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2023 ReportAnnual Report
2011
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
CORPORATE DIRECTORY
Maximus Resources Limited ABN 74 111 977 354
DIrECTOrS
Robert Michael Kennedy (Non-executive Chairman)
COMPLIANCE STATEMENTS
Disclaimer
This Annual Report contains forward looking statements that are
subject to risk factors associated with the exploration and mining
industry.
It is believed that the expectations reflected in these statements
are reasonable, but they may be affected by a variety of variables
which could cause actual results or trends to differ materially.
Exploration Targets
Exploration Targets are reported according to Clause 18 of the
JORC Code, 2004. This means that the potential quantity and
grade is conceptual in nature and that there has been insufficient
exploration to define a Mineral Resource and that it is uncertain
if further exploration will result in the determination of a Mineral
Resource.
Competent Person
The information in this report relates to Exploration Results,
Mineral Resources and Ore Reserves is based on information
compiled by Mr Stephen Hogan who is a Member of the
Australasian Institute of Mining and Metallurgy. Mr Hogan is
an employee of ERO Mining Ltd who has been seconded to
Maximus Resources Limited. He has sufficient experience that is
relevant to the styles of mineralisation and types of deposit under
consideration and consents to the inclusion of the information in
this report in the form and context in which it appears. Mr Hogan
qualifies as a Competent Person as defined in the 2004 edition
of the Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves (JORC Code).
Kevin Malaxos (Managing Director)
Leigh Carol McClusky (Non-executive Director)
Ewan John Vickery (Non-executive Director)
Nicholas John Smart (Alternate for Mr Vickery)
COMPANy SECrETAry
Rajita Alwis
rEgISTErED OffICE
Level 3, 100 Pirie Street
Adelaide South Australia 5000
PrINCIPAL OffICE
58 Beulah Road
Norwood South Australia 5067
Telephone +61 8 7324 3172, Facsimile +61 8 8312 5501
SOLICITOr
DMAW Lawyers
Level 3, 80 King William Street
Adelaide South Australia 5000
Telephone +61 8 8210 2222, Facsimile +61 8 8210 2233
ShArE rEgISTry
Computershare Investor Services
Level 5, 115 Grenfell Street
Adelaide South Australia 5000
Telephone +61 8 8236 2300, Facsimile +61 8 8236 2305
AuDITOr
grant Thornton
67 Greenhill Road
Wayville South Australia 5034
BANkEr
National Australia Bank
161–167 Glynburn Road
Firle South Australia 5070
STOCk ExChANgE LISTINg
Australia Securities Exchange (Adelaide)
Maximus Resources Limited shares are listed on the Australian
Securities Exchange
ASX code: MXR
WEBSITE
www.maximusresources.com
The website includes information about the Company, its
strategies, projects, reports and ASX announcements.
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
Contents
CHAIRMAN’S REPORT
MANAGING DIRECTOR’S REPORT
TENEMENT SCHEDULE
FINANCIAL REPORT
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
CORPORATE GOVERNANCE STATEMENT
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
CONSOLIDATED STATEMENTS OF
CHANGES IN EQUITY
CONSOLIDATED STATEMENTS OF
CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
ASX ADDITIONAL INFORMATION
2
3
5
7
8
15
16
20
20
21
22
24
25
52
53
56
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
1
CHAIRMAN’S REPORT 2011
Dear Fellow Shareholders
Since the last Annual Report we have continued the
Our managing Director will report on the prospectivity of the
rationalisation of our minerals portfolio with the emphasis in the
Narndee tenements which provide the greatest opportunity for
past year on proving up a greater gold resource in the Adelaide
a company making discovery. There is a broad choice of gold
Hills and completing the analysis of and review of the Narndee
and base metal targets across our tenement holding. We have
tenements which has resulted in the ranking of these targets
commenced geochemical and geophysical surveys on the
with a view to testing the six highest ranking of them in the near
highest priority targets at Narndee, with the first gravity survey
future.
Our Sellheim alluvial operation has been significantly affected by
the Queensland floods and as reported last year the change in
completed in October 2011. The only thing holding us back is
raising sufficient capital for what is seen by your board as the
most prospective exploration in the Narndee tenements.
season. The moisture content of the feed has reduced the ability
Due to the takeover by ERO Mining Ltd (ERO) of South East
to process sufficient throughput. As a result we have impaired
the asset by a further $500,000. The company continues to
Energy Ltd your company no longer controls ERO and has
removed it from the consolidated Accounts from the date of
pursue options for the Sellheim project, including modifying the
the takeover. We have maintained our interest in the Billa Kalina
processing plant to increase throughput or Joint Venture with
neighbouring operators to improve project viability.
As announced we have successfully sold our interests in the
Ironstone Well tenements for a prospective $4 million for gold
tenement with ERO who plan to conduct some ground gravity
works and finalise arrangements for a drilling program on the
tenements once clearance has been given by the Defence
Department to proceed onto the Woomera Prohibited Area
and a further $0.5 million for the iron content with a 20%
(WPA).
interest retained in the iron ore project. Importantly the costs of
The lack of funds has caused us to curtail our exploration plans
maintaining the tenements are no longer the responsibility of the
and impair our exploration assets as set out in the accounts
company.
but we are confident in our ability to raise funds for a focussed
Our significant tenement holdings both in South Australia and
exploration program across our portfolio.
Western Australia impose a great burden on the company. As a
Subsequent to my report last year I announced that Kevin
result we continue to rationalise the areas to maintain a hold on
Malaxos joined the company as Managing Director. Kevin has
the most prospective areas as we have invested significant funds
worked assiduously in progressing the Adelaide Hills project and
to identify the most prospective tenements.
the definition of targets in the Narndee Project.
I’m sure shareholders are aware of the difficulty facing junior
explorers in the current market in raising sufficient capital to
pursue what your board considers to be prime targets for
It remains for me to thank shareholders, my fellow Directors, staff
and contractors for their assistance and support in what has
been another difficult year. I look forward to company changing
exploration. We are exploring all avenues to maintain an interest
exploration success and your continued support for Maximus for
in our tenements whilst attracting sufficient capital to explore
the coming year.
them.
The recent exploration drill program at Deloraine generated
significant information regarding the mineralisation present
in the Deloraine goldfield and provided confirmation of the
continuation of the ore zone 90 metres south of the previous
2010 drill intersections. However, we need to discover sufficient
gold resources in the Adelaide Hills Project to justify a mining
operation. We believe that with sufficient capital and access to
the prospective ground we can prove up sufficient resources to
commence mining.
BoB Kennedy
Chairman
2
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
MANAGING DIRECTOR’S REPORT
REVIEW OF OPERATIONS
The 2010/11 financial year began with continued focus on
exploration of the Adelaide Hills gold project, rationalisation
of the company’s asset base with the divestment of Ironstone
Well culminating with significant progress and success with
the review of the Narndee tenements in Western Australia. The
year ahead will see continued focus on progressing exploration
activities on the highly prospective Narndee tenements,
rationalisation of the Adelaide Hills tenement holding and
discovering additional resources and assessing options to
optimise the Sellheim operation.
As mentioned by the Chairman, raising capital has been difficult
in the past year, but is crucial for your company to enable us to
continue to explore our exceptional tenement package. However,
I am pleased to say that ongoing support from shareholders
allowed sufficient capital to be raised to continue exploration
WOOLANGA
COPPER GOLD
SELLHEIM
GOLD
Eromanga Basin
Eromanga Basin
URANIUM
Gawler
Craton
BILLA KALINA
URANIUM COPPER GOLD
ADELAIDE HILLS
GOLD
BIRD IN HAND
DELORAINE
GOLD
YANDAL
GOLD
Yilgarn
Craton
NARNDEE
ZINC COPPER GOLD
NICKEL PLATINUM
Figure 1 Location of activities.
activities at Deloraine and Eureka in the Adelaide Hills and
prospectivity and it is these targets that we intend progressing
complete the review of the database of information relating to
with on-ground geochemical, geophysical and drill testing during
the Narndee tenements in Western Australia, resulting in the
2011/2012.
identification of 18 significant exploration targets.
The Bird in Hand prospect has a combined Indicated and
Your company’s two core assets are the Narndee Tenement
Inferred Resource tonnage of 598,000 tonnes at 12.3 g/t
package in Western Australia, which is highly prospective for
totalling approximately 237,000 contained ounces of gold with
Copper/Gold, Base metals and PGM mineralisation and the
the potential for lateral and down dip extensions. In 2008,
Adelaide Hills Gold Project containing the Bird in Hand gold
Maximus undertook a scoping study to assess the potential for
deposit.
Narndee has progressed significantly since the extensive
airborne electromagnetic (EM) survey conducted over our
Narndee and Windimurra tenements in Western Australia in
2008. A ground EM survey was completed in October 2010 on
several of the high calibre targets identified following analysis of
the airborne EM survey. This information has now been analysed
in significant detail resulting in 18 high quality exploration targets
identified. These 18 targets have been ranked according to their
development of the Bird in Hand deposit. This study was once
again reviewed, given the increasing gold price over the past
year, taking into account a risk assessment of the production
profile. Although the development of Bird in Hand was financially
viable, it was again determined that greater shareholder value
could be achieved through the discovery of additional gold
resources. This resulted in our efforts focusing on evaluation of
Deloraine and Eureka prospects to increase contained gold in
the Adelaide Hills precinct.
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
3
A total of four holes were drilled at Deloraine during the
The plan is to operate the existing plant at or above 25 lcm
first quarter of 2011. These holes were targeting extensions
per hour and continue to improve the level of understanding of
along strike and south of the mineralisation identified in the
our resource estimates and operational performance. Capital
2010 drill program. Hole DelDDH09 intersected a best grade
for increasing plant throughput to 35-40 lcm per hour will
result of 12.01 g/t over 1 m. This intersection proves that the
depend on the ongoing, consistent and proven profitability of
mineralisation extends 80 metres south of the previous 2010
the project. The potential of hardrock gold resources at the
drill program where hole DelDDH02 intersected 3 m at 30.2 g/t
Sellheim project needs to be investigated, and this project
and confirms that the high grade nature of the Deloraine field is
should begin later in 2012. However, all options to improve and
continuous. Additional drilling is planned in 2012 along strike to
optimise the operation, including opportunities to Joint Venture
the south to test further lateral extensions to the mineralisation.
with neighbouring operators will be investigated in an effort to
Access permits will be completed in the December quarter 2011.
optimise the operation and maximise throughput.
A total of four holes were drilled into the Eureka system
The Billa Kalina project is located north west of Lake Torrens in
adjacent to the Bird in Hand deposit in the Adelaide Hills to
the Eromanga Basin in central South Australia and contains the
test extensions to the historic gold workings on the tenement.
Peeweena Dam gravity anomaly. The project is part of the Billa
No significant grade was intersected and no further drilling is
Kalina Joint Venture and is managed by our JV partner, ERO
planned on the tenement.
The third project in the Maximus stable, is the Sellheim gold
project, located about 140 kilometres southeast of Charters
Towers in north Queensland. Following an infill sampling
Mining Limited. Access to the tenements to conduct a follow-
up ground gravity survey on the Peeweena Dam anomaly has
been restricted due to the tenements being located within the
Woomera Prohibited Area (WPA).
program in 2010 and a review of results, Board approval was
In 2010, the Defence department reviewed its stance on access
given to commence production at Sellheim. As an interim stage,
to the WPA and is implementing an interim joint use plan to
the test plant was upgraded to achieve a regular throughput of
provide clarity to exploration companies conducting activities
approximately 25 lcm (loose cubic metres) per hour.
within the WPA. ERO is awaiting approval to access the WPA
During the 2010/11 financial year, 29,551 lcm (loose cubic
metres) were treated for the recovery of 468.3 ounces gold. This
equates to a recovered grade of 0.46 g/lcm which is in line with
to complete the ground gravity survey on the Peeweena Dam
anomaly. Success with the ground gravity survey will trigger a
follow-up drill program.
forecast grade. During the year production was sourced from
In summary, 2010/11 has been a year of significant contrasts
each of the three resource areas, namely Jacks Patch, Boulder
for your company. The Sellheim project began to perform well,
Run and Golden Triangle. Following the unseasonable wet
then an incredibly wet December quarter and March quarter has
weather during the December and March Quarters, stockpiling
seen throughput significantly reduce. Drilling at Deloraine in the
and blending of material was undertaken to assist with plant
Adelaide Hills was a success with 90 metre extensions to the
performance and reduce blockages and binding in the plant.
south of the mineralised zone confirmed. However, the grades
The design throughput rate was achieved during the September
quarter 2010, but was significantly hampered in December
and January due to unseasonable high rainfall and again in
February 2011 during and after the passing of Cyclone Yasi,
with the site evacuated as a precautionary safety measure.
contained within the mineralisation were not as significant as the
previously reported grades. The year culminated with significant
success at Narndee, with 18 very prospective targets identified
for further detailed investigation and drill testing. This will be our
clear focus in 2011/12.
Twenty-seven production days were lost during December/
Finally, I wish to thank my fellow board members for their
January due to high rainfall and a further seven days were lost
support and guidance since I commenced in the role, and the
as a result of the cyclone including restricted access to site with
Maximus employees and contractors for their significant efforts
major access roads cut and clean-up activities on site, including
throughout a challenging year and look forward to working
re-establishing mining areas. Increased moisture content of
together with continued success in the coming year.
plant feed has significantly affected plant throughput, due to the
in-situ clay content, particularly in the Jacks Patch area resulting
in the average throughput rate for the plant averaging 20 lcm per
hour. Feed was initially sourced from the Golden Triangle area as
this has a lower clay component, compared with Jacks Patch or
Boulder Run and therefore more amenable to processing during
the end of the wet season.
Kevin Malaxos
Managing Director
4
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
TENEMENT SCHEDULE
For the year ended 30 June 2011
Tenement
number
Tenement
name
Date granted/
applied for
Expiry
date
Area
(sq km)
Registered holder/
applicant
Related
agreement
WESTERN AUSTRALIA
Narndee Project
E57/728
E57/729
E58/237
E58/240
E58/273
E58/274
E58/294
E58/295
E58/309-I
E58/356
E58/373
E59/908
E59/1083
E59/1085
E59/1087
E59/1088-I
E59/1173
E59/1174
E59/1230
E59/1231
E59/1237
E59/1238
E59/1252
E59/1335
E59/1365
E59/1370-I
E59/1415
E59/1561-I
P58/1201
P58/1418
P58/1419
P58/1444
P58/1453
P59/1757
P59/1813
P59/1856
P59/1868
P59/1869
P59/1870
P59/1871
P59/1900
Watson Well
4/03/2010
3/03/2015
200.0
Maximus Resources Ltd
Corporate Group Agreement
Youanmi Downs
4/04/2008
3/04/2013
Naluthanna Hill
22/03/2002
21/03/2012
11/03/2002
10/03/2012
75.0
38.0
50.0
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Windimurra
Wagoo Hills
Paynesville
Wondinong
Windsor
Brailia South
Mount Ford
4/05/2007
3/05/2012
140.0
Maximus Resources Ltd
5/03/2003
4/03/2012
7/06/2006
6/06/2012
7/06/2006
6/06/2011
22/01/2007
21/01/2012
98.0
22.0
6.0
17.0
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
25/02/2010
24/02/2015
212.0
Maximus Resources Ltd
Kantie Murdana Hill
17/11/2009
16/11/2014
212.0
Maximus Resources Ltd
Narndee
8/09/2000
7/09/2011
Narndee West
14/11/2002
13/11/2011
Budnee
Bricky Bore
Dunns Tank
14/11/2002
13/11/2011
6/06/2007
5/06/2012
24/10/2006
23/10/2011
Narndee Homestead
23/11/2006
22/11/2011
Mulermurra Well
23/11/2006
22/11/2011
48.0
53.0
54.0
98.0
50.0
31.0
11.4
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Dromedary Hills
8/02/2007
7/02/2012
100.0
Maximus Resources Ltd
Corporate Group Agreement
8/02/2007
7/02/2012
100.0
Maximus Resources Ltd
Corporate Group Agreement
Boodanoo
Yalanga Tank
25/01/2007
24/01/2012
Carwoola Dam
22/01/2007
21/01/2012
Boodanoo Well
21/06/2007
20/06/2012
4 Corner Bore
17/04/2008
16/04/2013
Kurrajong Bore
4/03/2010
3/03/2015
4/03/2010
3/03/2015
Warramboo
Milgoo Well
Corner Well
23.0
11.0
48.0
50.0
6.0
3.0
Maximus Resources Ltd
Corporate Group Agreement
Maximus Resources Ltd
Corporate Group Agreement
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
3/03/2010
2/03/2015
27.0
Maximus Resources Ltd
Corporate Group Agreement
26/03/2010
25/03/2015
211.0
Maximus Resources Ltd
3/04/2007
2/04/2011**
4/03/2010
3/03/2014
4/03/2010
3/03/2014
4/03/2010
3/03/2014
5/03/2010
4/03/2014
Warnambar Soak
22/01/2007
21/01/2011**
Corner Bore 3
28/12/2007
27/12/2011
Joes Gap
9/07/2008
8/07/2012
8/03/2010
7/03/2014
8/03/2010
7/03/2014
8/03/2010
7/03/2014
8/03/2010
7/03/2014
8/03/2010
7/03/2014
0.2
1.7
0.2
0.2
0.8
0.4
1.0
0.7
1.2
0.2
0.5
0.7
0.2
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
** Live pending amalgamation into adjacent Exploration Licence
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
5
TENEMENT SCHEDULE
For the year ended 30 June 2011
Tenement
number
Tenement
name
Date granted/
applied for
Expiry
date
Area
(sq km)
Registered holder/
applicant
Related
agreement
SOUTH AUSTRALIA
Adelaide Hills Project
EL4303
EL 4641
EL 4712
EL 4091
EL 4131
EL 4227
EL 4464
MC 4113
EL4193
EL4194
EL4222
EL 3920
Lobethal
Echunga
Mt Pleasant
Mt Barker
Kapunda
Brukunga
Tarlee
Bird in Hand
Mount Monster
Williamstown
Tepko
Mount Rufus
Billa Kalina Project
EL4760
EL4757
EL 4463
ELA33/10
ELA78/10
Francis
Margaret
Billa Kalina
Bamboo Lagoon
Millers Creek
Eromanga Project
EL 3601
EL 3602
ELA65/11
Black Hill Dam
Mt Anthony
Calcutta
27/10/08
27/10/08
11/02/09
3/09/07
22/06/11
22/06/11
13/04/10
17/02/10
18/03/10
17/07/06
17/07/06
21/03/11
1/09/09
7/01/11
30/03/11
25/02/08
28/04/08
25/02/09
13/04/10
31/08/11
6/01/12
29/03/12
24/02/12
27/04/12
24/02/12
12/04/12
11/11/08
11/11/2009***
26/10/11
26/10/11
10/02/12
2/09/11
Flinders Agreement
Flinders Agreement
Flinders Agreement
Flinders Agreement
Flinders and Copper Range Agreements
Flinders Agreement
Flinders Agreement
333
253
690
162
641
176
105
2
378
20
93
51
Flinders Mines Ltd
Flinders Mines Ltd
Flinders Mines Ltd
Flinders Mines Ltd
Flinders Mines Ltd
Flinders Mines Ltd
Flinders Mines Ltd
Maximus Resources Ltd
Maximus Resources
Maximus Resources
Maximus Resources
Maximus Resources
21/06/12
21/06/12
346
477
Flinders Mines Ltd
Flinders Mines Ltd
Flinders and Billa Kalina Agreements
Flinders and Billa Kalina Agreements
12/04/12
1,023
Flinders Mines Ltd
Flinders and Billa Kalina Agreements
412
771
Flinders Mines Ltd
Flinders Mines Ltd
Flinders and Billa Kalina Agreements
Flinders and Billa Kalina Agreements
16/07/11
16/07/11
485
409
984
Maximus Resources Ltd
Eromanga Basin Agreement
Maximus Resources Ltd
Eromanga Basin Agreement
Maximus Resources Ltd
Eromanga Basin Agreement
QUEENSLAND
Sellheim Project
ML10269
ML10270
ML10328
EPM 13499
EPM 15778
EPM 17573
NORTHERN TERRITORY
Woolanga Project
Slim Chance
Next Chance
Sellheim
13/11/2003
30/11/13
13/11/2003
30/11/13
1/12/2006
30/11/26
0.13
0.50
3.27
Maximus Resources Limited
Sellheim Agreement
Maximus Resources Limited
Sellheim Agreement
Maximus Resources Limited
Sellheim Agreement
Mount Richardson
1/03/2004
29/02/12
11.00
Maximus Resources Limited
Sellheim Agreement
Sellheim River
19/12/2007
18/12/12
63.00
Maximus Resources Limited
Sellheim Agreement
Douglas Creek
21/04/2008
39.00
Maximus Resources Limited
Sellheim Agreement
SEL25055
SEL25056
Strangways
Mud Tank-Alcoota
13/06/06
13/06/06
12/06/12
1118
Flinders Mines Ltd
Flinders and NuPower Agreements
12/06/12
520
Flinders Mines Ltd
Flinders and NuPower Agreements
*** MC4113 is still current pending grant of Retention Licence application lodged on 10 November 2009
6
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
FINANCIAL REPORT
For the year ended 30 June 2011
MAXIMUS RESOURCES LIMITED
ABN 74 111 977 354
These financial statements are the consolidated financial statements of the consolidated entity consisting of Maximus
Resources Limited and its subsidiaries. The financial statements are presented in the Australian currency.
