ABN 74 111 977 354
ANNUAL REPORT
2018
Maximus Resources Limited ABN 74 111 977 354
Corporate Directory
Directors
Ewan Vickery Non-executive Acting
Chairman
Kevin Malaxos Managing Director
Leigh McClusky Non-executive Director
Nicholas Smart Alternate for Mr Vickery
Company Secretary
Justin Nelson
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
Facsimile +61 8 8236 2305
Telephone +61 8 8236 2300
Solicitors
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 Audit Pty Ltd
Level 3, 170 Frome Street
Adelaide, South Australia 5000
Banker
National Australia Bank
48 Greenhill Road
Wayville, South Australia 5034
Stock Exchange Listing
Australia Securities Exchange (Adelaide)
Maximus Resources Limited shares are
listed on the
Australian Securities Exchange
ASX code: MXR
Website
www.maximusresources.com
The website includes information about the Company, its strategies, projects, reports and ASX announcements.
Maximus Resources Limited ABN 74 111 977 354
Annual Report
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
4
5
15
16
17
18
19
20
44
45
47
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 5
to 7.
The financial statements were authorised for issue by the directors on 5 October 2018. 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
Before we begin the official part of the meeting, on behalf of the Board of Maximus Resources Limited (Maximus) I would like to
pay tribute to our Late Chairman, Robert (Bob) Kennedy who passed away in March this year, after a relatively short illness. Bob
was the inaugural Chairman of Maximus when he established the company back in 2005, and led the Company since that time.
As many of you know, Bob was forthright in his pursuits on behalf of the company, and at times his energy knew no bounds. He
oversaw many exploration programs and several project reviews, and made sure that decisions were made with the
shareholders’ best interests at the forefront on every occasion. The Board looks forward to continuing his legacy, as we grow the
business.
On behalf of the Board of Directors, I present to you the 2018 Annual Report of Maximus Resources Limited.
Operationally, your Company has made noteworthy strides to progress from an explorer to a producer during the year. With the
refurbishment of the Burbanks Mill now finalised, attention turned to the successful commissioning of the plant and securing long
term consistent ore supply. The Mill allows for a streamlined process from exploration success, resource and reserve
development and ultimately to production.
After some initial delays due to unplanned maintenance and a lower than expected ore supply from Empire Resources Ltd
(Empire) resulting in a temporary stand-down of the Burbanks Mill, your Company signed multiple toll treatment agreements to
secure consistent ore leading into the latter part of the financial year. Maximus currently has three agreements in place to supply
up to 280,000 tonnes with the possibility of extending by an additional 300,000 tonnes leading into the 2018-19 financial year.
Maximus is also negotiating an additional large tonnage Toll agreements for the supply of an additional 100,000 tonnes with the
ability to extend for a further 200,000 tonnes from 2018/19, providing consistent supply moving forward. Having multiple Toll
agreements locked in should protect the company from interruptions to continuous ore supply resulting from production and
weather delays affecting our customers, as has occurred in the past.
As a result to the strong demand for mill capacity, the Company is reviewing its current capacity milling with a view of increasing
throughput in 2019.
Burbanks production increased steadily throughout FY18 with 34,346 tonnes treated during the June quarter. This increase has
delivered FY18 revenue of $3.38m which is expected to increase significantly through FY19 with 12 months of continuous feed.
Your Company continues to undertake gold exploration within the Spargoville tenements, with a proven resource base of 1.45
million tonnes for 112,000 JORC compliant ounces across five projects areas.
The company has identified two proximal tier one targets with similar geophysical characteristics as Wattle Dam. Maximus has
obtained drilling approvals for these targets and intends to utilize ground based electromagnetic (EM) and induced polarization
(IP) surveys along the Spargoville Shear to further investigate their potential.
Lithium-focused explorer, Lepidico entered into a heads of Agreement with your Company in 2017 to explore for Lithium minerals
on the Spargoville tenements, with Maximus retaining the rights to other minerals. Exploration drilling undertaken by Lepidico
intercepted significant nickel sulphide mineralization in shallow drilling on parts of the Company’s Spargoville tenements.
Maximus holds 80% of the nickel rights to this discovery. As the mineralization is comparable to other komatiite-hosted nickel
sulphide deposits located around the Kambalda dome, we consider these results to be significant, and accordingly a Program of
Works was submitted and approved by the WA Department for Mines and Petroleum for future investigation.
Your Company aims to fund exploration activities using the Burbanks Mill revenue while operating on minimal overheads.
Revenue from Toll milling operations will also enable the company to evaluate Toll milling throughput expansion if required and
target suitable acquisitions when they become available.
Our management team has achieved significant improvements in the performance of our Burbanks Mill, while expanding
exploration and building towards future production of Maximus ore. I have confidence that our management team will be able to
take the necessary steps to achieve this.
I thank all our shareholders, staff and contractors for their assistance and support during the past year, and look forward to a year
of continued exploration success, growth from our toll milling operation and your continued support for Maximus in the coming
year.
Ewan Vickery
ACTING CHAIRMAN
Maximus Resources 2018 Annual Report Page 1
Maximus Resources Limited ABN 74 111 977 354
Managing Director’s Report
Burbanks Mill
The year began with an enormous amount of excitement and anticipation as the refurbishment of the Burbanks gold treatment
plant, acquired in August 2016, was coming to a conclusion, and recommissioning imminent. The first Toll treatment Agreement
was signed in July 2017, with first ore delivered at the end of that month. Commissioning of the plant began in September, and
processing of the first commercial (or Toll) parcel of ore commenced in October 2017. Performance of the plant increased steadily,
after some minor teething issues with the plant, to be expected after sitting idle for 3 years. Forecast throughput and recoveries
were achieved throughout late October and November.
Delays to the delivery of ore by the customer in late November resulted in the plant being placed on standby, until the delivery of
additional ore tonnes were scheduled to re-commence milling. The Toll milling agreement was terminated in December, with the
final parcel completed on 21 December 2017. Efforts turned to sourcing alternative supplies of ore feed for Toll milling to replace
the terminated Empire Resources Ltd Agreement. Three small parcels of ore were processed during the first quarter of 2018.
Two substantial Toll Milling Agreements were finalised in early 2018, with first ore delivered in April. The mill performed extremely
well throughout the June quarter producing gold recovery levels of 95% and mill availability of 91%. A total of 34,346 tonnes were
processed during the June quarter, with a total of 77,388 tonnes processed since commissioning.
Significant improvements were identified and completed during the past year to improve Plant safety, reduce downtime and
reduce operating costs. The Company modified the cyanide storage facility, moving to a bulk liquid storage and distribution system
to eliminate manual mixing of cyanide, increase safety within the facility. A new water-bore was drilled and equipped to provide a
consistent water supply, increasing mill efficiency and reducing down-time.
The Burbanks facility represents a significant addition to the Maximus asset base, as the Company now generates cashflows
which are reinvested into exploration and project development. The performance of the Burbanks processing plant is heavily
reliant of the performance of its customers and the delivery of consistent tonnes to the mill. Interruptions to the supply of consistent
ore feed to the mill result in reduced recovery performance and reduce revenue. It is these factors that continue our focus to source
long term ore supply contracts with a minimum of two producers. Consistent ore supply is also a significant reminder in our quest
to acquire mining projects or progress Maximus projects through the approval process into production.
The Company currently has three signed Agreements for up to 280,000 tonnes, with the ability to increase this contracted tonnage
by an additional 300,000 tonnes, leading into the 2018-19 financial year. Maximus is also negotiating an additional large tonnage
Toll agreements for the supply of an additional 100,000 tonnes with the ability to extend for a further 200,000 tonnes from 2018/19,
providing consistent supply moving forward.
The Company generated $3.38 million revenue in 2017-18, providing capital for exploration purposes, which is forecasted to
increase by 70-80% in the current financial year. The Company is also reviewing current mill capacity (180,000 tonnes per year),
with a view to expanding mill treatment capacity in 2019, due to heightened interest in Toll Milling capacity in the area.
