly, all anomalies lie within 1km of the Company’s 600,000tpa Sandstone gold processing plant,
consistent with an area hosting the highest density of gold deposits within the entire Sandstone greenstone belt.
Davis is the first of the WoE targets to be tested by geochemical drilling, providing considerable confidence in the
Company’s technical approach to defining targets beneath transported cover and that other WoE targets may generate
similar anomalies.
Reconnaissance RC Drilling
Two traverses of reconnaissance RC holes (aggregating 5 holes; 386m) were completed over two of the four Davis prospect
gold anomalies to determine the nature and tenor of associated saprolitic mineralisation. Traverses comprised two, angled,
overlapping, RC holes at Davis East and three similar holes across Davis West (Figure 9).
The RC holes encountered broad zones of ferruginous quartz veining within saprolitic ultramafic rocks. While similar in
appearance and setting to gold mineralisation at the adjacent Wirraminna and Eureka deposits, the initial results included a
best intercept of 1m at 1.88g/t Au from 23m depth in MSRC259 at Davis West.
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MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018 Opera tions Overvie w
Figure 9. Davis prospect imaged aircore gold values showing
reconnaissance RC holes, proximal deposits and infrastructure.
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MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018 Oper ations O vervie w
Dandaraga Property
Option Agreement
Via its 100%-owned subsidiary, Sandstone Operations Pty Ltd (SOPL), Middle Island executed an option deed to acquire a
100% interest in the Dandaraga gold project (E57/1028) upon payment of $200,000 at any time prior to 8 September
2020 (refer ASX release of 11 September 2017).
Dandaraga is situated 16km southeast of Middle Island’s Sandstone gold project and processing plant, and 4km south of
the haul road from the Lord Henry and Lord Nelson deposits (Figure 1).
Geological Mapping and Chip Sampling
A campaign of detailed geological mapping, chip sampling and soil sampling was completed at Dandaraga during the June
quarter 2018.
Geological mapping defined a succession of predominantly east-dipping gabbros, dolerites, basalts, ultramafics and BIFs
that have been folded into a series of steeply north-northeast plunging synclines and anticlines. The eastern margin of the
succession has been variably assimilated by gneissic rocks of the Diemals Dome. The metamorphic grade is predominantly
greenschist facies, increasing to amphibolite facies proximal to the Diemals Dome contact. In addition to the known
mineralisation and historic workings, several areas of potential economic interest were identified.
The results of limited chip sampling were pending at financial year end.
Soil Sampling
Soil sampling was completed late in the June quarter on a 160m x 40m pattern. The top of the more calcareous, ‘B’ horizon
was targeted for sampling, with samples screened at -80# (180 microns) to generate ~200g of material at each site.
The results of soil sampling were pending at financial year end.
Ned’s Property
Acquisition
During the December quarter 2017, Middle Island acquired a 100% interest in the Ned’s gold exploration property for $500
in cash. The Ned’s gold property (P57/1384) covers an area of 34ha and lies ~10km east-southeast of the Company’s
existing Sandstone gold project (Figure 1). The Ned’s property straddles the former haul road linking the Lord Henry and
Lord Nelson deposits with Middle Island’s 600,000tpa Sandstone gold processing plant.
The Ned’s property is interpreted to comprise a north-south trending succession of predominantly ultramafic rocks situated
in the south-central portion of the Sandstone greenstone belt. Gold mineralisation is evidenced by nugget patches, spatially
related to historic gold workings developed on quartz veins within ultramafic rocks.
The Ned’s property lies between the Indomitable and Vanguard gold trends that represent the current focus of exploration
by Alto Metals Limited on adjacent tenements.
The outright acquisition of Ned’s, on extremely favourable terms, adds further exploration acreage to Middle Island’s well-
endowed Sandstone gold tenure. Ned’s represented the Company’s third such consolidation in calendar 2017, having
previously secured options over the Wirraminna and Dandaraga properties.
Soil Sampling
Soil sampling was completed at Ned’s late in the June quarter on a 160m x 40m pattern. The top of the more calcareous,
‘B’ horizon was targeted for sampling, with samples screened at -80# (180 microns) to generate ~200g of material at
each site.
The results of soil sampling were pending at financial year end.
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MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018 Opera tions Overvie w
Tribute Gold Production
As at 30 June 2018, aggregate tribute gold production amounted to 282oz, of which Middle Island’s share is 41.2oz. The
largest nugget identified since commencement of tribute production is a 13oz piece recovered from the Bullet Hill prospect
(Figure 10).
Figure 10. Gold nugget weighing 13oz recovered from the Bullet Hill prospect.
The larger nuggets from Middle Island’s share of production are being progressively sold to a registered gold buyer and
trader at a premium to the spot gold price, while the remainder will be batch smelted, refined and sold at the Perth Mint at
the prevailing spot price.
While covering monthly corporate administration costs, income from the tribute production is otherwise immaterial. The
major benefit is that the tribute arrangement is serving to identify additional bedrock gold targets for Middle Island, with
potential sources of saprolitic gold now defined at the Bullet Hill, Three Mile, and the new McClaren and Cowan prospects.
The Cowan prospect is of particular recent interest, with the discovery of sharp, platy nugget gold apparently derived from
a 1-2m wide, north-northwest trending quartz vein exposed over an ~100m strike length, disappearing beneath cover at
each end. This new target was the subject of maiden reconnaissance RC drilling early in FY19.
The remainder of these new prospects will be prioritised and assessed by exploration as funds permit.
Sandstone Mill Clean-up
Some 6.5t of mineralised residues derived from the Sandstone processing plant were despatched for gold recovery in the
September 2017 quarter. The cash proceeds derived from processing these residues, representing A$186,000, are reflected
in the FY18 financials. This is a pleasing result, consistent with the upper end of the anticipated range, the proceeds of
which have been applied to on-going exploration and administration.
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MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018 Oper ations O vervie w
Sandstone Resource Statement
Mineral Resources applicable to the Sandstone gold project as at 30 June 2018 are provided in Table 1 below.
Deposit
COG
(g/t Au)
Tonnes
Grade
(g/t Au)
Contained
Gold (oz.)
JORC Classification
0.7
0.7
0.5
2.0
0.7
0.7
1.0
0.5
0.5
Two Mile Hill – Open Pit
Two Mile Hill – Open Pit
Two Mile Hill – Tonalite
(below 380m RL)
Two Mile Hill – BIF
(below 380m RL)
Shillington – Open Pit
Shillington – Open Pit
Plum Pudding – Open Pit
Wirraminna – Open Pit
Wirraminna – Open Pit
Total Indicated
Total Inferred
Total Resource
1,012,000
114,000
1.36
1.10
44,000 Indicated
4,000 Inferred
8,944,000
1.35
391,000 Inferred
59,100
9.90
18,800 Indicated
1,015,000
272,000
50,000
307,000
243,000
2,393,100
9,673,000
12,673,000
1.33
1.17
1.60
1.50
1.10
1.56
1.34
1.38
43,000 Indicated
10,000 Inferred
2,572 Inferred
14,600 Indicated
8,400 Inferred
120,400 Indicated
416,000 Inferred
537,000 Indicated & Inferred
JORC
Code
2012
2012
2004
2004
2012
2012
2004
2012
2012
Exploration Target*
24-34Mt
1.1-1.4
0.9-1.5Moz Exploration Target
2012
*Includes 2004 Two Mile Hill Inferred Mineral Resource – Tonalite (below 380m RL)
The Mineral Resource update reflects the upgrade of the Wirraminna deposit from 2004 to 2012 JORC Code compliance,
addition of the Two Mile Hill tonalite deeps Exploration Target and an adjustment of the 2004 Inferred Resource relating to
the Two Mile Hill tonalite deposit (below 380mRL) to exclude 2012 Indicated and Inferred Mineral Resources above
380mRL.
Middle Island Resources Limited has a firm policy to only utilise the services of external independent consultants to estimate
Mineral Resources. The Company also has established practices and procedures to monitor the quality of data applied in
Mineral Resource estimation, and to commission and oversee the work undertaken by external independent consultants.
In all cases, Mineral Resources are estimated and reported in accordance with the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’ (the JORC Code). Mineral Resources reported in accordance with
the 2004 Edition of the JORC Code were prepared by Snowden Mining Industry Consultants on behalf of Troy Resources NL,
and are reported in the Troy Resources NL 2011 Annual Report. Mineral Resources reported in accordance with the 2012
Edition were variously prepared by Mr Brett Gossage of EGRM Consulting Pty Ltd and Mr Shaun Searle of Ashmore Advisory
Pty Ltd on behalf of Middle Island Resources Limited.
The Competent Persons are Members of the Australasian Institute of Mining and Metallurgy (AusIMM) and qualify as
Competent Persons as defined in the JORC Code.
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MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018 Opera tions Overvie w
REO GOLD PROJECT (SALE PROCESS COMMENCED) – BURKINA FASO
Option to Purchase Agreement
Middle Island executed a Heads of Agreement (HOA) to divest its 100% interest in the Reo gold project to Tajiri Resources
Corp. (TSX-V: TAJ, Tajiri) via an Option to Purchase Agreement (refer ASX Release of 13 February 2018).
During the June quarter 2018, Tajiri formally notified Middle Island that it had completed due diligence to its satisfaction
and wished to commence the Option (refer ASX Release of 16 May 2018). Tajiri also requested a Letter of Variation,
requiring the issue of all 5 million Tajiri shares to Middle Island on commencement of the 18-month option period, rather
than splitting the issue of shares equally between commencement and exercise of the Option. As at 30 June 2018, Middle
Island has received payment of US$35,000 (A$44,000) as an exclusivity fee, followed by a further US$150,000 (A$200,000)
on commencement of the Option, along with the issue of 5 million Tajiri shares valued at A$863,000, at the time of issue,
representing aggregate proceeds to date of A$1,107,000.
Should Tajiri choose to exercise the Option within an 18-month period, it is required to pay Middle Island a further
US$150,000, with Middle Island retaining a 2% NSR production royalty that Tajiri may elect to acquire for US$5 million. If
the Option is not exercised by Tajiri, Middle Island will retain all consideration paid to Middle Island and it will continue to
own its 100% interest in the Reo Project.
Tajiri has reimbursed all costs incurred by Middle Island since Option commencement, during which period a further two
permit extensions have been received from the Burkina Faso Mines Ministry. Middle Island is working closely with Tajiri to
facilitate the remaining permit extensions and transfers.
SAFETY, ENVIRONMENTAL & SOCIAL
Health, Safety & Environment
No injuries, safety or environmental incidents were recorded at the Company’s projects and premises during the financial
year. A WA Department of Mines, Industry Regulation and Safety environmental and safety audit of the Sandstone gold
project during the June quarter, resulted in several Notices being issued. The Company has either rectified or is in the
process of rectifying all Notices and more generally updating its environmental and safety procedures and protocols.
Rehabilitation of disturbed areas at the Sandstone gold project, primarily drill sites, is being progressively undertaken in
accordance with POW and environmental audit requirements. Safety signage, crest bunds and restricted access areas
associated with shafts, open pits and the processing plant have been upgraded, and are being regularly monitored and
maintained.