Maximus Resources Limited is a company limited by shares, is listed on the Australian Securities Exchange (ASX) under
the code “MXR” and is incorporated and domiciled in Australia.
The registered office and principal place of business is:
Maximus Resources Limited
Level 3, 100 Pirie Street
Adelaide South Australia 5000
Registered postal address is:
Maximus Resources Limited
PO Box 3126
Adelaide SA 5067
A description of the nature of the Company’s operations and its principal activities is included in the directors’ report on
pages 8 to 9, which is not part of these financial statements.
The financial statements were authorised for issue by the directors on 30 September 2011. The directors have the
power to amend and reissue the financial statements.
Through the use of the internet, we have ensured that our corporate reporting is timely and complete. All press releases,
financial reports and other information are available on our website: www.maximusresources.com.
Table of contents
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
CORPORATE GOVERNANCE STATEMENT
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
CONSOLIDATED STATEMENTS OF CASH FLOWS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
ASX ADDITIONAL INFORMATION
8
15
16
20
20
21
22
24
25
52
53
56
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
7
DIRECTORS’ REPORT
Your directors present their report on Maximus Resources Limited
(referred to hereafter as the Company) at the end of, or during, the
year ended 30 June 2011.
Directors
The following persons were directors of the Company during the
whole of the financial year and up to the date of this report:
Robert Michael Kennedy (Non-executive chairman)
Kevin John Malaxos (Managing Director, since 13 December 2010)
Leigh Carol McClusky (Non-executive director, since
1 September 2010)
Ewan John Vickery (Non-executive director)
Nicholas John Smart (Alternate director for E J Vickery)
Simon Andrew Booth (Managing Director, resigned 31 August 2010)
PrinciPal activities
During the year the principal activities of the Company consisted of
natural resources exploration and development.
DiviDenDs
There were no dividends declared or paid during the year (2010: Nil).
oPerating results anD financial Position
The net result of operations of the Company for the financial year
was a loss of $3,829,449 (2010: $6,914,654).
The net assets of the Company have decreased by $2,116,693
during the financial year from $19,196,627 at 30 June 2010 to
$17,079,934 at 30 June 2011.
Review of operations
The 2010/11 financial year begun with continued focus on
exploration of the Adelaide Hills gold project, rationalisation of the
asset base and culminated with significant progress and success
with the review of the Narndee tenements in Western Australia.
The financial markets generally were extremely cautious as world
markets, and particularly the Australian market recovered from the
Global Financial Crisis. However, ongoing support from shareholders
allowed sufficient capital to be raised to continue exploration
activities and complete the diamond drilling at Deloraine and Eureka
in the Adelaide Hills and complete the review of the database of
information relating to the Narndee tenements in Western Australia,
resulting in the identification of significant exploration targets to
follow up on. A Share Purchase Plan (SPP) and limited private
placement were undertaken which, in total raised $1.357 million.
Extremely encouraging drill results were reported from the Deloraine
and Deloraine Queen drilling campaign in the Adelaide Hills,
commenced in July 2010 with recorded intervals of 3 metres @
30.3 g/t, 1 m @ 12 g/t and 1 m @ 2 g/t. The drilling also confirmed
that the host rock mineralisation at Deloraine continues, at
considerable thickness to the south of the known historic workings.
Preparation of applications for access for further drilling has
commenced.
The change of Managing Director resulted in a hiatus of the
focused tenement reviews in the last quarter of 2010, but this task
was quickly resurrected in January 2011. The ground EM survey
proceeded as planned in November 2010 focusing on highly
prospective targets in the Narndee tenements identified from analysis
of the previous aerial TEM survey.
In October 2010, the Company announced the sale of its 90%
interest in the Ironstone Well tenements in Western Australia. This
8
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
decision was based on the company’s clear focus to remain a
gold and base metals exploration and production company. The
transaction resulted in initial cash payments, further staged cash
payments and a production royalty payment. Maximus retains a 20%
interest.
Maximus’s core projects remain the: Adelaide Hills gold project
in South Australia comprising principally the Bird in Hand gold
deposit and Deloraine gold prospect; Narndee base metals and gold
tenements in Western Australia; Sellheim alluvial gold project in north
Queensland.
The current direct total tenement holding is currently 4,705.9 square
kilometres (5,187.9 sq km under control) in three states (excluding
Woolanga in the NT managed by Nupower Resources Limited).
The intent remains to rationalise the tenement package to a more
manageable and focused holding. To achieve this, a full review
of all available data relating to the Narndee tenements has been
completed. A similar exercise will be undertaken on the Adelaide Hills
tenements commencing in 2011.
Maximus completed two capital raisings during the year. The first,
via a private placement in November 2010, raised approximately
$600,000 and funds were directed to the drill evaluation of the
Deloraine gold prospect in South Australia and completion of the
interrogation of the Narndee tenements data. The second capital
raise was via a Share Purchase Plan in May 2011 which raised
$707,500. These funds were used to finalise the Deloraine drill
and evaluation program, finalise the Narndee tenement review and
tenement maintenance charges.
Maximus continues to focus on its two core assets; being the
Adelaide Hills gold tenements and the Narndee Base metals and
gold tenements in WA, whilst investigating new tenements or Joint
Venture opportunities as they arise.
The completion of the review of the Narndee tenements, including
the identification of 18 high quality exploration targets; 14 individual
targets and 4 broad exploration zones has provided a renewed vigour
and clear focus on Narndee. Subsequent to the detailed review of the
Narndee tenements, the 18 high quality targets identified have been
reviewed and ranked for potential for success. Maximus now has
clearly defined targets and timing for progressing these tenements.
Exploration programs are currently being prepared including ground
disturbance applications where required.
The focus for the Adelaide hills tenements includes a thorough
review of all available information leading to a rationalisation
of tenement holding where required. Our clear aim remains on
identifying additional gold resources to add to the significant Bird in
Hand resource totalling 237,000 ounces. Identification of additional
resources at Deloraine, Eureka, Cromer or other locations within the
significant Adelaide hills tenement package will create a significant
gold precinct that may justify a central processing facility.
The Sellheim alluvial gold project in north Queensland showed
improvement throughout 2010, then suffered from consistent rain and
cyclones that impacted the entire state. Plant throughput increased
to 24 lcm per hour with good recovery of gold during the first 4–5
months of 2010/11 then persistent heavy rain caused throughput
to reduce to 21 lcm per hour. Production has been significantly
hampered by extended periods of high rainfall, reducing throughput
considerably or preventing access to the site all together.
Further improvement in throughput of the Sellheim plant is planned
to ensure a return to positive cashflow from the operation to fund an
infill sampling program to facilitate better planning and scheduling of
the deposit and undertake hard rock exploration on the leases.
DIRECTORS’ REPORT
Maximus will be clearly focused on the follow up assessment and
evaluation of the high quality targets identified on our Narndee
tenements. On ground soil and gravity analysis is planned for the
near future and drilling of high quality targets is currently being
planned. Concurrent to the Narndee progress, the review of the
Adelaide Hills data shall continue “behind the scenes” to ensure
that we target the most prospective tenements and rationalise our
tenement holding.
significant changes in the state of affairs
During the year Maximus Resources Limited’s percentage holding of
the Issued Capital of ERO Mining Limited reduced to 12.81%. This
dilution occurred due to the issue of shares in ERO Mining Limited.
This, along with changes to the members of the Boards of Directors
of Maximus Resources Limited and ERO Mining Limited, has resulted
in a loss of control of ERO Mining Limited as a subsidiary. Therefore,
ERO Mining Limited has been consolidated with Maximus Resources
Limited for the purposes of these financial statements up until the
date when control was lost. The accounting treatment of this loss of
control is detailed in notes 1(b) and 8.
Matters subsequent to the enD of the
financial year
Subsequent to balance date the Company completed a
non-renounceable rights issue that closed on 16 August 2011. As a
result of the capital issue 43,243,217 ordinary shares were allotted
raising $432,432.
Apart from the above, there has not arisen in the interval between
the end of the financial year and the date of this report any item,
transaction or event of material and unusual nature likely, in the
opinion of the directors, to affect significantly the operations of the
Company, the results of those operations, or the state of affairs of the
Company in future financial years.
future business DeveloPMents, ProsPects
anD business strategies
2011/12 will see Maximus focus on the high quality targets identified
on the Narndee Tenements in Western Australia. Following the
interrogation and evaluation of the airborne electromagnetic (EM)
survey conducted over our Narndee and Windimurra tenements in
Western Australia in 2008, a ground EM surveys was completed on
several of the high calibre targets identified. The ground EM survey
was conducted in October 2010. This information has now been
analysed in significant detail resulting in 18 high quality exploration
targets identified. These 18 targets have been ranked according to
their prospectivity and it is these targets that we intend progressing
towards drill testing during 2011/2012.
The Adelaide Hills Gold Project shall remain an integral part of the
Maximus suite of tenements. The Bird in Hand project forms the core
of this suite of tenements with 237,000 ounces already delineated
at an impressive grade of just over 12 g/t gold. A thorough analysis
and review of all available historic and more recent data shall be
undertaken to identify the most prospective targets to conduct follow
up drilling. The aim is to add in the order of 150–200,000 ounces
to the existing resource base from historical working areas such
as Deloraine, Deloraine Queen, Eureka and potentially additional
resources at Bird in Hand and then pursue production options.
At our Sellheim gold project in north Queensland, efforts continue
to maintain a consistent economic operation, but these have been
hampered by unseasonal high rainfall during the second half of the
year. Reconciliation and grade recovery through the processing
plant has been good as the crew became proficient in managing ore
feed variations and grade fluctuations. The plan is to operate the
existing plant at or above 25 lcm per hour and continue to improve
the level of understanding of our resource estimates and operational
performance.
environMental regulation
The Company’s operations are subject to significant environmental
regulation under both Commonwealth and relevant State legislation
in relation to discharge of hazardous waste and materials arising from
any exploration or mining activities and development conducted by
the Company on any of its tenements. The Company believes it is
not in breach of any environmental obligation.
Information on directors
robert Michael Kennedy
ASAIT, Grad Dip (Systems Analysis), FCA, ACIS, Life Member AIM, FAICD
Independent Non-executive Chairman
Experience and expertise
Mr Kennedy is a chartered accountant and a consultant to Kennedy
& Co, Chartered Accountants, a firm he founded. He joined Maximus
in December 2004 as a non-executive director and has been the
Chairman of Maximus since that date. Mr Kennedy brings to the
Board his expertise in finance and management consultancy and
extensive experience as chairman and non-executive director of a
range of listed public companies.
Mr Kennedy leads the development of strategies for the development
and future growth of Maximus. He has participated in the Diggers
& Dealers Mining Industry conferences for the last 3 years. He also
conducts the review of the Board including the Managing Director in
his executive role.
Apart from his attendance at Board and Committee meetings
Mr Kennedy leads the Board’s external engagement of the company
meeting with industry participants Government and the Media. He
is a regular attendee of Audit Committee functions of the major
accounting firms. During the year he attended the Masterclass of
the Australian Institute of Directors with members of top ASX200
company boards. He has been appointed the Chairman of the
University of Adelaide’s Institute of Minerals and Energy Resources,
is a mentor in the AICD’s diversity program and is a regular presenter
on topics relating to directors with the AICD and the CSA. In the area
of Community Engagement he regularly attends functions held by
institutions.
He was recently awarded Entrepreneur of the Year in the Ernst &
Young Central Region awards in the listed category.
In assessing Mr Kennedy’s independence, the Board (excluding
Mr Kennedy), took into account his stamina, his ability to think
independently across a wide range of issues and his relentless
availability. Whilst Mr Kennedy has been appointed to a number
of Resource Industry Boards, due to his extensive knowledge of
the industry, the time required across these companies in no way
impedes on his dedication to his role as Chairman of Maximus.
In taking all of these issues into account, the Board (excluding Mr
Kennedy), were unanimous in declaring Mr Kennedy as independent.
Other current directorships
Mr Kennedy is also a director of ASX listed companies Beach Energy
Limited (director since 1991, chairman since 1995), ERO Mining
Limited (since 2006), Flinders Mines Limited (since 2001), Marmota
Energy Limited (since 2007), Monax Mining Limited (since 2004),
Ramelius Resources Limited (since 2004) and Somerton Energy
Limited (since 2010).
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
9
DIRECTORS’ REPORT
Special responsibilities
Chairman of the Board.
Member of the Audit Committee.
Interests in shares and options
15,764,706 ordinary shares in Maximus Resources Limited.
Kevin John Malaxos
BSc Mining Engineering
Managing Director
Experience and expertise
A director since 13 December 2010, Mr Malaxos has 25 years
experience in the resources sector in senior management and
executive roles across a suite of commodities including gold,
nickel, iron ore, silver, lead, zinc and chromium. He has managed
surface and underground mining operations and brings a wealth of
experience in project evaluation and development, project approval
and Government liaison.
Mr Malaxos’ previous roles include CEO for Mt Gibson Mining (MGX)
and COO of listed iron ore developer Centrex Metals Limited (CXM),
where he was responsible for project development, project approvals
and community and government consultation.
Other current directorships
Mr Malaxos is a non-executive director of ASX listed company
Flinders Mines Limited (since December 2010).
Special responsibilities
Managing Director.
Interests in shares, options and rights
5,000,000 ordinary shares in Maximus Resources Limited.
3,000,000 rights to acquire ordinary shares in Maximus Resources
Limited.
leigh carol Mcclusky
Non-executive Director
Experience and expertise
Appointed as a director on 1 September 2010, Ms McClusky is an
experienced and respected media personality with a media career
spanning almost 30 years in newspapers, radio and television across
Australia.
Most recently Ms McClusky hosted a top rating current affairs
program in South Australia for 13 years, until she left in 2008 to
develop her boutique Public Relations consultancy, McClusky & Co
Public Relations and Communications, which now services a wide
variety of clients and is continuing to expand into a diverse range of
portfolios.
Ms McClusky has amassed a huge range of experience across
Sydney, Adelaide and Melbourne with Australian Associated Press,
The Sun newspaper, the Weekly Times, ABC Television, and the
Nine Network, presenting and hosting television and breakfast radio
programs.
Other current directorships
Ms McClusky is currently a Board member of the Women’s and
Children’s Hospital Foundation.
Interests in shares and options
433,334 ordinary shares in Maximus Resources Limited.
ewan John vickery
LLB
Non-executive Director
Experience and expertise
A director since incorporation 17 December 2004, Mr Vickery is
a corporate and business lawyer with over 30 years experience
in private practice in Adelaide. He has acted as an advisor to
companies on a variety of corporate and business issues including
capital and corporate restructuring, native title and land access
issues, and as lead native title advisor and negotiator for numerous
mining and petroleum companies.
He is a member of the Exploration Committee of the South Australian
Chamber of Mines and Energy Inc, the International Bar Association
Energy and Resources Law Section, the Australian Institute of
Company Directors and is a past national president of Australian
Mining and Petroleum Law Association (AMPLA Limited).
Other current directorships
Mr Vickery is a non-executive director of Flinders Mines Limited
(since 2001).
Former directorships in last three years
Mr Vickery was a non-executive director of ASX listed company ERO
Mining Limited from 2006 to 2011.
Special responsibilities
Chairman of the Audit Committee.
Interests in shares and options
3,225,867 ordinary shares in Maximus Resources Limited.
nicholas John smart
Alternate director for E J Vickery
Experience and expertise
An alternate director since 9 May 2005, Mr Smart has held positions
as a general manager in Australia and internationally. Previously a
full Associate Member of the Sydney Futures Exchange and adviser
with a national share brokering firm, with over 25 years experience
in the corporate arena including capital raising for private and
listed companies. Other experience includes startup companies in
technology development including commercialisation of the Synroc
process for safe storage of high level nuclear waste, controlled
temperature and atmosphere transport systems and the beneficiation
of low rank coals. He is an alternate director for Maximus Resources
Limited (since May 2005) and an alternate director for Flinders Mines
Ltd (since 2009). Mr Smart currently consults to various public and
private companies.
coMPany secretary
rajita shamani alwis
BCom (Acc & Fin), CA
Experience and expertise
Ms Alwis has been the Company Secretary since 30 June 2011 to
the date of this report. Ms Alwis has more than 10 years’ experience
in public practice and commerce and is a Company Secretary of
numerous listed and proprietary companies. Ms Alwis also provides
a Chief Financial Officer role to various public and private companies.
Ms Alwis is a Chartered Accountant and holds a degree of Bachelor
of Commerce (Accounting and Finance).
10
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
insurance PreMiuMs
Since the end of the previous year the Company has paid insurance
premiums of $18,069 to insure the directors and officers in respect
of directors’ and officers’ liability and legal expenses insurance
contracts.