Spargoville
The Company continued to progress exploration drilling and analysis at the Spargoville tenement package near Coolgardie in the
Eastern Goldfields of Western Australia where the total JORC (2012) complaint resource estimate currently stands at 1,448,100
tonnes @ 2.41 g/t for 112,280Ozs across five project sites. The Company is focusing on converting this existing resource base to
reserves while conducting further metallurgical recovery trials, initial put optimisation analysis and higher level economic analysis
to determine a preferable mining schedule. Progress on project evaluation slowed during the second half of the year as a result of
tonnage shortfalls through the Burbanks plant resulted in reduced cashflows against forecast.
Maximus commenced a thorough assessment of potential blind, short strike length high grade Wattle Dam type gold deposits
during 2018-19. Targets were identified to the North and South of Wattle Dam which display similar geophysical characteristics as
the Wattle Dam Gold Mine. These targets have been named S13 and S5, respectively. While Ramelius Resources Ltd conducted
some traverse drilling in the general area, the conductive sediment was not directly tested or intersected and the existing drill
spacings are too broad to intersect a short strike-length target similar to Wattle Dam. Maximus plan to conduct detailed ground
electromagnetic (EM) surveys at S13 and D5 to locate conductive sediments and drilling approval has also been obtained.
In August 2017, Maximus signed a binding term sheet with Lepidico Ltd (Lepidico), under which Lepidico could earn up to a 75%
interest in the Company’s lithium rights across a suite of tenements at Spargoville. Exploration completed by Lepidico returned
significant nickel sulphide mineralization in shallow drilling on Maximus’ Sherlock Nickel Project, southwest of Kambalda in
Western Australia. These results include 1m @ 1.87% nickel, and 6m @ 0.6% nickel in separate drill traverses. The Company
considers these results to be significant and warrant further investigation. A Program of Works was submitted and approved by the
WA DMIRS for a future drilling program.
Lepidico paid a total of $200,000 to Maximus for the exploration rights and subsequently relinquished its exploration rights on the
tenement package in late July 2018, prior to the final payment. Maximus retain all rights to lithium on the tenement package.
Maximus Resources 2018 Annual Report Page 2
Maximus Resources Limited ABN 74 111 977 354
Managing Director’s Report
Samples were collected from Reverse Circulation (RC) drilling conducted by others on the Atomic Three lithium prospect in
December 2017. The tenements are held by Estrella Resources Ltd (Estrella) and Maximus owns the gold rights. A total of 254 RC
drill samples were obtained from 10 holes consisting of a total of 1019 drilled metres. The Atomic Three Prospect lies along strike
and directly north of the Widgiemooltha gold project held by Mincor Resources which has reported a global resource estimate of
267,000 ounces of gold.
Flushing Meadows
Maximus retains a $40 per ounce gold royalty interest in the Yandal Gold Project (also known as Flushing Meadows) in respect of
previously granted mining leases and exploration licences. This royalty obligation by Yandal Resources Ltd to Maximus consists of
$40 per ounce of gold for the first 50,000 ounces of gold produced from the tenement area and $20 per ounce of gold in excess of
50,000 ounces and less than 150,000 ounces. The current Flushing Meadows mineral resource estimate stands at 1.549 million
tonnes at 1.6g/t gold for 81,000 ounces. The combined royalty is capped at $4 million.
Adelaide Hills
The Company retains entitlement to two contingent $1 million payments (totalling $2 million) plus a gold production royalty in
accordance with the Bird in Hand Sale Agreement with Terramin Australia Limited (Terramin). The first payment due upon the
environmental approval to mine (PEPR) from the South Australian Department for State Development (DSD) and the second
payment is payable on the commencement of bullion production from the site.
Maximus also 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 approval process. Terramin has announced the approvals process is well advanced and low start-up
capital is required.
The Bird in Hand Gold Project has a resource base of 588,000 tonnes at 13.3g/t for 252,000 ounces of gold, potentially making it
one of the highest grade gold mines in Australia if production is commenced.
Corporate
Following cessation of the Toll Milling Agreement with Empire Resources Ltd in December 2017, Empire commenced resolution
proceedings in March 2018 against Eastern Goldfields Milling Services (EGMS), a wholly owned subsidiary of Maximus
Resources, regarding the quantum of gold recovered during the Empire toll milling campaign in 2017. The Company continues to
defend its position regarding the quantum outstanding and is confident that a resolution can be achieved in the near future.
MXR was advised by the ATO in May 2018 that its application to participate in the Exploration Development Incentive Scheme
(EDI) was accepted. As a result, the Company was able to forego a portion of its carried forward tax losses due to Greenfields
exploration and consequently passed on tax credits to eligible shareholders on 29 June 2018. The Total EDI credits available for
the 2016/17 tax year (to apply in the 2017/18 financial year) totalled $341,048. The Company also submitted an application for the
Junior Exploration Incentive Credits scheme for the 2017/18 financial year.
Summary
The Company continues to search for, and evaluate potential gold projects and tenements within economic trucking distances of
the Burbanks treatment plant near Coolgardie with a view to bolstering the exploration portfolio and build on the Company’s asset
base. Confidential discussions continue on various projects for Joint Venture or acquisition.
Kevin Malaxos
Managing Director
Maximus Resources 2018 Annual Report Page 3
Tenement
Number
Tenement Name
Registered Holder/Applicant
MAXIMUS RESOURCES LIMITED - TENEMENT SCHEDULE
Maximus Resources Limited
Tenement Schedule
30 June 2018
Maximus
Resources
interest
30/06/2018
SPARGOVILLE PROJECT
M15/1475
P15/5545
L15/128
L15/255
M15/395
M15/703
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
BURBANKS PROJECT
Eagles Nest
Eagles Nest
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
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
Burbanks
Burbanks
Burbanks
Burbanks
Burbanks
Burbanks
Burbanks
Burbanks
Burbanks
Burbanks
Burbanks
Burbanks
Burbanks
Estimation Governance Statement
Maximus Resources Ltd
Maximus Resources Ltd
Tychean Resources Ltd
Tychean Resources Ltd
Tychean Resources Ltd
Tychean Resources Ltd
Tychean Resources Ltd
Maximus Resources Ltd & Bullabulling Pty Ltd
Maximus Resources Ltd & Pioneer Resources Ltd
Maximus Resources Ltd & Pioneer Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus Resources Ltd
Maximus 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%
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%
The Company ensures that all Mineral Resource estimates are subject to appropriate levels of governance and internal controls.
Exploration results are collected and managed by an independent competent qualified geologist. All data collection activities are conducted to
industry standards based on a framework of quality assurance and quality control protocols covering all aspects of sample collection, topographical
and geophysical surveys, drilling, sample preparation, physical and chemical analysis and data and sample management.
Mineral Resource estimates are prepared by qualified independent Competent Persons. If there is a material change in the estimate of a Mineral
Resource, the estimate and supporting documentation in question is reviewed by a suitable qualified independent Competent Persons.
The Company reports its Mineral Resources on an annual basis in accordance with JORC Code 2012.
Competent Persons Statement
The information in this report that relates to Exploration Targets and Exploration Results is based on information compiled by Mr Stephen Hogan who
is a Member of the Australasian Institute of Mining and Metallurgy. The information that relates to the Mineral Resource Estimate has been compiled
by Dr Graeme McDonald who is a Member of the Australasian Institute of Mining and Metallurgy. Both Mr Hogan and Dr McDonald have sufficient
experience relevant to the style of mineralisation, the type of deposit under consideration, and the activities being undertaking, to qualify as a
Competent Persons as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration results, Mineral Resources and Ore
Reserves (the JORC Code). This report is issued in the form and context in which it appears with the written consent of the Competent Persons.
Maximus Resources 2018 Annual Report Page 4
Maximus Resources Limited
Directors' Report
30 June 2018
Directors' report
Your directors present their report on Maximus Resources Limited and its controlled entities (referred to hereafter as
the Group) for the year ended 30 June 2018
Directors
The following persons were directors of the Group during the whole of the financial year and up to the date of this
report unless otherwise indicated:
Ewan John Vickery (Non-executive Acting Chairman)
Kevin John Malaxos (Managing Director)
Leigh Carol McClusky (Non-executive Director)
Nicholas John Smart (Alternate director for E J Vickery) (resigned 24 August 2018)
Robert Michael Kennedy (Non-executive Chairman) (ceased as at 20 March 2018)
*The Company notes with great sadness the passing of Mr Robert Kennedy on 20 March 2018
Principal activities
During the year the principal activities of the Group consisted of completing the refurbishment of the Burbanks Mill and
commencing commercial toll milling services of gold ore.