Social
The Company continues to engage with the Shire of Sandstone, pastoralists and the local Sandstone community. This
process includes the procurement of labour, materials and services locally, wherever practically possible and, most recently,
sponsorship of both the annual Sandstone Open Golf Tournament and Art Exhibition.
Middle Island has taken steps to inform communities within its Reo Project of the transaction with Tajiri Resources Corp.
and will do everything possible to ensure a smooth transition.
16
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018 Oper ations O vervie w
Forward Looking Statements
Certain statements made during or in connection with this communication, including, without limitation, those concerning the
economic outlook for the mining industry, expectations regarding gold prices, exploration costs and other operating results,
growth prospects and the outlook of Middle Island’s operations contain or comprise certain forward looking statements regarding
Middle Island’s exploration operations, economic performance and financial condition. Although Middle Island believes that the
expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will
prove to be correct.
Accordingly, results could differ materially from those set out in the forward looking statements as a result of, among other
factors, changes in economic and market conditions, success of business and operating initiatives, changes that could result from
future acquisitions of new exploration properties, the risks and hazards inherent in the mining business (including industrial
accidents, environmental hazards or geologically related conditions), changes in the regulatory environment and other government
actions, risks inherent in the ownership, exploration and operation of or investment in mining properties in foreign countries,
fluctuations in gold prices and exchange rates and business and operations risks management, as well as generally those additional
factors set forth in our periodic filings with ASX. Middle Island undertakes no obligation to update publicly or release any revisions
to these forward-looking statements to reflect events or circumstances after today’s date or to reflect the occurrence of
unanticipated events.
Competent Persons’ Statements
Information in this report relates to exploration results, geological interpretation and data quality, that are based on information
compiled by Mr Rick Yeates (MAusIMM). Mr Yeates is a fulltime employee of Middle Island and has sufficient experience which is
relevant to the style of mineralisation and type of deposits under consideration and to the activities undertaken to qualify as a
Competent Person as defined in the 2012 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves’. Mr Yeates consents to the inclusion in the annual report of the statements based on his information in the
form and context in which they appear.
Information in this release, which relates to Mineral Resources comprising the Two Mile Hill and Shillington deposits is based on
the work of independent consultant, Mr Brett Gossage (MAusIMM). Mr Gossage has sufficient experience that is relevant to the
styles of mineralisation, the type of deposits under consideration and the activities being reported upon 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 Gossage consents to the inclusion in this report of the statements based on the information in the form and context
in which they appear.
Information in this release, which relates to Mineral Resources comprising the Wirraminna deposit is based on the work of
independent consultant, Mr Shaun Searle MAusIMM. Mr Searle has sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and the activities being reported upon 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 Searle consents to the inclusion in this report of the statements based on the information in the form and context in which
they appear.
17
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018 Dir ector s ’ Re port
Your directors submit their report on the consolidated entity (referred to hereafter as the Group) which consists of Middle
Island Resources Limited and the entities it controlled at the end of, or during, the year ended 30 June 2018.
DIRECTORS
The names and details of the Company’s directors in office during the year and until the date of this report follow. Each
Director was in the office for this entire period unless otherwise stated.
Names, qualifications, experience and special responsibilities
Peter Thomas, (Non-Executive Chairman)
Mr Thomas was a practising solicitor from 1980 until June 2012 specialising in the provision of corporate and commercial
advice to explorers and miners. Since the mid-1980s, he has served on the boards of various listed companies. He was the
founding chairman of Sandfire Resources NL. He is also non-executive director of ASX-listed Image Resources NL and Emu NL.
Richard Yeates, (Managing Director)
Mr Yeates is a geologist whose professional career has spanned more than 30 years, initially working for major companies such
as BHP, Newmont and Amax, prior to co-founding the consulting firm of Resource Service Group (subsequently RSG Global) in
1987, which was ultimately sold to ASX listed consulting firm, Coffey International, in 2006 to become Coffey Mining.
Mr Yeates has considerable international experience, having worked in some 30 countries, particularly within Africa and South
America, variously undertaking project management assignments, feasibility studies and independent reviews for company
listings, project finance audits and technical valuations. Mr Yeates was also responsible for developing and overseeing all
marketing and promotional activities undertaken by RSG, RSG Global and Coffey Mining over a 23-year period.
Mr Yeates is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM), and is a Graduate Member of the
Australian Institute of Company Directors (AICD). He currently serves as a non-executive director of ASX 200 nickel
producer Western Areas Limited. Within the last three years Mr Yeates has been a former director of ASX listed company
Atherton Resources Limited (resigned 9 November 2015, company delisted from ASX on 30 December 2015).
Beau Nicholls, (Non-Executive Director)
Mr Nicholls has 20 years in mining and exploration geology, ranging from grass roots exploration management through to
mine production environments. He is a Member of the Australian Institute of Geoscientists (AIG) with a proven track record
on four continents (Australia, Eastern Europe, Africa and the Americas) and in over 20 countries, Mr Nicholls has been
instrumental in the discovery and/or development of a number of world class deposits. Mr Nicholls also has over 10 year’s
international consulting experience with RSG, RSG Global and Coffey Mining, including 3 years as the resident Regional
Manager in West Africa. Mr Nicholls is currently Chief Executive Officer of Sahara Mining Services.
Dennis Wilkins, B.Bus, AICD, ACIS (Alternate Director for Beau Nicholls)
Mr Wilkins is the founder and principal of DWCorporate Pty Ltd, a private corporate advisory firm servicing the natural
resources industry.
Since 1994, he has been a director of, and involved in the executive management of, several publicly listed resource
companies with operations variously in Australia, PNG, Scandinavia and Africa. From 1995 to 2001, he was the Finance
Director of Lynas Corporation Ltd during the period when the Mt Weld Rare Earths project was acquired by the group. He
was also an advisor to Atlas Iron Limited at the time of Atlas’ initial public offering in 2006.
Since July 2001, Mr Wilkins has been running DWCorporate Pty Ltd, where he advises on the formation of, and capital
raising for, emerging companies in the Australian resources sector.
Mr Wilkins is currently a director of Key Petroleum Limited. Within the last 3 years, Mr Wilkins has also been but no longer
is a director of Shaw River Manganese Limited.
18
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Direct ors’ Re port
COMPANY SECRETARY
Dennis Wilkins
Interests in the shares and options of the Company and related bodies corporate
As at the date of this report, the relevant interests of the directors in the shares and options of Middle Island Resources
Limited were:
Peter Thomas
Richard Yeates
Beau Nicholls
Dennis Wilkins
PRINCIPAL ACTIVITIES
Ordinary
Shares
13,190,000
48,964,138
14,050,000
1,166,667
Options over
Ordinary Shares
10,000,000
10,000,000
10,000,000
-
During the year the Group carried out exploration on its tenements and applied for or acquired additional tenements with
the primary objective of identifying deposits of gold to support the recommissioning of the Company’s 100% owned
processing plant at Sandstone. Whilst not the objective of the Group to explore for or seek to acquire mineral deposits
other than of gold, the Group reserves the right to follow up leads (thrown up by its gold exploration/investigative
activities) for other commodities and globally where the Board considers that doing so may add value.
DIVIDENDS
No dividends were paid or declared during the year. No recommendation for payment of dividends has been made.
FINANCIAL REVIEW
During the year the Company raised $1,897,500, before costs, from the issue of 111,617,647 fully paid ordinary shares.
Revenue from tribute production and gold sales of $215,573 (2017: Nil) was received, and other income was generated
from the sale of mining interests, sale of property, plant and equipment and rental of accommodation of $597,603 (2017:
Nil). The Group also received a grant of $121,629 (2017: Nil) from the Exploration Incentive Scheme.
During the year, total exploration expenditure incurred by the Group amounted to $1,637,496 (2017: $2,496,500). In line
with the Group’s accounting policies, all exploration expenditure, other than acquisition costs, were written off as they
were incurred. Tenement acquisition costs of nil (2017: $227,760) were impaired during the year. Other expenditure
incurred, net of administration related revenue, amounted to $837,112 (2017: $1,531,795). This resulted in an operating
loss after income tax for the year ended 30 June 2018 of $1,539,803 (2017: $4,256,055).
At 30 June 2018, cash assets available totalled $1,552,529.
19
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Dir ector s ’ Re port
Operating Results for the Year
Summarised operating results are as follows:
Revenue and losses for the year from ordinary activities before income tax expense
945,832
(1,539,803)
2018
Revenues
$
Loss
$
Shareholder Returns
Basic loss per share (cents)
Risk Management
2018
2017
(0.2)
(0.8)
The board is responsible for ensuring that risks, and also opportunities, are identified on a timely basis and that activities
are aligned with the risks and opportunities identified by the board.
The Group believes that it is crucial for all board members to be a part of this process, and as such, the board has not
established a separate risk management committee. Where appropriate the board enlists the support of other suitably
qualified professionals to join board committees.
The board has a number of mechanisms in place to ensure that management’s objectives and activities are aligned with the
risks identified by the board. These include the following:
•
Board approval of a strategic plan, which encompasses strategy statements designed to meet stakeholders’ needs and
manage business risk.
•
Implementation of board approved operating plans and budgets and board monitoring of progress against these budgets.
• A risk matrix designed to identify and quantify the various risk factors and implement mitigating strategies accordingly.
•
•
•
Regular review of management’s activities and the Company’s circumstances.
Continuing review of capital and resources market sentiment.
Continuing review of economic trends and circumstances
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Other than as disclosed in this Annual Report, no significant changes in the state of affairs of the Group occurred during
the financial year.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
No matters or circumstances, aside from those disclosed above, have arisen since the end of the year which 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
The Group’s primary focus for the coming financial year is to extend and enhance the proposed gold production profile for
the Sandstone Project in order to recommission its processing plant at the earliest opportunity.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Group is subject to significant environmental regulation in respect to its activities.
The Group aims to ensure the appropriate standard of environmental care is achieved, and in doing so, that it is aware of
and is in compliance with all environmental legislation. The directors of the Company are not aware of any breach of
environmental legislation for the year under review.
20
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Direct ors’ Re port
REMUNERATION REPORT
The information provided in this remuneration report has been audited as required by section 308(3C) of the
Corporations Act 2001.
Principles used to determine the nature and amount of remuneration
Remuneration Policy
The remuneration policy of Middle Island Resources Limited was designed to align key management personnel objectives
with shareholder and business objectives by providing a fixed remuneration component and offering, variously, short term
and long term securities incentives. The board believes the remuneration policy to be appropriate and effective in its ability
to attract and retain suitable key management personnel to run and manage the Group.
The remuneration policy, setting the terms and conditions for the executive directors and other senior executives (if any),
was developed by the board and evolves as circumstances require. All executives receive a base salary (based on factors
such as experience), superannuation and, possibly, a package of equity incentives in the Company. The board reviews each
executive package as and when it considers it appropriate to do so in accordance with its remuneration policy and by
reference to the Group’s performance, the executive’s performance and comparable information from industry sectors and
other listed companies in similar circumstances.
The board may exercise discretion in relation to approving incentives, bonuses and options. The policy is designed to
reward executives for performance that results in long term growth in shareholder wealth.