ProceeDings on behalf of coMPany
No person has applied to the Court under section 237 of the
Corporations Act 2001 to bring proceedings on behalf of the
Company or intervene in any proceedings to which the Company
is a party for the purpose of taking responsibility on behalf of the
Company for all or any part of those proceedings.
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.
non-auDit services
The Board of Directors, in accordance with advice from the Audit
Committee, is satisfied that the provision of non-audit services during
the year is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001. The directors are
satisfied that the services disclosed below did not compromise the
external auditor’s independence for the following reasons:
y all non-audit services are reviewed and approved by the Audit
Committee prior to commencement to ensure they do not
adversely affect the integrity and objectivity of the auditor; and
y
the nature of the services provided do not compromise the
general principles relating to auditor independence in accordance
with APES 110: Code of Ethics for Professional Accountants set
by the Accounting Professional and Ethical Standards Board.
There were no fees for non-audit services paid or payable to the
external auditors, its related practices or non-related audit firms
during the year ended 30 June 2011.
DIRECTORS’ REPORT
David Wayne godfrey
BCom (Fin), GradDipAcc, ASA, FFin, CFTP (Snr), MAICD
Experience and expertise
Mr Godfrey was the Company Secretary and Chief Financial Officer
from 11 November 2008 until his resignation on 30 June 2011.
Mr Godfrey has more than 25 years experience in the resources and
finance industries and is a member of Australian Society of CPAs,
Finance & Treasury Association, Chartered Secretaries Australia,
Australian Institute of Company Directors and is a Fellow of the
Financial Services Institute. He has previously held senior finance
roles in major corporations and for the Treasury of New Zealand and
has served as secretary of numerous publicly listed and subsidiary
companies for the Normandy Mining Limited Group, Newmont
Australia Limited Group and Uranium Exploration Australia Limited.
Interests in shares and options
53,334 options in Maximus Resources Limited.
Meetings of Directors
The numbers of meetings of the Company’s board of directors and of
each board committee held during the year ended 30 June 2011, and
the number of meetings attended by each director were:
Full meetings
of directors
Audit committee
meetings
A
15
7
12
15
-
2
B
15
7
12
15
-
2
A
2
-
-
2
-
-
B
2
-
-
2
-
-
Robert Michael Kennedy
Kevin John Malaxos
Leigh Carol McClusky
Ewan John Vickery
Nicholas John Smart
Simon Andrew Booth
A = Number of meetings attended
B = Number of meetings held during the time the director held office or was a
member of the committee during the year
inDeMnification anD insurance of officers
The Company is required to indemnify the directors and other officers
of the Company against any liabilities incurred by the directors and
officers that may arise from their position as directors and officers
of the Company. No costs were incurred during the year pursuant to
this indemnity.
The Company has entered into deeds of indemnity with each director
whereby, to the extent permitted by the Corporations Act 2001, the
Company agreed to indemnify each director against all loss and
liability incurred as an officer of the Company, including all liability in
defending any relevant proceedings.
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
11
DIRECTORS’ REPORT
Remuneration report – audited
The remuneration report is set out under the following main headings:
A Principles used to determine the nature and amount of
remuneration
B Details of remuneration
C Service agreements
D Share-based compensation
The information provided in this remuneration report has been
audited as required by section 308(3C) of the Corporations Act 2001.
a Principles used to determine the nature and
amount of remuneration
The Company’s policy for determining the nature and amounts of
emoluments of board members and senior executive officers of the
Company is as follows:
The Company’s Constitution specifies that the total amount of
remuneration of non-executive directors shall be fixed from time
to time by a general meeting. The current maximum aggregate
remuneration of non-executive directors has been set at $300,000
per annum. Directors may apportion any amount up to this
maximum amount amongst the non-executive directors as they
determine. Directors are also entitled to be paid reasonable travelling,
accommodation and other expenses incurred in performing their
duties as directors. The remuneration of the Managing Director is
determined by the non-executive directors on the Board as part of
the terms and conditions of his employment which are subject to
review from time to time. The remuneration of other executive officers
and employees is determined by the Managing Director subject to
the approval of the Board.
Non-executive director remuneration is by way of fees and statutory
superannuation contributions. Non-executive directors do not
participate in schemes designed for remuneration of executives nor
do they receive options or bonus payments and are not provided
with retirement benefits other than salary sacrifice and statutory
superannuation.
The Company’s remuneration structure is based on a number of
factors including the particular experience and performance of the
individual in meeting key objectives of the Company. The Board is
responsible for assessing relevant employment market conditions
and achieving the overall, long term objective of maximising
shareholder benefits, through the retention of high quality personnel.
The Company does not presently emphasise payment for results
through the provision of cash bonus schemes or other incentive
payments based on key performance indicators of the Company
given the nature of the Company’s business as a recently listed
mineral exploration entity and the current status of its activities.
However the Board may approve the payment of cash bonuses from
time to time in order to reward individual executive performance in
achieving key objectives as considered appropriate by the Board.
The Company also has an Employee Incentive Rights Plan approved
by shareholders that enables the Board to offer eligible employees
rights to acquire ordinary fully paid shares in the Company. Under
the terms of the Plan, rights to acquire ordinary fully paid shares
at no cost may be offered to the Company’s eligible employees
as determined by the Board in accordance with the terms and
conditions of the Plan. The objective of the Plan is to align the
interests of employees and shareholders by providing employees
of the Company with the opportunity to participate in the equity of
the Company as a long term incentive to achieve greater success
and profitability for the Company and to maximise the long term
performance of the Company.
The employment conditions of the Managing Director were
formalised in a contract of employment. The base salary as set out
in the employment contract is reviewed annually. The Managing
Director’s contract may be terminated at any time by mutual
agreement. The Company may terminate these contracts without
notice in serious instances of misconduct.
b Details of remuneration
This report details the nature and amount of remuneration for each
key management person of the Company and for the executives
receiving the highest remuneration.
The names and positions held by directors and key management
personnel of the Company during the financial year are:
Mr R M Kennedy Chairman, non-executive
Mr K J Malaxos Managing Director (since 13 December 2010)
Ms L C McClusky Director, non-executive (since 1 September 2010)
Mr E J Vickery
Director, non-executive
Mr N J Smart
Alternate director for E J Vickery, non-executive
Mr S A Booth
Former Managing Director
(resigned 31 August 2010)
Mr D W Godfrey Chief Financial Officer & Company Secretary
(resigned 30 June 2011)
12
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
DIRECTORS’ REPORT
Key management personnel and other executives of the Company
2011
Short term
employee benefits
Short term
employee benefits
Post employment
benefits
Share-based
payments
Share-based
payments
Directors fees
Salary
Superannuation
Options
Rights
Name
Robert Michael Kennedy
Kevin John Malaxos^
Leigh Carol McClusky*
Ewan John Vickery
Nicholas John Smart (Alternate)
Simon Andrew Booth
David Wayne Godfrey**
$
82,661
-
45,417
50,000
-
-
-
Total key management personnel compensation
178,078
$
139,858
-
-
-
38,227
206,880
384,965
$
7,439
12,587
-
4,500
-
3,440
18,619
46,585
$
-
-
-
-
-
-
-
$
-
34,500
-
-
-
-
-
34,500
Total
$
90,100
186,945
45,417
54,500
-
41,667
225,499
644,128
* Director fees for Ms McClusky were paid to a related entity of the director.
** Mr Godfrey is employed by FME Exploration Services Pty Ltd. His services are provided as part of the services agreement in place between FME Exploration Services
Pty Ltd and Maximus Resources Ltd. The management fees paid by Maximus Resources Limited are outlined in Note 26. This agreement was formalised 3 August
2006.
^ During the year selected executives were granted incentive rights which have a three year vesting period and performance conditions. In accordance with the
requirements of the Australian Accounting Standards, remuneration includes a proportion of the notional value of equity compensation granted or outstanding during
the year. The fair value of equity instruments which do not vest during the reporting period is determined as at the grant date and is progressively allocated over the
vesting period. The amount included as remuneration is not related to or indicative of the benefit (if any) that individuals may ultimately realise should the rights vest.
The fair value of the rights as at the date of their grant has been determined in accordance with the Employee Incentive Rights Plan as set out in note 33.
The directors conclude that there are no executives requiring disclosure other than those listed.
Key management personnel and other executives of the Company
2010
Short term
employee benefits
Short term
employee benefits
Post employment
benefits
Share-based
payments
Share-based
payments
Directors fees
Salary
Superannuation
Options
Rights
Name
Robert Michael Kennedy
Ewan John Vickery*
Nicholas John Smart (Alternate)
Simon Andrew Booth
Kevin John Anson Wills
Roseanne Celeste Healy (Alternate)
David Wayne Godfrey**
Total key management personnel compensation
$
99,358
60,000
5,000
-
-
5,000
-
169,358
$
-
-
-
$
8,942
2,250
-
$
-
-
-
222,300
20,007
16,330
-
-
178,899
401,199
-
-
16,101
47,300
-
-
-
16,330
$
-
-
-
-
-
-
-
-
Total
$
108,300
62,250
5,000
258,637
-
5,000
195,000
634,187
* For part of the year, director fees for Mr Vickery were paid to a related entity of the director.
** Mr Godfrey is employed by FME Exploration Services Pty Ltd. His services are provided as part of the services agreement in place between FME Exploration
Services Pty Ltd and Maximus Resources Ltd. The management fees paid by Maximus Resources Limited are outlined in Note 26. This agreement was formalised
3 August 2006.
The directors conclude that there are no executives requiring disclosure other than those listed.
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
13
DIRECTORS’ REPORT
The relative proportions of remuneration that are fixed and those that are at risk are as follows:
Name
Fixed remuneration
Fixed remuneration
At risk – STI*
At risk –STI*
At risk – LTI**
At risk – LTI**
Kevin John Malaxos
Simon Andrew Booth
David Wayne Godfrey
2011
%
82
100
100
2010
%
-
94
100
2011
%
-
-
-
2010
%
-
-
-
2011
2010
%
18
-
-
%
-
6
-
* Short term incentives (STI) include cash incentive payments (bonuses) linked to company and/or individual performance.
** Long term incentives (LTI) include equity grants issued via the Company’s Employee Share Option and Incentive Rights Plans. These plans are designed to provide
long term incentives for executives to deliver long term shareholder returns.
Directors’ interests in shares and options
Directors’ relevant interests in shares and options of the Company
are disclosed in note 22 of the financial statements.
Shares under option
Unissued ordinary shares of Maximus Resources Limited under
option at the date of this report are as follows:
Date options granted Expiry date
Exercise
price
Number under
option
10 April 2007
20 March 2012
2 July 2007
2 July 2012
17 March 2008
17 March 2013
4 February 2009
3 February 2014
$0.14
$0.50
$0.18
$0.04
380,000
3,000,000
605,000
1,645,000
5,630,000
Auditors 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 12.
This report is signed and dated in Adelaide on this 30th day of
September 2011 and made in accordance with a resolution of the
directors.
RoBeRt M Kennedy
Director
c service agreements
During the financial year, Mr Simon Booth resigned as Managing
Director and was replaced by Mr Kevin Malaxos. The Board
negotiated a contract with Mr Malaxos with no fixed term at a salary
of $275,000 per annum inclusive of superannuation guarantee
contributions to be reviewed annually and with termination on three
month’s notice. Mr Malaxos was also granted a sign on bonus of
the issue of 1,500,000 rights to acquire ordinary shares at no cost,
expiring 14 December 2011 and 1,500,000 rights to acquire ordinary
shares at no cost, expiring 14 December 2012. Messrs Kennedy and
Vickery and Ms McClusky are engaged as directors without formal
employment agreements.
D share-based compensation
Incentive rights
The Company has an Employee Incentive Rights Plan approved by
shareholders that enables the Board to offer eligible employees rights
to acquire ordinary fully paid shares in the Company. Under the terms
of the Plan, rights to acquire ordinary fully paid shares at no cost may
be offered to the Company’s eligible employees as determined by
the Board in accordance with the terms and conditions of the Plan.
During the year 3,000,000 rights were issued to employees at a value
of $0.023 each. This accounting value does not represent actual cash
payments to the employees, but is a recognition of the value of the
rights at grant date, over the vesting period.
The rights were issued in two tranches and have vesting periods of
ten months and 22 months respectively. The rights are based on a
personal criteria, being the continuity of service for the full vesting
periods. There rights have no performance criteria. No employee
incentive rights were issued to the non-executive directors during the
year.
Options granted as remuneration
Apart from the rights granted under the Company’s Employee
Incentive Rights Plan as detailed above, no other rights or options
were granted to directors or key management personnel of the
Company during the financial year.
Shares issued on exercise of remuneration options
No shares were issued to directors as a result of the exercise of
remuneration options during the financial year.
14
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
AUDITOR’S INDEPENDENCE DECLARATION
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
15
CORPORATE GOVERNANCE STATEMENT
The Board of Directors of Maximus Resources Limited is committed to
improving and achieving good standards of corporate governance and
has established corporate government policies and procedures, where
appropriate and practicable, consistent with the revised Corporate
Governance Principles and Recommendations – 2nd Edition issued by
the ASX Corporate Governance Council (“ASX Recommendations”).
The following statement sets out a summary of the Company’s
corporate governance practices that were in place during the
financial year and how those practices relate to the revised ASX
Recommendations. The Company elected to undergo an early
transition to the revised ASX Recommendations and as such has
reported against these for the financial years ended 30 June 2008
through to 30 June 2011.
These recommendations are not intended to be prescriptions to be
followed by all ASX listed companies, but rather guidelines designed
to produce an effective, quality and integrity outcome. The Corporate
Governance Council has recognised that a “one size fits all”
approach to Corporate Governance is not required. Instead, it states
aspirations of good practice for optimising corporate performance
and accountability in the interests of shareholders and the broader
economy. A company may consider that a recommendation is
inappropriate to its particular circumstances and has flexibility not to
adopt it and explain why.
In ensuring a good standard of ethical behaviour and accountability,
the Board has included in its corporate governance policies those
matters contained in the ASX Recommendations where applicable.
However, the Board also recognises that full adoption of the ASX
Recommendations may not be practical nor provide the optimal result
given the particular circumstances and structure of the Company.
The Board is, nevertheless, committed to ensuring that appropriate
Corporate Governance practices are in place for the proper direction
and management of the Company. This statement outlines the main
Corporate Governance practices of the Company disclosed under
the ASX Recommendations, including those that comply with good
practice and which unless otherwise disclosed, were in place during
the whole of the financial year ended 30 June 2011.
Principle 1: Lay solid foundations for management
and oversight
recoMMenDation 1.1
Recommendation followed
The Board is governed by the Corporations Act 2001, ASX Listing
Rules and a formal constitution adopted by the company in 2006.
The role of the Board is to provide leadership and direction to
management and to agree with management the aims, strategies and
policies of the Company for the protection and enhancement of long
term shareholder value.
The Board takes responsibility for the overall Corporate Governance
of the Company including its strategic direction, management
goal setting and monitoring, internal control, risk management and
financial reporting.
The Board has an established framework for the management of
the entity including a system of internal control, a business risk
management process and appropriate ethical standards. In fulfilling
its responsibilities, the Board is supported by an Audit Committee to
deal with internal control, ethical standards and financial reporting.
The Board appoints a Managing Director responsible for the day to
day management of the Company including management of financial,
physical and human resources, development and implementation of
risk management, internal control and regulatory compliance policies
16
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
and procedures, recommending strategic direction and planning
for the operations of the business and the provision of relevant
information to the Board.
The board has not adopted a formal statement of matters reserved
to them or a formal board charter that details their functions and
responsibilities nor a formal statement of the areas of authority
delegated to senior executives.
recoMMenDation 1.2
Recommendation followed
The Board takes responsibility for monitoring the composition of
the Board and reviewing the performance and compensation of
the Company’s executive directors and senior management with
the overall objective of motivating and appropriately rewarding
performance.
The Board considers the Company’s present circumstances and
goals ensure maximum shareholder benefits from the attraction
and retention of a high quality Board and senior management
team. The Board on a regular basis reviews the performance of
and remuneration for executive director’s and senior management
including any equity participation by such executive directors and
senior management. The Board evaluates the performance of the
Managing Director and Company Secretary on a regular basis and
encourages continuing professional development.
recoMMenDation 1.3
Recommendation followed
During the period the Board undertook an informal performance
evaluation of the Managing Director, Company Secretary and senior
management. The evaluation was in accordance with the Company’s
process for evaluation of senior executives.
Principle 2: Structure the board to add value
recoMMenDation 2.1
Recommendation followed
The composition of the Board consists of four directors, three of
whom, including the chairman, are independent directors.
The Audit Committee currently consists of two independent
directors, Messrs Vickery (Chairman) and Kennedy.
recoMMenDation 2.2
Recommendation followed
The Chairman, Mr Kennedy is an independent director.
recoMMenDation 2.3
Recommendation followed
The role of Chairman of the Board is separate from that of the
Managing Director, who is responsible for the day to day management
of the Company and is in compliance with the ASX Recommendation
that these roles not be exercised by the same individual.
recoMMenDation 2.4
Recommendation not followed
The Board believes that given the size of the Company and the stage
of the entity’s life as a publicly listed junior exploration company
that the cost of establishing a nomination committee in line with
ASX Recommendation 2.4 and establishing a formal charter as
recommended by ASX Recommendation 2.4 cannot be justified
by the perceived benefits of doing so. As such, the whole Board
currently carries out this function. It is anticipated that a formal
charter will be developed in the future, as the Company develops
further.
CORPORATE GOVERNANCE STATEMENT
recoMMenDation 2.5
Recommendation not followed
The Board recognises that as a result of the Company’s size and
the stage of the entity’s life as a publicly listed junior exploration
company, the assessment of the Board’s overall performance and
its own succession plan is conducted on an ad hoc basis. Whilst
this is at variance with the ASX Recommendation 2.5, the directors
consider that at the date of this report an appropriate and adequate
process for the evaluation of directors is in place. A more formal
process of Board assessment will be considered in the future as the
Company develops.
recoMMenDation 2.6
Recommendation followed
The names of the directors of the Company and terms in office at the
date of this Statement together with their skills, experience, expertise
and financial interests in the Company are set out in the Directors’
Report section of this report.
The non-executive directors are considered to be independent.
The Company has no relationships with any of the independent
directors which the Company believes would compromise the
independence of these directors.
All directors are entitled to take such legal advice as they require
at any time and from time to time on any matter concerning or in
relation to their rights, duties and obligations as directors in relation
to the affairs of the Company at the expense of the Company.
The Company’s constitution specifies the number of directors must
be at least three and at most ten. The Board may at any time appoint
a director to fill a casual vacancy. Directors appointed by the Board
are subject to election by shareholders at the following annual
general meeting and thereafter directors (other than the Managing
Director) are subject to re election at least every three years. The
tenure for executive directors is linked to their holding of executive
office.
As the board does not have a nominations committee, the functions
of this committee in its absence are deal with by the Board as a
whole.
An assessment of the Board’s overall performance and its own
succession plan is conducted on an ad hoc basis and was done so
during the year by the Chairman.