Dividends
There were no dividends declared or paid during the year (2017: 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 $1,410,844 (2017: $3,893,139).
The net assets of the Company have decreased by $1,074,432 during the financial year from $3,579,422 at 30 June
2017 to $2,504,990 at 30 June 2018.
2. Review of Operations
Burbanks Mill
On 2 August 2016 the Company signed a binding Share Sale Agreement with Ramelius Resources Limited to
purchase the Burbanks Processing Facility for $2.5 million through the acquisition of Eastern Goldfields Milling
Services Pty Ltd (formerly Ramelius Milling Services Pty Ltd). The consideration involved staged payments over a 24
month period. Negotiations were finalised with Ramelius to address the outstanding $750,000 plus interest payment
as a $3.00 royalty per tonne milled (see note 26). A final Milestone payment of $1 million was due in August 2018.
The facility is located 60 kilometers from the Spargoville tenements and within trucking distance of numerous gold
development projects. Significant refurbishment of the mill was completed in September 2017, and commercial Toll
milling activities commenced in October 2017. Capital improvements, including upgrading the cyanide handling facility
and completion of a production water bore, increased the mill’s reliability, reduced production costs and improved the
safety systems at site. Ongoing capital improvements are part of our long term strategy for future consistent
performance and cost efficacy.
In line with the Company’s growth strategy, the Company explored its growth opportunities with the signing of various
new toll milling agreements during the current financial year to generate cash flow to fund the future potential project
development. Total revenue for the year, from the commencement of Toll milling in October 2017 was $3.24 million.
Maximus Resources 2018 Annual Report Page 5
Maximus Resources Limited
Directors' Report
30 June 2018
Spargoville (WA)
The Company continues to focus on converting the five Mineral Resource gold estimates to Reserve category,
conducting metallurgical recovery trials, undertaking initial pit optimisation analysis and higher level economic
analysis to determine the optimum mining schedule. Following economic analysis of each project, permitting
requirements and project development scheduling can be evaluated, which will determine potential mine development
sequencing. All resources are situated on granted Mining Leases so the lead time to production is expected to be
short.
Nickel deposits in the Spargoville area are comparable to that of other komatiite-hosted deposits located around the
Kambalda Dome to the east, and the Widgiemooltha Dome to the south. Several nickel sulphide deposits were
discovered and subsequently mined by others. The company considers the results obtained from the recent drilling
program are significant and warrant further detailed exploration. A Program of Works has been submitted to the WA
DMP.
Maximus signed a binding term sheet with Lepidico Limited for an earn-in agreement covering the Spargoville Lithium
rights in August 2017. Under the terms of the agreement, the Company received $80,000 worth of Lepidico fully paid
ordinary shares and $120,000 in cash. However, the Company was notified in late July 2018 that Lepidico did not
intend to continue exploration on the Spargoville Lithium tenements. As a result, the earn-in agreement is terminated
and Maximus retains 100% of the Lithium Rights on the tenement package.
Adelaide Hills (SA)
Maximus completed the sale of 5 Adelaide hills tenements to Terramin Australia Ltd in October 2013. During the June
quarter, Terramin continued to engage with the SA Department of the Premier and Cabinet (DPC) in respect of the
draft mining lease proposal (MLP) for the development of the Bird-in-Hand Gold Project. Terramin announced that the
approvals process is well advanced with the draft Mining Lease application lodged and feedback being received.
Terramin reported that low startup capital is required, and off-site processing through the existing Angus Zinc
processing facility is proposed. Engineering studies have been completed.
The Company will receive the second stage cash payment of $1 million upon the approval of a Program for
Environmental Protection and Rehabilitation (PEPR). This approval is part of the mining lease proposal (MLP),
currently under review by the DPC for the development of the Bird-in-Hand Gold Project. The third stage cash
payment of $1 million is payable upon the commencement of bullion production. Maximus then receives an ongoing
0.5% royalty payable on bullion production in excess of the first 50,000ozs. The Bird in Hand Gold Project has a
resource 252,000 ounces of gold.
Corporate
During the 2018 financial year the following securities were issued:
· 83,140,002 ordinary shares were issued to sophisticated and professional investors on 6 September 2017.
The shares were offered at an issue price of $0.001 per share raising $83,140.
· 89,892,306 ordinary shares were issued to sophisticated and professional investors on 6 September 2017.
The shares were offered at an issue price of $0.0013 per share raising $116,860.
· 150,000,000 ordinary shares were issued to sophisticated and professional investors on 26 April 2018.The
shares were offered at an issue price of $0.001 per share raising $150,000.
3. Significant changes in the state of affairs
There have been no significant changes in the above state of affairs from the 2017 financial year to 2018.
Maximus Resources 2018 Annual Report Page 6
Maximus Resources Limited
Directors' Report
30 June 2018
4. Events arising since the end of the reporting period
Mr Nicholas Smart resigned as Alternate Director on 24 August 2018.
On 6 September 2018, 304,095,000 ordinary shares were issued to sophisticated and professional investors. The
shares were offered at an issue price of $0.001 per share raising $304,095 before cost.
The Company commenced discussions with several parties interested in participating in a capital raise to address
current and future capital requirements. Those discussions centred around a Convertible Note or a Placement of
Shares to sophisticated investors and a subsequent Rights Issue to MXR shareholders. At the date of this report,
those discussions have not been finalised, however a draft mandate was received by the Company and is being
reviewed by the Board of Directors.
The Company is working with Ramelius Resources Ltd (RMS) on a commercial settlement for the outstanding capital
for the Burbanks Treatment Plant, owned by Eastern Goldfields Milling Services Pty Ltd (MXR 100%). This settlement
is intended to result in full and final settlement of the outstanding balance for the mill, including release from the
Mortgage Agreement. The discussions regarding a capital raise include sufficient funds to finalise the proposed
commercial settlement with RMS.
Negotiations were nearing completion for an additional Toll treatment Agreement with an ASX listed company for the
supply of 100,000 tonnes of ore from October 2018, with the option to extend the Agreement for an additional 200,000
tonnes. The Toll Agreement was being reviewed by the potential client, but not signed therefore not yet suitable for
release at this time. This Toll Agreement would provide continuous feed to the Burbanks Treatment Plant for a
minimum of 6 months from commencement, and a further 12 months if the extension is agreed by both parties.
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 intends to 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 Group continues to focus on securing long-term consistent ore supplies accompanied with improved preventative
maintenance to improve mill performance and enhance revenue.
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.
Maximus Resources 2018 Annual Report Page 7
Maximus Resources Limited
Directors' Report
30 June 2018
Information on directors
Ewan John Vickery LLB
Acting Non-executive Acting Chairman
Experience and expertise
A director since incorporation 17 December 2004, Mr Vickery is a corporate and business lawyer with over 30 years’
experience in private practice in Adelaide. He has acted as an advisor to companies on a variety of corporate and
business issues including capital and corporate restructuring, native title and land access issues, and as lead native
title advisor and negotiator for numerous mining and petroleum companies.
He is a member of the Exploration Committee of the South Australian Chamber of Mines and Energy Inc, the
International Bar Association Energy and Resources Law Section, the Australian Institute of Company Directors and
is a past national president of Australian Mining and Petroleum Law Association (AMPLA Limited).
Former directorships in the last 3 years
Mr Vickery was a non-executive director of Tychean Resources Limited (from May 2013 to December 2017) and
Flinders Mines Limited (from 2000 to October 2016).
Special responsibilities
Acting Chairman of the Board (from March 2018)
Chairman of the Audit, Risk & Corporate Governance Committee.
Interests in shares and options
42,500,003 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
Nil
Former directorships in the last 3 years
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
Page 5
Maximus Resources 2018 Annual Report Page 8
potentially damaging impacts on corporate reputations. Her role also includes stakeholder engagement and
management, client advocacy and crisis communications.
Maximus Resources Limited
Directors' Report
30 June 2018
Other current directorships
Nil
Former directorships in the last 3 years
Nil
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.
Nicholas John Smart
Alternate director for E J Vickery (resigned 24 August 2018)
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 a director for Vintage Energy Limited, an alternate director for
Maximus Resources Limited (since May 2005 to 24 August 2018) and an alternate director for Flinders Mines Ltd
(2009 to 2016). Mr Smart currently consults to various public and private companies.