The executive directors and executives receive the superannuation guarantee contribution required by the government of
Australia, which was 9.5% for the 2018 financial year but are not entitled to receive any other retirement benefits.
All remuneration paid to directors and executives is “valued” at the cost to the Group and expensed. Options are ascribed
a “fair value” in accordance with Australian Accounting Standards using a methodology such as Black Scholes. The board
does not accept that the “fair value” represents market or realisable value. Rather, the board use a commonly accepted
methodology purely for the purposes of complying with the Australian Accounting Standards.
The board’s policy is to remunerate non executive directors at market rates for comparable companies, for time,
commitment and responsibilities, albeit non-executive directors are currently remunerated below or at the lower end of the
market rate range. The board determines payments to the non executive directors and reviews their remuneration annually,
based on market practice, duties and accountability. Independent external advice is sought as and when required. The
maximum aggregate amount of fees that can be paid to non executive directors is, subject to change with the approval of
shareholders in general meeting, currently $300,000. Fees for non executive directors are not linked to the performance of
the Group. However, to align directors’ interests with shareholder interests, the directors are encouraged to hold shares in
the Company and, subject to shareholder approval in general meeting may be offered participation in employee share and
option arrangements.
Performance based remuneration
The Group policy allows the use of performance-based remuneration, to attract and motivate employees, in the form of
options. Where utilised, options may be issued but not vest until certain hurdles have been met where the hurdles are
directed at advancing the Company towards its objectives potentially within prescribed periods.
Company performance, shareholder wealth and key management personnel remuneration
No direct relationship exists between key management personnel remuneration and Group performance (including
shareholder wealth).
Use of remuneration consultants
The Group did not employ the services of any remuneration consultants during the financial year ended 30 June 2018.
Voting and comments made at the Company’s 2016 Annual General Meeting
The Company received 100% of “yes” votes on its remuneration report for the 2017 financial year.
21
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Dir ector s ’ Re port
Details of remuneration
Details of the remuneration of the directors and the key management personnel of the Group are set out in the following
table:
Key management personnel of the Group
Short-Term
Post-Employment
Share-based
Payments(1)
Total
Non-Monetary
Superannuation Retirement
$
$
Benefits
$
$
$
Salary
& Fees
$
36,530
36,530
180,000
180,000
30,000
30,000
Directors
Peter Thomas
2018
2017
Richard Yeates
2018
2017
Beau Nicholls
2018
2017
Linton Kirk (resigned 11 July 2016)
2017
Dennis Wilkins (2)
2018
2017
-
-
-
Total key management personnel compensation
2018
2017
246,530
246,530
-
-
-
-
-
-
-
-
-
-
-
3,470
3,470
17,100
17,100
-
-
-
-
-
20,570
20,570
-
-
-
-
-
-
-
-
-
-
-
-
40,000
243,000
283,000
-
197,100
243,000
440,100
-
30,000
243,000
273,000
-
-
-
-
-
-
-
267,100
729,000
996,100
(1) Share-based payments represents share options granted during the 2017 financial year. These options were valued in accordance with Australian Accounting Standards
which specifies that an option-pricing model be applied to employees’ or directors’ stock options to estimate their fair value (the expression “fair value” – and derivatives
thereof – wherever used in this report bears the meaning ascribed to that expression by the Australian Accounting Standards Board. “Fair value” commonly does not reflect
realisable value and the Board does not represent or accept that stated fair values reflect market values. This observation is over-riding and shall prevail over any inconsistent
possible interpretation) as at their grant date.
(2) Mr Wilkins is not remunerated for his role as alternate director, however, a total of $69,382 (2017: $83,286) was paid to DWCorporate Pty Ltd, a business of which Mr
Wilkins is principal. DWCorporate Pty Ltd provided company secretarial, corporate advisory and accounting services to the Group during the year. The amounts paid were at
usual commercial rates with fees charged on an hourly basis.
Service agreements
Peter Thomas, Non-Executive Chairman:
•
Term of agreement – Commenced on 2 March 2010, no notice period for termination is required and no monies are
payable consequent on termination.
Richard Yeates, Managing Director:
•
Term of agreement – commenced 2 March 2010 and continues until terminated.
• Annual salary was initially $300,000 excluding superannuation; reduced to $200,000 from 1 February 2014, and
further reduced to $180,000 on 1 July 2014.
•
The agreement may be terminated by the Company giving 12 months’ written notice or by Mr Yeates giving 3 month’s
written notice (shorter notice periods apply in the event breach of contract by either party). No benefits are payable
on termination other than entitlements accrued to the date of termination.
22
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Direct ors’ Re port
Beau Nicholls, Non-Executive Director:
•
Term of agreement – Mr Nicholls was an executive director but became a non-executive director on 1 February 2014
from which date he was remunerated at the rate of $38,100 per annum until 1 July 2014 when his remuneration was
reduced to $30,000 per annum.
•
The agreement requires no notice period for termination, and no monies are payable consequent on termination.
Dennis Wilkins, Alternate Director and Company Secretary:
•
Term of agreement – Commencing 17 March 2010 until terminated in writing by either party, no notice period of
termination is required and no monies are payable consequent on termination.
• Mr Wilkins’ firm, DWCorporate Pty Ltd, is engaged to provide company secretarial, corporate advisory and accounting
services. Fees are charged on an hourly basis, and all amounts are disclosed in the remuneration table above.
Share-based compensation
Options may be issued to key management personnel as part of their remuneration. The Group has a formal policy in
relation to the key management personnel limiting their exposure to risk in relation to the securities which actively
discourages key management personnel from granting mortgages over securities held in the Group.
There were no options granted to key management personnel during the current reporting period. There were no ordinary
shares in the Company provided as a result of the exercise of remuneration options during the year.
Equity instruments held by key management personnel
Direct and indirect interests in options over ordinary shares
Balance at
start of the
year
Granted as
compensation Exercised
Other
changes
Balance at
end of the
year
Vested and
exercisable
Unvested
DIRECTORS OF MIDDLE ISLAND RESOURCES LIMITED
Peter Thomas
10,000,000
Richard Yeates
10,000,000
Beau Nicholls
10,000,000
Dennis Wilkins
-
-
-
-
-
-
-
-
-
- 10,000,000
10,000,000
- 10,000,000
10,000,000
- 10,000,000
10,000,000
-
-
-
-
-
-
-
Direct and indirect interests in ordinary shares
DIRECTORS OF MIDDLE ISLAND RESOURCES LIMITED
Balance at
start of the
period
Received during the
period on the
exercise of options
Other
changes during
the period
Balance at
end of the
period
Ordinary shares
Peter Thomas
Richard Yeates
Beau Nicholls
Dennis Wilkins
13,190,000
48,964,138
14,050,000
1,166,667
-
-
-
-
-
-
-
-
13,190,000
48,964,138
14,050,000
1,166,667
Loans to key management personnel
There were no loans to key management personnel during the year.
23
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Dir ector s ’ Re port
Other transactions with key management personnel
DWCorporate Pty Ltd, a business of which Mr Wilkins is principal, provided company secretarial and corporate advisory
services to the Middle Island Group during the year. The amounts paid were on arms’ length commercial terms and are
disclosed in the remuneration report in conjunction with Mr Wilkins’ compensation. At 30 June 2018 there was $1,155
(2017: nil) owing to DWCorporate Pty Ltd.
Mr Nicholls is a director and 35% shareholder of PowerXplor Ltd, which owns Sahara Mining Services SARL. During the
current year the Group sold motor vehicles to Sahara Mining Services SARL for gross proceeds of US$23,300 (2017: N/A).
As part of a cost sharing arrangement between Sahara Mining Services SARL and Middle Island Resources Limited, the two
companies shared administration and exploration costs during the 2017 financial year; with Middle Island Resources Limited
recharging $3,013 to Sahara Mining Services SARL during the year ended 30 June 2017. The amounts paid by Sahara
Mining Services SARL to Middle Island Resources Limited were on arms’ length commercial terms.
Quenda Investments Pty Ltd (“Quenda”), a company of which Mr Yeates is a director and shareholder, leant securities held
in Middle Island Resources Limited to the provider of a controlled placement facility during the current reporting period for
which Quenda was paid a stock borrow fee of $4,500 for the year ended 30 June 2018 (2017: N/A). The amounts paid
were on arms’ length commercial terms. At 30 June 2018 there was $500 (2017: nil) owing to Quenda Investments Pty Ltd.
End of audited section
DIRECTORS’ MEETINGS
During the year, the Company held seven meetings of directors. The attendance of directors at meetings of the board and
committees were:
Peter Thomas
Richard Yeates
Beau Nicholls
Dennis Wilkins (alternate for Beau Nicholls)
Committee Meetings Committee Meetings
Directors Meetings
Audit
Remuneration
A
6
7
7
7
B
7
7
7
7
A
2
*
1
2
B
2
*
2
2
A
1
1
1
*
B
1
1
1
*
Notes: A – Number of meetings attended. B – Number of meetings held during the time the director held office during the period. * – Not a member of the relevant committee.
SHARES UNDER OPTION
Unissued ordinary shares of Middle Island Resources Limited under option at the date of this report are as follows:
Date Options Issued
14 December 2016
Expiry Date
Exercise Price (cents)
Number of Options
18 November 2018
10.0
Total number of options outstanding at the date of this report
30,000,000
30,000,000
No person entitled to exercise any option referred to above has or had, by virtue of the option, a right to participate in any
share issue of any other body corporate.
INSURANCE OF DIRECTORS AND OFFICERS
During or since the financial year, in accordance with each director’s Deed of Indemnity, Insurance and Access with Middle
Island Resources Limited, the Group has paid premiums insuring all the directors of Middle Island Resources Limited against
all liabilities incurred by the director acting directly or indirectly as a director of the Company to the extent permitted by law,
including legal costs incurred by the director in defending proceedings, provided that the liabilities for which the director is
to be insured do not arise out of conduct involving a wilful breach of the director’s duty to the Company or a contravention
of sections 182 or 183 of the Corporations Act 2001.
The total amount of insurance contract premiums paid is $16,650.
24
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Direct ors’ Re port
NON-AUDIT SERVICES
The following details any non-audit services provided by the entity’s auditor, Greenwich & Co or associated entities. The
directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the
auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the
following reasons:
• All non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and
objectivity of the auditor;
• None of the services undermine the general standard of independence for auditors.
Greenwich & Co received or are due to receive the following amounts for the provision of non-audit services:
Taxation compliance services
PROCEEDINGS ON BEHALF OF THE COMPANY
2018
$
2017
$
4,200
6,000
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 any part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of
the Corporations Act 2001.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out
on page 26.
Signed in accordance with a resolution of the directors.
Richard Yeates
Managing Director
Perth, 27 September 2018
25
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED
Au ditors Indep en denc e D ec l ar at ion
Greenwich & Co Audit Pty Ltd I ABN 51 609 542 458
Level 2. 35 Outram Street, West Perth WA 6005
PO Box 983. West Perth WA 6872
T 08 6555 9500 I F 08 6555 9555
www.greenwichco.com
An independent member of Morison KSI I Liability limited by a scheme approved under Professional Standards Legislation
26
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Cor por ate Gove rna nce Sta tement
Middle Island Resources Limited and the Board are committed to achieving and demonstrating the highest standards of
corporate governance. Middle Island Resources Limited has reviewed its corporate governance practices against the
Corporate Governance Principles and Recommendations (3rd edition) published by the ASX Corporate Governance Council.