Principle 3: Promote ethical and responsible
decision making
recoMMenDation 3.1
Recommendation not followed
While the Company does not have a formal code of conduct, as the
Board believes that given the size of the Company and the stage of
the entity’s life as a publicly listed junior exploration company that the
cost of establishing and managing a formal code of conduct cannot
be justified, the Company requires all its directors and employees
to abide by good standards of behaviour, business ethics and in
accordance with the law.
In discharging their duties, directors of the Company are required to:
y act in good faith and in the best interests of the Company;
y exercise care and diligence that a reasonable person in that role
would exercise;
y exercise their powers in good faith for a proper purpose and in
the best interests of the Company;
y not improperly use their position or information obtained through
their position to gain a personal advantage or for the advantage
of another person to the detriment of the Company;
y disclose material personal interests and avoid actual or potential
conflicts of interests;
y
y
keep themselves informed of relevant Company matters;
keep confidential the business of all directors’ meetings; and
y observe and support the Board’s Corporate Governance
practices and procedures.
Directors are also required to provide the Company with details of
all securities registered in the director’s name or an entity in which
the director has a relevant interest within the meaning of section 9
of the Corporations Act 2001 and details of all contracts, other than
contracts to which the Company is a party to which the director is
a party or under which the director is entitled to a benefit, and that
confer a right to call for or deliver shares in the Company and the
nature of the director’s interest under the contract.
Directors are required to disclose to the Board any material contract
in which they may have an interest. In accordance with Section 195
of the Corporations Act 2001, a director having a material personal
interest in any matter to be dealt with by the Board, will not be
present when that matter is considered by the Board and will not
vote on that matter.
recoMMenDation 3.2
Recommendation followed
Directors, officers and employees are not permitted to trade in
securities of the Company at any time whilst in possession of price
sensitive information not readily available to the market. Section
1043A of the Corporations Act 2001 also prohibits the acquisition
and disposal of securities where a person possess information that
is not generally available and which may reasonably be expected to
have a material effect on the price of the securities if the information
was generally available. A securities trading policy has been
established and all employees and directors are obliged to comply.
All directors have signed agreements with the Company which
require them to provide the Company with details of all securities
registered in the director’s name or an entity in which the director
has a relevant interest within the meaning of section 9 of the
Corporations Act 2001 and details of all contracts, other than
contracts to which the Company is a party to which the director is
a party or under which the director is entitled to a benefit, and that
confer a right to call for or deliver shares in the Company and the
nature of the director’s interest under the contract.
Directors are required to disclose to the Board any material contract
in which they may have an interest. In accordance with Section 195
of the Corporations Act 2001, a director having a material personal
interest in any matter to be dealt with by the Board, will not be
present when that matter is considered by the Board and will not
vote on that matter.
recoMMenDation 3.3
Recommendation followed
A summary of the Company’s Trading Policy can be found at www.
maximusresources.com/governance.html.
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
17
CORPORATE GOVERNANCE STATEMENT
Principle 4: Safeguard integrity in financial reporting
Principles 5: Make timely and balanced disclosure
recoMMenDation 4.1
Recommendation followed
The Company has established an Audit Committee to oversee
corporate governance over internal controls, ethical standards,
financial reporting, and external accounting and compliance
procedures. Also, the Board as a whole addresses the governance
aspects of the full scope of Maximus’ activities to ensure that it
adheres to appropriate ethical standards.
The main responsibilities of the Audit and Corporate Governance
Committee include:
y
reviewing, assessing and making recommendations to the Board
on the annual and half year financial reports released to the
market by the Company;
y overseeing establishment, maintenance and reviewing the
effectiveness of the Company’s internal control and ensuring
efficacy and efficiency of operations, reliability of financial
reporting and compliance with applicable Accounting Standards
and ASX Listing Rules;
•
liaising with and reviewing reports of the external auditor; and
y
reviewing performance and independence of the external auditor
and where necessary making recommendations for appointment
and removal of the Company’s auditor.
recoMMenDation 4.2
Recommendation not followed
The Audit Committee consists of two non-executive, independent
Board directors, Messrs Vickery & Kennedy, and is chaired by
Mr Vickery.
The Board believes that given the size of the Company and the stage
of the entity’s life as a publicly listed junior exploration company
that the cost of establishing an audit committee with at least three
members in line with ASX Recommendation 4.2 cannot be justified
by the perceived benefits of doing so. The existing composition of
the Audit Committee is such that review and authorisation of the
integrity of the Company’s financial reporting and the independence
of the external auditor is via the exercise of independent and
informed judgment.
recoMMenDation 4.3
Recommendation followed
A formal Audit Committee Charter has been adopted, that details the
functions and responsibilities of the Audit Committee.
recoMMenDation 4.4
Recommendation followed
Mr Kennedy is a qualified Chartered Accountant. Details of the Audit
Committee member’s qualifications and attendance at meetings are
set out in the Directors’ Report section of this report.
The Committee meets at least twice per annum and reports to the
Board. The Managing Director,CFO/Company Secretary and external
auditor may by invitation attend meetings at the discretion of the
Committee.
recoMMenDations 5.1 anD 5.2
Recommendations followed
The Company has adopted a continuous disclosure policy and
operates under the continuous disclosure requirements of the
ASX Listing Rules and ensures that all information which may be
expected to affect the value of the Company’s securities or influence
investment decisions is released to the market in order that all
investors have equal and timely access to material information
concerning the Company. The information is made publicly
available on the Company’s website, following release to the ASX,
www.maximusresources.com/governance.html
Principle 6: Respect the rights of shareholders
recoMMenDations 6.1 anD 6.2
Recommendations not followed
The Board aims to ensure that shareholders are informed of all major
developments affecting the Company’s state of affairs.
In accordance with the ASX Recommendations, information is
communicated to shareholders as follows:
y
y
the annual financial report which includes relevant information
about the operations of the Company during the year,
changes in the state of affairs of the entity and details of future
developments, in addition to the other disclosures required by the
Corporations Act 2001;
the half yearly financial report lodged with ASX and Australian
Securities and Investments Commission (ASIC) and sent to all
shareholders who request it;
y notifications relating to any proposed major changes in the
Company which may impact on share ownership rights that are
submitted to a vote of shareholders;
y notices of all meetings of shareholders;
y publicly released documents including full text of notices of
meetings and explanatory material made available on the
Company’s website; and
y disclosure of the Company’s Corporate Governance practices
and communications strategy on the entity’s website.
The Board encourages full participation of shareholders at the
Annual General Meeting to ensure a high level of accountability and
identification with the Company’s strategy and goals. Important
issues are presented to the shareholders as single resolutions. The
external auditor of the Company is also invited to the Annual General
Meeting of shareholders and is available to answer any questions
concerning the conduct, preparation and content of the auditor’s
report. Pursuant to section 249K of the Corporations Act 2001 the
external auditor is provided with a copy of the notice of meeting and
related communications received by shareholders.
Due to the size of the Company and the stage of life of the entity
as a publicly listed junior exploration company, the Board does not
believe a formal policy for shareholder communication is required.
However, a summary describing how the Company will communicate
with its shareholders is posted on the Company’s website,
www.maximusresources.com/governance.html
18
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
CORPORATE GOVERNANCE STATEMENT
Principle 7: Recognise and manage risk
recoMMenDations 7.1, 7.2 anD 7.4
Recommendations not followed
The Board recognises that there are inherent risks associated with
the Company’s operations including mineral exploration and mining,
environmental, title and native title, legal and other operational risks.
The Board endeavours to mitigate such risks by continually reviewing
the activities of the Company in order to identify key business and
operational risks and ensuring that they are appropriately assessed
and managed. No formal report in relation to the Company’s
management of its material business risk is presented to the Board.
Due to the size of the Company and the stage of life of the entity
as a publicly listed junior exploration company, and the inherent
risks associated with the industry it operates in, the Board does
not believe formal policies for oversight and management of risk
is required nor a mechanism for formal review be established. A
summary describing how the Company manages risk by procedures
established at Board and executive level can be found posted on the
Company’s website, www.maximusresources.com/governance.html.
recoMMenDation 7.3
Recommendation followed
In accordance with ASX Recommendation 7.3 the Chief Executive
Officer and Chief Financial Officer have provided assurances that the
written declarations under s295A of the Corporations Act 2001 are
founded on a sound system of risk management and internal control
and that the system is operating effectively in all material respects in
relation to financial reporting risks. Both the Chief Executive Officer
and Chief Financial Officer provided said assurances at the time the
s295A declarations were provided to the Board.
Principle 8: Remunerate fairly and responsibly
recoMMenDation 8.1
Recommendation not followed
The Board believes that given the size of the Company and the stage
of the entity’s life as a publicly listed junior exploration company
that the cost of establishing a formal remuneration committee in line
with ASX Recommendation 8.1 cannot be justified by the perceived
benefits of doing so.
The Board takes responsibility for monitoring the composition of the
Board and reviewing the compensation of the Company’s executive
directors and senior management with the overall objective of
motivating and appropriately rewarding performance.
recoMMenDation 8.2
Recommendation not followed
The Board does not have a separate remuneration committee given
the size of the Company and the stage of the entity’s life as a publicly
listed junior exploration company.
recoMMenDation 8.3
Recommendation followed
The Company’s remuneration practices are set out as follows.
The Company’s Constitution specifies that the total amount of
remuneration of non-executive directors shall be fixed from time
to time by a general meeting. The current maximum aggregate
remuneration of non-executive directors has been set at $300,000
per annum. Directors may apportion any amount up to this
maximum amount amongst the non-executive directors as they
determine. Directors are also entitled to be paid reasonable travelling,
accommodation and other expenses incurred in performing their
duties as directors.
Non-executive director remuneration is by way of fees and statutory
superannuation contributions. Non-executive directors do not
participate in schemes designed for remuneration of executives nor
do they receive options or bonus payments and are not provided
with retirement benefits other than salary sacrifice and statutory
superannuation.
The remuneration of the Managing Director is determined by the
Board as part of the terms and conditions of his employment
which are subject to review from time to time. The remuneration of
employees is determined by the Managing Director subject to the
approval of the Board.
The Company’s remuneration structure is based on a number of
factors including the particular experience and performance of the
individual in meeting key objectives of the Company. The Board is
responsible for assessing relevant employment market conditions
and achieving the overall, long term objective of maximising
shareholder benefits, through the retention of high quality personnel.
The Company does not presently emphasise payment for results
through the provision of cash bonus schemes or other incentive
payments based on key performance indicators of the Company
given the nature of the Company’s business as a recently listed
mineral exploration entity and the current status of its activities.
However, the Board may approve the payment of cash bonuses from
time to time in order to reward individual executive performance in
achieving key objectives as considered appropriate by the Board.
The Company also has an Employee Incentive Rights Plan approved
by shareholders that enables the Board to offer eligible employees
rights to acquire ordinary fully paid shares in the Company. Under
the terms of the Plan, rights to acquire ordinary fully paid shares
at no cost may be offered to the Company’s eligible employees
as determined by the Board in accordance with the terms and
conditions of the Plan. The objective of the Plan is to align the
interests of employees and shareholders by providing employees
of the Company with the opportunity to participate in the equity of
the Company as a long term incentive to achieve greater success
and profitability for the Company and to maximise the long term
performance of the Company. The non-executive directors are not
eligible to participate in the Plan.
The employment conditions of the Managing Director are formalised
in a contract of employment. The Managing Director’s contract may
be terminated at any time by mutual agreement or without notice in
serious instances of misconduct.
Further details of director’s remuneration, superannuation and
retirement payments are set out in the Remuneration Report section
of the Directors’ Report.
The Company’s Corporate Governance Policies can be found at
www.maximusresources.com/governance.html.
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
19
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the year ended 30 June 2011
Notes
Consolidated
Consolidated
Parent entity
Parent entity
30 June
2011
$
712,760
6,198,109
(3,140,252)
-
30 June
2010
$
316,327
-
(460,896)
(87,255)
(1,020,180)
(1,525,834)
(150,645)
(2,853)
(158,640)
(3,975)
30 June
2011
$
507,987
500,000
(2,423,377)
-
(861,648)
(108,311)
(2,248)
30 June
2010
$
93,495
-
(123,637)
(47,428)
(719,387)
(96,434)
(2,878)
(9,082,352)
(8,759,982)
(1,219,215)
(6,097,181)
(675,199)
-
(197,018)
-
(7,160,612)
(10,680,255)
(3,803,830)
(6,993,450)
(33,719)
571,428
(25,619)
78,796
(7,194,331)
(10,108,827)
(3,829,449)
(6,914,654)
4
5
6
6
6
6
7
Revenue from continuing operations
Other income
Cost of goods sold
Other expenses
Administrative expenses
Marketing expenses
Finance costs
Exploration expenditure written off
Impairment of development assets
(Loss) before income tax
Income tax expense
(Loss) for the year
Other comprehensive income
Changes in the fair value of available-for-sale financial assets
21(c)
Other comprehensive income for the year (net of tax)
(1,388,795)
(1,388,795)
-
-
357,357
357,357
(566,600)
(566,600)
Total comprehensive income for the year
(8,583,126)
(10,108,827)
(3,472,092)
(7,481,254)
Profit / (loss) is attributable to:
Maximus Resources Limited
Non-controlling interests to 31 December 2010
Total comprehensive income for the year is attributable to:
Maximus Resources Limited
Non-controlling interests to 31 December 2010
1,869,020
(9,063,351)
(7,628,993)
(2,479,834)
(3,829,449)
(6,914,654)
-
-
(7,194,331)
(10,108,827)
(3,829,449)
(6,914,654)
480,225
(9,063,351)
(7,628,993)
(2,479,834)
(3,472,092)
(7,481,254)
-
-
(8,583,126)
(10,108,827)
(3,472,092)
(7,481,254)
Earnings per share for (loss) from continuing operations
attributable to the ordinary equity holders of the Company:
Basic earnings per share
Diluted earnings per share
32
32
(1.32)
(1.32)
(2.85)
(2.85)
Cents
Cents
The above consolidated statements of comprehensive income should be read in conjunction with the accompanying notes.
20
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 30 June 2011
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Investments accounted for using the equity method
Available-for-sale financial assets
Plant and equipment
Exploration and evaluation
Mine properties
Security deposit
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Non-current liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Retained losses
Capital and reserves attributable to owners of Maximus Resources
Limited
Non-controlling interests
Total equity
Notes
Consolidated
Consolidated
Parent entity
Parent entity
30 June
2011
$
74,038
509,207
-
122,457
705,702
-
1,071,071
637,087
30 June
2010
$
1,696,836
849,300
111,325
143,070
2,800,531
2
-
1,584,608
30 June
2011
$
74,038
509,207
-
122,457
705,702
-
1,071,071
637,087
30 June
2010
$
1,335,541
458,670
70,239
123,173
1,987,623
1
713,714
762,112
14,491,983
16,449,313
14,491,983
14,483,097
373,358
-
16,573,499
17,279,201
3,802,431
17,750
21,854,104
24,654,635
373,358
1,476,000
-
16,573,499
17,279,201
-
17,434,924
19,422,547
174,662
18,297
192,959
6,308
6,308
199,267
487,793
31,358
519,151
30,355
30,355
549,506
174,662
18,297
192,959
6,308
6,308
220,445
3,193
223,638
2,282
2,282
199,267
225,920
17,079,934
24,105,129
17,079,934
19,196,627
32,694,827
31,373,928
32,694,827
31,373,928
(34,563)
1,319,605
(34,563)
(426,420)
9
10
11
12
13
14
15
16(a)
16(b)
17
18
19
20
21
21(b)
(15,580,330)
(17,449,350)
(15,580,330)
(11,750,881)
17,079,934
15,244,183
17,079,934
19,196,627
-
8,860,946
-
-
17,079,934
24,105,129
17,079,934
19,196,627
The above consolidated statements of financial position should be read in conjunction with the accompanying notes.
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
21
CONSOLIDATED STATEMENTS OF CHANGES IN EqUITy
For the year ended 30 June 2011
Attributable to owners of Maximus Resources Limited
Consolidated
Notes
Issued capital
Reserves
$
$
Retained
losses
$
Total
Non-controlling
interests
Total equity
$
$
$
Balance at 1 July 2009
29,341,900
1,368,875
(10,494,894)
20,215,881
9,927,624
30,143,505
Total comprehensive income for the year:
Loss for the year
Loss attributed to non-controlling interest
Movement in non-controlling interest
Transactions with owners in their capacity
as owners:
Contributions of equity
Options issued during the year
Movement in non-controlling interest
Transaction costs (net of tax)
21
20
21
20
-
-
-
-
2,061,800
-
-
(29,772)
-
-
-
-
-
16,329
(65,599)
-
2,032,028
(49,270)
(7,628,993)
(7,628,993)
-
(7,628,993)
-
-
(2,479,834)
(2,479,834)
674,537
674,537
(674,537)
-
(6,954,456)
(6,954,456)
(3,154,371)
(10,108,827)
-
-
-
-
-
2,061,800
2,053,199
4,114,999
16,329
(65,599)
(29,772)
-
16,329
65,599
(31,105)
-
(60,877)
1,982,758
2,087,693
4,070,451
Balance at 30 June 2010
31,373,928
1,319,605
(17,449,350)
15,244,183
8,860,946
24,105,129
Attributable to owners of Maximus Resources Limited
Consolidated
Notes
Issued capital
Reserves
$
$
Retained
losses
$
Total
Non-controlling
interests
Total equity
$
$
$
Balance at 1 July 2010
31,373,928
1,319,605
(17,449,350)
15,244,183
8,860,946
24,105,129
Total comprehensive income for the year:
Profit/(loss) for the year
Revaluation of financial assets (net of tax)
Transactions with owners in their capacity
as owners:
Contributions of equity
Rights issued during the year
Movement in non-controlling interest
Transaction costs (net of tax)
Derecognition of non-controlling interest upon loss
of control
21
21
20
21
-
-
-
-
1,869,020
1,869,020
(9,063,351)
(7,194,331)
(1,388,795)
-
(1,388,795)
-
1,388,795)
(1,388,795)
1,869,020
480,225
(9,063,351)
(8,583,126)
1,373,662
-
-
(52,763)
-
34,500
(16,121)
-
-
16,248
1,320,899
34,627
-
-
-
-
-
-
1,373,662
450,000
1,823,662
34,500
(16,121)
(52,763)
16,248
-
34,500
16,121
(18,902)
-
(71,665)
(244,814)
(228,566)
1,355,526
202,405
1,557,931
Balance at 30 June 2011
32,694,827
(34,563)
(15,580,330)
17,079,934
-
17,079,934
22
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
CONSOLIDATED STATEMENTS OF CHANGES IN EqUITy
For the year ended 30 June 2011
Parent entity
Notes
Contributed equity
Reserves
Retained losses
Total equity
Balance at 1 July 2009
Total comprehensive income for the year:
Profit/(loss) for the year
Revaluation of financial assets (net of tax)
Transactions with owners in their capacity
as owners:
Contributions of equity
Options issued during the year
Transaction costs (net of tax)
Balance at 30 June 2010
21
21
20
21
20
$
$
$
$
29,341,900
123,851
(4,836,227)
24,629,524
-
-
-
-
(6,914,654)
(566,601)
(566,601)
-
(6,914,654)
2,061,800
-
(29,772)
2,032,028
31,373,928
-
16,330
-
16,330
(426,420)
-
-
-
-
(11,750,881)
(6,914,654)
(566,601)
(7,481,255)
2,061,800
16,330
(29,772)
2,048,358
19,196,627
Parent entity
Notes
Contributed equity
Reserves
Retained losses
Total equity
$
$
$
$
Balance at 1 July 2010
31,373,928
(426,420)
(11,750,881)
19,196,627
Total comprehensive income for the year:
Profit/(loss) for the year
Revaluation of financial assets (net of tax)
Transactions with owners in their capacity
as owners:
Contributions of equity
Rights issued during the year
Transaction costs (net of tax)
Balance at 30 June 2011
21
21
20
21
20
-
-
-
1,373,662
-
(52,763)
1,320,899
32,694,827
-
357,357
357,357
-
34,500
-
34,500
(34,563)
(3,829,449)
-
(3,829,449)
-
-
-
-
(15,580,330)
(3,829,449)
357,357
(3,472,092)
1,373,662
34,500
(52,763)
1,355,399
17,079,934
The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes.