Other current directorships
Nil
Former directorships in the last 3 years
Nil
Interests in shares and options
37,500 ordinary shares in Maximus Resources Limited.
Robert Michael Kennedy KSJ, ASAIT, Grad Dip (Systems Analysis), Dip Financial Planning, Dip Financial
Services, FCA, CTA, AGIA, Life Member AIM, FAICD. (ceased 20 March 2018)
Non-executive Chairman
Experience and expertise
Mr Kennedy, a Chartered Accountant, had been non-executive chairman of Maximus Resources Limited since 2004.
Mr Kennedy brought 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 conducted the review of the Board including the
Managing Director in his executive role.
Apart from his attendance at Board and Committee meetings, Mr Kennedy led the development of strategies for the
development and future growth of the Company.
Other current directorships
Nil
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), Marmota Energy Limited (from April 2006 to April 2015), Ramelius
Resources Limited (from March 2003 to March 2018), Flinders Mines Limited (from December 2001 to March 2018),
Monax Mining Limited (from 2004 to March 2018) and Tychean Resources Limited (from 2006 to March 2018).
Special responsibilities
Chairman of the Board (ceased March 2018).
Member of the Audit, Risk & Corporate Governance Committee (ceased March 2018).
Maximus Resources 2018 Annual Report Page 9
Maximus Resources Limited
Directors' Report
30 June 2018
Company Secretary
Justin Nelson LLB BA, (Jur) (Appointed 23 March 2018)
Experience and expertise
Mr Nelson has extensive experience in the listed company environment through his former role as the ASX’s SA State
Manager and Manager Listings (Adelaide). An expert in corporate governance procedures, ASX Listing Rules and
company meeting practice, Mr Nelson is also a regular presenter on corporate governance topics for Chartered
Secretaries Australia (CSA), the leading independent authority on best practice in board and organisational
governance and risk management.
Rajita Shamani Alwis LLB BCom, CA. (resigned 23 March 2018)
Experience and expertise
Ms Alwis had been the Company Secretary since 30 June 2011 until her resignation. Ms Alwis had 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 2018, and the number of meetings attended by each director were:
Robert Michael Kennedy (ceased 20 March 2018)
Kevin John Malaxos
Leigh Carol McClusky
Ewan John Vickery
Nicholas John Smart
Full
meetings of
directors
B
A
Audit & Risk
Committee
meetings
B
A
6
12
12
12
-
8
12
12
12
-
1
2
2
2
-
2
2
2
2
-
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 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 $22,828 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
Maximus Resources 2018 Annual Report Page 10
Maximus Resources Limited
Directors' Report
30 June 2018
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 2018 was $6,000 (2017: $3,500).
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 2017 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.
The Company does not presently emphasize 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
Maximus Resources 2018 Annual Report Page 11
Maximus Resources Limited
Directors' Report
30 June 2018
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 2018.
B. Voting and comments made at the Company’s 2017 Annual General Meeting
Maximus Resources Limited received more than 77% of ‘yes’ votes on its remuneration report for the 2017 financial
year. The Company did not receive any specific feedback at the AGM or throughout the year on its remuneration
practices.
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 E J Vickery – Acting Chairman, non-executive (appointed March 2018)
Mr K J Malaxos - Managing Director
Ms L C McClusky - Director, non-executive
Mr R M Kennedy - Chairman, non-executive (ceased 20 March 2018)
Mr N J Smart - Alternate director for E J Vickery, non-executive
Mr J Nelson – Company Secretary (appointed 23 March 2018)
Ms R S Alwis - Company Secretary (resigned 23 March 2018)
Key management personnel and other executives of the Company
2018
Name
Robert M Kennedy* (ceased 20 March 2018)
Kevin J Malaxos***
Leigh C McClusky*
Ewan J Vickery*
Nicholas J Smart
Rajita S Alwis** (resigned 23 March 2018)
Justin Nelson (appointed 23 March 2018)
Total key management personnel
compensation
Short-term employee benefits
Post-employment
benefits
Share-based
payments
Long-term
employee
benefits
Long service
leave
Superannuation
$
accrued Options Rights
$
$
$
Fees
$
-
-
-
-
58,625
12,500
Salary
$
-
167,428
-
-
-
-
-
Annual
leave
accrued
$
-
15,449
-
-
-
-
-
-
15,906
-
-
-
-
-
-
47,087
-
-
-
-
-
Total
$
-
245,870
-
-
-
58,625
12,500
316,995
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
71,125
167,428
15,449
15,906
47,087
* The Directors suspended directors’ fees from 1 April 2017 to preserve cash for operational purposes.
**Ms Alwis resigned on 23 March 2018 and Mr Justin Nelson was appointed as Company Secretary. Mr Nelson is engaged under a service
contract with DMAW Lawyers Pty Ltd. During the year, fees were paid or payable for services provided by Mr Nelson was $12,500.
***Mr Malaxos did not receive a salary from July 2017 to October 2017 to preserve cash for operational purposes.
Maximus Resources 2018 Annual Report Page 12
Key management personnel and other executives of the Company
Maximus Resources Limited
Directors' Report
30 June 2018
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
Salary
$
Bonus
$
Fees
$
61,712
-
40,875
37,329
-
68,175
-
188,356
-
-
-
-
Superannuation Options Rights
$
5,863
17,894
-
3,546
-
-
27,303
$
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
Total
$
67,575
206,250
40,875
40,875
-
68,175
423,750
-
-
-
-
-
-
-
Total key management personnel compensation
208,091
188,356
*Mr Malaxos did not receive a salary from April 2017 to June 2017 to preserve cash for operational purposes.
The relative proportions of remuneration that are fixed and those that are at risk are as follows:
Name
Kevin John Malaxos
Fixed remuneration
2017
%
100
2018
%
100
2018
At risk - STI*
2018
%
-
2017
%
-
At risk - LTI**
2018
%
-
2017
%
-
* 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.
All Non-executive Directors were 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
Maximus Resources 2018 Annual Report Page 13
Maximus Resources Limited
Directors' Report
30 June 2018
(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.
2018
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
-
*ceased in March 2018
2017
Name
R M Kennedy
K J Malaxos
L C McClusky
E J Vickery
N J Smart
Balance at
start of the
year
24,000,000
11,000,000
1,982,670
10,000,003
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Issued as
remuneration
Exercised
(expired/
purchased)
Acquired
during the
year
Balance at
end of the
year
Vested and
exercisable
Unvested
-
-
-
-
-
(24,000,000)
(11,000,000)
(1,982,670)
(10,000,003)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(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.
2018
Name
R M Kennedy*
KJ Malaxos
L C McClusky
E J Vickery
N J Smart
*ceased in March 2018
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
91,500,000
46,000,000
7,939,338
42,500,003
37,500
-
-
-
-
-
Ceased
(91,500,000)
-
-
-
-
Acquired/
(disposed)
Balance at the
end of the year
-
-
-
-
-
-
46,000,000
7,939,338
42,500,003
37,500
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
Shares under option
At the date of this report the Company has no shares under option. (2017: 533,333,333)
END OF AUDITED REMUNERATION REPORT
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 15.
This report is signed and dated in Adelaide on this 5th day of October 2018 and made in accordance with a resolution
of the directors.
