ABN 74 111 977 354
ANNUAL REPORT
2017
Maximus Resources Limited ABN 74 111 977 354
Corporate Directory
Directors
Robert Kennedy (Non-executive Chairman)
Kevin Malaxos (Managing Director)
Leigh McClusky (Non-executive Director)
Ewan Vickery (Non-executive Director)
Nicholas Smart (Alternate for Mr Vickery)
Company Secretary
Rajita Alwis
Registered Office
Level 3, 100 Pirie Street
Adelaide, South Australia 5000
Principal Office
Level 3, 100 Pirie Street
Adelaide, South Australia 5000
Telephone +61 8 7324 3172
Facsimile +61 8 8312 5501
Postal Address
GPO Box 1167
Adelaide SA 5001
Share Registry
Computershare Investor Services
Level 5, 115 Grenfell Street
Adelaide, South Australia 5000
Telephone +61 8 8236 2300
Facsimile +61 8 8236 2305
Solicitors
DMAW Lawyers
Level 3, 80 King William Street
Adelaide, South Australia 5000
Telephone +61 8 8210 2222
Facsimile +61 8 8210 2233
Minter Ellison Lawyers
Level 10, 25 Grenfell Street
Adelaide, South Australia 5000
Telephone +61 8 8233 5555
Facsimile +61 8 8233 5556
Auditor
Grant Thornton
Level 3, 170 Frome Street
Adelaide, South Australia 5000
Banker
National Australia Bank
48 Greenhill Road
Wayville, South Australia 5034
Stock Exchange Listing
Australian Securities Exchange
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 ABN 74 111 977 354
Financial report - 30 June 2017
Contents
Chairman’s Letter
Managing Director’s Report
Tenement Report Schedule
Directors' report
Auditor's Independence Declaration
Financial statements
Consolidated statements of profit or loss and other 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
Page
1
2
12
13
14
15
16
17
41
42
46
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
SA 5000
Registered postal address is:
Maximus Resources Limited
GPO Box 1167
Adelaide
SA 5001
A description of the nature of the Company's operations and its principal activities is included in the directors' report on pages 2 to
8.
The financial statements were authorised for issue by the directors on 29/09/2017. 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.
Maximus Resources Limited ABN 74 111 977 354
Chairman's Letter
Dear Fellow Shareholders
It is with a degree of satisfaction that I present the significant advances made by the Company during
the financial year. These advances have not been without their challenges, but I can confidently
state that your company is now is a significantly more robust position than it was in mid-2016.
As a small exploration focused Company, we have held our nerve and remained predominantly
focused on our gold assets, whilst our peers have chased the latest commodity of the day. We
investigated various mineral commodities located on our tenements early in the year, including
lithium with limited success. Therefore, with limited funds and our continued commitment to prudent
exploration expenditure, we remained focused on our gold assets in what has been a year of growth
for the gold industry and the gold price. We continued to undertake targeted exploration on our
Spargoville tenements, and we have proven a modest resource base of 1.45 million tonnes for
112,000 ounces.
Where assets did not present a reasonable return or potential return to the Company, the decision
was made to either offer these assets for joint venture or sale. This allowed the Company to focus
on what we considered our better opportunities for growth.
The exploration team has continued to work diligently throughout the year assessing the significant
database of information acquired with our purchase of the Spargoville tenement package in 2015.
This database included in excess of 65 gold targets, with some 50 targets still to be investigated.
With success from our exploration drilling programs undertaken during the year, we now have 5
Joint Ore Reserve Committee, or JORC compliant resources, representing 5 potential future mining
operations. These resources may be extracted from either open pit or underground mining methods,
and evaluations will be undertaken in the near future.
As I have mentioned previously, the total of these 5 resources represent 1.45 million tonnes of ore
for 112,000 ounces. We continue to build on this resource base with the intention of process our
own gold ore through the recently acquired Burbanks treatment plant.
The acquisition of the Burbanks gold treatment plant was agreed in August 2016, and represented
a cornerstone asset acquisition for your Company’s transition from an explorer to a producer. The
transaction was finalised in October 2016 and work commenced on refurbishing the plant. This work
has recently been completed with Toll milling commenced generating revenue for the Company.
We have secured ore feed to the Burbanks mill from two sources which should provide continuous
feed through to June 30, 2018. We have also fielded numerous enquiries from developers and
producers to secure throughput capacity in the mill to process gold ore on a Toll basis. We will
continue to progress these discussions with a view to ensuring the supply of continuous mill feed to
the plant through 2018, until such time as Maximus has secured approval to mine ore from its
Spargoville resources.
The Company continues to review mining projects for acquisition as they become available, with a
view to progressing from explorer and toll mill operator to an owner miner in our own right. These
opportunities are becoming scarcer as the gold industry continues to improve, but small projects do
occasionally present and we will assess each opportunity as and when they arise.
We continue to operate on minimal budget overheads in order to conserve our capital for the
Burbanks plant refurbishment, whilst meeting an acceptable standard for a listed company. Our
Managing Director has successfully achieved significant growth in our resources portfolio whilst
acquiring and refurbishing the Burbanks gold treatment plant. I commend his report to you which
will expand on our projects.
It remains for me to thank shareholders, my fellow Directors, staff and contractors for their assistance
and support during the past year. I look forward to further exploration success, growth from our toll
milling operation and your continued support for Maximus in the coming year.
Bob Kennedy
CHAIRMAN
Maximus Resources Limited ABN 74 111 977 354
Managing Director’s Report
Burbanks Mill
The Burbanks gold treatment facility was acquired in August 2016 from Ramelius Resources Limited for $2.5 million.
The Processing plant was purchased as it presented a significant opportunity for the Company to generate early
cashflows via the treatment of 3rd party ore feed on a Toll treatment basis, whilst enabling the Company to focus on
project generation and mining approvals of its Spargoville gold projects. Acquisition of the Burbanks facility also
eliminates the significant restraint on timing and costs of processing ore produced through other 3rd part treatment
plants in the area.
Several parties have shown interest in securing milling capacity to Toll treat ore through the Burbank facility in 2017
with Toll Treatment agreements signed with Empire Resources Ltd and Lloyd George Mining Pty Ltd. Discussions
have commenced with several other parties regarding Toll treatment services throughout 2018.
Refurbishment plans and works commenced in November 2016. The major mechanical refurbishments were finalised
in June 2017 with electrical upgrades and refurbishment of the crushing and screening circuit completed in August
2017. Commissioning of the processing plant commenced in September with crushing of gold ore from Empire
Resources. Processing of gold ore through Burbanks commenced in September 2017 and nameplate capacity
achieved in early October.
Recruitment of operational personnel also commenced during June to ensure sufficient trained personnel were
available during the final refurbishment program and commissioning phase.
During the refurbishment process many additional improvements were identified and incorporated into the works
schedule to prevent future downtime whilst significantly improving the safety systems throughout the plant. One such
improvement is the move to a liquid cyanide storage and distribution system, eliminating the manual mixing of dry
cyanide.
Spargoville
Following the initial acquisition of 25% interest in the Spargoville tenement package near Coolgardie in the Eastern
Goldfields of Western Australia on 5 August 2015, Maximus quickly moved to 90% equity under the terms of the Sale
Agreement with Tychean Resources Limited (TYK). The acquisition provided an interest in, and access to 36
tenements totalling approximately 11,485 hectares. The Company subsequently negotiated a second Sale
Agreement with TYK securing the final remaining 10% equity in the Spargoville project for 25 million MXR shares.
This final share issue was completed in October 2016 extinguishing all remaining TYK equity in the Spargoville
tenement package and cancels the gold royalty applicable under the first Sale Agreement.
The Company continued to progress exploration drilling and analysis on two main gold targets, Eagles Nest and West
Larkinville during the year, resulting in preliminary ore resource estimates being generated. Efforts continued with the
review of the extensive package of exploration data, acquired as part of the Spargoville tenement acquisition.
Infill drilling completed at Eagles Nest confirmed that the orebody appears to plunge to the south and off the Maximus
tenement, prompting the Company to acquire the adjoining southern tenement. A further extensional drill program
was undertaken in November to test for strike extensions to the south, across the recently acquired adjoining
tenement, and depth extensions. The results were very positive allowing a reinterpretation of the ore block model
resulting in an extension to the overall strike length of Eagles nest, and thickening of the middle section of the ore
zone. A revised mineral resource estimate compliant with the JORC 2012 guidelines was completed resulting in a
significant increase in the contained ore tonnes to 679,600 tonnes at 1.95 g/t for 42,600 ounces, representing a 59%
increase in contained ounces.
Initial drilling on the West Larkinville gold project identified a small shallow deposit. Infill drilling undertaken in
November, concurrent with the Eagles Nest drill program, resulted in a thickening of the central ore zone, with a
significant lift in the overall model grade to above 3.0 g/t. The JORC 2012 revised mineral resource estimate now
totals 119,700T at 3.02 g/t for 11,600 ounces of contained gold. The orebody remains open to the north and at depth
to the south, indicating potential future increases to the resource model tonnes.
Work continued on evaluating the historic production data from the Wattle Dam High Grade underground mine to
determine the potential volume of remaining gold ore and the economics of extracting this ore. During this evaluation
work, an area east of the main Wattle Dam open pit outline was identified as an exploration target, as it appeared to
be under-explored. A preliminary aircore (AC) and reverse circulation (RC) drill program totaling 3,334 metres was
undertaken at the east Wattle Dam site to identify potential parallel structures to the main Wattle dam mineralized
lode and test for continuation of the structure hosting the Redback prospect to the south of Wattle dam. Several
encouraging results were return from the drill program,
Maximus Resources Limited ABN 74 111 977 354
Managing Director’s Report
Further drilling is planned to be undertaken in 2017/18 between the Redback project and Wattle dam east project to
confirm the intrusive contact is continuous between the two sites, which may indicate the potential for additional
mineralisation along this contact trend.
With success from our exploration drilling programs undertaken during the year, we now have 5 Joint Ore Reserve
Committee, or JORC compliant resources, representing 5 potential future mining operations. These resources may
be extracted from either open pit or underground mining methods, and evaluations will be undertaken in the near
future.