The 2018 Corporate Governance Statement is current as at 27 September 2018 and reflects the corporate governance
practices in place throughout the 2018 financial year. The 2018 Corporate Governance Statement was approved by the
Board on 27 September 2018. A description of the Group’s current corporate governance practices is set out in the
Group’s Corporate Governance Statement which can be viewed at www.middleisland.com.au.
27
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Consolidate d S ta te me nt of Pr of it o r L os s a nd O ther
Comprehen sive I nc ome
FOR THE YEAR ENDED 30 JUNE 2018
Notes
Consolidated
Consolidated
4(a)
4(b)
25
11
6
REVENUE
Sale of commodities
Other income
EXPENDITURE
Exploration expenses
Administration expenses
Salaries and employee benefits expense
Depreciation expense
Share-based payments expense
Impairment of capitalised tenement acquisition costs
LOSS BEFORE INCOME TAX
INCOME TAX BENEFIT / (EXPENSE)
LOSS FOR THE PERIOD ATTRIBUTABLE TO OWNERS OF
MIDDLE ISLAND RESOURCES LIMITED
OTHER COMPREHENSIVE INCOME
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Other comprehensive income for the period, net of tax
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
ATTRIBUTABLE TO OWNERS OF
MIDDLE ISLAND RESOURCES LIMITED
2018
$
215,573
730,259
2017
$
-
14,664
(1,637,496)
(2,496,500)
(481,259)
(363,013)
(3,867)
-
-
(466,955)
(337,343)
(13,161)
(729,000)
(227,760)
(1,539,803)
(4,256,055)
-
-
(1,539,803)
(4,256,055)
31,036
31,036
(13,931)
(13,931)
(1,508,767)
(4,269,986)
Basic and diluted loss per share for loss attributable to the
ordinary equity holders of the Company (cents per share)
24
(0.2)
(0.8)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the Notes to the Consolidated Financial Statements
28
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED
Conso lida ted S tate me nt of F in anci al Pos iti on
AS AT 30 JUNE 2018
Notes
Consolidated
Consolidated
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Financial assets
Non-current asset held for sale
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Tenement acquisition costs
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
7
8
9
10
11
12
13
14
15
2018
$
1,552,529
42,837
847,522
202,317
2017
$
1,841,875
10,198
-
-
2,645,205
1,852,073
2,049,348
1,327,754
3,377,102
6,022,307
2,044,092
2,057,754
4,101,846
5,953,919
400,286
400,286
606,781
606,781
1,203,417
1,203,417
1,603,703
4,418,604
1,203,417
1,203,417
1,810,198
4,143,721
34,954,474
1,148,988
33,170,824
1,124,382
(31,684,858)
(30,151,485)
4,418,604
4,143,721
The above Consolidated Statement of Financial Position should be read in conjunction with the Notes to the Consolidated Financial Statements.
29
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED
Consolidate d S ta te me nt of Ch an ges in E q ui ty
FOR YEAR ENDED 30 JUNE 2018
Contributed
Equity
Notes
Share-
based
Payments
Reserve
Foreign
Currency
Translation
Reserve
Accumulated
Losses
$
$
$
$
Total
$
BALANCE AT 1 JULY 2016
31,399,916
6,430
402,883
(25,895,430)
5,913,799
Loss for the year
OTHER COMPREHENSIVE INCOME
Exchange differences on translation
of foreign operations
TOTAL COMPREHENSIVE INCOME
FOR THE PERIOD
TRANSACTIONS WITH OWNERS
IN THEIR CAPACITY AS OWNERS
Shares issued during the year
Share issue transaction costs
Options issued/vesting to
employees
14
14
25
-
-
-
1,858,851
(87,943)
-
-
-
-
-
-
729,000
-
(4,256,055)
(4,256,055)
(13,931)
-
(13,931)
(13,931)
(4,256,055)
(4,269,986)
-
-
-
-
-
-
1,858,851
(87,943)
729,000
BALANCE AT 30 JUNE 2017
33,170,824
735,430
388,952
(30,151,485)
4,143,721
Loss for the year
OTHER COMPREHENSIVE INCOME
Exchange differences on translation
of foreign operations
TOTAL COMPREHENSIVE INCOME
TRANSACTIONS WITH OWNERS
IN THEIR CAPACITY AS OWNERS
Shares issued during the year
Share issue transaction costs
Employee options expired/cancelled
during the year
-
-
-
1,897,500
(113,850)
14
14
25
-
-
-
-
-
-
(6,430)
-
(1,539,803)
(1,539,803)
31,036
-
31,036
31,036
(1,539,803)
(1,508,767)
-
-
-
-
-
1,897,500
(113,850)
6,430
-
BALANCE AT 30 JUNE 2018
34,954,474
729,000
419,988
(31,684,858)
4,418,604
The above Consolidated Statement of Changes in Equity should be read in conjunction with the Notes to the Consolidated Financial Statements.
30
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED
Conso lida ted S tate me nt of Ca s h F lo ws
FOR YEAR ENDED 30 JUNE 2018
Notes
Consolidated
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Exploration Incentive Scheme grant received
Payments to suppliers and employees
Expenditure on mining interests
Interest received
2018
$
223,113
121,629
(827,674)
(1,368,429)
8,104
2017
$
-
-
(1,018,001)
(2,474,775)
14,692
NET CASH OUTFLOW FROM OPERATING ACTIVITIES
22(a)
(1,843,257)
(3,478,084)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for mining properties
Proceeds on sale of mining properties
Payments for property, plant and equipment
Proceeds on sale of property, plant and equipment
-
(124,475)
248,481
(509,120)
30,544
-
(1,294,981)
-
NET CASH OUTFLOW FROM INVESTING ACTIVITIES
(230,095)
(1,419,456)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issues of ordinary shares
Payments for share issue transaction costs
NET CASH INFLOW FROM FINANCING ACTIVITIES
NET (DECREASE) IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
7
1,897,500
(113,850)
1,783,650
(289,702)
1,841,875
356
1,552,529
3,218,071
(87,943)
3,130,128
(1,767,412)
3,612,918
(3,631)
1,841,875
The above Consolidated Statement of Cash Flows should be read in conjunction with the Notes to the Consolidated Financial Statements.
31
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED
Note s to the Co nsolida ted Fin an cia l St at emen t s
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial statements are set out below. The
financial statements are for the consolidated entity consisting of Middle Island Resources Limited and its subsidiaries.
The financial statements are presented in Australian currency. Middle Island Resources Limited is a company limited
by shares, domiciled and incorporated in Australia. The financial statements were authorised for issue by the
directors on 27 September 2018. The directors have the power to amend and reissue the financial statements.
(a) 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. Middle
Island Resources Limited is a for-profit entity for the purpose of preparing the financial statements.
(i) Compliance with IFRS
The consolidated financial statements of the Middle Island Resources Limited Group also comply with International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
(ii) New and amended standards adopted by the Group
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the
AASB that are relevant to their operations and effective for the current annual reporting period. The adoption of
these Accounting Standards and Interpretations did not have any significant impact on the financial performance or
position of the Group during the financial year.
(iii) Early adoption of standards
The Group did not elect to apply any pronouncements before their operative date in the annual reporting period
beginning 1 July 2017.
(iv) Historical cost convention
These financial statements have been prepared under the historical cost convention.
(v) Going concern
For the year ended 30 June 2018 the Group incurred a net loss of $1,539,803 (2017: $4,256,055), incurred net
cash outflows from operating activities of $1,843,257 (2017: $3,478,084) and had net working capital of
$2,244,919 (2017: $1,245,292) at reporting date.
The ability of the entity to continue as a going concern is dependent on securing additional funding through capital
raisings and/or sale of interests in projects to continue to fund its operational and development activities.
These conditions indicate a material uncertainty that may cast a significant doubt about the Group’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. 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 that they will be able to raise additional equity 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. 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.
32
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Note s to th e Co nsolida ted Fin a ncia l St at emen t s
(b) Principles of consolidation
(i) Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Middle Island
Resources Limited (“Company” or “parent entity”) as at 30 June 2018 and the results of all subsidiaries for the year
then ended. Middle Island Resources Limited and its subsidiaries together are referred to in these financial
statements as the Group or the consolidated entity.
Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the
financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights.
The existence and effect of potential voting rights that are currently exercisable or convertible are considered when
assessing whether the Group controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are
de-consolidated from the date that control ceases. A list of controlled entities is disclosed in note 21 to the financial
statements.
The acquisition method of accounting is used to account for business combinations by the Group.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement
of profit or loss and other comprehensive income, statement of changes in equity and statement of financial
position respectively.
(ii) Changes in ownership interests
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with
equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts
of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference
between the amount of the adjustment to non-controlling interests and any consideration paid or received is
recognised in a separate reserve within equity attributable to owners of Middle Island Resources Limited.
When the Group ceases to have control, any retained interest in the entity is remeasured to its fair value with the
change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of
subsequently accounting for the retained interest as an associate, jointly controlled entity or financial asset. In
addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for
as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously
recognised in other comprehensive income are reclassified to profit or loss.
If the ownership interest in a jointly controlled entity or associate is reduced but joint control or significant influence is
retained, only a proportionate share of the amounts previously recognised in other comprehensive income are
reclassified to profit or loss where appropriate.
(c) Segment reporting
An operating segment is defined as a component of an entity that engages in business activities from which it may
earn revenues and incur expenses, whose operating results are regularly reviewed by the entity’s chief operating
decision maker to make decisions about resources to be allocated to the segment and assess its performance, and
for which discrete financial information is available.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the full Board of Directors.
33
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Note s to the Co nsolida ted Fin an cia l St at emen t s
(d) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the
primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial
statements are presented in Australian dollars, which is Middle Island Resources Limited’s functional and
presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in profit or loss. They are deferred in equity if they are attributable to part of the net investment in a
foreign operation.
(iii) Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the
presentation currency as follows:
•
•
assets and liabilities for each statement of financial position presented are translated at the closing rate at the
date of that statement of financial position;
income and expenses for each statement of profit or loss and other comprehensive income are translated at
average exchange rates (unless that is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are translated at the dates of the
transactions); and
•
all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of
borrowings and other financial instruments designated as hedges of such investments, are recognised in other
comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are
repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.
(e) Revenue recognition
Sale of commodities
Revenue from gold concentrate sales is brought to account when the significant risks and rewards of ownership
have transferred to the buyer and selling prices are known or can be reasonably estimated.
Interest
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the
financial assets.
Other income
All other income is recognised when the right to receive other income is established.
All revenue is stated net of the amount of goods and services tax.
(f) Income tax
The income tax expense or revenue for the year is the tax payable on the current year’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 and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end
of the reporting period in the countries where the Company’s subsidiaries and associated operate and generate
taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in
which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis
of amounts expected to be paid to the tax authorities.