Kevin J Malaxos
Director
Maximus Resources 2018 Annual Report Page 14
Grant Thornton House
Level 3
170 Frome Street
Adelaide, SA 5000
Correspondence to:
GPO Box 1270
Adelaide SA 5001
T 61 8 8372 6666
F 61 8 8372 6677
E info.sa@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of Maximus Resources Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor
for the audit of Maximus Resources Limited for the year ended 30 June 2018, I declare that, to the
best of my knowledge and belief, there have been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
J L Humphrey
Partner – Audit & Assurance
Adelaide, 5 October 2018
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
Maximus Resources 2018 Annual Report Page 15
Maximus Resources Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2018
Consolidated
30 June
2018
$
30 June
2017
$
Notes
Revenue
Gold Sales - Spargoville
Gold Sales - Burbanks
Processing Sales – Burbanks
Other Sales - Burbanks
Cost of sales
Gross Profit
Revenue from other activities
Expenses
Administrative expenses
Compliance expenses
Depreciation expense
Employee expenses
Legal expenses
Marketing expenses
Finance expense
Exploration expenditure written off
Other expenses
Gain/(loss) on sale of shares
(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)
5
4
5
5
5
16
5
6
6,597
285,104
3,240,020
192,398
(4,646,947)
(922,828)
45,653
-
5,000
-
(458,253)
(407,600)
16,443
35,073
(173,168)
(121,721)
(1,641)
(120,865)
(2,709)
(4,970)
(67,771)
(515)
-
(11,099)
(99,591)
(131,559)
(1,824)
(253,166)
(6,350)
(6,409)
(22,613)
(2,919,675)
(79,425)
-
(1,410,844)
-
(3,893,139)
-
(1,410,844)
(3,893,139)
-
-
-
-
Total comprehensive loss for the year
(1,410,844)
(3,893,139)
Earnings per share for (loss) from continuing operations
attributable to the ordinary equity holders of the
Company:
Basic earnings per share
Cents
Cents
28
(0.047)
(0.168)
This statement should be read in conjunction with the notes to the financial statements.
Maximus Resources 2018 Annual Report Page 16
Maximus Resources Limited
Consolidated statement of financial position
As at 30 June 2018
Notes
Consolidated
30 June
2018
$
30 June
2017
$
7
8
9
11
12
13
16
14
17
15
18
19
28,823
342,987
18,368
146,865
229,813
35,199
18,368
9,719
537,043
293,099
3,997,596
2,622,942
3,834,306
2,467,297
6,620,538
6,301,603
7,157,581
6,594,702
1,892,756
1,806,899
136,819
416,781
415,402
43,008
3,836,474
875,191
-
816,117
1,342,433
797,656
816,117
2,140,089
4,652,591
3,015,280
2,504,990
3,579,422
40,325,309
(37,820,319)
2,504,990
39,988,897
(36,409,475)
3,579,422
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.
Maximus Resources 2018 Annual Report Page 17
Maximus Resources Limited
Consolidated statement of changes in equity
For the year ended 30 June 2018
Consolidated
Contributed
equity
$
Accumulated
losses
$
Notes
Total equity
$
Balance at 1 July 2017
Total comprehensive loss for the year:
(Loss) for the year
Other comprehensive income
Transactions with owners in their
capacity as owners:
Contributions of equity
39,988,897
(36,409,475)
3,579,422
-
-
-
(1,410,844)
-
(1,410,844)
(1,410,844)
-
(1,410,844)
18
336,412
-
336,412
Balance at 30 June 2018
40,325,309
(37,820,319)
2,504,990
Balance at 1 July 2016
37,943,923
(32,516,336)
5,427,587
Total comprehensive loss for the year:
(Loss) for the year
Other comprehensive income
Transactions with owners in their
capacity as owners:
-
-
-
(3,893,139)
(3,893,139)
-
(3,893,139)
(3,893,139)
Contributions of equity
Balance at 30 June 2017
18
2,044,974
39,988,897
-
(36,409,475)
2,044,974
3,579,422
This statement should be read in conjunction with the notes to the financial statements.
Maximus Resources 2018 Annual Report Page 18
Maximus Resources Limited
Consolidated statement of cash flows
For the year ended 30 June 2018
Consolidated
30 June
2018
$
30 June
2017
$
Notes
27
10
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
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
Proceeds from disposal of Lithium rights
Proceeds from sale of 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
Proceeds from Directors Loans
Payments made for Ramelius Resources payable
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
3,288,181
(3,327,865)
2,308
6,620
51,153
(669,859)
20,295
-
(43,996)
(598,411)
-
(356,160)
120,000
68,901
(356,147)
(829,424)
(625,271)
-
-
(1,205,355)
(523,406)
(2,660,050)
350,000
90,000
(60,000)
(13,588)
2,126,500
-
-
(81,526)
366,412
2,044,974
(200,990)
229,813
(1,213,487)
1,443,300
Cash and cash equivalents at the end of the financial year
7
28,823
229,813
This statement should be read in conjunction with the notes to the financial statements.
Maximus Resources 2018 Annual Report Page 19
Maximus Resources Limited
30 June 2018
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.
Compliance with IFRS
(i)
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 an improvement in mill performance and/or
capital raising for continued operations.
The Company incurred a loss of $1,410,844 (2017: $3,893,139) with negative operating and investing cashflows of $567,402.
The operations were funded by revenues from toll milling operations and 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 2018. 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 2018.
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) Revenue and Other Income
Revenue is measured at the fair value of the consideration received or receivable. Revenue from the rendering of services is
recognised upon the delivery of the service to the customer.
Revenue from the sale of gold is measured at fair value of the consideration received or receivable. Revenue is recognised
when the significant risks and rewards of ownership have been transferred to the buyer.
Maximus Resources 2018 Annual Report Page 20
Maximus Resources Limited
30 June 2018
Notes to the Consolidated Financial Statements (continued)
Interest revenue is recognised using the effective interest rate method.
d) 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.
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 (2017: 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.
e) 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.
f)
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.
Maximus Resources 2018 Annual Report Page 21
Maximus Resources Limited
30 June 2018
Notes to the Consolidated Financial Statements (continued)
g)
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.
h) 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.
i)
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.
j)
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.
Maximus Resources 2018 Annual Report Page 22
Maximus Resources Limited
30 June 2018
Notes to the Consolidated Financial Statements (continued)
Provision for restoration and rehabilitation
The Company assesses the 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.
k) 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 is measured on the cost basis. The carrying amount of plant and equipment is reviewed annually by
directors to ensure it is not in excess of the recoverable amount. The recoverable amount is assessed on the basis of the
expected net cash flows that will be received from the assets’ employment and subsequent disposal. The expected net cash
flows have been discounted to their present values in determining recoverable amounts.
Subsequent costs are included in the assets’ carrying amount or recognised as separate assets as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Company and the cost can be measured reliably.
All other repairs and maintenance are charged to the statement of 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.
l)
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.
m) Earnings per share (EPS)
Basic earnings per share
(i)
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.
Maximus Resources 2018 Annual Report Page 23
Maximus Resources Limited
30 June 2018
Notes to the Consolidated Financial Statements (continued)
n) 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.
o) 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.
p) Comparative figures
Comparative figures are adjusted to conform to Accounting Standards when required.
q) 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.
r) 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 Group assesses impairment at each reporting date by evaluating conditions specific to the Group 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(n). 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.
Maximus Resources 2018 Annual Report Page 24
Maximus Resources Limited
30 June 2018
Notes to the Consolidated Financial Statements (continued)
s) New and revised standards that are effective for these financial statements
The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
t) Standards, amendments and interpretations to existing standards that are not yet effective and have not been
adopted early by the group:
Accounting Standards issued by the AASB that are not yet mandatorily applicable to the Group, together with an assessment of
the potential impact of such pronouncements on the Group when adopted in future periods, are discussed below:
AASB 9: Financial Instruments and associated Amending Standards (applicable to annual reporting periods beginning on or
after 1 July 2018).
The Standard will be applicable retrospectively (subject to the provisions on hedge accounting outlined below) and includes
revised requirements for the classification and measurement of financial instruments requirements for financial instruments and
hedge accounting.
The key changes that may affect the Group on initial application include certain simplifications to the classification of financial
assets, simplifications to the accounting of embedded derivatives, upfront accounting for expected credit loss, and the
irrevocable election to recognise gains and losses on investments in equity instruments that are not held for trading in other
comprehensive income. AASB 9 also introduces a new model for hedge accounting that will allow greater flexibility in the
ability to hedge risk, particularly with respect to hedges of non-financial items. Should the entity elect to change its hedge
policies in line with the new hedge accounting requirements of the Standard, the application of such accounting would be largely
prospective.
The directors do not anticipate that the adoption of AASB 9 will have a material impact on the Group’s financial instruments.
AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods beginning on or after 1 July 2018, as
deferred by AASB 2015-8: Amendments to Australian Accounting Standards – Effective Date of AASB 15)
AASB 15 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with
customers.
When effective, this Standard will replace the current accounting requirements applicable to revenue with a single,
principles-based model. Apart from a limited number of exceptions, including leases, the new revenue model in AASB 15 will
apply to all contracts with customers as well as non-monetary exchanges between entities in the same line of business to
facilitate sales to customers and potential customers.