The 5 resources contain a total of 1.45 million tonnes of ore for 112,000 ounces. We continue to build on this resource
base with the intention of process our own gold ore through the recently acquired Burbanks treatment plant.
Minimal field exploration was undertaken during the second half of the year, due to capital being invested in the
Burbanks refurbishment. However, exploration would shall re-commence in early 2018 as the mill becomes cash
positive.
With limited exploration success from our lithium exploration activities, a binding term sheet was signed with Lepidico
Ltd (a pure lithium explorer) in August 2017 under which Lepidico can earn a 75% interest in the Company’s lithium
rights located on the Spargoville Project through staged payments totaling $350,000. The initial payment of $80,000
in Lepidico shares at a 5 day VWAP issue price was received in August 2017. At any time within the three years, and
after the third payment detailed above, Lepidico can secure 100% of the Lithium Rights by making a payment of
$400,000 as either cash, or 50% cash and Lepidco shares at a 5 day VWAP issue price.
Narndee
A total of 6 tenements were held in the Narndee package at the beginning of the financial year containing 2 Electro-
magnetic (EM) targets showing a potentially similar structure to the Nova Nickel deposit in the Fraser Range south
of Perth. A ground EM survey commenced in July 2016 to investigate and test MG 03 and MG 24. The survey of
MG03 was completed in July, with rain delaying completion of MG24 until August 2016. No significant target identified.
The remaining six tenements were relinquished by the end of the year.
Millers Creek
No on-ground activities were conducted during the year. No interest was shown by third parties in acquiring an
interest in the tenement package and all tenements were relinquished during the financial year.
Adelaide Hills
Maximus retains entitlement to two contingent $1 million payments (totalling $2 million) in accordance with the Bird
in Hand Sale Agreement which are dependent on Environmental approval to mine (PEPR) from the Department for
State Development (DSD, formerly DMITRE) and the commencement of bullion production from the site. Maximus
retains a 0.5% gross royalty on gold produced in excess of 50,000 Oz mined and continues to liaise with Terramin
and monitor progress of the project feasibility study and approval process.
Corporate
During August 2017, Maximus acquired Ramelius Milling Services Pty Ltd, the holding company for the Burbanks
Treatment facility owned by ASX listed Ramelius Resources Ltd. Upon signing of a Sale Agreement, the Company
prepared a detailed refurbishment plan and commenced a mid-level refurbishment in November 2016. The treatment
plant has an annual capacity of 180,000 tonnes per annum, and is particularly suited to high grade, course gold style
mineralisation. The Burbanks plant provides MXR with a cash generating asset to fund future operational and
exploration capital costs. The plant was recommissioned in September 2017 with first commercial gold poured
expected during late October 2017.
Summary
The Company shall continue to review potential gold projects and advance exploration targets held by other
companies or individuals, within an economic trucking distance to Coolgardie, to build upon the exploration asset
base at Spargoville and grow future gold resources. These additional 3rd party targets may be acquired or accessed
through joint ventures or other commercial agreements.
Kevin Malaxos
MANAGING DIRECTOR
MAXIMUS RESOURCES LIMITED - TENEMENT SCHEDULE
Tenement
Number
Tenement Name
Registered Holder/Applicant
Maximus Resources Limited
Tenement Schedule
30 June 2017
Maximus
Resources
interest
30/06/2017
WESTERN AUSTRALIA
SPARGOVILLE PROJECT
Eagles Nest
Eagles Nest
Kambalda West
Kambalda West
Kambalda West
Kambalda West
Kambalda West
Kambalda West
Kambalda West
Kambalda West
Hilditch
Larkinville
Larkinville
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
BURBANKS PROJECT
Burbanks
Burbanks
Burbanks
Burbanks
Burbanks
Burbanks
Burbanks
Burbanks
Burbanks
Burbanks
Burbanks
Burbanks
Burbanks
M15/1475
P15/5545
E15/967
E15/968
L15/128
L15/255
M15/395
M15/703
P15/5860
P15/5953
M15/1448
M15/1449
P15/5912
M15/1101
M15/1263
M15/1264
M15/1323
M15/1338
M15/1474
M15/1769
M15/1770
M15/1771
M15/1772
M15/1773
M15/1774
M15/1775
M15/1776
G15/10
G15/11
G15/12
G15/13
G15/25
L15/109
L15/110
L15/189
L15/234
L15/284
M15/1273
M15/1369
M15/1370
Maximus Resources Ltd & Tychean Resources Ltd
Maximus Resources Ltd
Tychean Resources Ltd
Tychean Resources Ltd
Tychean Resources Ltd
Tychean Resources Ltd
Tychean Resources Ltd
Tychean Resources Ltd
Tychean Resources Ltd
Tychean Resources Ltd
Maximus Resources Ltd, Tychean Resources Ltd & Bullabulling Pty Ltd
Maximus Resources Ltd, Tychean Resources Ltd & Pioneer Resources Ltd
Maximus Resources Ltd, Tychean Resources Ltd & Pioneer Resources Ltd
Maximus Resources Ltd & Tychean Resources Ltd
Maximus Resources Ltd & Tychean Resources Ltd
Maximus Resources Ltd & Tychean Resources Ltd
Maximus Resources Ltd & Tychean Resources Ltd
Maximus Resources Ltd & Tychean Resources Ltd
Maximus Resources Ltd & Tychean Resources Ltd
Maximus Resources Ltd & Tychean Resources Ltd
Maximus Resources Ltd & Tychean Resources Ltd
Maximus Resources Ltd & Tychean Resources Ltd
Maximus Resources Ltd & Tychean Resources Ltd
Maximus Resources Ltd & Tychean Resources Ltd
Maximus Resources Ltd & Tychean Resources Ltd
Maximus Resources Ltd & Tychean Resources Ltd
Maximus Resources Ltd & Tychean Resources Ltd
Eastern Goldfields Milling Services Pty Ltd
Eastern Goldfields Milling Services Pty Ltd
Eastern Goldfields Milling Services Pty Ltd
Eastern Goldfields Milling Services Pty Ltd
Eastern Goldfields Milling Services Pty Ltd
Eastern Goldfields Milling Services Pty Ltd
Eastern Goldfields Milling Services Pty Ltd
Eastern Goldfields Milling Services Pty Ltd
Eastern Goldfields Milling Services Pty Ltd
Eastern Goldfields Milling Services Pty Ltd
Eastern Goldfields Milling Services Pty Ltd
Eastern Goldfields Milling Services Pty Ltd
Eastern Goldfields Milling Services Pty Ltd
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
90.00%
75.00%
75.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Page | 1
Maximus Resources Limited
Directors' Report
30 June 2017
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 2017
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)
Leigh Carol McClusky (Non-executive director)
Ewan John Vickery (Non-executive director)
Nicholas John Smart (Alternate director for E J Vickery)
Principal activities
During the year the principal activities of the Company consisted of the refurbishment of the Burbanks Mill, natural
resources exploration and development.
Dividends
There were no dividends declared or paid during the year (2016: Nil).
OPERATIONAL AND FINANCIAL REVIEW
1. Operating results and financial position
The net result of operations of the Company for the financial year was a loss of $3,893,139 (2016: $681,865). The
loss includes exploration impairment of $2,919,675 which is mainly derived from impairing exploration and evaluation
costs relation to the Narndee project.
The net assets of the Company have decreased by $1,848,165 during the financial year from $5,427,587 at 30 June
2016 to $3,579,422 at 30 June 2017. While the tangible assets of the Company have increased as a result of the
acquisition of Eastern Goldfields Milling Services Pty Ltd, the overall net assets have decreased due to the impairment
of exploration and evaluation assets in relation to the Narndee project during the year.
2. Review of Operations
Burbanks Mill
The Burbanks gold treatment facility was acquired in August 2016 from Ramelius Resources Limited for $2.5 million.
The Processing plant was purchased as it presented a significant opportunity for the Company to generate early
cashflows via the treatment of 3rd party ore feed on a Toll treatment basis, whilst enabling the Company to focus on
project generation and mining approvals of its Spargoville gold projects. Acquisition of the Burbanks facility also
eliminates the significant restraint on timing and costs of processing ore produced through other 3rd part treatment
plants in the area.
Refurbishment plans and works commenced in December 2016. The mechanical refurbishment was finalized in June
2017 with electrical upgrades and refurbishment of the crushing and screening circuit completed in July 2017.
Several parties have shown interest to secure capacity to Toll treat ore through the Burbank facility in 2017 with Toll
Treatment agreements signed with Empire Resources Ltd and Lloyd George mining. Discussions have commenced
with several other parties regarding Toll treatment agreements.
Recruitment of operational personnel also commenced during June to ensure sufficient trained personnel were
available during the final refurbishment program and commissioning phase.
Processing ore through Burbanks commenced during late September 2017.
Page | 2
Maximus Resources Limited
Directors' Report
30 June 2017
Spargoville
The Company continued to progress exploration drilling and analysis on two main gold targets, Eagles Nest and West
Larkinville during the period, resulting in preliminary ore resource estimates being generated. Efforts continued with
the review of exploration data, acquired as part of the Spargoville tenement acquisition in August 2015, with additional
targets identified for further interrogation.
Infill drilling completed at Eagles Nest confirmed that the orebody appears to plunge to the south and off the Maximus
tenement, which resulted in MXR acquiring the adjoining southern tenement. A further extensional drill program was
undertaken in November to test for strike extensions to the south, across the recently acquired adjoining tenement,
and depth extensions. The results were very positive allowing a reinterpretation of the ore block model resulting in an
extension to the overall strike length of Eagles nest, and thickening of the middle section of the ore zone. A revised
mineral resource estimate compliant with the JORC 2012 guidelines was being prepared and should see a significant
increase in the contained ore tonnes and resultant ounces.
Initial drilling on the West Larkinville gold project identified a small shallow deposit. Infill drilling undertaken in
November, concurrent with the Eagles Nest drill program, resulted in a thickening of the central ore zone, with a
significant lift in the overall model grade to above 3.0 g/t. The JORC 2012 revised mineral resource estimate now totals
119,700T at 3.02 g/t for 11,600 ounces of contained gold. The orebody remains open to the north and at depth to the
south, indicating potential future increases to the resource model tonnes.