34
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Note s to th e Co nsolida ted Fin a ncia l St at emen t s
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the
deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction
other than a business combination that at the time of the transaction affects neither accounting nor taxable profit
or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially
enacted by the reporting date and are expected to apply when the related deferred income tax asset is realised or
the deferred income tax liability is settled.
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.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax
bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the
temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax
liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive
income or directly in equity, respectively. No deferred tax is recognised for the carried forward losses as the Group
considers there will be no taxable profit available to offset such brought forward tax losses in the future.
(g) Leases
Leases where a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee
are classified as operating leases (note 19(b)). Payments made under operating leases (net of any incentives received
from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease.
(h) Impairment of non-financial assets
Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other
assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and
value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of
assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed
for possible reversal of the impairment at each reporting period.
(i) Cash and cash equivalents
For statement of cash flows presentation purposes, 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 insignificant risk of changes
in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement
of financial position.
(j) Investments and other financial assets
Classification
The Group classifies its investments in the following categories: financial assets at fair value through profit or loss,
and loans and receivables. The classification depends on the purpose for which the investments were acquired.
Management determines the classification of its investments at initial recognition.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified
in this category if acquired principally for the purpose of selling in the short term. Derivatives are classified as held
for trading unless they are designated as hedges. Assets in this category are classified as current assets.
35
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Note s to the Co nsolida ted Fin an cia l St at emen t s
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in
an active market. They are recognised initially at fair value and subsequently at amortised cost less impairment.
They are included in current assets, except for those with maturities greater than 12 months after the reporting date
which are classified as non-current assets. Loans and receivables are included in trade and other receivables in the
statement of financial position.
Collectability of loans and receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible
are written off by reducing the carrying amount directly. An allowance account (provision for impairment) is used
when there is objective evidence that the Group will not be able to collect all amounts due according to the original
terms of the receivables or in an otherwise timely manner. The amount of the impairment allowance is the
difference between the asset’s carrying amount and the estimated future cash flows. None of the Group’s loans
and receivables has an applicable interest rate hence the cash flows are not discounted.
The amount of the impairment loss is recognised in the statement of profit or loss within impairment expenses.
When a loan or receivable for which an impairment allowance had been recognised becomes uncollectible in a
subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously
written off are credited against other expenses in the statement of profit or loss.
Recognition and derecognition
Regular way purchases and sales of financial assets (being a purchase or sale of a financial asset under a contract
the terms of which require delivery of the asset within the time frame established generally by regulation or
convention in the marketplace concerned) are recognised on trade-date – the date on which the Group commits to
purchase or sell the asset. Investments are initially recognised at “fair value” (as used in this report, “fair value”
bears the meaning ascribed by the AASB which can produce a result that does not reflect market or realisable value)
plus transaction costs for all financial assets not carried at “fair value” through profit or loss. Financial assets carried
at “fair value” through profit or loss are initially recognised at “fair value” and transaction costs are expensed to the
statement of profit or loss and other comprehensive income. Financial assets are derecognised when the rights to
receive cash flows from the financial assets have expired or have been transferred and the Group has transferred
substantially all the risks and rewards of ownership.
Measurement
Loans and receivables are carried at amortised cost using the effective interest method.
Financial assets at fair value through profit or loss are subsequently carried at fair value. Gains or losses arising from
changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in the
statement of comprehensive income within revenue from continuing operations or administration expenses in the
period in which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in
profit or loss as part of revenue from continuing operations when the Group’s right to receive payments is
established.
Details on how the fair value of financial investments is determined are disclosed in note 2.
Impairment
The Group assesses at each reporting date whether there is objective evidence that a financial asset or group of
financial assets is impaired. If there is evidence of impairment for any of the Group’s financial assets carried at
amortised cost, the loss is measured as the difference between the asset’s carrying amount and the present value of
estimated future cash flows, excluding future credit losses that have not been incurred. The cash flows are
discounted at the financial asset’s original effective interest rate. The loss is recognised in the statement of profit or
loss and other comprehensive income.
(k) Plant and equipment
All plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is
directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Group and the cost of
the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is
36
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Note s to th e Co nsolida ted Fin a ncia l St at emen t s
derecognised when replaced. All other repairs and maintenance are charged to the statement of profit or loss and
other comprehensive income during the reporting period in which they are incurred.
Depreciation of plant and equipment is calculated using the straight-line method to allocate their cost or revalued
amounts, net of their residual values, over their estimated useful lives or, in the case of leasehold improvements and
certain leased plant and equipment, the shorter lease term. The rates vary between 25% and 40% per annum.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount (note 1(h)). Gains and losses on disposals are determined by
comparing proceeds with carrying amount. These are included in the statement of profit or loss and other
comprehensive income.
(l) Exploration and evaluation costs
It is the Group’s policy to capitalise the cost of acquiring rights to explore areas of interest. All other exploration
expenditure is expensed to the statement of profit or loss and other comprehensive income.
The costs of acquisition are carried forward as an asset provided one of the following conditions is met:
•
•
Such costs are expected to be recouped through the successful development and exploitation of the area of
interest, or alternatively, by its sale; or
Exploration activities in the area of interest have not yet reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves, and active and significant
operations in relation to the area are continuing.
When the technical feasibility and commercial viability of extracting a mineral resource have been demonstrated
then any capitalised exploration and evaluation expenditure is reclassified as capitalised mine development. Prior to
reclassification, capitalised exploration and evaluation expenditure is assessed for impairment.
Impairment
The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment at the cash
generating unit level whenever facts and circumstances suggest that the carrying amount of the asset may exceed
its recoverable amount.
An impairment exists when the carrying amount of an asset or cash-generating unit exceeds its estimated
recoverable amount. Any impairment losses are recognised in the statement of profit or loss and other
comprehensive income.
(m) Non-current asset held for sale
Non-current assets classified as held for sale are generally measured at the lower of carrying amount and fair value
less costs to sell, where the carrying amount will be recovered principally through sale as opposed to continued use.
No depreciation or amortisation is charged against assets classified as held for sale. Classification as “held for sale”
occurs when: management has committed to a plan; sale is expected to occur within one year from the date of
classification; and active marketing has commenced. Such assets are classified as current assets.
Any impairment losses are recognised for any initial or subsequent write down of an asset classified as held for sale
to fair value less cost to sell. Any reversal of impairment recognised on classification as held for sale or prior to such
classification is recognised as a gain in profit or loss in the period in which it occurs.
(n) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to and unpaid at the end of the
financial year. The amounts are unsecured, non-interest bearing and are paid on normal commercial terms.
(o) Employee benefits
Wages and salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled within
12 months of the reporting date are recognised in other payables in respect of employees’ services up to the
reporting date and are measured at the amounts expected to be paid when the liabilities are settled.
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MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Note s to the Co nsolida ted Fin an cia l St at emen t s
(p) Share-based payments
The Group may provide benefits to employees (including directors) of the Group, and to vendors and suppliers, in
the form of share-based payment transactions, whereby employees or service providers render services, or where
vendors sell assets to the Group, in exchange for shares or rights over shares (‘equity-settled transactions’), refer to
note 25.
The cost of these equity-settled transactions in the case of employees is measured by reference to the “fair value”
(not market value) at the date at which they are granted. The “fair value” is determined in accordance with
Australian Accounting Standards by an internal valuation using a Black-Scholes (or other industry accepted) option
pricing model for options and by reference to market price for ordinary shares. The Directors do not consider the
resultant value as determined by the Black-Scholes European Option Pricing Model (or any other model) is
necessarily representative of the market value of the share options issued, however, in the absence of a reliable
measure of the goods or services received, AASB 2 Share Based Payments prescribes the measurement of the fair
value of the equity instruments granted. The Black-Scholes European Option Pricing Model is an industry accepted
method of valuing equity instruments.
The cost of remuneration equity-settled transactions is recognised, together with a corresponding increase in equity,
over the period in which any performance conditions are fulfilled, ending on the date on which the relevant
employees become fully entitled to the award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects
(i) the extent to which the vesting period has expired and (ii) the number of options that, in the opinion of the
directors of the Group, will ultimately vest. This opinion is formed based on the best available information at
balance date. No adjustment is made for the likelihood of market performance conditions being met as the effect
of these conditions is included in the determination of fair value at grant date.
No expense is recognised for options that do not ultimately vest, except for options where vesting is conditional
upon a market condition.
Where an option is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet
recognised for the option is recognised immediately. However, if a new option is substituted for the cancelled
option, and designated as a replacement option on the date that it is granted, the cancelled and new option are
treated as a modification of the original option.
(q) Provision for rehabilitation
The Company records the estimated cost to rehabilitate operating locations in the period in which the obligation
arises on an undiscounted basis. The nature of rehabilitation activities includes the dismantling and removing of
structures, rehabilitating mines, dismantling operating facilities, closure of plant and waste sites and restoration,
reclamation and revegetation of affected areas.
Typically, the obligation arises when the asset is installed or the ground/environment is disturbed at the production
location. When the liability is initially recorded, the value of the estimated cost of eventual rehabilitation is
capitalised by increasing the carrying amount of the related mining assets. Additional disturbances or changes in
rehabilitation costs will be recognised as additions or changes to the corresponding asset and rehabilitation liability
when incurred.
Costs incurred that relate to an existing condition caused by past operations, and do not have future economic
benefit, are expensed as incurred.
(r) 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. Incremental costs directly attributable to the issue of new shares or options for the
acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.
38
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Note s to th e Co nsolida ted Fin a ncia l St at emen t s
(s) Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the company, excluding any
costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in ordinary shares issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation to
dilutive potential ordinary shares.
(t) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is recognised as part of the cost of 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 taxation authority is included with other receivables or 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 taxation authority, are presented as operating cash flows.
(u) Government grants
Exploration incentives (“Grant”) are recognised at fair value where there is reasonable assurance that the grant will
be received, and all grant conditions are met. Grants relating to expense items are recognised as income over the
periods necessary to match the grant to the costs it is compensating. Grants relating to assets are credited to
deferred income at fair value and are credited to income over the expected useful life of the asset on a straight line
basis.
(v) Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
(w) New accounting standards and interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June
2018 reporting periods and have not been early adopted by the Group. The Group’s assessment of the impact of
these new standards and interpretations is set out below. New standards and interpretations not mentioned are
considered unlikely to impact on the financial reporting of the Group.
AASB 9 Financial Instruments (applicable for annual reporting periods commencing on or after
1 January 2018).
AASB 9 addresses the classification, measurement and derecognition of financial assets and financial liabilities,
introduces new rules for hedge accounting and a new impairment model for financial assets. AASB 9 is effective for
annual periods beginning on or after 1 January 2018, with early application permitted. Except for hedge
accounting, retrospective application is required but providing comparative information is not compulsory. For
hedge accounting, the requirements are generally applied prospectively, with some limited exceptions.
The Group plans to adopt the new standard on the required effective date and will not restate comparative
information. Based on the Group’s current operations and financial assets and liabilities currently held, the Group
does not anticipate any material impact on the financial statements upon adoption of this standard. The Group
does not presently engage in hedge accounting.