The core principle of the Standard is that an entity will recognise revenue to depict the transfer of promised goods or services to
customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the goods or
services. To achieve this objective, AASB 15 provides the following five-step process:
·
·
Identify the contract(s) with a customer;
Identify the performance obligations in the contract(s);
· Determine the transaction price;
· Allocate the transaction price to the performance obligations in the contract(s); and
· Recognise revenue when (or as) the performance obligations are satisfied.
The transitional provisions of this Standard permit an entity to either: restate the contracts that existed in each prior period
presented per AASB 108: Accounting Policies, Changes in Accounting Estimates and Errors (subject to certain practical
expedients in AASB 15); or recognise the cumulative effect of retrospective application to incomplete contracts on the date of
initial application. There are also enhanced disclosure requirements.
Based on detailed assessment performed, the effects of AASB 15 are not expected to have a material effect on the Group.
AASB 16: Leases (applicable to annual reporting periods beginning on or after 1 July 2019).
When effective, this Standard will replace the current accounting requirements applicable to leases in AASB 117: Leases and
related Interpretations. AASB 16 introduces a single lessee accounting model that eliminates the requirement for leases to be
classified as operating or finance leases.
The main changes introduced by the new standard are as follows:
·
·
recognition of a right-of-use asset and lease liability for all leases (excluding short-term leases with a lease term 12
months or less of tenure and leases relating to low-value assets);
depreciation of right-of-use assets in line with AASB 116: Property, Plant and Equipment in profit or loss and unwinding
of the liability in principal and interest components;
Maximus Resources 2018 Annual Report Page 25
Maximus Resources Limited
30 June 2018
Notes to the Consolidated Financial Statements (continued)
·
·
·
inclusion of variable lease payments that depend on an index or a rate in the initial measurement of the lease liability
using the index or rate at the commencement date;
application of a practical expedient to permit a lessee to elect not to separate non-lease components and instead
account for all components as a lease: and
inclusion of additional disclosure requirements.
The transitional provisions of AASB 16 allow a lessee to either retrospectively apply the Standard to comparatives in line with
AASB 108 or recognise the cumulative effect of retrospective application as an adjustment to opening equity on the date of initial
application.
As at the reporting date, the Group has no operating lease commitments (Note 23b). The Group is currently assessing the full
impact of the standard, but expects that the impact on its assets, liabilities and equity will be material. The impact on the net
results after tax will depend on a number of factors still under consideration. The Group expects to be able to provide a
reasonable estimate of such impact in its next annual financial report.
The impact of adopting these standards is not expected to significantly impact future financial statements.
u) Going Concern
These financial statements have been prepared on a going concern basis which contemplates the continuity of normal
business activities and the realisation of assets and discharge of liabilities in the normal course of business.
The consolidated group has incurred a net loss after tax for the year ended 30 June 2018 of $1,410,844 and operations were
funded by a net cash outflow, from operating and investing activities of $627,402. At 30 June 2018, the consolidated group had
net liabilities of $3,299.
The consolidated group’s ability to continue as a going concern is contingent on raising additional capital and/or the successful
exploration and subsequent exploitation of its areas of interest through sale or development. Should the consolidated entity not
achieve the matters set out above, there would then be significant uncertainty over the ability of the consolidated entity to
continue as a going concern, and, therefore, it may have to realise its assets and extinguish its liabilities, other than in the
ordinary course of business and at amounts different from those stated in the 2018 annual financial report.
The 2018 annual financial report does not include any adjustments that may be necessary if the consolidated group is unable
to continue as a going concern.
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
Consolidated
30 June
2018
$
30 June
2017
$
28,823
342,987
371,810
1,892,757
1,806,898
-
229,813
35,199
265,012
416,781
415,402
1,342,433
3,699,655
2,174,616
Maximus Resources 2018 Annual Report Page 26
Maximus Resources Limited
30 June 2018
Notes to the Consolidated Financial Statements (continued)
(a) Market risk
Price risk
(i)
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.
Cash flow and fair value interest rate risk
(i)
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:
Cash and cash equivalents
Net exposure to cashflow interest rate
30 June
2018
Weighted
average
interest rate
%
1.95%
30 June
2018
Balance
$
28,823
28,823
30 June
2017
Weighted
average
interest rate
%
1.95%
30 June
2017
Balance
$
229,813
229,813
Interest rate sensitivity analysis
At 30 June 2018, 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 2018
Financial assets
Cash and cash equivalents
Total increase/ (decrease)
30 June 2017
Financial assets
Cash and cash equivalents
Total increase/ (decrease)
(b) Credit risk
Carrying
amount
$
28,823
Carrying
amount
$
229,813
Interest rate risk
Increase 2%
Decrease 2%
Profit
$
Equity
$
Profit
$
Equity
$
50
50
Profit
$
397
397
50
50
(50)
(50)
(50)
(50)
Increase 2%
Decrease 2%
Equity
$
397
397
Profit
$
(397)
(397)
Equity
$
(397)
(397
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.
Maximus Resources 2018 Annual Report Page 27
Maximus Resources Limited
30 June 2018
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 Group is managed primarily on the basis of geographical
area of interest, since the diversification of the Group operations inherently has notably different risk profiles and performance
assessment criteria. Operating segments are therefore determined on the same basis.
Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have
similar economic characteristics and are also similar with respect to the following:
·
·
external regulatory requirements
geographical and geological styles
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 Group.
2018
Exploration
Burbanks Mill
Other
Total
$
$
$
$
Segment revenue
6,597
3,717,522
-
3,724,119
Adjusted earnings before interest, tax,
depreciation and amortisation (EBITDA)
Impairment
Segment assets
6,597
(1,216,803)
(515) (1,210,721))
-
-
(515)
(515)
2,622,942
4,511,343
-
7,134,285
Capital expenditure
355,646
339,456
515
695,617
Total movement for the year
355,646
339,456
-
695,102
Total segment assets
Unallocated assets
Total assets
Total segment liabilities
Unallocated liabilities
Total liabilities
7,134,285
23,295
7,157,582
4,299,105
221,106
4,652,591
Maximus Resources 2018 Annual Report Page 28
Maximus Resources Limited
30 June 2018
Notes to the Consolidated Financial Statements (continued)
3. Segment Information (cont)
2017
Exploration
$
Burbanks Mill
$
Other
$
Total
$
Segment revenue
45,653
5,000
-
50,653
Adjusted earnings before interest, tax,
depreciation and amortisation (EBITDA)
Impairment
Segment assets
Segment asset movements for the year:
Capital expenditure
45,653
(475,866)
(2,919,675)
(3,349,888)
(2,919,675)
(2,919,675)
2,467,297
3,885,028
-
6,352,325
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
(ii) Adjusted EBITDA
A reconciliation of adjusted EBITDA to operating loss before income tax is provided as follows:
Allocated:
Adjusted EBITDA
Unallocated:
Interest revenue
Gain/(loss) on sale of available for sale financial assets
Administrative expenses
Marketing expenses
6,352,325
242,377
6,594,702
2,744,564
270,716
3,015,280
Consolidated
30 June
2018
$
30 June
2017
$
(1,223,915)
(3,349,888)
2,308
(11,099)
(173,168)
(4,970)
35,073
-
(571,915)
(6,409)
Loss before income tax from continuing operations
(1,410,844)
(3,893,139)
Allocated:
Segment assets
Unallocated:
Cash and cash equivalents
Trade and other receivables
Other assets
Plant and equipment
Consolidated
30 June
2018
$
30 June
2017
$
7,134,285
6,352,325
3,376
204
18,615
1,101
217,688
12,228
9,719
2,742
Total assets as per the consolidated statements of financial position
7,157,581
6,594,702
Maximus Resources 2018 Annual Report Page 29
Maximus Resources Limited
30 June 2018
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
2018
$
30 June
2017
$
4,299,105
2,744,564
221,107
132,379
188,259
82,457
Total liabilities as per the consolidated statements of financial position
4,652,591
3,015,280
4. Other income
Interest received
Other
5. Expenses
Cost of sales
Milling expenses - consumables
Crushing expenses
Leaching expenses
Laboratory expenses
Gold room expenses
Tailings Dam expenses
Employee expenses
Insurance expenses
Depreciation
Licence fees
Legal fees
Travel expenses
Other mill expenses
Administration
Administration costs
Consulting costs
Occupancy expenses
Compliance expenses
Share registry fees
ASX fees
Audit Fees
Insurance
Other compliance expenses
Consolidated
30 June
2018
$
30 June
2017
$
2,308
14,135
20,295
14,778
16,443
35,073
Consolidated
30 June
2018
$
30 June
2017
$
1,000,037
538,516
552,204
119,140
76,314
195,214
1,473,382
48,162
191,216
371
105,307
29,146
317,938
91,271
-
-
-
-
-
248,355
40,347
37,008
6,323
11,351
23,598
4,646,947
458,253
16,347
111,984
44,837
173,168
32,964
20,711
43,500
22,828
1,718
31,845
19,550
48,196
99,591
48,288
23,100
34,745
22,978
2,448
121,721
131,559
Maximus Resources 2018 Annual Report Page 30
Maximus Resources Limited
30 June 2018
Notes to the Consolidated Financial Statements (continued)
Marketing
Marketing and promotion
Exploration expenses
General exploration expenditure written off
Capitalised exploration expenditure impaired
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 27.5% (2017: 30%)
Tax effect of amounts which are not deductible
(assessable) in calculating taxable income:
Temporary differences not brought to account
Income tax expense
4,970
4,970
68
447
6,409
6,409
5,650
2,914,025
515
2,919,675
Consolidated
30 June
2018
$
30 June
2017
$
-
-
-
-
(1,410,844)
(3,893,139)
(387,982)
(1,167,942)
387,982
1,167,942
-
-
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(f) 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 $7,696,402 (2017: $7,308,420) that are available indefinitely for offset against future
taxable profits.