Work continued on evaluating the historic production data from the Wattle Dam High Grade underground mine to
determine the potential volume of remaining gold ore and the economics of extracting this ore. During this evaluation
work, an area east of the main Wattle Dam open pit outline was identified as an exploration target, as it appeared to be
under-explored. A preliminary aircore (AC) and reverse circulation (RC) drill program was undertaken at the east
Wattle Dam site to identify potential parallel structures to the main Wattle dam mineralized lode and test for
continuation of the structure hosting the Redback prospect to the south of Wattle dam. A total of 4 RC and 60 AC holes
were completed for a total of 3,334 metres. Several encouraging results were return from the drill program, The
ultramafic/felsic intrusive contact identified in several drill holes is a similar setting to the mineralisation at the Redback
deposit, some 500m to the south, and directly along strike.
Further drilling is planned tol be undertaken in 2017/18 between the Redback and Wattle dam east projects to confirm
the intrusive contact is continuous between the two sites.
Narndee
A total of 6 tenements were held in the Narndee package at the beginning of the financial year. Within these tenements
were 2 high priority EM targets (MG 03 and MG24) showing a potentially similar structure to the Nova Nickel deposit in
the Fraser Range south of Perth.
A ground EM survey commenced in July 2016 to investigate and test MG 03 and MG 24. The survey was rained out
after completing the review of MG03, with no significant anomaly identified. The EM survey of EM 24 was completed in
August 2016 with no significant target identified.
The remaining six tenements were relinquished by the end of the year.
Adelaide Hills
The remaining 2 tenements in the Adelaide Hills tenement package were surrendered during the financial year.
Following the Sale Agreement with Terramin Exploration Pty Ltd in November 2013, two contingent $1 million
payments (totalling $2 million) remain outstanding and are dependent on Environmental approval to mine (PEPR) from
the Department for State Development (DSD) and the commencement of bullion production from the site. A 0.5% gold
royalty is also applicable to all ounces produced from the Bird in Hand project in excess of 50,000 ounces.
Page | 3
Maximus Resources Limited
Directors' Report
30 June 2017
Millers Creek
No on-ground activities were conducted during the year. The tenement package was posted on a web-based
minerals industry notice board seeking a Joint Venture party of buyer to progress exploration on the targets. No
interest was shown and all tenements were relinquished during the financial year.
Northern Gawler Craton
Maximus held one tenement, the Welbourn Hill tenement, in the Northern Gawler Craton region at the beginning of the
financial year. The Company continued to search for a Joint Venture party to conduct further exploration on this
tenement, however due to no interest shown the tenement was relinquished during the financial year.
Corporate
During the 2017 financial year the following securities were issued:
• 533,000,000 ordinary shares and 533,000,000 unlisted options were issued to sophisticated and professional
investors following a General Meeting of shareholders on 16 September 2016. The shares were offered at an
issue price of $0.003 per share raising $1.6 million before costs. 500,000,000 ordinary shares and unlisted
options were issued on 27 September 2016. The remaining 33,000,000 ordinary shares and unlisted options
were issued on 4 October 2016.
• On 18 October 2016 the Company issued 25,000,000 fully paid ordinary shares to Tychean Resources Limited
(ASX: TYK). These shares were issued under the terms of the Second Sale Agreement with TYK for
consideration of full ownership of TYK’s interest in the Spargoville gold project. The Agreement also removed
all earn-in obligations required by the Company and cancelled any gold royalty to TYK.
• 113,250,000 ordinary shares were issued to shareholders on 31 May 2017 who participated in the Share
Purchase Plan. The shares were offered at an issue price of $0.002 per share raising $226,500 before costs.
• 300,000,000 ordinary shares were issued to sophisticated and professional on 26 June 2017. The shares
were offered at an issue price of $0.001 per share raising $300,000 before costs.
3. Significant changes in the state of affairs
During the year the Company acquired Eastern Goldfields Milling Services Pty Ltd (formerly Ramelius Milling Services
Pty Ltd) from Ramelius Resources Limited (ASX:RMS). The transaction with RMS resulted in the Company acquiring
the Burbanks Processing Facility located in Coolgardie, Western Australia. While the Company has been effecting
exploration activities on its key project areas, it has also undertaken the refurbishment of the Burbanks Mill and plans to
commence operations during September 2017 on a toll treatment basis
There have been no other significant changes in the state of affairs from the 2016 financial year to 2017.
4. Events arising since the end of the reporting period
On 3 July 2017 the Company signed a Toll Treatment Agreement with Empire Resources Limited for the supply of up
to 150,000 tonne of ore from the Penny’s Find gold project to the Burbanks Treatment Facility which commenced
during mid-September 2017. The Agreement also allows Empire Resources to extend the agreement for up to an
additional 150,000 tonnes of ore from the Penny’s Find underground resource should this project proceed.
During August 2017 the Company signed a Binding Term Sheet with Lepidico Ltd (Lepidico) under which Lepidico can
earn a 75% interest in the Company’s lithium rights located on the Spargoville Project. Lepidico must meet the
following terms to earn the 75% interest in the lithium rights:
On execution of the term sheet, payment to the Company of $80,000 Lepidico shares, at a 5 day VWAP issue price
(issued 21 August 2017);
Six months after execution, payment to the Company of $120,000 in cash or Lepidico shares at a 5 day VWAP issue
price; and
12 months after execution, payment to the Company of $150,000 in cash or Lepdico shares at a 5 day VWAP issue
price.
At anytime within the three years, and after the third payment detailed above, Lepidico can secure 100% of the Lithium
Rights by making a payment of $400,000 as either cash, or a combination of 50% cash and 50% Lepidco shares at a
Page | 4
Maximus Resources Limited
Directors' Report
30 June 2017
5 day VWAP issue price.
On 6 September 2017 the Company completed a placement by issuing 173,032,308 ordinary shares to sophisticated
and professional investors to raise $200,000 before costs.
There has been no other transaction or event of a material or unusual nature that has arisen in the interval between the
end of the financial year and the date of this report that is 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.
5. Future business developments, prospects and business strategies
The Company is poised to progress from a pure explorer to a producer in the near future, should continued exploration
success be achieved. The acquisition of the Spargoville tenements has presented several advanced gold exploration
targets. The Company plans to pursue the gold potential of the Spargoville tenements.
In addition to exploration on the Spargoville tenements, the Company shall continue to review potential gold projects
and advance exploration targets held by other companies or individuals, within an economic trucking distance to
Coolgardie, to build upon the exploration asset base at Spargoville and grow future gold resources. These additional
3rd party targets may be acquired or accessed through joint ventures or other agreements.
The Company acquired the Burbanks gold ore processing facility in August 2016. The ultimate plan is to refurbish the
treatment facility and process Maximus owned or controlled ore sources. The Company completed refurbishment of
the mill during August 2017 enabling the facility to Toll treat gold ore from 3rd parties located within an economic
trucking distance to the facility. This process will enable the Company to continue exploration activities at Spargoville
with the aim of generating MXR owned mineable gold ore resources. Once regulatory approval is received for each
project, the Company aims to process the ore through the Burbanks processing plant. Agreement has been secured
with third parties to toll treat gold ore and discussions are ongoing with several additional parties to ensure Toll
treatment ore is available to treat through the plant until mining commences at the company owned resources.
6. Environmental regulation
The Company’s operations are subject to significant environmental regulation under both Commonwealth and 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 KSJ, ASAIT, Grad Dip (Systems Analysis), Dip Financial Planning, Dip Financial
Services, FCA, CTA, AGIA, Life Member AIM, FAICD.
Non-executive Chairman
Experience and expertise
Mr Kennedy, a Chartered Accountant, has been non-executive chairman of Maximus Resources Limited since 2004.
Mr Kennedy brings to the Board his expertise and extensive experience as Chairman and non-executive director of a
range of listed public companies in the resources sector. He 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 development of strategies for the
development and future growth of the Company.
Independence
Whilst Mr Kennedy has been appointed to a number of Resource Industry Boards, due to his knowledge of the industry
and the companies all operating domestically, the time required across these companies in no way impedes on his
dedication to his role as Chairman of the Board. 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 a director of ASX listed companies Ramelius Resources Limited (since listing in March 2003), Flinders
Mines Limited (since December 2001), Monax Mining Limited (since 2004), and Tychean Resources Limited (since
2006).
Page | 5
Former directorships in the last 3 years
He was appointed the Chairman of the University of Adelaide’s Institute of Minerals and Energy Resources in 2008 and
his term ended early in 2014. Formerly he was a director of Crestal Petroleum Limited (formerly Tellus Resources
Limited from 2013 to February 2015) and Marmota Energy Limited (from April 2006 to April 2015).
Maximus Resources Limited
Directors' Report
30 June 2017
Special responsibilities
Chairman of the Board.
Member of the Audit, Risk & Corporate Governance Committee.
Interests in shares and options
91,500,000 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 30 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 was a non-executive director of ASX-listed company Flinders Mines Limited (from December 2010 to
October 2016).
Special responsibilities
Managing Director.
Interests in shares, options and rights
46,000,000 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 the Managing Director of the McCo GROUP, a strategic
communications company with offices in Adelaide, Melbourne and Geelong.
After more than 30 years in key media roles across Melbourne, Sydney and Adelaide, Ms McClusky now works closely
with a range of organisations and industries to develop proactive communication campaigns and to deflect potentially
damaging impacts on corporate reputations. Her role also includes stakeholder engagement and management, client
advocacy and crisis communications.
Special responsibilities
Member of the Audit, Risk & Corporate Governance Committee.
Interests in shares, options and rights
7,939,338 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
Page | 6
a past national president of Australian Mining and Petroleum Law Association (AMPLA Limited).
Other current directorships
Mr Vickery is also a non-executive director of Tychean Resources Limited (Appointed May 2013).
Mr Vickery was a non-executive director of Flinders Mines Limited (from 2000 to October 2016).
Maximus Resources Limited
Directors' Report
30 June 2017
Special responsibilities
Chairman of the Audit, Risk & Corporate Governance Committee.