39
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Note s to the Co nsolida ted Fin an cia l St at emen t s
AASB 15 Revenue from Contracts with Customers (applicable for annual reporting periods
commencing on or after 1 January 2018).
AASB 15 will replace AASB 118 which covers revenue arising from the sale of goods and the rendering of services
and AASB 111 which covers construction contracts. The new standard is based on the principle that revenue is
recognised when control of a good or service transfers to a customer and establishes a five-step model to account
for revenue arising from contracts with customers. The standard permits either a full retrospective or a modified
retrospective approach for the adoption.
The Group plans to adopt the new standard on the required effective date using the full retrospective method.
There will be no material impact on the Group’s financial position or performance from the adoption of this new
standard.
AASB 16 Leases (applicable for annual reporting periods commencing on or after 1 January 2019).
AASB 16 was issued in February 2016. It will result in almost all leases being recognised on the statement of
financial position, as the distinction between operating and finance leases is removed. Under the new standard, an
asset (the right to use the leased item) and a financial liability to pay rentals are recognised. The only exceptions are
short-term and low-value leases.
The accounting for lessors will not significantly change.
The Group plans to adopt the new standard on the required effective date. The Group continues to assess the
potential impact of AASB 16 on its consolidated financial statements.
(x) Critical accounting judgements, estimates and assumptions
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:
Exploration and evaluation costs
The costs of acquiring rights to explore areas of interest are capitalised, all other exploration and evaluation costs
are expensed as incurred.
These costs of acquisition are carried forward only if they relate to an area of interest for which rights of tenure are
current and in respect of which: (i) such costs are expected to be recouped through successful development and
exploitation or from sale of area; or (ii) exploration and evaluation activities in the area have not yet reached a stage
that permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active
operations in, or relating to, the area are continuing.
When an area of interest is abandoned or the directors decide that it is not commercial, any capitalised acquisition
costs in respect of that area are written off in the financial year the decision is made.
Taxation
Balances disclosed in the financial statements and the notes thereto related to taxation are based on the best
estimates of the directors. These estimates take into account both the financial performance and position of the
Group as they pertain to current income taxation legislation, and the directors understanding thereof. No
adjustment has been made for pending or future taxation legislation. The current income tax position represents
that directors’ best estimate, pending an assessment by the Australian Taxation Office.
Share-based payments
Share-based payment transactions, in the form of options to acquire ordinary shares, are valued using the Black-
Scholes option pricing model. This model uses assumptions and estimates as inputs.
The Directors do not consider the resultant value as determined by the Black-Scholes European Option Pricing
Model is necessarily representative of the market value of the share options issued, however, in the absence of a
reliable measure of the goods or services received, AASB 2 Share Based Payments prescribes the measurement of the
fair value of the equity instruments granted. The Black-Scholes European Option Pricing Model is an industry
accepted method of valuing equity instruments, at the date of grant.
40
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Note s to th e Co nsolida ted Fin a ncia l St at emen t s
Impairments
The Group assesses impairment at the end of each reporting period by evaluating conditions and events specific to
the Group that may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed
using the directors’ best estimate of the asset’s fair value, which can incorporate various key assumptions.
Any amounts in excess of the fair value are impaired, in line with accounting policy disclosures in notes 1(h), 1(j)
and 1(l).
Provision for rehabilitation
The Group assesses its mine rehabilitation provision half-yearly in accordance with accounting policy note 1(q).
Significant judgement is required in determining the provision primarily relating to the estimation of costs in the
Mine Closure Plan that is lodged with the Department of Mines, Industry Regulation and Safety.
2.
FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and
price risk), credit risk and liquidity risk.
Risk management is carried out by the full Board of Directors as the Group believes that it is crucial for all board
members to be involved in this process.
(a) Market risk
(i) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures,
primarily with respect to the A$, the US dollar and the West African CFA franc.
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated
in a currency that is not the entity’s functional currency and net investments in foreign operations. The Group has
not formalised a foreign currency risk management policy however, it monitors its foreign currency expenditure in
light of exchange rate movements.
The functional currency of the Group’s West African based subsidiary company is the West African CFA franc. Given
the current scale of the operations in West Africa, the foreign exchange exposure is not considered to be material to
the Group.
(ii) Price risk
The Group is exposed to equity securities price risk. This arises from investments held by the Group and classified in
the statement of financial position as financial assets at fair value through profit or loss. Given the current level of
operations, the Group’s financial statements for the year ended 30 June 2018 are not exposed to commodity price
risk.
To minimise the risk, the Group’s investments are of high quality and are publicly traded on reputable international
stock exchanges. The investments are managed on a day to day basis so as to pick up any significant adjustments to
market prices.
Sensitivity analysis
At 30 June 2018, if the value of the equity instruments had increased by 15% with all other variables held constant,
post-tax loss for the Group would have been $127,128 lower, with no changes to other equity balances, as a result
of gains on equity securities classified as financial assets at fair value through profit or loss (2017: nil).
At 30 June 2018, if the value of the equity instruments had decreased by 15% with all other variables held
constant, post-tax loss for the Group would have been $127,128 higher, with no changes to other equity balances,
as a result of losses on equity securities classified as financial assets at fair value through profit or loss (2017: nil).
41
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Note s to the Co nsolida ted Fin an cia l St at emen t s
(iii) Interest rate risk
The Group is exposed to movements in market interest rates on cash and cash equivalents. The Group policy is to
monitor the interest rate yield curve out to six months to ensure a balance is maintained between the liquidity of
cash assets and the interest rate return. The entire balance of cash and cash equivalents for the Group $1,552,529
(2017: $1,841,875) is subject to interest rate risk. The weighted average interest rate received on cash and cash
equivalents by the Group was 0.51% (2017: 0.64%).
Sensitivity analysis
At 30 June 2018, if interest rates had changed by - 50 basis points from the weighted average rate for the year
with all other variables held constant, post-tax loss for the Group would have been $7,969 lower (2017: $11,449
lower) as a result of lower or higher interest income from cash and cash equivalents.
At 30 June 2018, if interest rates had changed by + 50 basis points from the weighted average rate for the year
with all other variables held constant, post-tax loss for the Group would have been $7,969 higher (2017: $11,449
higher) as a result of lower or higher interest income from cash and cash equivalents.
(b) Credit risk
The Group has no significant concentrations of credit risk. The maximum exposure to credit risk at balance date is
the carrying amount (net of provision for impairment) of those assets as disclosed in the statement of financial
position and notes to the financial statements.
All surplus cash holdings within the Group are currently invested with AA- rated financial institutions.
(c) Liquidity risk
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring sufficient
cash and marketable securities are available to meet the current and future commitments of the Group. Due to the
nature of the Group’s activities, being mineral exploration, the Group does not have ready access to credit facilities,
with the primary source of funding being equity raisings. The Board of Directors constantly monitor the state of
equity markets in conjunction with the Group’s current and future funding requirements, with a view to initiating
appropriate capital raisings.
The financial liabilities of the Group are confined to trade and other payables as disclosed in the statement of financial
position. All trade and other payables are non-interest bearing and due within 12 months of the reporting date.
(d) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes. The equity investments held by the Group are classified at fair value through profit or loss. The
market value of all equity investments represents the fair value based on quoted prices on active markets (TSX) as at
the reporting date without any deduction for transaction costs. These investments are classified as level 1 financial
instruments.
42
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Note s to th e Co nsolida ted Fin a ncia l St at emen t s
The carrying amounts and estimated fair values of financial assets and financial liabilities are as follows:
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial assets
Total Financial Assets
Financial Liabilities
Trade and other payables
Total Financial Liabilities
Consolidated
Consolidated
2018
$
2017
$
1,552,529
1,841,875
42,837
847,522
10,198
-
2,442,888
1,852,073
400,286
400,286
606,781
606,781
The methods and assumptions used to estimate the fair value of financial instruments are outlined below:
Cash
The carrying amount is fair value due to the liquid nature of these assets.
Receivables/Payables
Due to the short-term nature of these financial rights and obligations, their carrying amounts are estimated to
represent their fair values.
Fair value measurements of financial assets
The carrying values of financial assets and liabilities of the Group approximate their fair values. Fair values of
financial assets and liabilities have been determined for measurement and / or disclosure purposes.
Fair value hierarchy
The Group classifies assets and liabilities carried at fair value using a fair value hierarchy that reflects the significance
of the inputs used in determining that value. The following table analyses financial instruments carried at fair value
by the valuation method. The different levels in the hierarchy have been defined as follows:
Level 1:
Level 2:
Level 3:
quoted prices (unadjusted) in active markets for identical assets or liabilities;
inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices); and
inputs for the asset or liability that are not based on observable market data (unobservable inputs).
30 June 2018
Financial assets
Total as at 30 June 2018
Level 1
Level 2
Level 3
$
$
$
Total
$
847,522
847,522
-
-
-
-
847,522
847,522
43
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED
Note s to the Co nsolida ted Fin an cia l St at emen t s
3.
SEGMENT INFORMATION
For management purposes, the Group has identified two reportable segments, being exploration activities undertaken
in Australia and West Africa. These segments include activities associated with the determination and assessment of
the existence of commercial economic reserves from the Group’s mineral assets in these geographic locations.
Segment performance is evaluated based on the operating profit and loss and cash flows and is measured in
accordance with the Group’s accounting policies.
Segment revenue – Australia
Segment revenue – West Africa
Segment revenue – Total
Reconciliation of segment revenue to total revenue before tax:
-
Interest revenue
TOTAL REVENUE
Segment result – Australia
Segment result – West Africa
Segment result – Total
Reconciliation of segment result to net loss before tax:
- Other income
- Other corporate and administration
NET LOSS BEFORE TAX
Segment operating assets – Australia
Segment operating assets – West Africa
Segment operating assets – Total
Reconciliation of segment operating assets to total assets:
- Other corporate and administration assets
TOTAL ASSETS
Segment operating liabilities – Australia
Segment operating liabilities – West Africa
Segment operating liabilities – Total
Reconciliation of segment operating liabilities to total liabilities:
- Other corporate and administration liabilities
TOTAL LIABILITIES
Consolidated
Consolidated
2018
$
215,573
-
215,573
8,104
223,677
2017
$
-
-
-
14,664
14,664
(1,363,497)
(2,309,205)
(58,426)
(415,055)
(1,421,923)
(2,724,260)
722,155
-
(840,035)
(1,531,795)
(1,539,803)
(4,256,055)
3,366,853
3,366,853
202,317
730,092
3,569,170
4,096,945
2,453,137
1,856,974
6,022,307
5,953,919
1,501,669
1,725,769
78
73
1,501,747
1,725,842
101,956
84,356
1,603,703
1,810,198
44
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Note s to th e Co nsolida ted Fin a ncia l St at emen t s
4.
REVENUE AND OTHER INCOME
(a) Revenue from continuing operations
Sale of commodities
-
Tribute production
- Gold sales
(b) Other income
Interest revenue
Net gain on sales of mining interests
Exploration Incentive Scheme grant
Net gain on disposal of property, plant and equipment
Accommodation rental
Net foreign exchange gains
Consolidated
Consolidated
2018
$
2017
$
29,250
186,323
215,573
8,104
551,489
121,629
30,544
15,570
2,923
-
-
-
14,664
-
-
-
-
-
730,259
14,664
5.