The tax rates applicable to each potential tax benefit are as follows:
·
·
timing differences – 27.5%
tax losses – 27.5%
7. Current assets - Cash and cash equivalents
Cash at bank and in hand
Term deposits
(a) Risk exposure
Consolidated
30 June
2018
$
30 June
2017
$
11,823
17,000
229,813
-
28,823
229,813
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.
Maximus Resources 2018 Annual Report Page 31
Maximus Resources Limited
30 June 2018
Notes to the Consolidated Financial Statements (continued)
(b) Deposits at call
The deposits are bearing a weighted average interest rate of 1.95% (2017: 1.95%).
8. Current assets - Trade and other receivables
Net trade receivables
Trade and other receivables
GST paid on purchases
9. Current assets - Other current assets
Accrued revenue
Prepayments
Consolidated
30 June
2018
$
30 June
2017
$
342,987
-
28,833
6,366
342,987
35,199
Consolidated
30 June
2018
$
30 June
2017
$
128,250
18,615
146,865
-
9,719
9,719
Maximus Resources 2018 Annual Report Page 32
Maximus Resources Limited
30 June 2018
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)
During the year ended 30 June 2018 $60,000 was paid to RMS in respect of the Second Deed of Variation.
Total purchase consideration was therefore $2,522,613.
The acquisition of Eastern Goldfields Milling Services Pty Ltd was 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 were
as follows:
Fuel
ASSETS
Inventory:
- Consumables
-
Property Plant & Equipment:
- Mill Plant & Equipment
- Motor Vehicles
-
-
TOTAL ASSETS
Burbanks – Office equipment
Burbanks – Office furniture
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 2017 financial 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.
The total cash payments made to RMS during the 2018 financial year was $60,000.
Mr Kennedy was a director of Ramelius Resources Limited and abstained from any voting and discussions in relation to the
acquisition.
Maximus Resources 2018 Annual Report Page 33
11. Plant and equipment
Consolidated
At 30 June 2017
Cost or fair value
Accumulated depreciation
Net book amount
Year ended 30 June 2018
Opening net book amount
Asset purchases
Depreciation charge
Closing net book amount
At 30 June 2018
Cost or fair value
Accumulated depreciation
Net book amount
Consolidated
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
Maximus Resources Limited
30 June 2018
Notes to the Consolidated Financial Statements (continued)
Other plant
and equipment
$
Burbanks
plant &
equipment
$
Burbanks
Office
equipment
and furniture
$
Total
$
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
2,742
-
(1,641)
3,815,333
349,227
(189,575)
16,231
6,920
(1,641)
3,834,306
356,147
(192,857)
1,101
3,974,985
21,510
3,997,596
22,222
(21,121)
4,200,364
(225,379)
24,356
(2,846)
4,246,942
(249,346)
1,101
3,974,985
21,510
3,997,596
Other plant
and equipment
$
Burbanks
plant &
equipment
$
Burbanks
Office
equipment
and furniture
$
Total
$
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
Maximus Resources 2018 Annual Report Page 34
Maximus Resources Limited
30 June 2018
Notes to the Consolidated Financial Statements (continued)
12. Non-current assets - Exploration and evaluation
Exploration and evaluation
Movement:
Opening balance
Expenditure incurred
Sales of Lithium rights*
Impairment of capitalised expenditure
Closing balance
Closing balance comprises:
Exploration and evaluation - 100% owned
Exploration and evaluation phases - joint operation
Consolidated
30 June
2018
30 June
2017
2,467,297
356,160
(200,000)
(515)
4,220,642
1,166,330
-
(2,919,675)
2,622,942
2,467,297
-
2,622,942
-
2,467,297
2,622,942
2,467,297
*The Company sold its Lithium rights to ASX-listed company Lepidico Ltd for $80,000 worth of Lepidico fully paid ordinary
shares and a cash payment of $120,000.
13. Current liabilities - Trade and other payables
Trade payables
Prepaid revenue
Other payables and accruals
14. Current liabilities – Provisions
Provision – Employee benefits
15. Non-current liabilities – Provisions
Provision – Employee benefits
Restoration provision
Consolidated
30 June
2018
$
30 June
2017
$
1,159,160
205,000
528,596
416,781
-
-
1,892,756
416,781
Consolidated
30 June
2018
$
30 June
2017
$
136,819
43,008
136,819
43,008
Consolidated
30 June
2018
$
30 June
2017
$
1,045
815,072
39,449
758,207
816,117
797,656
Maximus Resources 2018 Annual Report Page 35
16. Current liabilities – Financial liabilities
Loans from related parties (refer to note 24)
Financial Liability – Ramelius Resources Ltd (Royalty)
Maximus Resources Limited
30 June 2018
Notes to the Consolidated Financial Statements (continued)
Consolidated
30 June
2018
$
30 June
2017
$
94,286
1,712,613
-
415,402
1,806,899
415,402
During the year ended 30 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 $712,613 ($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 consideration to purchase Eastern Goldfields Milling Services also includes a final staged
payment of $1,000,000 due to Ramelius Resources Limited (RMS). This future payment is not subject to any interest and
therefore $1,000,000 represents the value of the future payment.
During the year ended 30 June 2018, Mandurang Pty Ltd, of which the late Mr Robert Kennedy was a Director of, loaned the
Company $50,000. The loan is interest bearing at 6%pa and is required to be repaid upon completion of a successful capital
raise. Interest has been capitalised into the total loan payable.
During the year ended 30 June 2018, Mrs G Malaxos, spouse of Mr Kevin Malaxos, loaned the Company $40,000. The loan is
interest bearing at 6%pa and is required to be repaid upon completion of a successful capital raise. Interest has been
capitalised into the total loan payable.
17. Non-current liabilities – Financial liabilities
Financial Liability – Ramelius Resources Ltd (Royalty) – refer note 16
Financial Liability – Ramelius Resources Ltd
Consolidated
30 June
2018
$
30 June
2017
$
357,211
985,222
1,342,433
-
-
-
Maximus Resources 2018 Annual Report Page 36
18. Contributed equity
(a) Share capital
Ordinary shares
Fully paid
(b) Movements in ordinary share capital:
Maximus Resources Limited
30 June 2018
Notes to the Consolidated Financial Statements (continued)
Consolidated
Consolidated
30 June
2018
30 June
2017
30 June
2018
30 June
2017
3,177,301,940 2,854,269,632
40,325,309
39,988,897
$
$
Date
Details
Number of
shares
Issue price
$
1 July 2016
Opening 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
$0.003
$0.002
$0.002
$0.001
Less: Transaction costs arising on share issues
Deferred tax credit recognised directly in equity
1,500,000
100,000
50,000
226,500
300,000
2,176,500
(131,526)
-
30 June 2017
Balance
2,854,269,632
39,988,897
6 September 2017
6 September 2017
26 April 2018
Issue of Shares - placement
Issue of Shares – placement
Issue of Shares – placement
83,140,002
89,892,306
150,000,000
$0.001
$0.0013
$0.001
83,140
116,860
150,000
Less: Transaction costs arising on share issues
Deferred tax credit recognised directly in equity
350,000
(13,588)
-
30 June 2018
Balance
3,177,301,940
40,325,309
(c) Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the
number of and amounts paid on the shares held.