Interests in shares and options
42,500,003 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
broking 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 to 2016). Mr Smart currently consults to various
public and private companies.
Interests in shares and options
37,500 ordinary shares in Maximus Resources Limited.
Company Secretary
Rajita Shamani Alwis LLB BCom, CA.
Experience and expertise
Ms Alwis has been the Company Secretary since 30 June 2011 to the date of this report. Ms Alwis has over 15 years’
experience in public practice and commerce and has been a Chief Financial Officer and Company Secretary of
numerous listed and proprietary companies.
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 2017, and the number of meetings attended by each director were:
Robert Michael Kennedy
Kevin John Malaxos
Leigh Carol McClusky
Ewan John Vickery
Nicholas John Smart
Full
meetings of
directors
B
A
Audit & Risk
Committee
meetings
B
A
10
10
9
10
-
10
10
10
10
-
3
3
2
3
-
3
3
3
3
-
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 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.
The Company is required to indemnify the directors and other officers of the Company against any liabilities incurred by
Page | 7
Maximus Resources Limited
Directors' Report
30 June 2017
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.
Insurance premiums
Since the end of the previous year the Company has paid insurance premiums of $14,648 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:
•
•
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
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.
Fees for non-audit services paid or payable to the external auditors or its related practices during the year ended 30
June 2017 was $3,500 (2016: $2,000).
Remuneration report – audited
The remuneration report is set out under the following main headings:
Principles used to determine the nature and amount of remuneration
Voting and comments made at the Company’s 2016 Annual General Meeting
Details of remuneration
Service agreements
Share-based compensation
A
B
C
D
E
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 other key
management personnel 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.
Page | 8
Maximus Resources Limited
Directors' Report
30 June 2017
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 junior 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 and in instances of serious misconduct the Company may terminate his agreement without
notice. No remuneration consultants were engaged for the year ending 30 June 2017 or 2016.
B. Voting and comments made at the Company’s 2016 Annual General Meeting
Maximus Resources Limited received more than 90% of ‘yes’ votes on its remuneration report for the 2016 financial
year. The Company did not receive any specific feedback at the AGM or throughout the year on its remuneration
practices.
C. Details of remuneration
This report details the nature and amount of remuneration for each key management person of the Company.
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
Ms L C McClusky - Director, non-executive
Mr E J Vickery - Director, non-executive
Mr N J Smart - Alternate director for E J Vickery, non-executive
Ms R S Alwis - Company Secretary
Key management personnel and other executives of the Company
2017
Name
Robert M Kennedy
Kevin J Malaxos
Leigh C McClusky
Ewan J Vickery
Nicholas J Smart
Rajita S Alwis
Short-term employee benefits
Post-employment
benefits
Share-based
payments
Fees
$
61,712
-
40,875
37,329
-
68,175
Salary
$
-
188,356
-
-
-
-
Bonus Superannuation Options
$
$
$
-
-
-
-
-
-
-
5,863
17,894
-
3,546
-
-
27,303
-
-
-
-
-
-
-
Total key management personnel compensation
208,091
188,356
* Note. The Directors suspended directors’ fees from 1 April 2017 to preserve cash for operational purposes
Rights
$
Total
$
-
-
-
-
-
-
-
67,575
206,250
40,875
40,875
-
68,175
423,750
Page | 9
Key management personnel and other executives of the Company
Maximus Resources Limited
Directors' Report
30 June 2017
2016
Name
Robert M Kennedy
Kevin J Malaxos
Leigh C McClusky
Ewan J Vickery
Nicholas J Smart
Rajita S Alwis
Short-term employee benefits
Post-employment
benefits
Share-based
payments
Salary
$
Bonus
$
Fees
$
82,283
-
54,500
49,772
-
69,225
-
251,143
-
-
-
-
Superannuation Options
$
7,817
23,857
-
4,728
-
-
36,402
$
-
-
-
-
-
-
-
Rights
$
Total
$
-
-
-
-
-
-
-
90,100
275,000
54,500
54,500
-
69,225
543,325
-
-
-
-
-
-
-
Total key management personnel compensation
255,780
251,143
The relative proportions of remuneration that are fixed and those that are at risk are as follows:
Name
Kevin John Malaxos
Fixed remuneration
2016
%
100
2017
%
100
2017
At risk - STI*
2017
%
-
2016
%
-
At risk - LTI**
2017
%
-
2016
%
15
* 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. This plan is designed
to provide long-term incentives for executives to deliver long-term shareholder returns.
D. Service agreements
The Board has 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 months’ notice.
Messrs Kennedy and Vickery and Ms McClusky are engaged as directors with formal agreements per the ASX
Corporate Governance Principles and Recommendations Third Edition.
E. 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. No rights were issued during the year.
Options granted as remuneration
No options were granted during the 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.
Directors' interests in shares and options
(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.
2017
Name
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
R M Kennedy
K J Malaxos
L C McClusky
E J Vickery
N J Smart
24,000,000
11,000,000
1,982,670
10,000,003
-
-
-
-
-
-
(24,000,000)
(11,000,000)
(1,982,670)
(10,000,003)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Page | 10
Maximus Resources Limited
Directors' Report
30 June 2017
2016
Name
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
R M Kennedy
K J Malaxos
L C McClusky
E J Vickery
N J Smart
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
24,000,000
11,000,000
1,982,670
10,000,003
-
24,000,000
11,000,000
1,982,670
10,000,003
-
24,000,000
11,000,000
1,983,670
10,000,003
-
-
-
-
-
-
*The options were acquired as a result of participating in the pro-rata Entitlement Issue.
(ii) 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.
2017
Name
R M Kennedy
KJ Malaxos
L C McClusky
E J Vickery
N J Smart
Balance at the
start of the year
Received as
compensation
Exercise of
options/rights
Acquired/
(disposed)*
Balance at the
end of the year
84,000,000
38,500,000
6,939,338
35,000,003
37,500
-
-
-
-
-
-
-
-
-
-
7,500,000
7,500,000
1,000,000
7,500,000
-
91,500,000
46,000,000
7,939,338
42,500,003
37,500
*The shares were acquired as a result of participating in the Share Purchase Plan.
2016
Name
R M Kennedy
KJ Malaxos
L C McClusky
E J Vickery
N J Smart
Balance at the
start of the year
Received as
compensation
Exercise of
options/rights
Acquired/
(disposed)
Balance at the
end of the year
50,000,000
20,000,000
2,456,668
16,070,001
37,500
-
-
-
-
-
-
-
-
-
-
34,000,000
18,500,000
4,482,670
18,930,002
-
84,000,000
38,500,000
6,939,338
35,000,003
37,500
END OF AUDITED REMUNERATION REPORT
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
27 September 2016
4 October 2016
29 September 2017
29 September 2017
$0.006
$0.006
Number under
option
500,000,000
33,333,333
533,333,333
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 29th day of September 2017 and made in accordance with a
resolution of the directors.
Kevin J Malaxos
Director
Page | 11
Page | 12
Maximus Resources Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2017
Consolidated
30 June
2017
$
30 June
2016
$
Notes
Revenue
Gold Sales - Spargoville
Other Sales – Burbanks
Other income
Burbanks mill expenses
Administrative expenses
Compliance expenses
Depreciation expense
Employment benefits expense
Marketing expenses
Finance expense
Exploration expenditure written off
Other expenses
Gain/(loss) on sale of available for sale financial assets
Impairment of financial assets
(Loss) before income tax
Income tax expense
Loss for the year
Other comprehensive income (Items that maybe
reclassified subsequently to profit or loss)
Changes in the fair value of available-for-sale financial assets
Other comprehensive income for the year (net of tax)
4
5
5
5
5
16
5
10
17
6
45,653
5,000
35,073
(458,253)
(105,941)
(131,559)
(1,824)
(253,166)
(6,409)
(22,613)
(2,919,675)
(79,425)
-
-
16,845
-
11,232
-
(103,325)
(94,485)
(1,295)
(341,306)
(5,025)
-
(70,904)
-
(7,281)
(52,527)
(3,893,139)
-
(648,071)
(33,794)
(3,893,139)
(681,865)
-
-
-
-
Total comprehensive loss for the year
(3,893,139)
(681,865)
(Loss) is attributable to:
Maximus Resources Limited
Total comprehensive loss for the year is attributable to:
Maximus Resources Limited
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
(3,893,139)
(681,865)
(3,893,139)
(681,865)
Cents
Cents
28
28
(0.168)
(0.168)
(0.07)
(0.07)
This statement should be read in conjunction with the notes to the financial statements.
Page | 13
Maximus Resources Limited
Consolidated statement of financial position
As at 30 June 2017
Notes
Consolidated
30 June
2017
$
30 June
2016
$
7
8
9
11
12
13
16
14
17
15
18
19
229,813
35,199
18,368
9,719
1,443,300
455
-
9,546
293,099
1,453,301
3,834,306
2,467,297
2,811
4,220,642
6,301,603
4,223,453
6,594,702
5,676,754
407,505
415,402
43,008
183,162
-
37,023
875,191
220,185
1,342,433
797,656
-
28,982
2,140,089
28,982
3,015,280
249,167
3,579,422
5,427,587
39,988,897
(36,409,475)
37,943,923
(32,516,336)
3,579,422
5,427,587
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Plant and equipment
Exploration and evaluation
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Financial liability
Provisions
Total current liabilities
Non-current liabilities
Financial liability
Provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Accumulated losses
Total equity
This statement should be read in conjunction with the notes to the financial statements.
Page | 14
Maximus Resources Limited
Consolidated statement of changes in equity
For the year ended 30 June 2017
Consolidated
Notes
Contributed equity
$
Accumulated losses
$
Total equity
$
Balance at 1 July 2016
Total comprehensive loss for the year:
(Loss) for the year
Other comprehensive income
Transactions with owners in their
capacity as owners:
Contributions of equity
18
19
37,943,923
(32,516,336)
5,427,587
-
-
(3,893,139)
-
(3,893,139)
(3,893,139)
-
(3,893,139)
2,044,974
-
2,044,974
Balance at 30 June 2017
39,988,897
(36,409,475)
3,579,422
Balance at 1 July 2015
35,398,391
(31,834,471)
3,563,920
Total comprehensive loss for the year:
(Loss) for the year
Other comprehensive income
Transactions with owners in their
capacity as owners:
Contributions of equity
Balance at 30 June 2016
18
19
-
-
(681,865)
-
(681,865)
(681,865)
(681,865)
2,545,532
37,943,923
-
(32,516,336)
2,545,532
5,427,587
This statement should be read in conjunction with the notes to the financial statements.