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
23
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the year ended 30 June 2011
Notes
Consolidated
Consolidated
Parent entity
Parent entity
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)
710,668
220,716
514,130
Payments to suppliers and employees (inclusive of goods and services tax)
(2,521,978)
(1,878,819)
(1,831,618)
30 June
2011
$
30 June
2010
$
30 June
2011
$
(276,102)
(13,963)
(81,370)
31
15
8
Interest received
Income tax received
Net cash (outflow) inflow from operating activities
Cash flows from investing activities
Payments for plant and equipment
Loss of cash balances upon loss of control of subsidiary
Payments for development assets
Proceeds from sale of plant and equipment
Proceeds from disposal of tenement
Repayment of loans by related parties
Purchase of investments
Payments for exploration and evaluation
Net cash (outflow) inflow from investing activities
Cash flows from financing activities
Proceeds from issues of shares and other equity securities
Payments of issue costs
Net cash inflow from financing activities
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
9
52,477
594,513
(1,164,320)
(13,963)
(290,188)
-
-
50,000
150,000
-
(2,075,613)
(2,179,764)
1,823,662
(102,376)
1,721,286
(1,622,798)
1,696,836
74,038
102,558
663,274
(892,271)
44,242
331,377
(941,869)
-
(1,104,363)
170,998
-
75,000
-
-
-
-
50,000
75,000
-
(1,956,416)
(3,090,883)
(1,728,957)
(1,617,920)
4,114,999
(85,263)
4,029,736
1,373,662
(75,376)
1,298,286
46,582
(1,261,503)
1,650,254
1,696,836
1,335,541
74,038
1,335,541
30 June
2010
$
28,259
(884,652)
71,872
333,824
(450,697)
-
-
76,132
-
-
(15,000)
(1,104,863)
(1,125,101)
2,061,800
(42,531)
2,019,269
443,471
892,070
The above consolidated statements of cash flows should be read in conjunction with the accompanying notes.
24
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
1 summary of significant accounting policies
The principal accounting policies adopted in the preparation of these
consolidated financial statements are set out below. These policies
have been consistently applied to all the years presented, unless
otherwise stated. The financial statements are for the consolidated
entity consisting of Maximus Resources Limited and its subsidiaries.
a) basis of preparation
These general purpose financial statements have been prepared
in accordance with Australian Accounting Standards, other
authoritative pronouncements of the Australian Accounting
Standards Board, Urgent Issues Group Interpretations and the
Corporations Act 2001.
i) Compliance with IFRS
The consolidated financial statements of the Maximus
Resources Limited company also comply with International
Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board (IASB).
Australian Accounting Standards include Australian equivalents
to International Financial Reporting Standards (AIFRS).
Compliance with AIFRSs ensures that the financial statements
and notes comply with International Financial Reporting
Standards (IFRS).
ii) New and revised accounting standards
The Group has adopted the following revisions and
amendments to AASB’s issued by the Australian Accounting
Standards Board and IFRS issued by the International
Accounting Standards Board, which are relevant to and
effective for the Group’s financial statements for the annual
period beginning 1 July 2010:
• AASB 2009-5 Further Amendments to Australian
Accounting Standards arising from the Annual
Improvements Project
• AASB 2010-3 Amendments to Australian Accounting
Standards arising from the Annual Improvements Project.
The adoption of new and revised Accounting Standards
effective for the financial statements for the annual period
beginning 1 July 2010 did not have a material impact on the
Group’s financial statements.
iii) Historical cost convention
These financial statements have been prepared on an accrual
basis, under the historical cost convention, as modified by
the revaluation of available-for-sale financial assets, financial
assets and liabilities (including derivative instruments) at fair
value through profit or loss and certain classes of property,
plant and equipment.
iv) Critical accounting estimates
The directors evaluate estimates and judgments incorporated
into the financial report based on historical knowledge and best
available current information. Estimates assume a reasonable
expectation of future events and are based on current trends
and economic data, obtained both externally and within the
Company.
b) Principles of consolidation
i) Subsidiaries
The consolidated financial statements incorporate the assets
and liabilities of all subsidiaries of Maximus Resources Limited
(‘’Company’’ or ‘’Parent Entity’’) as at 30 June 2011 and the
results of all subsidiaries for the year then ended. Maximus
Resources Limited and its subsidiaries together are referred
to in this financial report as the ‘Consolidated Entity’ or the
‘Group’.
Subsidiaries are all entities (including special purpose entities)
over which the Company 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
Company controls another entity.
Subsidiaries are fully consolidated from the date on
which control is transferred to the Company. They are de
consolidated from the date that control ceases.
The acquisition method of accounting is used to account for
business combinations by the Company (refer to note 1).
The Company applies a policy of treating transactions with
minority interests as transactions with parties external to the
Company. Disposals to minority interests result in gains and
losses for the Company that are recorded in the consolidated
statements of financial performance. Purchases from minority
interests result in goodwill, being the difference between any
consideration paid and the relevant share acquired of the
carrying value of identifiable net assets of the subsidiary.
Intercompany transactions, balances and unrealised gains
on transactions between Company 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 Company.
Non-controlling interests in the results and equity of
subsidiaries are shown separately in the consolidated
statements of comprehensive income, consolidated statements
of changes in equity and consolidated statements of financial
position respectively.
Investments in subsidiaries are accounted for at cost in the
separate financial statements of Maximus Resources Limited.
ii) Changes in ownership interests
The Company treats transactions with non-controlling interests
that do not result in a loss of control as transactions with
equity owners of the Company. 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 in recognised in a separate
reserve within equity attributable to owners of Maximus
Resources Limited.
When the Company ceases to have control, joint control
or significant influence, 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 Company 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.
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
25
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
c) segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker.
The chief operating decision maker has been identified as the
Board of Directors.
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.
d) revenue recognition
i) Sale of goods
Revenue from sale of goods includes sales of refined gold
production and internet sales of gold nuggets. Recognition is
at point of sale of the product, when the risks and rewards of
ownership are transferred.
ii) Interest income
Interest income is recognised on a proportional basis taking
into account the interest rates applicable to the financial
assets.
e) income tax
The income tax expense or revenue for the period is the tax
payable on the current period’s taxable income based on the
applicable income tax rate for each jurisdiction adjusted by
changes in deferred tax assets and liabilities attributable to
temporary differences 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
associates 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.
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 financial
statements. However, deferred tax liabilities are not recognised if
they arise from the initial recognition of goodwill. Deferred income
tax is also 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 end of the reporting period 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 Company 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.
f) impairment of non-financial assets
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 tested 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 date.
g) cash and cash equivalents
For the purpose of presentation in the statement of cash flows,
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 12 months or less that
are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value, and bank
overdrafts. Bank overdrafts are shown within borrowings in current
liabilities in the statement of financial position.
h) trade receivables
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less provision for impairment. Trade receivables
are generally due for settlement within 30 days. They are
presented as current assets unless collection is not expected for
more than 12 months after the reporting date.
i) investments in associates
Associates are all entities over which the Company has significant
influence but not control, generally accompanying a shareholding
of between 20% and 50% of the voting rights. Investments
in associates are accounted for using the equity method of
accounting, after initially being recognised at cost. The Company’s
investment in associates includes goodwill (net of any accumulated
impairment loss) identified on acquisition (refer to note 28).
j) Joint ventures
i) Jointly controlled assets
The Company’s share of the assets, liabilities, revenue and
expenses of joint venture operations are included in the
appropriate items of the financial statements. Details of the
joint ventures are set out in note 29.
ii) Joint venture entities
The Company’s interests in joint ventures are accounted for
using the equity method after initially being recognised at cost.
Under the equity method, the share of the profits or losses of
a joint venture is recognised in the consolidated statement
of comprehensive income, and the share of movements in
reserves is recognised in reserves in the statement of financial
position. Details relating to the joint venture entities are set out
in note 29.
26
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
k) investments and other financial assets
Recognition and derecognition
Regular purchases and sales of financial assets are recognised on
trade date the date on which the Company commits to purchase
or sell the asset. Financial assets are derecognised when the
rights to receive cash flows from the financial assets have expired
or have been transferred and the Company has transferred
substantially all the risks and rewards of ownership.
When securities classified as available-for-sale are sold,
the accumulated fair value adjustments recognised in other
comprehensive income are reclassified to profit or loss as gains
and losses from investment securities.
Measurement
At initial recognition, the Company measures a financial asset
at its fair value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs that are directly
attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at fair value through profit or loss
are expensed in profit or loss.
Loans and receivables and held to maturity investments are
subsequently carried at amortised cost using the effective interest
method.
Available-for-sale financial assets and 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
profit or loss within other income or other 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 Company’s right
to receive payments is established. Interest income from these
financial assets is included in the net gains/(losses).
Changes in the fair value of monetary securities denominated
in a foreign currency and classified as available-for-sale are
analysed between translation differences resulting from changes
in amortised cost of the security and other changes in the
carrying amount of the security. The translation differences
related to changes in the amortised cost are recognised in profit
or loss, and other changes in carrying amount are recognised in
other comprehensive income. Changes in the fair value of other
monetary and non-monetary securities classified as available-for-
sale are recognised in other comprehensive income.
Details on how the fair value of financial instruments is determined
are disclosed in note 2.
Fair value
The fair values of quoted investments are based on current bid
prices. If the market for a financial asset is not active (and for
unlisted securities), the Company establishes fair value by using
valuation techniques. These include the use of recent arm’s length
transactions, reference to other instruments that are substantially
the same, discounted cash flow analysis, and option pricing
models making maximum use of market inputs and relying as little
as possible on entity specific inputs.
Impairment
The Company assesses at the end of each reporting period
whether there is objective evidence that a financial asset or group
of financial assets is impaired. A financial asset or a group of
financial assets is impaired and impairment losses are incurred
only if there is objective evidence of impairment as a result of one
or more events that occurred after the initial recognition of the
asset (a ‘loss event’) and that loss event (or events) has an impact
on the estimated future cash flows of the financial asset or group
of financial assets that can be reliably estimated. In the case of
equity investments classified as available-for-sale, a significant or
prolonged decline in the fair value of the security below its cost is
considered an indicator that the assets are impaired.
If there is evidence of impairment for any of the Company’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 profit or loss.
l) Plant and equipment
Each class of plant and equipment is carried at cost or fair
value less, where applicable, any accumulated depreciation and
impairment losses.
Plant and equipment
Plant and equipment are measured on the cost basis. The carrying
amount of plant and equipment is reviewed annually by directors
to ensure it is not in excess of the recoverable amount. The
recoverable amount is assessed on the basis of the expected net
cash flows that will be received from the assets’ employment and
subsequent disposal. The expected net cash flows have been
discounted to their present values in determining recoverable
amounts.
Subsequent costs are included in the assets’ carrying amount
or recognised as separate assets as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Company and the cost can be measured reliably.
All other repairs and maintenance are charged to the statement of
comprehensive income during the financial period in which they
are incurred.
Depreciation
The depreciable amount of all fixed assets is depreciated on
a straight line basis over their useful lives to the Company
commencing from the time the asset is held ready for use.
The depreciation rates used for plant and equipment are from
12.5 to 40%.
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(f).
Gains and losses on disposals are determined by comparing
proceeds with carrying amount. These are included in the
statement of comprehensive income. When revalued assets are
sold, it is Company policy to transfer any amounts included in
other reserves in respect of those assets to retained earnings.
m) trade and other payables
These amounts represent liabilities for goods and services
provided to the Company prior to the end of financial year which
are unpaid. The amounts are unsecured and are usually paid within
30 days of recognition. Trade and other payables are presented as
current liabilities unless payment is not due within 12 months from
the reporting date. They are recognised initially at their fair value
and subsequently measured at amortised cost using the effective
interest method.
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
27
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
n) employee benefits
i) Short term obligations
Liabilities for wages and salaries, including non-monetary
benefits and annual leave expected to be settled within
12 months after the end of each reporting period in which
the employees render the related service are recognised in
respect of employees’ services up to the end of the reporting
period and are measured at the amounts expected to be paid
when the liabilities are settled. The liability for annual leave is
recognised in the provision for annual leave. All other short
term employee benefit obligations are presented as payables.
ii) Other long term employee benefit obligations
The liability for long service leave and annual leave which is
not expected to be settled within 12 months after the end of
the reporting period in which the employees render the related
service is recognised in non-current liabilities provisions and
measured as the present value of expected future payments to
be made in respect of services provided by employees up to
the end of the reporting period using the projected unit credit
method. Consideration is given to expected future wage and
salary levels, experience of employee departures and periods of
service. Expected future payments are discounted using market
yields at the end of the reporting period on national government
bonds with terms to maturity and currency that match, as
closely as possible, the estimated future cash outflows.
iii) Share-based payments
Share-based compensation benefits are provided to employees
via the Maximus Resources Limited Employee Incentive Rights
Plan and an employee share scheme. Information relating to
these schemes is set out in note 33.
The cost of equity settled transactions is measured by the
fair value at the date at which the equity instruments are
granted. The fair value is determined using the Black Scholes
or Binomial pricing model. The cost is recognised as an
expense in the statement of comprehensive income with a
corresponding increase in the share-based payments reserve
or issued capital when the options, rights or shares are issued.
o) earnings per share (ePs)
i) Basic earnings per share
Basic earnings per share is calculated by dividing:
•
the profit attributable to equity holders of the Company,
excluding any costs of servicing equity other than ordinary
shares
• by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus
elements in ordinary shares issued during the year and
excluding treasury shares.
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 additional ordinary shares
that would have been outstanding assuming the conversion
of all dilutive potential ordinary shares.
p) exploration and evaluation expenditure
Exploration and evaluation costs related to an area of interest
are written off as incurred except they may be carried forward as
an item in the statement of financial position where the rights of
tenure of an area are current and one of the following conditions
is met:
•
the costs are expected to be recouped through successful
development and exploitation of the area of interest, or
alternatively, by its sale; and
• exploration and/or evaluation activities in the area of interest
have not at the end of each reporting period reached a stage
which permits a reasonable assessment of the existence or
otherwise of economically recoverable reserves, and active and
significant operations in, or in relation to, the area of interest
are continuing.
Capitalised costs include costs directly related to exploration and
evaluation activities in the relevant area of interest. General and
administrative costs are allocated to an exploration or evaluation
asset only to the extent that those costs can be related directly
to operational activities in the area of interest to which the asset
relates.
Capitalised exploration and evaluation expenditure is written off
where the above conditions are no longer satisfied.
Identifiable exploration assets acquired are recognised as assets
at their cost of acquisition, as determined by the requirements of
AASB 3: Business Combinations.
Exploration and evaluation expenditure incurred subsequent
to the acquisition in respect of an exploration asset acquired is
accounted for in accordance with the policy outlined above.
All capitalised exploration and evaluation expenditure is assessed
for impairment if facts and circumstances indicate that an
impairment may exist. Exploration and evaluation assets are also
tested for impairment once commercial reserves are found, before
the assets are transferred to development properties.
q) Development properties
Development expenditure incurred by or on behalf of the Company
is accumulated separately for each area of interest in which
economically recoverable reserves have been identified to the
satisfaction of the directors. Such expenditure comprises net direct
costs and an appropriate portion of related overhead expenditure
having a specific nexus with the development property.
Once a development decision has been taken, all past and future
exploration and evaluation expenditure in respect of the area of
interest is aggregated with the cost of development and classified
under non-current assets as ‘’development properties’’.
A development property is reclassified as ‘’mine property’’ at the
end of the commissioning phase, when the production reaches a
previously determined capacity.
No amortisation is provided in respect of development properties
until they are reclassified as ‘’mine properties’’.
Development properties are tested for impairment in accordance
with the policy in note 1(f).
r) Mine properties
Mine properties represent the accumulation of all exploration,
evaluation and development expenditure incurred by or on behalf
of the Company in relation to areas of interest in which mining of a
mineral resource has commenced.
28
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
When further development expenditure is incurred in respect of
a mine property after the commencement of production, such
expenditure is carried forward as part of the mine property only
when it is probable that the additional future economic benefits
associated with the expenditure will flow to the Company.
Otherwise such expenditure is classified as part of the cost of
production.
Mine properties are tested for impairment in accordance with the
policy in note 1(f).
s) 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.
t) comparative figures
Comparative figures are adjusted to conform to Accounting
Standards when required.
u) inventories
i) Raw materials, stores and finished goods
Refined gold production and gold nuggets on hand at year
end, are stated at the lower of cost and net realisable value.
Cost of goods sold comprises direct materials, direct labour
and an appropriate proportion of variable and fixed overhead
expenditure, the latter being allocated on the basis of normal
operating capacity. Net realisable value is the estimated selling
price in the ordinary course of business less the estimated
costs of completion and the estimated costs necessary to
make the sale.
v) contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares
or options are shown in equity as a deduction, net of tax, from the
proceeds.
If the Company reacquires its own equity instruments, for example
as the result of a share buy back or a share-based payment
plan, the consideration paid, including any directly attributable
incremental costs (net of income taxes) is deducted from equity
attributable to the owners of Maximus Resources Limited as
treasury shares until the shares are cancelled or reissued. Where
such ordinary shares are subsequently reissued, any consideration
received, net of any directly attributable incremental transaction
costs and the related income tax effects, is included in equity
attributable to the owners of Maximus Resources Limited
w) Key estimates
The preparation of the financial statements requires management
to make estimates and judgements. These estimates and
judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future
events that may have a financial impact on the Group and that are
believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the
future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below:
Impairment
The Company assesses impairment at each reporting date by
evaluating conditions specific to the Company that may lead
to impairment of assets. Where an impairment trigger exists,
the recoverable amount of the asset is determined. Value in
use calculations performed in assessing recoverable amounts
incorporate a number of key estimates.
Exploration and Evaluation
The Company’s policy for exploration and evaluation is discussed
in Note 1(p). The application of this policy requires management to
make certain assumptions as to future events and circumstances.