EXPENSES
Loss before income tax includes the following specific expenses:
Defined contribution superannuation expense
Minimum lease payments relating to operating leases
30,567
40,420
32,474
56,779
6.
INCOME TAX
(a) Income tax expense
Current tax
Deferred tax
-
-
-
-
(b) Numerical reconciliation of income tax expense to prima facie tax
payable
Loss from continuing operations before income tax expense
(1,539,803)
(4,256,055)
Prima facie tax benefit at the Australian tax rate of 30%
(461,941)
(1,276,816)
Tax effect of amounts which are not deductible (taxable) in calculating
taxable income:
Foreign (gains [sale of mining interests])/losses [impairment]
Foreign losses – West Africa excluded
Share-based payments
Movements in unrecognised temporary differences
Tax effect of current period tax losses for which no deferred tax asset has
been recognised
Income tax expense
(163,534)
8,393
-
(617,082)
(27,674)
68,328
-
218,700
(989,788)
(418,641)
644,756
1,408,429
-
-
45
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED
Note s to the Co nsolida ted Fin an cia l St at emen t s
(c) Unrecognised temporary differences
Deferred Tax Assets (at 30%)
Capital raising costs
Other temporary differences
Carry forward foreign losses
Carry forward tax losses
Deferred Tax Liabilities (at 30%)
Tenement acquisition costs
Net deferred tax assets
Consolidated
Consolidated
2018
$
2017
$
70,994
9,057
62,866
(696)
7,876,791
7,868,398
3,694,620
3,058,239
(398,326)
(398,326)
11,253,136
10,590,481
Net deferred tax assets have not been brought to account as it is not probable within the immediate future that tax
profits will be available against which deductible temporary differences and tax losses can be utilised. The Group’s
ability to use losses in the future is subject to the Group satisfying the relevant tax authority’s criteria for using these
losses.
7.
CURRENT ASSETS - CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Short-term deposits
1,511,769
1,801,115
40,760
40,760
Cash and cash equivalents as shown in the statement of financial position
and the statement of cash flows
1,552,529
1,841,875
Cash and cash equivalents at 30 June 2018 comprises A$1,431,138 (2017: A$1,840,053), with the balance held in
US dollars and West African CFA francs.
Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates.
Short-term deposits are made for varying periods of between one day and three months depending on the
immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.
The Group has provided a bank guarantee of $20,760 for a property lease.
8.
CURRENT ASSETS - TRADE AND OTHER RECEIVABLES
Trade Debtors
Other
20,369
22,468
42,837
6,453
3,745
10,198
9.
CURRENT ASSETS - FINANCIAL ASSETS
Canadian listed equity securities
847,522
-
Changes in fair values of financial assets are included in ‘other income’ or ‘administrative expenses’ in the statement
of profit or loss and other comprehensive income. Refer to note 2 for details of the fair value measurement.
46
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED
Note s to th e Co nsolida ted Fin a ncia l St at emen t s
10.
NON-CURRENT ASSETS - PLANT AND EQUIPMENT
Freehold
Land
Plant and
Equipment
At 1 July 2016
Cost
Accumulated depreciation
Net book amount
Year ended 30 June 2017
Opening net book amount
Exchange differences
Additions
Depreciation charge
Total
$
$
467,399
467,399
(454,733)
(454,733)
12,666
12,666
12,666
(394)
12,666
(394)
$
-
-
-
-
-
126,929
1,918,052
2,044,981
-
(13,161)
(13,161)
Closing net book amount
126,929
1,917,163
2,044,092
At 30 June 2017
Cost
Accumulated depreciation
Net book amount
Year ended 30 June 2018
Opening net book amount
Exchange differences
Additions
Depreciation charge
126,929
2,384,245
2,511,174
-
(467,082)
(467,082)
126,929
1,917,163
2,044,092
126,929
1,917,163
2,044,092
-
-
-
3
9,120
(3,867)
3
9,120
(3,867)
Closing net book amount
126,929
1,922,419
2,049,348
At 30 June 2018
Cost
Accumulated depreciation
Net book amount
126,929
2,244,405
2,371,334
-
(321,986)
(321,986)
126,929
1,922,419
2,049,348
47
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Note s to the Co nsolida ted Fin an cia l St at emen t s
11.
NON CURRENT ASSETS - TENEMENT ACQUISITION COSTS
Tenement acquisition costs carried forward in respect of
mining areas of interest
Opening net book amount
Exchange variances
Tenement acquisition costs
Disposals
Reclassification to non-current asset held for sale
Impairment of capitalised tenement acquisition costs
Closing net book amount
12.
CURRENT LIABILITIES - TRADE AND OTHER PAYABLES
Trade payables
Other payables and accruals
Deferred payment on Sandstone Project Acquisition
13.
NON-CURRENT LIABILITIES - PROVISIONS
Rehabilitation
Carrying amount at start of year
Increase in provision
Carrying amount at end of year
Consolidated
Consolidated
2018
$
2017
$
2,057,754
30,403
967,528
(9,768)
-
1,327,754
(558,086)
(202,317)
-
-
-
(227,760)
1,327,754
2,057,754
59,506
340,780
-
400,286
33,895
72,886
500,000
606,781
1,203,417
-
-
1,203,417
1,203,417
1,203,417
The Group records the present value of the estimated cost to rehabilitate operating locations in the period in which
the obligation arises. The nature of rehabilitation activities includes the dismantling and removing of structures,
rehabilitating mines, dismantling operating facilities, closure of plant and waste sites and restoration, reclamation
and revegetation of affected areas. The provision includes rehabilitation costs associated with the Sandstone Gold
Project based on the latest estimated future costs contained in the Mine Closure Plan lodged with the Government
of Western Australia Department of Mines, Industry Regulation and Safety.
48
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Note s to th e Co nsolida ted Fin a ncia l St at emen t s
14.
ISSUED CAPITAL
(a) Share capital
2018
2017
Notes
Number of
Shares
$
Number of
Shares
$
Ordinary shares fully paid
14(b), 14(d)
697,901,437
34,954,474
586,283,790
33,170,824
Total issued capital
697,901,437
34,954,474
586,283,790
33,170,824
(b) Movements in ordinary share capital
Beginning of the financial year
586,283,790
33,170,824
459,318,295
31,399,916
Issued for cash at 1.5 cents per share
-
-
117,256,757
1,758,851
Issued for cash at 1.7 cents per share
111,617,647
1,897,500
-
Issued as consideration for services
Share issue transaction costs
-
-
-
9,708,738
(113,850)
-
-
100,000
(87,943)
End of the financial year
697,901,437
34,954,474
586,283,790
33,170,824
(c) Movements in options on issue
Beginning of the financial year
Number of Options
2018
2017
38,300,000
800,000
(Cancelled)/issued, exercisable at 7 cents, on or before 18 November 2018
(7,500,000)
7,500,000
Issued, exercisable at 10 cents, on or before 18 November 2018
-
30,000,000
Expired on 7 July 2017, exercisable at 10 cents
Expired on 7 July 2017, exercisable at 15 cents
Expired on 7 July 2017, exercisable at 20 cents
End of the financial year
(d) Ordinary shares
(600,000)
(100,000)
(100,000)
-
-
-
30,000,000
38,300,000
Ordinary fully paid shares entitle the holder to participate in dividends and the proceeds on winding up of the
Company in proportion to the number of the shares held.
On a show of hands every holder of ordinary fully paid shares present at a meeting in person or by proxy, is entitled
to one vote, and upon a poll is entitled to one vote for each share held.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
49
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Note s to the Co nsolida ted Fin an cia l St at emen t s
(e) Capital risk management
The Group’s objectives when managing capital is to safeguard its ability to continue as a going concern, so that it
may strive to provide returns for shareholders and benefits for other stakeholders.
Due to the nature of the Group’s activities, being mineral exploration, the Group does not have ready access to
credit facilities, with the primary source of funding being equity raisings. Therefore, the focus of the Group’s capital
risk management is the current working capital position against the requirements of the Group to meet exploration
programmes and corporate overheads. The Group’s strategy is to ensure appropriate liquidity is maintained to meet
anticipated operating requirements, with a view to initiating appropriate capital raisings as required. The working
capital position of the Group at 30 June 2018 and 30 June 2017 are as follows:
Cash and cash equivalents
Trade and other receivable
Financial assets
Trade and other payables
Working capital position
15.
RESERVES AND ACCUMULATED LOSSES
(a) Reserves
Foreign currency translation reserve
Share-based payments reserve (see note 25)
(b) Nature and purpose of reserves
(i) Foreign currency translation reserve
Consolidated
Consolidated
2018
$
2017
$
1,552,529
1,841,875
42,837
847,522
10,198
-
(400,286)
(606,781)
2,042,602
1,245,292
419,988
729,000
388,952
735,430
1,148,988
1,124,382
Exchange differences arising on translation of the foreign controlled entity are recognised in other comprehensive
income as described in note 1(d) and accumulated within a separate reserve within equity. The cumulative amount is
reclassified to profit or loss when the net investment is disposed.
(ii) Share-based payments reserve
The share-based payments reserve is used to recognise the fair value of options issued.
16.
DIVIDENDS
No dividends were paid during the financial year. No recommendation for payment of dividends has been made.
50
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Note s to th e Co nsolida ted Fin a ncia l St at emen t s
17.
REMUNERATION OF AUDITORS
During the year the following fees were paid or payable for services provided by the auditor of the Company, its
related practices and non-related audit firms:
(a) Audit services
Greenwich & Co – audit and review of financial reports
Total remuneration for audit services
(b) Non-audit services
Greenwich & Co – taxation compliance services
Total remuneration for other services
18.
CONTINGENCIES
Consolidated
Consolidated
2018
$
29,000
29,000
4,200
4,200
2017
$
60,020
60,020
6,000
6,000
The purchase price for the Sandstone Gold Project included a deferred payment of $500,000 payable within 28 days
of the receipt of proceeds from the first sale of gold produced from the Sandstone Assets. This payment is contingent
on the production and sale of gold from the Sandstone Assets.
The Sandstone tenements were acquired subject to legacy royalties, including a royalty equal to 2% of the net smelter
return on all minerals produced from M57/128 and M57/129 and a royalty of A$1 per tonne of ore mined and
treated from M57/129.
There may be a further legacy royalty payable in relation to the tenements acquired by the Company. Pursuant to an
Agreement (Deed of Sale – Sandstone) dated 27 September 2004 (Sale Deed) a royalty may be payable in relation to a
portion of any gold produced from the Sandstone tenements. Royalties payable under the Sale Deed are to be
calculated using a complex formula driven by the specific tenements from which gold is produced, the “deemed
entitlement to gold” of persons having a 33.3% participating interest in “the Sandstone Joint Venture”, and a royalty
rate of $12.50 per ounce of gold. Eighty six tenements are covered by the Sale Deed, only two of which were
acquired by the Company. The Company’s understanding is that the Sandstone Joint Venture no longer exists. The
royalty only commences when 50,000 ounces of gold have been produced across the eighty six tenements and it
ceases when $4 million has been paid in total across the eighty six tenements under the Sale Deed. Accordingly,
depending on how much gold has been produced from the other eighty four tenements and the status of the
Sandstone Joint Venture, it is possible that a $12.50 royalty per ounce of gold produced is payable on 1/3 of the gold
produced from certain portions of the tenements acquired by the Company. The Company will inform the market if
and as soon as the status of that potential further royalty has been resolved.