Page | 15
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Net cash used in operating activities
Cash flows from investing activities
Payment for purchase of Eastern Goldfields Milling Services Pty Ltd
Payment for property, plant & equipment
Payments for available for sale financial assets
Proceeds from sale of available for sale financial assets
Payments for exploration and evaluation
Net cash provided by investing activities
Cash flows from financing activities
Proceeds from issues of shares and other equity securities
Transactions costs associated with equity issues
Net cash provided by financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Notes
27
10
Maximus Resources Limited
Consolidated statement of cash flows
For the year ended 30 June 2017
Consolidated
30 June
2017
$
30 June
2016
$
51,153
(669,859)
20,295
16,845
(450,172)
11,232
(598,411)
(422,095)
(829,424)
(625,271)
-
-
(1,205,355)
-
-
(1,279)
30,406
(1,380,925)
(2,660,050)
(1,351,798)
2,126,500
(81,526)
2,424,384
(112,646)
2,044,974
2,311,738
(1,213,487)
1,443,300
537,845
905,455
Cash and cash equivalents at the end of the financial year
7
229,813
1,443,300
This statement should be read in conjunction with the notes to the financial statements.
Page | 16
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
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 and the Corporations Act 2001. Maximus
Resources Limited is a for-profit entity for the purpose of preparing the financial statements.
(i) Compliance with IFRS
The consolidated financial statements of the Maximus Resources Limited 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) 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.
(iii) 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.
Going concern
The financial report has been prepared on the basis of going concern.
The cash flow projections of the Company and consolidated entity evidence that there is a material uncertainty that the Company
is a going concern and Maximus will require positive cash flows from additional capital for continued operations.
The Company incurred a loss of $3,893,139 (2016 $681,865) with negative operating and investing cashflows of $3,258,464.
The operations were funded by the raising of funds through the various equity issues during the year.
The Company and consolidated entity’s ability to operate as a going concern is contingent upon obtaining additional capital and
generating positive cashflows from operations, in particular operations at the Burbanks Processing Facility. If additional capital is
not obtained, the going concern basis of accounting may not be appropriate, as a result that the Company may have to realise its
assets and extinguish its liabilities, other than in the ordinary course of business in amounts which could be different from those
stated in the financial report. No allowance for such circumstances has been made in the financial report.
b) Basis of consolidation
The Group financial statements consolidate those of the Parent Company and all of its subsidiaries as of 30 June 2017. The
Parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the
ability to affect those returns through its power over the subsidiary. All subsidiaries have a reporting date of 30 June.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and losses
on transactions between Group companies. Where unrealised losses on intra-group asset sales are reversed on consolidation,
the underlying asset is also tested for impairment from a group perspective. Amounts reported in the financial statements of
subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the
effective date of acquisition, or up to the effective date of disposal, as applicable.
c) Employee Benefits
Short-term employee benefits
Short-term employee benefits are benefits, other than termination benefits, that are expected to be settled wholly within twelve
(12) months after the end of the period in which the employees render the related service. Examples of such benefits include
wages and salaries, non-monetary benefits and accumulating sick leave. Short-term employee benefits are measured at the
undiscounted amounts expected to be paid when the liabilities are settled.
Page | 17
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
Other long-term employee benefits
The Group’s liabilities for annual leave and long service leave are included in other long term benefits as they are not expected to
be settled wholly within twelve (12) months after the end of the period in which the employees render the related service. They
are measured at the present value of the expected future payments to be made to employees. The expected future payments
incorporate anticipated future wage and salary levels, experience of employee departures and periods of service, and are
discounted at rates determined by reference to market yields at the end of the reporting period on high quality corporate bonds
(2016: government bonds) that have maturity dates that approximate the timing of the estimated future cash outflows. Any
re-measurements arising from experience adjustments and changes in assumptions are recognised in profit or loss in the periods
in which the changes occur.
The Group presents employee benefit obligations as current liabilities in the statement of financial position if the Group does not
have an unconditional right to defer settlement for at least twelve (12) months after the reporting period, irrespective of when the
actual settlement is expected to take place.
d) 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.
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.
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.
The Company and its subsidiaries are not part of a consolidated tax group.
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.
Page | 18
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
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 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).
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 the statement of profit or loss and other comprehensive income.
Provision for restoration and rehabilitation
The Company assesses its mill restoration and rehabilitation provision in accordance with accounting policies. Significant
judgement is required in determining the provision for restoration and rehabilitation as there are many transactions and other
factors that will affect the ultimate liability payable to rehabilitate the mill site. The estimate of future costs therefore requires
management to make assessment of the future restoration and rehabilitation date, future environmental legislation, changes in
regulations, price increases, changes in discount rates, the extent of restoration and rehabilitation activities and future removal
technologies. When these factors change and become known in the future, such differences will impact the restoration and
rehabilitation provision in the period in which they change or become known. At each reporting date, the rehabilitation and
restoration provision is remeasured to reflect any of these changes.
j) 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
Page | 19
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
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 profit or loss and other 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 & 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 profit or loss and other 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.
k) 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.
l) 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.
m) 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.
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.
Page | 20
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
n) 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.
o) Comparative figures
Comparative figures are adjusted to conform to Accounting Standards when required.
p) 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.
q) Key estimates
The preparation of the financial statements requires management to make estimates and judgments. These estimates and
judgments 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(m). 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 profit or loss and other comprehensive income.
r) New and revised standards that are effective for these financial statements
A number of new and revised standards and an interpretation became effective for the first time to annual periods beginning on or
after 1 July 2016. Information on these new standards is presented below.
AASB 2012-3 Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities
AASB 2012-3 adds application guidance to AASB 132 to address inconsistencies identified in applying some of the offsetting
criteria of AASB 132, including clarifying the meaning of “currently has a legally enforceable right of set-off” and that some gross
settlement systems may be considered equivalent to net settlement.
AASB 2012-3 is applicable to annual reporting periods beginning on or after 1 January 2015.
The adoption of these amendments has not had a material impact on the Group as the amendments merely clarify the existing
requirements in AASB 132.
AASB 2013-3 Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets
These narrow-scope amendments address disclosure of information about the recoverable amount of impaired assets if that
amount is based on fair value less costs of disposal.
When developing IFRS 13 Fair Value Measurement, the IASB decided to amend IAS 36 Impairment of Assets to require
disclosures about the recoverable amount of impaired assets. The IASB noticed however that some of the amendments made
in introducing those requirements resulted in the requirement being more broadly applicable than the IASB had intended. These
amendments to
IAS 36 therefore clarify the IASB’s original intention that the scope of those disclosures is limited to the recoverable amount of
Page | 21
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
impaired assets that is based on fair value less costs of disposal.
AASB 2013-3 makes the equivalent amendments to AASB 136 Impairment of Assets and is applicable to annual reporting
periods beginning on or after 1 January 2015.
The adoption of these amendments has not had a material impact on the Group as they are largely of the nature of clarification of
existing requirements.
AASB 2013-5 Amendments to Australian Accounting Standards – Investment Entities
The amendments in AASB 2013-5 provide an exception to consolidation to investment entities and require them to measure
unconsolidated subsidiaries at fair value through profit or loss in accordance with AASB 9 Financial Instruments (or AASB 139
Financial Instruments: Recognition and Measurement where AASB 9 has not yet been adopted). The amendments also
introduce new disclosure requirements for investment entities that have subsidiaries.
These amendments apply to investment entities, whose business purpose is to invest funds solely for returns from capital
appreciation, investment income or both. Examples of entities which might qualify as investment entities would include
Australian superannuation entities, listed investment companies, pooled investment trusts and Federal, State and Territory fund
management authorities.
AASB 2013-5 is applicable to annual reporting periods beginning on or after 1 January 2015.
This Standard has not had any impact on the Group as it does not meet the definition of an ‘investment entity’ in order to apply
this consolidation exception.
AASB 2015-1 Amendments to Australian Accounting Standards (Part A: Annual Improvements
2010-2012 and 2011-2013 Cycles)
Part A of AASB 2015-1 makes amendments to various Australian Accounting Standards arising from the issuance by the IASB of
International Financial Reporting Standards Annual Improvements to IFRSs 2010-2012 Cycle and Annual Improvements to
IFRSs 2011-2013 Cycle.
Among other improvements, the amendments arising from Annual Improvements to IFRSs 2010-2012 Cycle:
clarify that the definition of a ‘related party’ includes a management entity that provides key management personnel services to
the reporting entity (either directly or through a group entity)
amend AASB 8 Operating Segments to explicitly require the disclosure of judgements made by management in applying the
aggregation criteria
Among other improvements, the amendments arising from Annual Improvements to IFRSs 2011-2013 Cycle clarify that an entity
should assess whether an acquired property is an investment property under AASB 140 Investment Property and perform a
separate assessment under AASB 3 Business Combinations to determine whether the acquisition of the investment property
constitutes a business combination.
Part A of AASB 2015-1 is applicable to annual reporting periods beginning on or after 1 July 2015.
The adoption of these amendments has not had a material impact on the Group as they are largely of the nature of clarification of
existing requirements.
s) Standards, amendments and interpretations to existing standards that are not yet effective and have not been
adopted early by the group:
The accounting standards that have not been early adopted for the year ended 30 June 2017, but will be applicable to the group
in future reporting periods, are detailed below. Apart from these standards, other accounting standards that will be applicable in
future periods have been reviewed, however they have been considered to be insignificant to the group.
At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing
standards have been published but are not yet effective, and have not been adopted early by the group. Management anticipates
that all of the relevant pronouncements will be adopted in the group's accounting policies for the first period beginning after the
effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be
relevant to the group’s financial statements is provided below.