Any such estimates and assumptions may change as new
information becomes available. If, after having capitalised
exploration and evaluation expenditure, management concludes
that the capitalised expenditure is unlikely to be recovered by
future sale or exploration, then the relevant capitalised amount will
be written off through the statement of comprehensive income.
Share-based payments
The Group measures share-based payments at fair value at the
grant date using the Black Scholes or Binomial formula taking into
account the terms and conditions upon which the instrument was
granted, as discussed in note 33.
x) new accounting standards and interpretations
The Australian Accounting Standards Board (AASB) has issued
new and amended accounting standards and interpretations that
have mandatory application dates for future reporting periods. The
Company has decided against early adoption of these standards.
A discussion of those future requirements and their impact on the
Company is set out below.
The Company does not anticipate the early adoption of any of the
below Australian Accounting Standards.
These standards are applicable retrospectively and amend the
classification and measurement of financial assets. The Company
has not yet determined the potential impact on the financial
statements. The changes made to accounting requirements include:
AASB 9: Financial Instruments and AASB 2009–11: Amendments
to Australian Accounting Standards arising from AASB 9 [AASB 1,
3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136,
139, 1023 & 1038 and Interpretations 10 & 12] and AASB 2010
7: Amendments to Australian Accounting Standards arising from
AASB 9 (applicable for annual reporting periods commencing on
or after 1 January 2013).
— simplifying the classifications of financial assets into those
carried at amortised cost and those carried at fair value;
— simplifying the requirements for embedded derivatives;
— removing the tainting rules associated with held to maturity
assets;
— removing the requirements to separate and fair value
embedded derivatives for financial assets carried at amortised
cost;
— allowing an irrevocable election on initial recognition to present
gains and losses on investments in equity instruments that are
not held for trading in other comprehensive income. Dividends
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
29
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
AASB 2010-8: Amendments to Australian Accounting Standards
– Deferred Tax: Recovery of Underlying Assets [AASB 112]
(applicable for annual reporting periods commencing on or after
1 January 2012)
In December 2010, the AASB amended AASB 112 Income
Taxes to provide a practical approach for measuring deferred
tax liabilities and deferred tax assets when investment property
is measured using the fair value model. AASB 112 requires the
measurement of deferred tax assets or liabilities to reflect the
tax consequences that would follow from the way management
expects to recover or settle the carrying amount of the relevant
assets or liabilities, that is through use or through sale. The
amendment introduces a rebuttable presumption that investment
property which is measured at fair value is recovered entirely by
sale. The Company will apply the amendment from 1 July 2012. It
is currently evaluating the impact of the amendment.
y) impact of the carbon tax legislation
On 10 July 2011, the Commonwealth Government announced the
“Securing a Clean Energy Future – the Australian Government’s
Climate Change Plan”. Whilst the announcement provides
further details of the framework for a carbon pricing mechanism,
uncertainties continue to exist on the impact of any carbon pricing
mechanism on the Group as legislation must be voted on and
passed by both Houses of Parliament. In addition, as the Group
will not fall within the “Top 500 Australian Polluters”, the impact of
the Carbon Scheme will be through indirect effects of increased
prices on many production inputs and general business expenses
as suppliers subject to the carbon pricing mechanism are likely
to pass on their carbon price burden to their customers in the
form of increased prices. Directors expect that this will not have a
significant impact upon the operation costs within the business,
and therefore will not have an impact upon the valuation of assets
and/or going concern of the business.
z) application of asic class order [co 10/654]
The Parent Entity has applied ASIC Class Order [CO 10/654] and
presented its separate financial statements together with the
consolidated financial statements.
in respect of these investments that are a return on investment
can be recognised in profit or loss and there is no impairment
or recycling on disposal of the instrument;
— reclassifying financial assets where there is a change in an
entity’s business model as they are initially classified based on:
a. the objective of the entity’s business model for managing
the financial assets;
b. the characteristics of the contractual cash flows;
— revised requirements for the classification and measurement of
financial liabilities, and carrying over the existing derecognition
requirements from AASB 139: Financial Instruments:
Recognition and Measurement; and
— changes in fair value related to changes in the entity’s own
credit risk is presented in other comprehensive income rather
than within profit or loss (applicable where an entity chooses to
measure a liability at fair value through profit or loss).
AASB 124: Related Party Disclosures (applicable for annual
reporting periods commencing on or after 1 January 2011).
This standard removes the requirement for government related
entities to disclose details of all transactions with the government
and other government related entities and clarifies the definition
of a related party to remove inconsistencies and simplify the
structure of the standard. No changes are expected to materially
affect the Company.
AASB 2009–12: Amendments to Australian Accounting Standards
[AASBs 5, 8, 108, 110, 112, 119, 133, 137, 139, 1023 & 1031
and Interpretations 2, 4, 16, 1039 & 1052] (applicable for annual
reporting periods commencing on or after 1 January 2011).
This standard makes a number of editorial amendments to a range
of Australian Accounting Standards and Interpretations, including
amendments to reflect changes made to the text of International
Financial Reporting Standards by the IASB. The standard also
amends AASB 8 to require entities to exercise judgment in
assessing whether a government and entities known to be under
the control of that government are considered a single customer
for the purposes of certain operating segment disclosures. These
amendments are not expected to impact the Company.
AASB 2009–14: Amendments to Australian Interpretation
— Prepayments of a Minimum Funding Requirement [AASB
Interpretation 14] (applicable for annual reporting periods
commencing on or after 1 January 2011).
This standard amends Interpretation 14 to address unintended
consequences that can arise from the previous accounting
requirements when an entity prepays future contributions into a
defined benefit pension plan. These amendments are not expected
to impact the Company.
AASB 2010-6: Amendments to Australian Accounting Standards
Disclosures on Transfers of Financial Assets [AASB 1 & AASB 7]
(applicable for annual reporting periods commencing on or after 1
July 2011)
Amendments made to AASB 7 Financial Instruments: Disclosures
in November 2010 introduce additional disclosures in respect
of risk exposures arising from transferred financial assets. The
amendments will affect particularly entities that sell, factor,
securitise, lend or otherwise transfer financial assets to other
parties. They are not expected to have any significant impact on
the Company’s disclosures. The Company intends to apply the
amendment from 1 July 2011.
30
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
2 financial risk management
The Company’s activities expose it to a variety of financial risks: market risk (including interest rate risk), credit risk and liquidity risk. The
Company’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects
on the financial performance of the Company.
Risk management is carried out by management under policies approved by the Board of Directors. Management identifies and evaluates
financial risks in close co-operation with the Company’s operating units. The board provides principles for overall risk management, as well as
policies covering specific areas, such as interest rate risk, credit risk, the use of financial instruments and investment of excess liquidity.
The Company’s financial instruments consist mainly of deposits with banks, accounts receivable and payable, and loans to associated
companies.
The Company holds the following financial instruments:
Financial assets
Cash and cash equivalents
Trade and other receivables
Investments accounted for using the equity method
Available-for-sale financial assets
Financial liabilities
Trade and other payables
a) Market risk
i) Foreign exchange risk
Consolidated
30 June 2011
$
Consolidated
30 June 2010
$
Parent entity
30 June 2011
$
Parent entity
30 June 2010
$
74,038
509,207
-
1,071,071
1,654,316
174,662
174,662
1,696,835
849,300
2
-
2,546,137
487,792
487,792
74,038
509,207
-
1,071,071
1,654,316
174,662
174,662
1,335,541
458,670
1
713,714
2,507,926
220,445
220,445
Foreign exchange risk is the risk that financial loss will be suffered due to adverse movements in exchange rates. The Company is not
exposed to foreign exchange risk.
ii) Price risk
Price risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate as a result of changes in market prices
(other than those arising from foreign exchange or interest rate risk). The Company is not exposed to any material price risk.
iii) Cash flow and fair value interest rate risk
Interest rate risk is the risk that a financial instrument’s value will fluctuate as a result of changes in market interest rates and the effective
weighted interest rates on classes of financial assets and financial liabilities. Interest rate risk is managed by the Company with the use of
rolling short term deposits.
The Company has no long term financial liabilities upon which it pays interest.
As at the end of the reporting period, Maximus Resources Limited had the following variable rate cash and cash equivalent holdings:
Parent entity
30 June 2011
30 June 2011
30 June 2010
30 June 2010
Cash and cash equivalents
Net exposure to cash flow interest rate risk
Weighted average
interest rate
Balance
$
Weighted average
interest rate
%
4.80%
74,038
74,038
%
5.46%
Balance
$
1,335,541
1,335,541
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
Interest rate sensitivity analysis
At 30 June 2011, the effect on profit and equity as a result of changes in the interest rate, with all other variables remaining constant would be
as follows:
Parent entity
30 June 2011
Financial assets
Cash and cash equivalents
Total increase/ (decrease)
Parent entity
30 June 2010
Financial assets
Cash and cash equivalents
Total increase/ (decrease)
b) credit risk
Carrying amount
$
74,038
Carrying amount
$
1,335,541
Interest rate risk
Interest rate risk
Interest rate risk
Interest rate risk
Increase 2%
Increase 2%
Decrease 2%
Decrease 2%
Profit
$
1,481
1,481
Equity
$
1,481
1,481
Profit
$
(1,481)
(1,481)
Equity
$
(1,481)
(1,481)
Interest rate risk
Interest rate risk
Interest rate risk
Interest rate risk
Increase 2%
Increase 2%
Decrease 2%
Decrease 2%
Profit
$
26,711
26,711
Equity
$
26,711
26,711
Profit
$
Equity
$
(26,711)
(26,711)
(26,711)
(26,711)
Credit risk is the risk of default by borrowers and transactional counterparties as well as the loss of value of assets due to deterioration in
credit quality. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as credit exposures
to wholesale and retail customers, including outstanding receivables and committed transactions. For banks and financial institutions, only
independently rated parties with a minimum rating of ‘A’ are accepted. Individual risk limits are set based on internal or external ratings in
accordance with limits set by the board. Sales to retail customers are required to be settled in cash or using major credit cards, mitigating
credit risk.
c) liquidity risk
Liquidity risk is the risk that the Company may encounter difficulty in settling its debts or otherwise meeting its obligations. The Company
manages liquidity risk by monitoring cash flows and ensuring that adequate funds are available to meet cash demands. At the reporting date
the Company held deposits at call of $35,000 (2010: $1,100,000) that are expected to readily generate cash inflows for managing liquidity risk.
d) fair value measurements
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.
AASB 7: Financial Instruments: Disclosures requires disclosure of fair value measurements by level of the following fair value measurement
hierarchy:
a) quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
b) 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) (level 2),and
c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3)
32
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
The following table presents the Company’s assets and liabilities measured and recognised at fair value at 30 June 2011 and 30 June 2010.
30 June 2011
Assets
Available-for-sale financial assets
ERO Mining Limited
30 June 2010
Assets
Available-for-sale financial assets
ERO Mining Limited
FME Exploration Services Pty Ltd
3 segment information
a) Description of segments
Level 1
$
1,071,071
1,071,071
Level 1
$
713,714
1
713,715
Level 2
Level 3
$
-
-
$
-
-
Level 2
Level 3
$
-
-
-
$
-
-
-
Total
$
1,071,071
1,071,071
Total
$
713,714
1
713,715
Identification of reportable segments
Management has determined the operating segments based on the reports reviewed and used by the Board of Directors (the chief operating
decision makers) that are used to make strategic decisions. The Company is managed primarily on the basis of geographical area of interest,
since the diversification of the Company operations inherently has notably different risk profiles and performance assessment criteria.
Operating segments are therefore determined on the same basis.
Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic
characteristics and are also similar with respect to the following:
• external regulatory requirements
• geographical and geological styles
Mining
The Sellheim segment will mine for alluvial gold. Further listed segmented assets for the Company including development costs and costs
associated with the mining lease are reported on in this segment.
Accounting policies developed
Unless stated otherwise, all amounts reported to the Board of Directors as chief decision maker with respect to operating segments are
determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Company.
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
b) business segments
2011
Segment revenue
Adjusted earnings before interest, tax,
depreciation and amortisation (EBITDA)
Cost of goods sold
Impairment
Segment assets
Segment asset movements for the year:
Capital expenditure
Amortisation
Adjustment to exploration assets upon loss of
control of subsidiary
Loss of development assets upon loss of control
of subsidiary
Disposals
Capital expenditure impaired
Impairment of development asset
Movement in gold inventory
Total movement for the year
Sellheim
Adelaide Hills
Province
Narndee
Other
ERO Mining
Total
$
467,391
(1,050,362)
(2,423,377)
(500,000)
373,358
(17,143)
(905,624)
-
-
-
(302,982)
(197,018)
(70,239)
$
-
-
-
-
$
-
-
-
-
$
-
$
$
196,538
663,929
(916,233)
(8,613,405)
(10,580,000)
-
(716,875)
(3,140,252)
(916,233)
(8,341,318)
(9,757,551)
8,068,641
5,651,168
772,174
-
14,865,341
1,137,462
415,426
142,356
401,161
2,079,262
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(248,250)
(1,153,874)
5,495,760
5,495,760
(1,600,000)
(1,600,000)
(450,000)
(916,233)
-
(450,000)
(7,863,137)
(9,082,352)
-
-
(478,181)
(41,086)
(675,199)
(111,325)
(1,493,006)
1,137,462
415,426
(1,223,877)
(4,333,733)
(5,497,728)
Total segment assets
Unallocated assets
Total assets
Total segment liabilities
Unallocated liabilities
Total liabilities
2010
Segment revenue
Adjusted EBITDA
Cost of goods sold
Impairment
Segment assets:
Segment assets
Inter segment elimination
Total segment assets
-
-
-
-
-
14,865,341
2,413,860
17,279,201
-
199,267
199,267
Sellheim
Adelaide Hills
Province
Narndee
Other
ERO Mining
Total
$
28,259
(830,045)
(460,896)
(585,533)
$
-
-
-
-
$
-
$
-
$
$
192,457
220,716
(5,242,092)
(362,363)
(2,377,537)
(8,812,037)
-
-
-
(460,896)
(5,242,092)
(362,363)
(2,569,994)
(8,759,982)
1,866,364
6,931,179
5,235,742
1,996,051
12,675,428
28,704,764
-
-
-
-
(8,341,695)
(8,341,695)
1,866,364
6,931,179
5,235,742
1,996,051
4,333,733
20,363,069
Segment asset movements for the year:
Capital expenditure
Amortisation
Capital expenditure impaired
Total movement for the year
545,658
(188,125)
(585,533)
(228,000)
90,558
227,169
334,120
1,863,274
-
-
-
3,060,779
(188,125)
(5,242,092)
(362,363)
(2,569,994)
(8,759,982)
90,558
(5,014,923)
(28,243)
(706,720)
(5,887,328)
-
-
Total segment assets
Unallocated assets
Total assets
Total segment liabilities
Unallocated liabilities
Total liabilities
34
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
-
-
-
-
-
20,363,069
4,291,566
24,654,635
-
549,506
549,506
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
i) Segment revenue
Segment revenue reconciles to total revenue from continuing operations as follows:
Total segment revenue
Interest revenue
Total revenue from continuing operations (note 4)
ii) Adjusted EBITDA
Consolidated
30 June 2011
Consolidated
30 June 2010
$
663,929
48,831
712,760
$
220,716
95,611
316,327
A reconciliation of adjusted EBITDA to operating profit before income tax is provided as follows:
Allocated:
Adjusted EBITDA
Unallocated:
Interest revenue
Net gain on loss of control of subsidiary
Other expenses
Administrative expenses
Marketing expenses
Finance costs
Amortisation
Profit before income tax from continuing operations
iii) Segment assets
Reportable segments’ assets are reconciled to total assets as follows:
Allocated:
Segment assets
Unallocated:
Cash and cash equivalents
Trade and other receivables
Other assets
Investments accounted for using the equity method
Available-for-sale financial assets
Plant and equipment
Security deposit
Total assets as per the consolidated statements of financial position
iv) Segment liabilities
Reportable segments’ liabilities are reconciled to total liabilities as follows:
Allocated:
Allocated segment liabilities
Unallocated:
Trade and other payables
Provisions
Total liabilities as per the consolidated statements of financial position
Consolidated
30 June 2011
$
Consolidated
30 June 2010
$
(10,580,000)
(8,812,037)
48,831
5,698,109
-
(1,020,180)
(150,645)
(2,853)
(1,153,874)
(7,160,612)
95,611
-
(87,255)
(1,525,834)
(158,640)
(3,975)
(188,125)
(10,680,255)
Consolidated
30 June 2011
$
Consolidated
30 June 2010
$
14,865,341
20,363,069
74,038
509,207
122,457
-
1,071,071
637,087
-
17,279,201
1,696,836
849,300
143,070
2
-
1,584,608
17,750
24,654,635
Consolidated
30 June 2011
Consolidated
30 June 2010
$
-
174,662
24,605
199,267
$
-
487,793
61,713
549,506
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
4 revenue
From continuing operations
Sales revenue
Gold sales
Other revenue
Interest received
5 other income
Sale of tenement
Net gain on loss of control of subsidiary (note 8)
6 expenses
Cost of goods sold
Cost of gold extraction
Cost of exploration site sold
Administration
Compliance
Depreciation
Administration costs
Employment costs
Legal fees
Other
Marketing
Marketing and promotion
Exploration expenses
General exploration expenditure written off
Capitalised exploration expenditure impaired
36
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
Consolidated
30 June 2011
$
Consolidated
30 June 2010
$
Parent entity
30 June 2011
$
Parent entity
30 June 2010
$
663,929
663,929
48,831
48,831
712,760
220,716
220,716
95,611
95,611
316,327
467,391
467,391
40,596
40,596
507,987
28,259
28,259
65,236
65,236
93,495
Consolidated
30 June 2011
Consolidated
30 June 2010
Parent entity
30 June 2011
Parent entity
30 June 2010
$
500,000
5,698,109
6,198,109
$
-
-
-
$
500,000
-
500,000
$
-
-
-
Consolidated
30 June 2011
$
Consolidated
30 June 2010
$
Parent entity
30 June 2011
$
Parent entity
30 June 2010
$
2,640,252
500,000
3,140,252
161,565
76,006
110,743
373,927
37,654
260,285
158,640
-
158,640
290,851
86,122
310,800
684,820
18,687
134,554
1,020,180
1,525,834
150,645
150,645
171,141
8,911,211
9,082,352
158,640
158,640
262,571
8,497,411
8,759,982
1,923,377
500,000
2,423,377
118,944
17,609
155,400
291,367
18,043
260,285
861,648
108,311
108,311
123,637
-
123,637
150,802
8,346
111,000
260,850
7,377
181,012
719,387
96,434
96,434
139,094
1,080,121
1,219,215
169,764
5,927,417
6,097,181
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
7 income tax expense
a) income tax expense:
Deferred tax
Research and development tax offset
b) numerical reconciliation of income tax
expense to prima facie tax payable
Profit from continuing operations before income tax expense
Tax at the Australian tax rate of 30% (2010: 30%)
Tax effect of amounts which are not deductible (assessable) in calculating
taxable income:
Non-deductible items
Share placement issue costs
Temporary differences not brought to account
Research and development tax offset
Income tax expense
Consolidated
30 June 2011
$
Consolidated
30 June 2010
$
Parent entity
30 June 2011
$
Parent entity
30 June 2010
$
30,713
3,006
33,719
26,091
(597,519)
(571,428)
22,613
3,006
25,619
255,587
(334,383)
(78,796)
(7,160,612)
(2,148,184)
(10,680,255)
(3,204,077)
(3,803,830)
(1,141,149)
(6,993,450)
(2,098,035)
-
-
2,178,897
3,006
33,719
4,899
29,772
3,195,497
(597,519)
(571,428)
-
-
1,163,762
3,006
25,619
4,899
12,759
2,335,964
(334,383)
(78,796)
A deferred tax asset (DTA) has not been recognised in respect of temporary differences as they do not meet the recognition criteria as outlined in
Note 1(e) of the financial statements. A DTA has not been recognised in respect of tax losses either as realisation of the benefit is not regarded as
probable.