51
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Note s to the Co nsolida ted Fin an cia l St at emen t s
19.
COMMITMENTS
(a) Exploration commitments
The Group has certain (contingent) commitments to meet minimum expenditure requirements on the mining
exploration assets it has an interest in. Outstanding exploration commitments are as follows:
within one year
later than one year but not later than five years
later than five years
(b) Lease commitments: Group as lessee
Operating leases (non-cancellable):
Minimum lease payments
within one year
later than one year but not later than five years
Aggregate lease expenditure contracted for at reporting date but not
recognised as liabilities
Consolidated
Consolidated
2018
$
314,241
788,800
2017
$
306,161
1,006,722
1,675,100
1,872,300
2,778,141
3,185,183
29,644
29,644
-
-
29,644
29,644
The property lease is a non-cancellable lease with a one-year term, with rent payable monthly in advance. The lease
does not contain any provisional rent increase clauses. The lease allows for subletting of all lease areas subject to the
approval of the lessor, who cannot unreasonably withhold such approval.
20.
RELATED PARTY TRANSACTIONS
(a) Parent entity
The ultimate parent entity within the Group is Middle Island Resources Limited.
(b) Subsidiaries
Interests in subsidiaries are set out in note 21.
(c) Key management personnel compensation
Short-term benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payments
246,530
20,570
-
-
-
267,100
246,530
20,570
-
-
729,000
996,100
Detailed remuneration disclosures are provided in the remuneration report on pages 21 to 24.
52
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED
Note s to th e Co nsolida ted Fin a ncia l St at emen t s
(d) Transactions and balances with other related parties
DWCorporate Pty Ltd, a business of which Mr Wilkins is principal, provided company secretarial corporate advisory
services to the Middle Island Group during the year. The amounts paid were on arms’ length commercial terms and
are disclosed in the remuneration report in conjunction with Mr Wilkins’ compensation. At 30 June 2018 there was
$1,155 (2017: nil) owing to DWCorporate Pty Ltd.
Mr Nicholls is a director and 35% shareholder of PowerXplor Ltd, which owns Sahara Mining Services SARL. During
the current year the Group sold motor vehicles to Sahara Mining Services SARL for gross proceeds of US$23,300
(2017: N/A). As part of a cost sharing arrangement between Sahara Mining Services SARL and Middle Island
Resources Limited, the two companies shared administration and exploration costs during the 2017 financial year;
with Middle Island Resources Limited recharging $3,013 to Sahara Mining Services SARL during the year ended 30
June 2017. The amounts paid by Sahara Mining Services SARL to Middle Island Resources Limited were on arms’
length commercial terms.
Quenda Investments Pty Ltd (“Quenda”), a company of which Mr Yeates is a director and shareholder, leant
securities held in Middle Island Resources Limited to the provider of a controlled placement facility during the
current reporting period for which Quenda was paid a stock borrow fee of $4,500 for the year ended 30 June 2018
(2017: N/A). The amounts paid were on arms’ length commercial terms. At 30 June 2018 there was $500 (2017:
nil) owing to Quenda Investments Pty Ltd.
(e) Loans to related parties
Middle Island Resources Limited has provided unsecured, interest free loans to each of its wholly owned subsidiaries
totalling $20,575,570 at 30 June 2018 (2017: $20,040,062). An impairment assessment is undertaken each
financial year by examining the financial position of the subsidiary and the market in which the subsidiary operates
to determine whether there is objective evidence that the subsidiary is impaired. When such objective evidence
exists, the Company recognises an allowance for the impairment loss.
21.
SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 1(b):
Name
Country of
Incorporation
Class of
Shares
Equity
Holding(1)
2018
2017
Middle Island Resources Limited – Burkina Faso SARL
Burkina Faso
Ordinary
%
100
Middle Island Resources Limited – Sandstone
Operations Pty Ltd
Australia
Ordinary
100
%
100
100
(1) The proportion of ownership interest is equal to the proportion of voting power held.
22.
EVENTS OCCURRING AFTER THE BALANCE SHEET DATE
No matters or circumstances, aside from those disclosed above, have arisen since the end of the year which
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.
53
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED
Note s to the Co nsolida ted Fin an cia l St at emen t s
23.
STATEMENT OF CASH FLOWS
(a) Reconciliation of net loss after income tax to net cash outflow
from operating activities
Net loss for the year
Non-cash items
Depreciation of non-current assets
Share-based payments
Share issued as consideration for corporate advisory fee
Impairment of capitalised tenement acquisition costs
Net gain on disposal of property, plant and equipment
Net gain on sales of mining properties
Net exchange differences
Change in operating assets and liabilities
(Increase) in trade and other receivables
Decrease in financial assets at fair value through profit or loss
(Decrease)/increase in trade and other payables
Consolidated
Consolidated
2018
$
2017
$
(1,539,803)
(4,256,055)
3,867
-
-
-
(30,544)
(551,489)
(1,892)
(32,639)
15,738
293,505
13,161
729,000
100,000
227,760
-
-
-
(5,385)
-
(286,565)
Net cash outflow from operating activities
(1,843,257)
(3,478,084)
(b) Non-cash investing and financing activities
As part consideration on the sale of mining properties during the 2018 financial year the Group received equity
securities in the purchaser valued at $863,260 which have been classified as financial assets at fair value through
profit or loss.
During the 2017 financial year, the Company issued 9,708,738 fully paid ordinary shares as consideration for a
corporate advisory fee to the extent of $100,000.
24.
LOSS PER SHARE
(a) Reconciliation of earnings used in calculating loss per share
Loss attributable to the owners of the Company used in calculating basic
and diluted loss per share
(1,539,803)
(4,256,055)
Number of
shares
Number of
shares
2018
2017
(b) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in
calculating basic and diluted loss per share
644,997,730
505,678,351
(c) Information on the classification of options
As the Group has made a loss for the year ended 30 June 2018, all options on issue are considered antidilutive and
have not been included in the calculation of diluted earnings per share. These options could potentially dilute basic
earnings per share.
54
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED
Note s to th e Co nsolida ted Fin a ncia l St at emen t s
25.
SHARE-BASED PAYMENTS
(a) Options issued to employees and contractors
The Group may provide benefits to employees (including directors) and contractors of the Group in the form of
share-based payment transactions, whereby options to acquire ordinary shares are issued as an incentive to improve
employee and shareholder goal congruence. The exercise price of the options granted and on issue as at 30 June
2018 is 10 cents per option, with an expiry date of 18 November 2018.
Options granted carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary
share of the Company with full dividend and voting rights.
Set out below are summaries of the options granted (as 30 June in the stated years):
Consolidated
Consolidated
Consolidated
Consolidated
2018
2018
2017
2017
Number of
options
Weighted
average exercise
price cents
Number of
options
Weighted
average exercise
price cents
Outstanding at the beginning
of the financial year
Granted
Forfeited/cancelled
Exercised
Expired/lapsed
Outstanding at year-end
Exercisable at year-end
38,300,000
-
(7,500,000)
-
(800,000)
30,000,000
30,000,000
9.5
-
7.0
-
11.9
10.0
10.0
800,000
37,500,000
-
-
-
38,300,000
30,800,000
11.9
9.4
-
-
-
9.5
10.0
The weighted average remaining contractual life of share options outstanding at the end of the financial year was
0.4 years (2017: 1.4 years), and the exercise price was 10 cents per option.
Fair value of options granted
There were no options granted during the 2018 financial year. The weighted average “fair value” (not market value)
of the options granted during the 2017 financial year was 1.9 cents. The price was calculated by using the Black-
Scholes European Option Pricing Model applying the following inputs. The Directors do not consider the resultant
value as determined by the Black-Scholes European Option Pricing Model is necessarily representative of the market
value of the share options issued.
Weighted average exercise price (cents)
Weighted average life of the options (years)
Weighted average underlying share price (cents)
Expected share price volatility
Risk free interest rate
2018
2017
$
-
-
-
-
-
$
9.4
1.9
6.0
100.0%
1.5%
Historical volatility has been used as the basis for determining expected share price volatility as it assumed that this
is indicative of future trends, which may not eventuate. The life of the options is based on historical exercise
patterns, which may not eventuate in the future.
55
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED
Note s to the Co nsolida ted Fin an cia l St at emen t s
(b) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the year were as follows:
Options granted to/vesting with employees (including directors) and
contractors as part of share-based payments
Consolidated
Consolidated
2018
$
-
2017
$
729,000
26.
PARENT ENTITY INFORMATION
The following information relates to the parent entity, Middle Island Resources Limited, at 30 June 2018. The
information presented here has been prepared using accounting policies consistent with those presented in Note 1.
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Contributed equity
Share-based payments reserve
Accumulated losses
Total equity
Loss for the year
Total comprehensive loss for the year
2018
$
2017
$
2,268,749
1,832,297
2,200,043
3,988,600
4,468,792
5,820,897
105,830
105,830
84,356
84,356
34,954,474
33,170,824
729,000
735,430
(31,320,512)
(28,169,713)
4,362,962
5,736,541
(3,157,229)
(1,690,845)
(3,157,229)
(1,690,845)
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MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED
Direct ors’ De cla ration
In the directors’ opinion:
1.
the financial statements and notes set out on pages 28 to 56 are in accordance with the Corporations Act 2001,
including:
(a)
(b)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2018 and of its
performance for the financial year ended on that date;
2.
3.
there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due
and payable; and
a statement that the attached financial statements are in compliance with International Financial Reporting
Standards has been included in the notes to the financial statements.
The directors have been given the declarations by the chief executive officer and chief financial officer required by section
295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
Richard Yeates
Managing Director
Perth, 27 September 2018
57
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Inde pe nde nt Audito r’ s Re po r t
Greenwich & Co Audit Pty Ltd I ABN 51 609 542 458
Level 2. 35 Outram Street, West Perth WA 6005
PO Box 983. West Perth WA 6872
T 08 6555 9500 I F 08 6555 9555
www.greenwichco.com
An independent member of Morison KSI I Liability limited by a scheme approved under Professional Standards Legislation
58
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Independe nt Audito r’ s Repo rt
59
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Inde pe nde nt Audito r’ s Re po r t
60
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Independe nt Audito r’ s Repo rt
61
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Independent Audito r’ s Re po r t
62
MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2018Middle IslandRESOURCES LIMITED Additiona l Info rm ation
Additional information required by Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows. The
information is current as at 13 September 2018. .
(a) Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
1
1,001
5,001
10,001
-
-
-
-
1,000
5,000
10,000
100,000
100,001
and above
The number of shareholders holding less than a marketable parcel of shares are:
(b) Twenty largest shareholders
The names of the twenty largest holders of quoted ordinary shares are:
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Harmanis Holdings Pty Ltd
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