Year ended 30 June 2018: IFRS 15: Revenue from Contracts with Customers
This standard will change the timing and in some cases the quantum of revenue received from customers. IFRS 15 requires an
entity to recognise revenue by identifying for each customer contract, the performance obligations in the contract and the
transaction price. The transaction price is then allocated against the performance obligations in the contract with revenue
recognised when (or as) the entity satisfies each performance obligation. Management are currently assessing the impact of the
new standard but it is not expected to have a material impact on the financial performance or financial position of the consolidated
entity.
Year ended 30 June 2019: AASB 9: Financial Instruments
This standard introduces new requirements for the classification and measurement of financial assets and liabilities. These
requirements improve and simplify the approach for classification and measurement of financial assets compared with the
requirements of AASB 139. The main changes are
Page | 22
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
•
Financial assets that are debt instruments will be classified based on (1) the objective of the entity’s business model for
managing the financial assets; and (2) the characteristics of the contractual cash flows.
• Allows an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are
not held for trading in other comprehensive income (instead of in profit or loss).
• Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no
•
impairment or recycling on disposal of the instrument.
Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing so
eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or
liabilities, or recognising the gains and losses on them, on different bases.
• Where the fair value option is used for financial liabilities the change in fair value is to be accounted by presenting changes
in credit risk in other comprehensive income (OCI) and the remaining change in the statement of profit or loss.
This standard is not expected to result in a material change to the manner in which the Group’s financial result is determined or
upon the extent of disclosures included in future financial reports although the Group will quantify the effect of the application of
AASB 9 when the final standard, including all phases, is issued.
There are no other standards that are not yet effective and that are expected to have a material impact on the entity in the
current or future reporting periods and on foreseeable future transactions.
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. 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.
The Company holds the following financial instruments:
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Financial liabilities – current
Financial liabilities – non-current
(a) Market risk
Consolidated
30 June
2017
$
30 June
2016
$
229,813
35,199
1,443,300
455
265,012
1,443,755
416,781
415,402
1,342,433
183,162
-
-
2,174,616
183,162
(i) 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.
(i) 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:
Page | 23
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
30 June
2017
Weighted
average
interest rate
%
1.95%
30 June
2017
Balance
$
229,813
229,813
30 June
2016
Weighted
average
interest rate
%
1.95%
30 June
2016
Balance
$
1,443,300
1,443,300
Cash and cash equivalents
Net exposure to cashflow interest rate
Interest rate sensitivity analysis
At 30 June 2017, 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:
30 June 2017
Financial assets
Cash and cash equivalents
Total increase/ (decrease)
30 June 2016
Financial assets
Cash and cash equivalents
Total increase/ (decrease)
(b) Credit risk
Carrying
amount
$
Increase 2%
Decrease 2%
Interest rate risk
Profit
$
Equity
$
Profit
$
Equity
$
229,813
397
397
397
397
(397)
(397)
(397)
(397
Carrying
amount
$
Increase 2%
Decrease 2%
Profit
$
Equity
$
Profit
$
Equity
$
1,443,300
225
225
225
225
(225)
(225)
(225)
(225)
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.
Page | 24
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
3 Segment information
(a) Description of segments
Identification of reportable segments
Management has determined the operating segments based on the reports reviewed and used by Managing Director (the chief
operating decision maker) 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.
Following acquisition of the Burbanks Mill the operating segments have now changed. Previously the segments were separated
for each exploration area. In 2017 other than Spargoville these have been consolidated into “Other”.
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
Accounting policies developed
Unless stated otherwise, all amounts reported to the Managing Director 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.
2017
Spargoville
Burbanks Mill
Other
Total
Segment revenue
Adjusted earnings before interest, tax,
depreciation and amortisation (EBITDA)
Impairment
Segment assets
$
45,653
$
5,000
$
$
-
50,653
45,653
(475,866)
(2,919,675)
(3,349,888)
2,467,297
3,885,028
-
6,352,325
(2,919,675)
(2,919,675)
Capital expenditure
1,099,285
625,271
79,686
1,804,242
Total movement for the year
1,099,285
625,271
(2,839,989)
(1,115,433)
Total segment assets
Unallocated assets
Total assets
Total segment liabilities
Unallocated liabilities
Total liabilities
-
2,744,564
6,352,325
242,377
6,594,702
-
2,744,564
270,716
3,015,280
Page | 25
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
3. Segment Information (cont)
2016
Millers Creek
$
Spargoville
$
Narndee
$
Other
$
Total
$
Segment revenue
-
16,845
Adjusted earnings before interest, tax,
depreciation and amortisation (EBITDA)
Impairment
Segment assets
(30,443)
(30,443)
16,845
-
-
-
-
-
16,845
(40,461)
(54,059)
(40,461)
(70,904)
-
1,368,011
2,839,836
12,795
4,220,642
Segment asset movements for the year:
Capital expenditure
30,443
1,368,011
179,215
53,256
1,630,925
Total movement for the year
-
1,368,011
179,215
12,795
1,560,021
Total segment assets
Unallocated assets
Total assets
Total segment liabilities
Unallocated liabilities
Total liabilities
(ii) Adjusted EBITDA
A reconciliation of adjusted EBITDA to operating loss before income tax is provided as follows:
Allocated:
Adjusted EBITDA
Unallocated:
Interest revenue
Impairment of financial assets
Gain/(loss) on sale of available for sale financial assets
Administrative expenses
Marketing expenses
4,220,642
1,456,112
5,676,754
-
249,167
249,167
Consolidated
30 June
2017
$
30 June
2016
$
(3,349,888)
(54,059)
35,073
-
-
(571,915)
(6,409)
11,232
(52,527)
(7,281)
(540,411)
(5,025)
Profit before income tax from continuing operations
(3,893,139)
(648,071)
Allocated:
Segment assets
Unallocated:
Cash and cash equivalents
Trade and other receivables
Other assets
Plant and equipment
Consolidated
30 June
2017
$
30 June
2016
$
6,352,325
4,220,642
217,688
12,228
9,719
2,742
1,443,300
455
9,546
2,811
Total assets as per the consolidated statements of financial position
6,594,702
5,676,754
Page | 26
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
3. Segment Information (cont)
(iii) Segment liabilities
Reportable segments' liabilities are reconciled to total liabilities as follows:
Allocated:
Allocated segment liabilities
Unallocated:
Trade and other payables
Provisions
Consolidated
30 June
2017
30 June
2016
2,744,564
-
188,259
82,457
183,162
66,005
Total liabilities as per the consolidated statements of financial position
3,015,280
249,167
4. Other income
Interest received
Other
5. Expenses
Burbanks mill expenses
Milling expenses – consumables etc
Personnel expenses
Insurance
Depreciation
Licences
Travel
Other mill expenses
Administration
Administration costs
Legal fees
Compliance expenses
Share registry fees
ASX fees
Audit Fees
Insurance
Other compliance expenses
Marketing
Marketing and promotion
Exploration expenses
General exploration expenditure written off
Capitalised exploration expenditure impaired
Consolidated
30 June
2017
20,295
14,778
30 June
2016
11,232
-
35,073
11,232
Consolidated
30 June
2017
30 June
2016
91,271
248,355
40,347
37,008
6,323
11,351
23,598
458,253
99,591
6,350
-
-
-
-
-
-
-
-
103,325
-
105,941
103,325
48,288
23,100
34,745
22,978
2,448
24,040
17,951
25,928
25,158
1,408
131,559
94,485
6,409
5,025
6,409
5,025
5,650
2,914,025
12,125
58,779
2,919,675
70,904
Page | 27
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
6. Income Tax Expense
(a)
Income tax expense:
Current tax
(b) Numerical reconciliation of income tax expense to
prima facie tax payable
Loss from continuing operations before income tax expense
Tax at the Australian tax rate of 30% (2016: 30%)
Tax effect of amounts which are not deductible (assessable)
in calculating taxable income:
Temporary differences not brought to account
Income tax expense
Consolidated
30 June
2017
$
30 June
2016
$
-
-
33,794
33,794
(3,893,139)
(681,865)
(1,167,942)
(204,560)
1,167,942
(238,354)
-
33,794
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 $7,308,420 (2016: $6,140,478) 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%
7. Current assets - Cash and cash equivalents
Cash at bank and in hand
Term deposits
(a) Risk exposure
Consolidated
30 June
2017
$
30 June
2016
$
229,813
-
313,300
1,130,000
229,813
1,443,300
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 1.95% (2016: 2.05%).
Page | 28
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
8. Current assets - Trade and other receivables
Net trade receivables
Trade and other receivables
GST paid on purchases
9. Current assets - Other current assets
Prepayments
Consolidated
30 June
2017
$
30 June
2016
$
28,833
6,366
35,199
-
455
455
Consolidated
30 June
2017
$
30 June
2016
$
9,719
9,546
Page | 29
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
10. Business Combination
On 2 August 2016 the Company signed a Share Sale Agreement with Ramelius Resources Limited (ASX:RMS) for the
purchase of the company, Eastern Goldfields Milling Services Pty Ltd (formerly Ramelius Milling Services Pty Ltd) that
owns the Burbanks Processing Facility located 10km south of Coolgardie, Western Australia. The Company changed
the name of the wholly-owned subsidiary shortly after acquisition from RMS. The consideration to acquire Eastern
Goldfields Milling Services Pty Ltd was $2.5 million that was to be paid in staged payments over a 24 month period as
outlined below:
• $50,000 deposit to secure an exclusivity period to finalise Due Diligence and negotiate Share Sale Agreement
(paid July 2016).
• $200,000 upon signing of the binding Sale Agreement (paid August 2016).
• $250,000 upon transfer of all licenses and shares in Ramelius Milling Service Pty Ltd (paid 30 August 2016)
• $1,000,000 to be paid to RMS 12 months from the date of signing the Sale Agreement or commencement of
commercial production, whichever occurs first; and
• $1,000,000 upon the 24 month anniversary of signing the Share Sale Agreement. (Refer Note 17)
During March 2017 the Company signed a Deed of Variation with RMS in relation to the Share Sale Agreement. The
Deed of Variation changed the payment terms relating to the $1,000,000 stage payment due either 12 months from the
date of signing the Sale Agreement (2 August 2017) or commencement of commercial production, whichever occurs
first. The new terms for this staged payment are four instalments of $250,000 due on 1 April 2017, 1 July 2017, 1
October 2017 and 1 January 2018 with interest. A payment of $250,000 was made to RMS on 1 April 2017.