The Company has unrecognised DTAs of $3,100,041 (2010: $2,308,588) that are available indefinitely for offset against future taxable profits.
The tax rates applicable to each potential tax benefit are as follows:
•
•
timing differences – 30%
tax losses – 30%
8 Discontinued operation / loss of control of subsidiary
a) Description
During the year Maximus Resources Limited’s percentage holding of the Issued Capital of ERO Mining Limited reduced to 12.81%. This
dilution occurred due to issues of shares in ERO Mining Limited. This, along with changes to the members of the Boards of Directors of
Maximus Resources Limited and ERO Mining Limited, has resulted in a loss of control of ERO Mining Limited as a subsidiary. Therefore, ERO
Mining Limited has been consolidated with Maximus Resources Limited for the purposes of these financial statements up until the date when
control was lost. The accounting treatment of this loss of control is detailed in note 1(b).
Financial information relating to the loss of control for the period to the date of disposal is set out below. Further information is set out in
note 3 – segment information.
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
b) financial performance and cash flow information
The financial performance and cash flow information presented below for 2011 include the six month period ended 31 December 2010 being
the effective date of deconsolidation of ERO Mining Limited (2010: 12 months ended 30 June 2010).
30 June 2011
30 June 2010
$
$
Financial performance information of ERO Mining Limited included in consolidated statement of
comprehensive income
Revenue (note 4)
Expenses
Loss before income tax of subsidiary for the period
Income tax (benefit)/expense
Loss after income tax of subsidiary for the period
Gain on loss of control of asset before income tax (note 5)
Income tax expense
Gain on loss of control of subsidiary after income tax
Loss from subsidiary
Cash flow information of ERO Mining Limited included in consolidated statement of cash flows
Net cash (outflow)/inflow from operating activities
Net cash (outflow)/inflow from investing activities (2011 includes an outflow of $290,188 from the loss of cash balances
upon loss of control of subsidiary)
Net cash inflow from financing activities
Net (decrease) in cash generated by the subsidiary
c) carrying amounts of assets and liabilities
The carrying amounts of assets and liabilities of the subsidiary as at 31 December 2010 were:
Total assets
Total liabilities
Net assets
d) Details of the loss of control of subsidiary
Consideration received or receivable
Derecognition of non-controlling interest upon loss of control
Carrying amount of net assets lost due to loss of control of subsidiary (refer (c) above)
Gain on loss of control of subsidiary before income tax
Income tax expense
Gain on loss of control of subsidiary after income tax
9 current assets – cash and cash equivalents
222,832
(3,909,637)
(3,686,805)
492,632
(3,194,173)
-
-
-
(3,194,173)
(441,574)
(1,965,782)
2,010,467
(396,889)
204,773
(9,259,664)
(9,054,891)
(8,100)
(9,062,991)
5,698,109
-
5,698,109
(3,364,882)
(222,450)
(561,844)
423,000
(361,294)
5,584,643
(252,624)
5,332,019
-
11,030,128
(5,332,019)
5,698,109
-
5,698,109
Cash at bank and in hand
Term deposits
a) risk exposure
Consolidated
30 June 2011
Consolidated
30 June 2010
Parent entity
30 June 2011
Parent entity
30 June 2010
$
39,038
35,000
74,038
$
596,836
1,100,000
1,696,836
$
39,038
35,000
74,038
$
235,541
1,100,000
1,335,541
The Company’s exposure to interest rate risk is discussed in note 2. The maximum exposure to credit risk at the end of each reporting period
is the carrying amount of each class of cash and cash equivalents mentioned above.
b) Deposits at call
The deposits are bearing a weighted average interest rate of 6.01% (2010: 5.46%). The deposits have a period to repricing of 26 days (2010:
16 days).
38
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
10 current assets – trade and other receivables
Net trade receivables
Trade and other receivables
GST paid on purchases
Net receivable from related party
Receivable from FME Exploration Services Pty Ltd*
Consolidated
30 June 2011
$
Consolidated
30 June 2010
$
Parent entity
30 June 2011
$
Parent entity
30 June 2010
$
501,694
7,513
509,207
-
-
509,207
701,929
(2,629)
699,300
150,000
150,000
849,300
501,694
7,513
509,207
-
-
509,207
380,605
3,065
383,670
75,000
75,000
458,670
* The entity advanced this amount to assist in the funding of working capital. The Company provides support to the related party to ensure it can pay its debts as and
when they fall due and payable. This arrangement was terminated on 30 June 2011 by mutual agreement.
a) Past due but not impaired
As at 30 June 2011, there were no material trade and other receivables that were considered to be past due and impaired (2010: Nil).
b) related party receivables
This receivable from FME Exploration Services Pty Ltd is repayable at call and interest at market rates can be charged at the discretion of the
directors of the Company. The Company will not seek repayment where such repayments would prejudice the related party’s ability to meet
any obligations as and when they fall due.
11 current assets – inventories
Finished goods
– at net realisable value
12 current assets – other current assets
Security deposit
Pre-paid insurance
Consolidated
30 June 2011
$
-
-
Consolidated
30 June 2010
$
111,325
111,325
Parent entity
30 June 2011
$
-
-
Parent entity
30 June 2010
$
70,239
70,239
Consolidated
30 June 2011
Consolidated
30 June 2010
Parent entity
30 June 2011
Parent entity
30 June 2010
$
98,841
23,616
122,457
$
98,841
44,229
143,070
$
98,841
23,616
122,457
$
98,841
24,332
123,173
13 non-current assets – investments accounted for using the equity method
Shares in associates (note 28)
a) shares in associates
Consolidated
30 June 2011
Consolidated
30 June 2010
Parent entity
30 June 2011
Parent entity
30 June 2010
$
-
-
$
2
2
$
-
-
$
1
1
Investments in associates are accounted for in the financial statements using the equity method of accounting. The equity method of
accounting recognises the Company’s share of post acquisition reserves of its associates.
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
14 non-current assets – available-for-sale financial assets
a) fair values
Available-for-sale financial assets include the following classes of financial assets:
Shares in listed companies
b) listed securities
Consolidated
30 June 2011
Consolidated
30 June 2010
Parent entity
30 June 2011
Parent entity
30 June 2010
$
1,071,071
1,071,071
$
-
-
$
1,071,071
1,071,071
$
713,714
713,714
Maximus Resources Limited holds 44,607,143 shares in ERO Mining Limited (2010: 44,607,143). There are no fixed returns or fixed maturity
dates attached to these investments. These shares are held as available-for-sale and their value is marked to market at financial year end.
15 non-current assets – Plant and equipment
Consolidated
At 1 July 2009
Cost or fair value
Accumulated depreciation
Net book amount
Year ended 30 June 2010
Opening net book amount
Additions
Disposals
Depreciation charge
Closing net book amount
At 30 June 2010
Cost or fair value
Accumulated depreciation
Net book amount
Consolidated
Year ended 30 June 2011
Opening net book amount
Additions
Depreciation charge
Loss of assets upon loss of control of subsidiary
Closing net book amount
At 30 June 2011
Cost or fair value
Accumulated depreciation
Net book amount
Plant
and equipment
Furniture, fittings
and equipment
Machinery
and vehicles
Computer equipment
and software
$
$
$
$
1,397,411
(184,227)
1,213,184
1,213,184
130,357
(138,127)
(135,252)
1,070,162
1,389,641
(319,479)
1,070,162
25,699
(4,922)
20,777
20,777
927
(4,908)
(1,938)
14,858
21,718
(6,860)
14,858
592,180
(134,546)
457,634
457,634
170,700
(105,458)
(31,891)
490,985
657,422
(166,437)
490,985
100,733
(59,264)
41,469
41,469
-
(25,004)
(7,862)
8,603
75,728
(67,125)
8,603
Plant
and equipment
Furniture, fittings
and equipment
Machinery
and vehicles
Computer equipment
and software
$
$
$
$
1,070,162
13,963
(143,655)
(388,673)
551,797
903,985
(352,188)
551,797
14,858
-
(2,656)
(2,254)
9,948
18,191
(8,243)
9,948
490,985
-
(50,382)
(365,840)
74,763
144,468
(69,705)
74,763
8,603
-
(7,137)
(887)
579
67,908
(67,329)
579
Total
$
2,116,023
(382,959)
1,733,064
1,733,064
301,984
(273,497)
(176,943)
1,584,608
2,144,509
(559,901)
1,584,608
Total
$
1,584,608
13,963
(203,830)
(757,654)
637,087
1,134,552
(497,465)
637,087
40
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
Parent entity
At 1 July 2009
Cost or fair value
Accumulated depreciation
Net book amount
Year ended 30 June 2010
Opening net book amount
Additions
Disposals
Depreciation charge
Closing net book amount
At 30 June 2010
Cost or fair value
Accumulated depreciation
Net book amount
Parent entity
Year ended 30 June 2011
Opening net book amount
Additions
Depreciation charge
Closing net book amount
At 30 June 2011
Cost or fair value
Accumulated depreciation
Net book amount
Plant
and equipment
Furniture, fittings
and equipment
Machinery
and vehicles
Computer equipment
and software
$
$
$
$
856,413
(139,900)
716,513
716,513
81,369
(47,761)
(100,114)
650,007
890,022
(240,015)
650,007
23,119
(4,372)
18,747
18,747
-
(4,927)
(1,473)
12,347
18,191
(5,844)
12,347
190,335
(51,023)
139,312
139,312
-
(45,867)
(623)
92,822
144,468
(51,646)
92,822
92,911
(54,720)
38,191
38,191
-
(25,004)
(6,251)
6,936
67,907
(60,971)
6,936
Plant
and equipment
Furniture, fittings
and equipment
Machinery
and vehicles
Computer equipment
and software
$
$
$
$
650,007
13,963
(112,173)
551,797
903,985
(352,188)
551,797
12,347
-
(2,399)
9,948
18,191
(8,243)
9,948
92,822
-
(18,059)
74,763
144,468
(69,705)
74,763
6,936
-
(6,357)
579
67,908
(67,329)
579
Total
$
1,162,778
(250,015)
912,763
912,763
81,369
(123,559)
(108,461)
762,112
1,120,588
(358,476)
762,112
Total
$
762,112
13,963
(138,988)
637,087
1,134,552
(497,465)
637,087
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
16 non-current assets – exploration and evaluation, development and mine properties
a) exploration and evaluation
Consolidated
30 June 2011
$
Consolidated
30 June 2010
$
Parent entity
30 June 2011
$
Parent entity
30 June 2010
$
16,449,313
2,079,262
5,495,760
24,793,046
1,956,249
-
-
(1,540,000)
14,483,097
1,678,101
-
-
(171,141)
(262,571)
(139,094)
21,015,582
934,932
-
(1,540,000)
-
(8,911,211)
(8,497,411)
(1,080,121)
(5,927,417)
(450,000)
-
(450,000)
-
14,491,983
16,449,313
14,491,983
14,483,097
6,144,190
8,347,793
8,968,393
7,480,920
6,144,190
8,347,793
6,047,507
8,435,590
14,491,983
16,449,313
14,491,983
14,483,097
Consolidated
30 June 2011
$
Consolidated
30 June 2010
$
Parent entity
30 June 2011
$
3,802,431
-
(1,600,000)
-
(1,153,874)
(675,199)
373,358
1,342,982
(969,624)
373,358
1,346,026
1,104,530
-
1,540,000
(188,125)
-
3,802,431
3,990,556
(188,125)
3,802,431
1,476,000
-
-
-
(905,624)
(197,018)
373,358
1,342,982
(969,624)
373,358
Parent entity
30 June 2010
$
-
-
-
1,540,000
(64,000)
-
1,476,000
1,540,000
(64,000)
1,476,000
Consolidated
30 June 2011
Consolidated
30 June 2010
Parent entity
30 June 2011
Parent entity
30 June 2010
$
110,818
52,967
8,572
2,305
174,662
$
272,230
170,810
27,804
16,949
487,793
$
110,818
52,967
8,572
2,305
174,662
$
159,401
50,938
10,095
11
220,445
Exploration and evaluation
Movement:
Opening balance
Expenditure incurred
Adjustment to assets upon loss of control of subsidiary
Transfer to mine properties
Less: Exploration expenditure written off
Impairment of capitalised expenditure
Disposal of tenement
Closing balance
Closing balance comprises:
Exploration and evaluation – 100% owned
Exploration and evaluation phases – joint ventures
b) Mine properties
Mine properties
Movement:
Opening balance
Additions through normal acquisition
Loss of assets upon loss of control of subsidiary
Transferred from exploration and evaluation
Amortisation charge
Impairment charge
Closing balance
Cost
Less: Accumulated amortisation
Closing balance
17 current liabilities – trade and other payables
Trade payables
Accrued expenses
Credit cards
GST collected on sales
42
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
18 current liabilities – Provisions
Annual leave
19 non-current liabilities – Provisions
Long service leave
20 contributed equity
a) share capital
Ordinary shares
Fully paid
b) Movements in ordinary share capital:
Consolidated
30 June 2011
Consolidated
30 June 2010
Parent entity
30 June 2011
Parent entity
30 June 2010
$
18,297
18,297
$
31,358
31,358
$
18,297
18,297
$
3,193
3,193
Consolidated
30 June 2011
Consolidated
30 June 2010
Parent entity
30 June 2011
Parent entity
30 June 2010
$
6,308
6,308
$
30,355
30,355
$
6,308
6,308
$
2,282
2,282
Consolidated
30 June 2011
$
Consolidated
30 June 2010
$
Parent entity
30 June 2011
$
Parent entity
30 June 2010
$
342,048,706
261,245,035
32,694,827
31,373,928
Date
1 July 2009
30 June 2010
1 December 2010
11 May 2011
Details
Opening balance
Share purchase plan
Proceeds received
Share placement
Proceeds received
Less: Transaction costs arising on share issues
Deferred tax credit recognised directly in equity
Balance
Share placement
Proceeds received
Share purchase plan
Proceeds received
Less: Transaction costs arising on share issues
Deferred tax credit recognised directly in equity
Number of shares
184,882,136
Issue price
29,341,900
$
62,955,493
$0.027
1,699,800
13,407,406
$0.027
261,245,035
362,000
(42,531)
12,759
31,373,928
39,186,000
$0.017
666,162
41,617,671
$0.017
707,500
32,747,590
(75,376)
22,613
32,694,827
30 June 2011
Balance
342,048,706
c) ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of
and amounts paid on the shares held.
At shareholders’ meetings, on a show of hands every holder of ordinary shares present in person or by proxy is entitled to one vote, and upon
a poll each share is entitled to one vote.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
d) options and rights
Information relating to the Maximus Resources Limited Employee Share Option and Incentive Rights Plans, including details of options and
rights issued, exercised and lapsed during the financial year and the options/rights outstanding at the end of the financial year, is set out in
note 33.
e) capital risk management
The Company has no debt capital. There are no externally imposed capital requirements.
The Company’s debt and capital includes ordinary share capital, supported by financial assets. There are no externally imposed capital
requirements.
Management effectively manages the Company’s capital by assessing its financial risks and adjusting its capital structure in response to
changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share
issues.
There have been no changes in the strategy adopted by management to control the capital of the Company since the prior year. This strategy
is to ensure that the Company has no debt.
21 reserves and retained losses
a) reserves
Available-for-sale investments revaluation reserve
Share-based payments reserve
Movements:
Available-for-sale investments revaluation reserve
Balance 1 July
Derecognition of non-controlling interest upon loss of control of
subsidiary
Revaluation of financial assets (net of tax) (note 14)
Balance 30 June
Share-based payments reserve
Balance 1 July
Options issued during the year(see note 27)
Movements in non-controlling interest
Derecognition of non-controlling interest upon loss of control of
subsidiary
Rights issued during the year
Balance 30 June
b) retained losses
Movements in retained losses were as follows:
Balance 1 July
Net loss for the year
Balance 30 June
c) nature and purpose of reserves
i) Available-for-sale reserve
Consolidated
30 June 2011
$
(1,388,794)
1,354,231
(34,563)
-
(764,794)
(624,000)
(1,388,794)
Consolidated
30 June 2010
$
-
1,319,605
1,319,605
Parent entity
30 June 2011
$
Parent entity
30 June 2010
$
(1,388,794)
(1,746,151)
1,354,231
(34,563)
1,319,731
(426,420)
-
-
-
-
(1,746,151)
(1,179,550)
-
-
357,357
(566,601)
(1,388,794)
(1,746,151)
1,319,605
1,368,875
1,319,731
-
(16,121)
16,247
34,500
1,354,231
16,330
(65,600)
-
-
1,319,605
-
-
-
34,500
1,354,231
1,303,401
16,330
-
-
-
1,319,731
(17,449,350)
1,869,020
(9,820,357)
(7,628,993)
(11,750,881)
(3,829,449)
(4,836,227)
(6,914,654)
(15,580,330)
(17,449,350)
(15,580,330)
(11,750,881)
Changes in the fair value of instruments, such as equities, classified as available-for-sale financial assets, are recognised in other
comprehensive income, as described in note 1(k) and accumulated in a separate reserve within equity. Amounts are reclassified to profit or
loss when the associated assets are sold or impaired.
ii) Share-based payments reserve
The share-based payments reserve records items recognised as expenses on valuation of employee options and rights and options issued
to external parties in consideration for goods and services rendered.
44
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
22 Key management personnel disclosures
a) Directors
The following persons were directors of Maximus Resources Limited during the 2011 financial year:
i) Chairman – non-executive
R M Kennedy
ii) Executive directors
K J Malaxos, Managing Director (since 13 December 2010)
S A Booth, former Managing Director (resigned 31 August 2010)
iii) Non-executive directors
L C McClusky (since 1 September 2010)
E J Vickery
N J Smart, Alternate director for E J Vickery
b) other key management personnel
The following persons also had authority and responsibility for planning, directing and controlling the activities of the Company, directly or
indirectly, during the financial year:
Name
Position
Employer
D W Godfrey (resigned 30 June 2011)
Chief Financial Officer/ Company Secretary
FME Exploration Services Pty Ltd
c) Key management personnel compensation
Short term employee benefits
Post employment benefits
Share-based payments
Parent entity
30 June 2011
Parent entity
30 June 2010
$
563,043
46,585
34,500
644,128
$
570,557
50,882
16,330
637,769
Detailed remuneration disclosures are provided in sections A to D of the remuneration report on pages 8 to 10.