During June 2017 the Company signed a Second Deed of Variation to amend the terms of the remaining $750k owing to
RMS. The Second Deed of Variation introduced a royalty payable to RMS for $772,613 ($750k plus interest) that would
be repaid at a rate of $3.00 per tonne of ore processed through the Burbanks Processing Facility. (Refer Note 16)
Total purchase consideration was therefore $2,500,000. The interest on the Second Deed of Variation (royalty payable)
includes interest of $22,613.
The acquisition of Eastern Goldfields Milling Services Pty Ltd will be accounted for under AASB 3 – Business
Combinations. This requires the acquired assets and liabilities to be recorded at fair value. The fair values of the
identifiable assets and liabilities are as follows:
ASSETS
Inventory:
- Consumables
- Fuel
Property Plant & Equipment:
- Mill Plant & Equipment
- Motor Vehicles
- Burbanks – Office equipment
- Burbanks – Office furniture
TOTAL ASSETS
LIABILITIES
Rehabilitation provision
TOTAL LIABILITIES
$
12,604
8,138
3,225,119
7,012
1,505
3,828
3,258,206
758,206
758,206
The Company also entered into a Mortgage Agreement with RMS over the assets held in Eastern Goldfields Milling
Services Pty Ltd. This Mortgage Agreement provides security to RMS against any default by the Company on the
payment terms detailed above. Should the Company default on any future payments, RMS has the option to take
possession of Eastern Goldfields Milling Services Pty Ltd.
The total cash payments made to RMS during the year was $750,000. The Company incurred costs of $79,424 which
are acquisition costs in relation to the purchase of Eastern Goldfields Milling Services Pty Ltd. The total cash outflow
therefore was $829,424.
Mr Kennedy is a director of Ramelius Resources Limited and abstained from any voting and discussions in relation to the
acquisition (refer note 24).
Page | 30
11. Plant and equipment
Consolidated
At 30 June 2016
Cost or fair value
Accumulated depreciation
Net book amount
Year ended 30 June 2017
Opening net book amount
Asset purchases
Assets transferred (fair value)
Depreciation charge
Closing net book amount
At 30 June 2017
Cost or fair value
Accumulated depreciation
Net book amount
Consolidated
Year ended 30 June 2016
Opening net book amount
Depreciation charge
Closing net book amount
At 30 June 2016
Cost or fair value
Accumulated depreciation
Net book amount
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
Other plant
and equipment
$
Burbanks
plant &
equipment
$
Burbanks
Office
equipment
and furniture
$
Total
$
20,467
(17,656)
2,811
-
-
-
-
-
-
20,467
(17,656)
2,811
4,107
1,755
-
(3,120)
-
626,016
3,225,121
(35,804)
-
5,091
12,345
(1,205)
4,107
632,862
3,237,466
(40,129)
2,742
3,815,333
16,231
3,834,306
22,222
(19,480)
3,851,137
(35,804)
17,436
(1,205)
3,890,795
(56,489)
2,742
3,815,333
16,231
3,834,306
Other plant
and equipment
$
Burbanks
plant &
equipment
$
Burbanks
Office
equipment
and furniture
$
4,107
(1,296)
2,811
20,467
(17,656)
2,811
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
4,107
(1,296)
2,811
20,467
(17,656)
2,811
Page | 31
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
12. Non-current assets - Exploration and evaluation
Exploration and evaluation
Movement:
Opening balance
Expenditure incurred
Impairment of capitalised expenditure
Closing balance
Closing balance comprises:
Exploration and evaluation - 100% owned
Exploration and evaluation phases - joint ventures
13. Current liabilities - Trade and other payables
Trade payables
14. Current liabilities – Provisions
Provision – Employee benefits
15. Non-current liabilities – Provisions
Provision – Employee benefits
Restoration provision
Consolidated
30 June
2017
30 June
2016
4,220,642
1,166,330
(2,919,675)
2,660,621
1,630,925
(70,904)
2,467,297
4,220,642
-
2,467,297
2,839,836
1,380,806
2,467,297
4,220,642
Consolidated
30 June
2017
$
30 June
2016
$
407,505
183,162
407,505
183,162
Consolidated
30 June
2017
$
30 June
2016
$
43,008
37,023
43,008
37,023
Consolidated
30 June
2017
$
30 June
2016
$
39,449
758,207
28,982
-
797,656
28,982
Page | 32
16. Current liabilities – Financial liabilities
Financial Liability – Ramelius Resources Ltd (Royalty)
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
Consolidated
30 June
2017
$
30 June
2016
$
415,402
415,402
-
-
During June 2017 the Company signed a Second Deed of Variation to amend the terms of the remaining $750k owing to
Ramelius Resources Limited (ASX:RMS). The Second Deed of Variation introduced a royalty payable to RMS for $772,613
($750k plus interest of $22,613) that would be repaid at a rate of $3.00 per tonne of ore processed through the Burbanks
Processing Facility. The $415,402 Financial Liability above represents the current portion of the royalty payable to RMS
based on current projections for the toll treatment operations at the Burbanks Mill.
17. Non-current liabilities – Financial liabilities
Financial Liability – Ramelius Resources Ltd (Royalty) – refer note 16
Financial Liability – Ramelius Resources Ltd
Consolidated
30 June
2017
$
357,211
985,222
1,342,433
30 June
2016
$
-
-
The consideration to purchase Eastern Goldfields Milling Services Pty Ltd includes a final staged payment of $1,000,000 due
on 3 August 2018 to RMS. The future payment is not subject to any interest and therefore $985,222 represents the
discounted value of the future payment. (Refer Note 10)
Page | 33
18. Contributed equity
(a) Share capital
Ordinary shares
Fully paid
(b) Movements in ordinary share capital:
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
Consolidated
Consolidated
30 June
2017
30 June
2016
30 June
2017
30 June
2016
39,988,897 1,882,686,299
37,943,923
870,407,498
Date
Details
Number of
shares
Issue price
$
1 July 2015
Opening balance
870,407,498
35,398,391
27 October 2015
11 December 2015
17 February 2016
25 February 2016
13 April 2016
16 May 2016
17 May 2016
30 June 2016
Issue of Shares - placement
Issue of Shares – Share Purchase Plan
Issue of Shares – Tychean Resources Limited
Issue of Shares - placement
Issue of Shares - placement
Issue of Shares – Entitlement Issue (Rights Issue)
Issue of Shares – Entitlement Issue Shortfall
Exercise of Options
100,000,000
138,000,000
100,000,000
66,000,000
70,000,000
530,182,388
7,580,611
515,802
Less: Transaction costs arising on share issues
Deferred tax credit recognised directly in equity
$0.002
$0.002
$0.002
$0.001
$0.0038
200,000
276,000
200,000
66,000
266,000
$0.003 1,590,547
22,742
$0.003
3,095
$0.006
2,624,384
(112,646)
33,794
(78,852)
30 June 2016
Balance
1,882,686,299
37,943,923
27 September 2016
4 October 2016
18 October 2016
31 May 2017
26 June 2017
Issue of Shares - placement
Issue of Shares – placement
Issue of Shares – Tychean Resources Limited
Issue of Shares – Share Purchase Plan
Issue of Shares – placement
500,000,000
33,333,333
25,000,000
113,250,000
300,000,000
$0.003 1,500,000
100,000
$0.003
50,000
$0.002
226,500
$0.002
300,000
$0.001
Less: Transaction costs arising on share issues
Deferred tax credit recognised directly in equity
30 June 2017
Balance
(c) Ordinary shares
2,176,500
(131,526)
-
39,988,897
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.
Page | 34
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
18. Contributed equity (cont)
(d) Options and rights
There were no options and rights issued during the 2016 and 2017 year in relation to the Maximus Resources Limited Employee
Share Option and Incentive Rights Plans.
(e) Capital risk management
The Company debt capital which commenced during the 2017 financial year and as such there are externally imposed capital
requirements.
The Company's debt and capital includes ordinary share capital, supported by property, plant and equipment.
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.
During the year there was a change in the strategy adopted by management to control the capital from the acquisition of the
Burbanks Mill Processing Facility.
19. Retained losses
Retained Earnings
Balance 1 July
Net loss for the year
Balance 30 June
20. Key management personnel disclosures
Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Share-based payments
Consolidated
30 June
2017
30 June
2016
(32,516,336)
(3,893,139)
(31,834,471)
(681,865)
(36,409,475)
(32,516,336)
Consolidated
30 June
2017
$
396,477
27,303
-
30 June
2016
$
506,923
36,402
-
423,750
543,325
Detailed remuneration disclosures and interests held by key management personnel are provided in sections A to D of the
remuneration report on pages 8 to 11.
Page | 35
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
21. Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the Company and its related
practices:
Grant Thornton
Audit and review of financial reports
Taxation Services
Total auditors' remuneration
22. Contingencies
(a) Contingent liabilities
Consolidated
30 June
2017
30 June
2016
34,745
3,500
27,357
2,000
38,245
29,357
The Group had no known contingent liabilities as at 30 June 2017 (2016: $35,000).
(b) Contingent assets
The Adelaide Hills tenement package was reduced to 4 tenements following the sale of 5 tenements, including the Bird in Hand
project to Terramin Australia Limited (“Terramin”). The consideration included the following contingent payment from Terramin:
•
•
$1,000,000 payable upon approval of a Program for Environmental Protection and Rehabilitation; and
$1,000,000 payable upon commencement of bullion production.
Maximus is also entitled to a 0.5% royalty payable upon bullion production in excess of 50,000 ozs.
23. 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 2017 amounts of approximately $290,590 (2016: $1,018,400) 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 performance bonds for the purposes of
rehabilitation of areas disturbed by exploration activities. At 30 June 2017, the Group had no bank guarantees in place for this
purpose (2016: $35,000).
Page | 36
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
24. Key management personnel
(a) Key management personnel
Disclosures relating to key management personnel are set out in note 20.