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
d) equity instrument disclosures relating to key management personnel
i) Option holdings
The numbers of options over ordinary shares in the Company held during the financial year by each director of Maximus Resources
Limited and other key management personnel of the Company, including their personally related parties, are set out below.
2011
Name
R M Kennedy
K J Malaxos
L C McClusky
E J Vickery
N J Smart
S A Booth
D W Godfrey
2010
Name
R M Kennedy
E J Vickery
K J Lines
N J Smart
S A Booth
K J A Wills
R C Healy
Balance at start
of the year
Issued as
remuneration
Exercised (expired/
purchased)
Acquired
during the year
Balance at end of
the year
Vested and
exercisable
Unvested
-
-
-
-
-
3,000,000
53,334
-
-
-
-
-
-
-
-
-
-
-
-
(3,000,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
53,334
53,334
-
-
-
-
-
-
-
Balance at start
of the year
Issued as
remuneration
Exercised (expired/
purchased)
Acquired
during the year
Balance at end of
the year
Vested and
exercisable
Unvested
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
3,000,000
3,000,000
-
-
-
-
-
-
-
53,334
53,334
-
-
-
-
-
-
-
-
D W Godfrey
53,334
ii) Rights holdings
The numbers of rights to acquire ordinary shares in the Company held during the financial year by each director of Maximus Resources
Limited and other key management personnel of the Company, including their personally related parties, are set out below.
2011
Name
R M Kennedy
K J Malaxos
L C McClusky
E J Vickery
N J Smart
S A Booth
D W Godfrey
Balance at start
of the year
Issued as
remuneration
Exercised (expired/
purchased)
Acquired during the
year
Balance at end of
the year
Vested and
exercisable
-
-
-
-
-
-
-
-
3,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
-
-
-
-
-
-
-
-
-
-
-
-
Unvested
-
3,000,000
-
-
-
-
-
There were no issues or holdings of rights during the year ended 30 June 2010.
46
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
iii) Share holdings
The numbers of shares in the Company held during the financial year by each director of Maximus Resources Limited and other key
management personnel of the Company, including their personally related parties, are set out below. There were no shares granted during
the reporting period as compensation.
2011
Name
R M Kennedy
K J Malaxos
L C McClusky
E J Vickery
N J Smart
S A Booth
D W Godfrey
2010
Name
R M Kennedy
E J Vickery
K J Lines
N J Smart
D W Godfrey
S A Booth
K J A Wills
R C Healy
D W Godfrey
Balance at the start of
the year
Received as
compensation
Exercise of options
Acquired/ (disposed)
Balance at the end of
the year
10,000,000
-
-
1,350,013
-
650,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,764,706
11,764,706
-
250,000
882,353
-
-
-
-
250,000
2,232,366
-
650,000
-
Balance at the start of
the year
Received as
compensation
Exercise of options
Acquired/ (disposed)
Balance at the end of
the year
6,920,000
794,458
-
-
-
-
3,678,278
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,080,000
555,555
10,000,000
1,350,013
-
-
-
650,000
-
-
-
-
-
-
650,000
3,678,278
-
-
Subsequent to balance date the Company completed a rights issue whereby directors participated in the capital issue. The current
holdings of directors after the rights issue are detailed in the Directors report on pages 1 to 11.
23 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:
Grant Thornton
Audit and review of financial reports
Total auditors’ remuneration
Consolidated
30 June 2011
$
Consolidated
30 June 2010
$
Parent entity
30 June 2011
$
Parent entity
30 June 2010
$
27,550
27,550
54,563
54,563
27,550
27,550
26,313
26,313
The prior year consolidated amount includes ERO Mining Limited’s audit fees for the year ended 30 June 2010.
24 contingencies
Contingent liabilities
The Company had no known contingent liabilities as at 30 June 2011 (2010: Nil).
25 commitments
a) commitments for exploration and joint venture expenditure
In order to maintain current rights of tenure to exploration tenements the Company will be required to outlay in the year ending 30 June 2012
amounts of approximately $2,714,000 (2011: $3,083,000) in respect of tenement lease rentals and to meet minimum expenditure requirements
pursuant to various joint venture requirements.
b) lease commitments – company as lessee
The State Government departments responsible for mineral resources require perfomance bonds for the purposes of rehabilitation of areas
disturbed by exploration activities. At 30 June 2011, the Group had $35,000 of bank guarantees in place for this purpose (2010: $45,800).
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
26 related party transactions
a) investments in associates
Investments in associates are set out in note 28.
b) Key management personnel
Disclosures relating to key management personnel are set out in note 22.
c) transactions with other related parties
The following transactions occurred with related parties:
• Administrative services were provided by FME Exploration Services Pty Ltd to the Company during the period 1 July 2010 to 28 February
2011 for $88,800 (30 June 2010: $111,000).
• FME Exploration Services Pty Ltd repaid $75,000 of the working capital loan from the Company. The total receivable from FME Exploration
Services Pty Ltd at 28 February 2011 was Nil (30 June 2010: $75,000).
• On 30 June 2011 the Company borrowed $40,000 from Mandurang Pty Ltd, of which Mr R M Kennedy is a director. The Company will pay
interest on the loan at a rate of 7.65% per annum compounded monthly. The loan will be fully repaid with interest by 31 August 2011.
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties
unless otherwise stated.
27 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 of entity
Country of incorporation
Class of shares
Equity holding*
Equity holding*
ERO Mining Limited
Australia
Ordinary
2011
%
12.81
2010
%
27.85
* During the year Maximus Resources Limited’s percentage holding of the Issued Capital of ERO Mining Limited reduced to 12.81%. This dilution occurred due to
a issues of shares in ERO Mining Limited. This, along with changes to the members of the Boards of Directors of Maximus Resources Limited and ERO Mining
Limited, has resulted in a loss of control of ERO Mining Limited as a subsidiary. Therefore, ERO Mining Limited has been consolidated with Maximus Resources
Limited for the purposes of these financial statements up until the date when control was lost. The accounting treatment of this loss of control is detailed in
note 1(b).
The gain recognised on the loss of control of the subsidiary was $5,698,109. The gain is recognised in Other income in the Statement of
comprehensive income (refer to note 5). Information on the performance of ERO Mining Limited for the 6 month period to the date of loss of
control is detailed in note 8.
28 investments in associates
An interest was held in FME Exploration Services Pty Ltd, an associated company incorporated in Australia, until the disposal of the holding on
28 February 2011. Information relating to this holding is set out below:
a) Movements in carrying amounts
Carrying amount at the beginning of the financial year
Disposal of shares
Carrying amount at the end of the financial year
Parent entity
30 June 2011
Parent entity
30 June 2010
$
1
(1)
-
$
1
-
1
b) summarised financial information of associates
The Company’s share of the results of its principal associates and its aggregated assets (including goodwill) and liabilities are as follows:
Company’s share of:
2010
FME Exploration Services Pty Ltd
Ownership Interest
%
33
Assets
$
253,515
253,515
Liabilities
Revenues
$
$
281,721
281,721
444,052
444,052
c) contingent liabilities of associates
Share of contingent liabilities incurred jointly with other investors
48
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
-
-
Profit
$
5,699
5,699
85,028
85,028
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
29 interests in joint ventures
Maximus Resources Limited has the following interests in unincorporated joint ventures:
State
Agreement name
Parties
Summary
NT & SA
Flinders Agreement
Maximus Resources Ltd (MXR) and Flinders
Mines Ltd (FMS)
Under this July 2005 agreement and amending deeds MXR through
the issue of shares and options has 100% non-diamond rights to the
Woolanga and Billa Kalina Project tenements and to EL4303 and has 100%
metalliferous mineral rights to the other Adelaide Hills Project tenements.
NT & SA
Eromanga Basin Agreement
ERO Mining Ltd (ERO), Flinders Mines Ltd
(FMS) and Maximus Resources Ltd (MXR)
ERO can earn a 70% interest in MXR’s Eromanga Basin Project tenements in
SA and the NT by spending $7 million on the tenements within 6 years.
NT
NuPower Agreement
MXR, FMS and NuPower Resources Ltd
QLD
Sellheim Agreement
MXR and A Stiff, C Budge and P Harvey
SA
SA
WA
WA
WA
WA
WA
Billa Kalina Agreement
MXR, ERO and FMS
Copper Range Agreement
MXR, FMS and Copper Range (SA) Pty Ltd
Corporate Group Agreement
MXR and Corporate Resource Consultants
Pty Ltd, B Legendre and T E Johnston and
Associates Pty Ltd
Creasy Agreement
MXR and Nemex Pty Ltd and M G Creasy
Flinders Canegrass Agreement
MXR and FMS
Ironstone Well Iron Ore Agreement
MXR and Nemex Ventures Pty Ltd
Orex Ironstone Well Deed of
Assignment
MXR and Orex Mining Pty Ltd and Nemex
Pty Ltd
NuPower may earn a 51% interest in Energy Minerals by expenditure
of $3 million from commencement over 4 years and a 70% interest by
expenditure of a further $2 million over 2 years.
MXR has purchased the project tenements – production royalties are
payable to Stiff, Budge and Harvey.
ERO can earn a 50% interest in the non-diamond mineral rights of MXR’s
Billa Kalina Project tenements by spending $3million on the tenements within
six years.
Copper Range can earn a 51% interest in MXR’s rights to base and precious
metals in EL4131 by spending $500,000 over five years with an option to
earn a 75% interest by further expenditure of $500,000.
Corporate Group retains a 10% free carried interest in all or specified blocks
within several exploration licences in the Narndee Project.
Creasy retains a 30% free carried interest in prospecting licences 53/1308
to 53/1311 following MXR’s purchase of 90% of Nemex’s interest in the
Ironstone Well Project.
FMS purchased the Canegrass Project tenements from MXR. FMS must pay
MXR a 2% net smelter royalty from any future production from the tenement
areas.
MXR has sold a 70% interest in the iron ore rights to Nemex for a total
consideration of $0.5 million. MXR retains a 20% interest in iron ore rights.
MXR has sold a 90% interest in all minerals except iron in E53/1223
and a 90% interest in all minerals in the remaining Ironstone Well Project
tenements for a future production royalty capped at $4 million
30 events occurring after the reporting period
Subsequent to balance date the Company completed a non-renounceable rights issue that closed on 16 August 2011. As a result of the capital
issue 43,243,217 ordinary shares were allotted raising $432,432.
Apart from the above, no matter or circumstance has occurred subsequent to the end of the financial year that has significantly affected, or may
significantly affect, the operations of the Company, the results of those operations, or the state of affairs of the Company in subsequent financial
years.
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
31 reconciliation of profit after income tax to net cash inflow from operating activities
Profit/(loss) for the year
Depreciation
Amortisation
Non-cash employee benefits expense – share-based payments
Impairment of capitalised exploration expenditure
Impairment of development assets
Net (gain)/loss on disposal of non-current assets
Tax effect on transaction costs
Tax effect on investments
Gain on loss of control of subsidiary
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
Decrease/(increase) in inventories
Decrease/(increase) in other operating assets
(Decrease)/increase in trade and other payables
(Decrease)/increase in provisions
Consolidated
30 June 2011
$
Consolidated
30 June 2010
$
Parent entity
30 June 2011
$
Parent entity
30 June 2010
$
(7,194,331)
(10,108,827)
(3,829,449)
(6,914,654)
150,181
1,153,874
34,500
9,082,352
675,199
-
30,713
-
(5,698,109)
688,154
111,325
20,613
(181,683)
(37,108)
176,943
188,125
16,329
8,759,982
-
76,619
24,383
-
-
38,991
(111,325)
(44,229)
67,236
23,502
91,784
905,624
34,500
1,219,215
197,018
-
22,613
-
-
372,524
70,239
716
(45,783)
19,130
108,461
64,167
16,329
6,097,181
-
47,428
12,759
242,829
-
1,294
(70,239)
(24,332)
(33,381)
1,461
Net cash (outflow)/inflow from operating activities
(1,164,320)
(892,271)
(941,869)
(450,697)
32 earnings per share
a) basic earnings per share
30 June 2011
30 June 2010
Loss from continuing operations attributable to the ordinary equity holders
(3,829,449)
(6,914,654)
Weighted average number of ordinary shares outstanding during the year used to calculate basic earnings per share
289,598,815
242,206,614
Basic earnings per share (cents)
b) Diluted earnings per share
(1.32)
(2.85)
Loss from continuing operations attributable to the ordinary equity holders
(3,829,449)
(6,914,654)
Weighted average number of options outstanding during the year used to calculate diluted earnings per share
-
-
Weighted average number of ordinary shares outstanding during the year used to calculate diluted earnings per share
289,598,815
242,206,614
Diluted earnings per share (cents)
(1.32)
(2.85)
Options
Options granted to employees under the Maximus Resources Limited Employee Share Option Plan are considered to be potential ordinary
shares. These have a dilutive effect on the weighted average number of ordinary shares. As the Company has reported a loss of $3,829,449 this
financial year (2010: $6,914,654), the options have not been included in the determination of diluted earnings per share. Details relating to the
options are set out in note 33.
50
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2011
33 share-based payments
a) employee option Plan
The following options arrangements existed at 30 June 2011:
The Maximus Resources Limited Employee Share Option Plan enables the Board, at its discretion, to issue options to employees of the
Company or its associated companies. Each option will have a life of five years and be exercisable at a price determined by the Board.
This price will not be below the market price of a share at the time of issue. All options are un-listed and non-transferable. The options
granted under the plan carry no voting or dividend rights.
On 10 April 2007 930,000 options were issued to employees under the Company’s Employee Share Option Plan. The options are
exercisable at 14 cents on or before 20 March 2012.
On 17 March 2008 890,000 options were issued to employees under the Company’s Employee Share Option Plan. The options are
exercisable at 18 cents on or before 17 March 2013.
On 4 February 2009 1,965,000 options were issued to employees under the Company’s Employee Share Option Plan. The options are
exercisable at 4 cents on or before 3 February 2014.
On 29 May 2009 40,000 options were issued to employees under the Company’s Employee Share Option Plan. The options are
exercisable at 4 cents on or before 3 February 2014.
Set out below is a summary of the options granted under the plan:
2011
Outstanding at the beginning of the year
Granted
Exercised
Expired
Outstanding at the end of the year
2010
Balance
Granted
Exercised
Expired
Outstanding at the end of the year
Number of options
Weighted average
exercise price
10,720,000
-
-
(5,090,000)
5,630,000
$
0.269
-
-
0.227
0.307
Number of options
Weighted average
exercise price $
9,665,000
3,000,000
-
(1,945,000)
10,720,000
0.315
0.050
-
0.163
0.269
The options outstanding at 30 June 2011 had a weighted average exercise price of $0.307 (2010: $0.269) and a weighted average
remaining contractual life of 18 months (2010: 36 months). Exercise prices range from $0.040 to $0.500 in respect of options outstanding at
30 June 1011.
Fair value of options granted
No employee options were granted during the year ended 30 June 2011 (2010: Nil). Therefore no calculation of the fair value of options
granted during the year was required to be made using the Black Scholes option pricing model.
b) employee incentive rights Plan
The following incentive rights arrangements existed at 30 June 2011:
The Maximus Resources Limited Employee Incentive Rights Plan enables the Board, at its discretion, to issue rights to employees of the
Company or its associated companies. The vesting periods of the rights are set at the Board’s discretion and all rights have conditions that
must be met before they can be exercised. All rights are un-listed and non-transferable. The rights granted under the plan carry no voting
or dividend rights.
On 11 February 2011 3,000,000 rights were issued to employees under the Company’s Employee Incentive Rights Plan. 1,500,000 of
the rights have fair values of 2.3 cents per right and expire on 14 December 2011, with a vesting period of 10 months. The remaining
1,500,000 rights have fair values of 2.3 cents per right and expire on 14 December 2012, with a vesting period of 22 months.
34 going concern
The financial report has been prepared on the basis of going concern.
The cash flow projections of the Company indicate that it will require positive cash flows from gold mining operations and/or additional capital for
continued operations.
The Company’s ability to continue as a going concern is contingent upon obtaining additional capital or generating sufficient cash flows from gold
mining operations. If additional capital is not obtained, the going concern basis may not be appropriate, with the result that the Company may
have to realise its assets and extinguish its liabilities, other than in the ordinary course of business and in amounts different from those stated in
the financial report. No allowance for such circumstances has been made in the financial report.
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
51
DIRECTORS’ DECLARATION
30 June 2011
In the directors’ opinion:
a) the financial statements and notes set out on pages 19 to 58 are in accordance with the Corporations Act 2001, including:
i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and
ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2011 and of their performance for the financial year
ended on that date, and
b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable, and
c) the financial statements comply with International Financial Reporting Standards as confirmed in note 1(a).
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.
RoBeRt M Kennedy
Director
Adelaide
30 September 2011
52
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
INDEPENDENT AUDITOR’S REPORT
30 June 2011
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
53
INDEPENDENT AUDITOR’S REPORT
30 June 2011
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
54
INDEPENDENT AUDITOR’S REPORT
30 June 2011
MAXIMUS RESOURCES LIMITED | ANNUAL REPORT 2011
55
ASX ADDITIONAL INFORMATION
30 June 2011
The shareholder information set out below was applicable as at
5 October 2011.
Unquoted securities
Unlisted options over ordinary shares
a) Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
Number on
issue
Number of
holders
Options @ $0.14, expiring 20 March 2012
Options @ $0.50 expiring on 2 July 2012
380,000
3,000,000
Options @ $0.18 expiring on 17 March 2013
605,000
Options @ $0.04 expiring on 3 February 2014
1,645,000
7
5
13
16
No person holds 20% or more of these securities – RA to Check
Incentive rights
Incentive rights
Number on
issue
Number of
holders
3,000,000
1
c) substantial holders
As at 5 October 2011 the Company did not have any substantial
shareholders.
d) voting rights
The voting rights attaching to each class of equity securities are
set out below:
a) Ordinary Shares
On a show of hands every member present at a meeting in
person or by proxy shall have one vote and upon a poll each
share shall have once vote.
b) Options
No voting rights.
Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Shares
Options
118
259
276
1,064
563
2,280
0
1
-
15
13
29
There were 1,473 holders of less than a marketable parcel of ordinary
shares. At a share price of 0.9 cents, an unmarketable parcel is
55,556 shares
b) equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest equity holders of quotes
securities are listed below:
Rank Name
Units
% of units
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Flinders Mines Limited
Triple Eight Gold Pty Ltd
Yandal Investments Pty Ltd
Colin John Hough
Tre Pty Ltd
Abesque Pty Ltd
Miss Kathryn Yule
Zhangxi Zeng
Geosolutions Pty Ltd
Mr David Charles Pritchard Morrow
Mr Wenming Zhu and
Mrs Xiaohong Yuan
Lawrence Crowe Consulting
Pty Ltd
Mr Darryn Anthony
KJ Exploration Pty Ltd
Chaffey Consulting Pty Ltd
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