(b) Transactions with key management personnel
The following transactions occurred with related parties:
•
•
•
•
On 2 August 2016 the Company signed a Share Sale Agreement with Ramelius Resources Limited (ASX:RMS) for the
purchase of the company, Eastern Goldfields Milling Services Pty Ltd (formerly Ramelius Milling Services Pty Ltd) that
owns the Burbanks Processing Facility located 10km south of Coolgardie, Western Australia. The consideration to
acquire Eastern Goldfields Milling Services Pty Ltd was $2.5 million that was to be paid in staged payments over a 24
month period. Mr Kennedy as a director of Ramelius Resources Limited abstained from any discussions and voting
relating to this transaction.
During March 2017 the Company signed a Deed of Variation with RMS in relation to the Share Sale Agreement to
acquire Eastern Goldfields Milling Services Pty Ltd. The Deed of Variation changed the payment terms relating to the
$1,000,000 stage payment due either 12 months from the date of signing the Sale Agreement (2 August 2017) or
commencement of commercial production, whichever occurs first. The new terms for this staged payment amended to
four instalments of $250,000 due on 1 April 2017, 1 July 2017, 1 October 2017 and 1 January 2018 with interest. A
payment of $250,000 was made to RMS on 1 April 2017. Mr Kennedy as a director of Ramelius Resources Limited
abstained from any discussions and voting relating to this transaction.
During June 2017 the Company signed a Second Deed of Variation to amend the terms of the remaining $750k owing to
RMS. The Second Deed of Variation introduced a royalty payable to RMS for $772,613 ($750k plus interest) that
would be repaid at a rate of $3.00 per tonne of ore processed through the Burbanks Processing Facility. Mr Kennedy
as a director of Ramelius Resources Limited abstained from any discussions and voting relating to this transaction.
During February 2016 the Company signed a Second Sale Farm-in Agreement with Tychean to secure 100% of the
Tychean equity in the Spargoville Gold Project. The consideration to acquire the 100% was fully paid ordinary shares
in Maximus Resources Limited to the value of $50,000. The issue price was $0.002 per ordinary share resulting in
25,000,000 fully paid ordinary shares that were issued to Tychean on 18 October 2016. Messrs Kennedy and Vickery
are directors of Tychean Resources Limited and abstained from any voting and discussions relating to this transaction.
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to
other parties unless otherwise stated.
25. 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
2016
%
2017
%
MXR Minerals Pty Ltd
Eastern Goldfields Milling Services Pty Ltd
Australia
Australia
Ordinary
Ordinary
100
100
100
0
Page | 37
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
26. Events occurring after the reporting period
On 5 July 2017 the Company signed a Toll Treatment Agreement with Empire Resources Limited for the supply of
up to 150,000 tonne of ore from the Penny’s Find gold project to the Burbanks Treatment Facility which
commenced during mid-September 2017.
During August 2017 the Company signed a Binding Term Sheet with Lepidico Ltd (Lepidico) under which Lepidico
can earn a 75% interest in the Company’s lithium rights located on the Spargoville Project. To earn the 75%
interest Lepidico must meet all of the following terms:
On execution of the term sheet, payment to the Company of $80,000 Lepidico shares, at a 5 day VWAP issue price
(issued 21 August 2017);
Six months after execution, payment to the Company of $120,000 in cash or Lepidico shares at a 5 day VWAP
issue price; and
12 months after execution, payment to the Company of $150,000 in cash or Lepdico shares at a 5 day VWAP issue
price.
At anytime within the three years, and after the third payment detailed above, Lepidico can secure 100% of the
Lithium Rights by making a payment of $400,000 as either cash, or a combination of 50% cash and 50% Lepidco
shares at a 5 day VWAP issue price.
On 6 September 2017 the Company completed a placement by issuing 173,032,308 ordinary shares to
sophisticated and professional investors to raise $200,000 before costs.
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 Group, the results of those operations, or the state of affairs of the
Group in subsequent financial years.
27. Reconciliation of profit after income tax to net cash inflow from operating activities
(Loss) for the year
Depreciation
Tax effect on transaction costs
Impairment of capitalised exploration expenditure
Impairment of financial assets
(Gain)/loss on sale of financial assets
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
Decrease/(increase) in other operating assets
(Decrease)/increase in trade and other payables
(Decrease)/increase in provisions
Consolidated
30 June
2017
$
(3,893,141)
38,832
-
2,919,675
-
-
(23,083)
(558,024)
900,878
16,452
30 June
2016
$
(681,865)
1,295
33,794
70,904
52,527
7,281
4,210
2,248
68,510
19,001
Net cash (outflow)/inflow from operating activities
(598,411)
(422,095)
Page | 38
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
28. Earnings per share
(a) Basic earnings per share
Loss from continuing operations attributable to the ordinary equity holders
Weighted average number of ordinary shares outstanding during the year used to
calculate basic earnings per share
Basic earnings per share (cents)
(b) Diluted earnings per share
Loss from continuing operations attributable to the ordinary equity holders
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
Diluted earnings per share (cents)
30 June
2017
30 June
2016
(3,893,139)
(681,865)
2,316,585,108
(0.168)
1,014,057,771
(0.07)
(3,893,139)
(681,865)
2,316,585,108
(0.168)
1,014,057,771
(0.07)
Options
Options granted to employees under the Maximus Resources Limited Employee Share Option Plan are typically considered to be
potential ordinary shares. These may have a dilutive effect on the weighted average number of ordinary shares. As the
Company has reported a loss of $3,893,139 this financial year (2016: $681,865), the options have not been included in the
determination of diluted earnings per share.
29. Share-based payments
(a) Employee Option Plan
No option arrangements existed at 30 June 2017:
Fair value of options granted
No employee options were granted during the year ended 30 June 2017 (2016: 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
No incentive rights arrangements existed at 30 June 2017 and 2016.
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30. Parent Entity
Statement of financial position
Current Assets
Non-current Assets
Total Assets
Current Liabilities
Non-Current Liabilities
Total Liabilities
Net Assets
Shareholder’s Equity
Contributed Equity
Retained Losses
Maximus Resources Limited
30 June 2017
Notes to the Consolidated Financial Statements (continued)
Parent
2017
$
240,145
4,970,039
2016
$
1,453,827
4,223,454
5,210,184
5,677,281
1,003,880
1,039,449
220,183
28,982
2,043,329
249,165
3,166,855
5,428,116
39,988,897
(36,822,042)
37,943,923
(32,515,807)
Capital and reserves attributable to owners
3,166,855
5,428,116
Statement of profit or loss and other comprehensive income
Profit for the year
Other comprehensive income
Total comprehensive income
(4,306,235)
-
(681,865)
-
(4,306,235)
(681,865)
Parent Entity Contingencies
Contingent liabilities
The parent entity had no known contingent liabilities as at 30 June 2017 (2016: $35,000).
Contingent assets
The Adelaide Hills tenement package was reduced to 4 tenements following the sale of 5 tenements, including the Bird in Hand
project to Terramin Australia Limited (“Terramin”). The consideration included the following contingent payment from Terramin:
•
•
$1,000,000 payable upon approval of a Program for Environmental Protection and Rehabilitation; and
$1,000,000 payable upon commencement of bullion production.
Maximus is also entitled to a 0.5% royalty payable upon bullion production in excess of 50,000 ozs.
Parent Entity 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 2017 amounts of approximately $290,590 (2016: $1,018,400) 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 performance bonds for the purposes of
rehabilitation of areas disturbed by exploration activities. At 30 June 2017, the Group had no bank guarantees in place for this
purpose (2016: $35,000).
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In the directors' opinion:
Maximus Resources Limited
Directors' declaration
30 June 2017
(a)
the consolidated financial statements and notes set out on pages 13 to 40 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
giving a true and fair view of the consolidated entity's financial position as at 30 June 2017 and of their
performance for the financial year ended on that date, and
(ii)
(b)
(c)
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
the financial statements comply with International Financial Reporting Standards as confirmed in note 1(a).
The directors have been given the declarations by the Managing Director and Company Secretary required by section 295A of
the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
Kevin J Malaxos
Director
Adelaide
29th September 2017
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Maximus Resources Limited
ASX Additional Information
The shareholder information set out below was applicable as at 30 September 2017.
A Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
ORDINARY SHARES
Holding
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Shares
130
203
220
711
1,461
2,725
There were 1,882 holders of less than a marketable parcel of ordinary shares. At a share price of $0.001,
an unmarketable parcel is 500,000 shares.
B Equity Security Holders
Twenty largest quoted equity security holders
The names of the twenty largest equity holders of quoted 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.
MR NICHOLAS BARADAKIS
BRISTOL CONTRACTING PTY LTD
MRS GWENDOLINE MALAXOS
UBS NOMINEES PTY LTD
MR STEPHEN RONALD O'KEEFFE
TRIPLE EIGHT GOLD PTY LTD
CORPORATE PROPERTY SERVICES PTY LTD
RMK SUPER PTY LTD
KENNY INVESTMENTS PTY LTD
MR ALISTAIR MARK CAMERON
MR ARCHIBALD GEOFFREY LOUDON
DINWOODIE INVESTMENTS PTY LTD
MR DARRYN ANTHONY
TLG TRADING PTY LTD
LAKE PACIFIC PTY LTD
OCTIFIL PTY LTD
TYCHEAN RESOURCES LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
MR MARK ANDREW TKOCZ + MS SUSAN ELIZABETH EVANS
MR SANG WOON LEE
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (TOTAL)
Total Remaining Holders Balance
C Substantial holders
As at 30 September 2017 there were not substantial shareholders.
130,000,000
86,516,154
86,516,154
56,837,527
48,757,319
48,223,482
45,000,000
43,276,518
41,800,000
36,900,000
33,333,333
30,000,000
29,000,000
27,000,000
25,000,000
25,000,000
25,000,000
24,096,922
23,000,000
21,900,000
887,157,409
2,140,144,531
4.29
2.86
2.86
1.88
1.61
1.59
1.49
1.43
1.38
1.22
1.10
0.99
0.96
0.89
0.83
0.83
0.83
0.80
0.76
0.72
29.31
70.69
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Maximus Resources Limited
ASX Additional Information
D Voting Rights
The voting rights attaching to each class of equity securities are set out below:
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.
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