At shareholders' meetings, on a show of hands every holder of ordinary shares present in person or by proxy is entitled to one
vote, and upon a poll each share is entitled to one vote.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
Maximus Resources 2018 Annual Report Page 37
Maximus Resources Limited
30 June 2018
Notes to the Consolidated Financial Statements (continued)
18. Contributed equity (cont)
(d) Options and rights
There were no options and rights issued during the 2017 and 2018 year in relation to the Maximus Resources Limited Employee
Share Option and Incentive Rights Plans.
(e) Capital risk management
The Company has no debt which has 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.
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
Consolidated
30 June
2018
$
30 June
2017
$
(36,409,475)
(1,410,844)
(32,516,336)
(3,893,139)
(37,820,319)
(36,409,475)
Consolidated
30 June
2018
$
30 June
2017
$
269,908
47,087
396,477
27,303
316,995
423,750
Detailed remuneration disclosures and interests held by key management personnel are provided in sections A to E of the
remuneration report on pages 11 to 14.
Maximus Resources 2018 Annual Report Page 38
Maximus Resources Limited
30 June 2018
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
2018
$
30 June
2017
$
43,500
6,000
49,500
34,745
3,500
38,245
The Group had no known contingent liabilities as at 30 June 2018 (2017: $NIL).
(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.
The Flushing Meadows tenement package was sold to Orex Mining Pty Ltd (now Yandal Resources Ltd) in October 2010.
Maximus is entitled to a gold royalty in respect of gold produced from any part of the tenement area of $40 per ounce on the first
50,000 ounces of gold generated, with the first $200,000 to be pre-paid upon commencement of gold production and $20 per
ounce of gold produced in excess of 50,000 ounces and less than 150,000 ounces to a maximum of $4 million royalty revenue
being received by Maximus.
Additionally, there is a 3% net smelter return for any gold by-products or co-products from the tenement area.
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 2018 amounts of approximately $1,299,020 (2017: $290,590) 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 2018, the Group had no bank guarantees in place for this
purpose (2017: $NIL).
Maximus Resources 2018 Annual Report Page 39
Maximus Resources Limited
30 June 2018
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:
During the year ended 30 June 2018, Mandurang Pty Ltd, of which Mr Robert Kennedy (late Chairman) was a Director of,
loaned the Company $50,000. The loan is interest bearing at 6%pa and is required to be repaid upon completion of a successful
capital raise. Interest has been capitalised into the total loan payable.
During the year ended 30 June 2018, Mrs G Malaxos, spouse of Mr Kevin Malaxos, loaned the Company $40,000. The loan is
interest bearing at 6%pa and is required to be repaid upon completion of a successful capital raise. Interest has been capitalised
into the total loan payable.
Mr Kennedy was a director of Ramelius Resources Limited and abstained from any voting and discussions in relation to the
acquisition of the Burbanks Mill in financial year 2017.
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
2017
%
2018
%
MXR Minerals Pty Ltd
Eastern Goldfields Milling Services Pty Ltd
Australia
Australia
Ordinary
Ordinary
100
100
100
100
Maximus Resources 2018 Annual Report Page 40
Maximus Resources Limited
30 June 2018
Notes to the Consolidated Financial Statements (continued)
26. Events occurring after the reporting period
Mr Nicholas Smart resigned as Alternate Director on 24 August 2018.
On 6 September 2018, 304,095,000 ordinary shares were issued to sophisticated and professional investors. The shares were
offered at an issue price of $0.001 per share raising $304,095 before cost.
The Company commenced discussions with several parties interested in participating in a capital raise to address current and
future capital requirements. Those discussions centred around a Convertible Note or a Placement of Shares to sophisticated
investors and a subsequent Rights Issue to MXR shareholders. At the date of this report, those discussions have not been
finalised, however a mandate for a Convertible Note was received by the Company and signed by the Board of Directors, which
is to be voted on at the AGM.
The Company has agreed with Ramelius Resources Ltd (RMS) on a commercial settlement for the outstanding capital for the
Burbanks Treatment Plant, owned by Eastern Goldfields Milling Services Pty Ltd (MXR 100%). This settlement is intended to
result in full and final settlement of the outstanding balance for the mill, including release from the Mortgage Agreement. The
discussions regarding a capital raise include sufficient funds to finalise the proposed commercial settlement with RMS.
Negotiations were nearing completion for an additional Toll treatment Agreement with an ASX listed company for the supply of
100,000 tonnes of ore from October 2018, with the option to extend the Agreement for an additional 200,000 tonnes. The Toll
Agreement was being reviewed by the potential client, but not signed therefore not yet suitable for release at this time. This Toll
Agreement would provide continuous feed to the Burbanks Treatment Plant for a minimum of 6 months from commencement,
and a further 12 months if the extension is agreed by both parties.
There are no other events or circumstances that have occurred subsequent to the end of the reporting period that have or will
significantly affect the operations of the Group.
27. Reconciliation of profit after income tax to net cash inflow from operating activities
Loss for the year
Depreciation
Impairment of capitalised exploration expenditure
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
2018
$
30 June
2017
$
(1,410,844)
192,857
515
11,099
(307,788)
(192,861)
1,550,754
112,272
(3,893,139)
38,832
2,919,675
-
(23,083)
(558,024)
900,876
16,452
Net cash (outflow)/inflow from operating activities
(43,996)
(598,411)
Maximus Resources 2018 Annual Report Page 41
Maximus Resources Limited
30 June 2018
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
Pursuant to AASB 133, the Company has no diluted securities.
30 June
2018
30 June
2017
(1,410,844)
(3,893,139)
3,022,663,133
2,316,585,108
(0.047)
(0.168)
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 $1,396,066 this financial year (2017: $3,893,139), 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 2018:
Fair value of options granted
No employee options were granted during the year ended 30 June 2018 (2017: 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 2018 and 2017.
Maximus Resources 2018 Annual Report Page 42
Maximus Resources Limited
30 June 2018
Notes to the Consolidated Financial Statements (continued)
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
Capital and reserves attributable to owners
Statement of profit or loss and other comprehensive income
Profit for the year
Other comprehensive income
Total comprehensive income
Parent
2018
$
2017
$
13,682
4,634,460
240,145
4,970,039
4,648,142
5,210,184
1,142,107
1,001,045
1,003,880
1,039,449
2,143,152
2,043,329
2,504,990
3,166,855
40,325,309
(37,820,319)
39,988,897
(36,822,042)
2,504,990
3,166,855
(998,276)
-
(4,306,235)
-
(998,276)
(4,306,235)
Parent Entity Contingencies
Contingent liabilities
The parent entity had no known contingent liabilities as at 30 June 2018 (2017: $NIL).
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.
The Flushing Meadows tenement package was sold to Orex Mining Pty Ltd (now Yandal Resources Ltd) in October 2010.
Maximus is entitled to a gold royalty in respect of gold produced from any part of the tenement area of $40 per ounce on the first
50,000 ounces of gold generated, with the first $200,000 to be pre-paid upon commencement of gold production and $20 per
ounce of gold produced in excess of 50,000 ounces and less than 150,000 ounces to a maximum of $4 million royalty revenue
being received by Maximus.
Additionally, there is a 3% net smelter return for any gold by-products or co-products from the tenement area.
Maximus Resources 2018 Annual Report Page 43
Maximus Resources Limited
Directors' declaration
30 June 2018
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 2018 amounts of approximately $698,820 (2017: $290,590) in respect of tenement lease rentals and to meet minimum
expenditure requirements pursuant to various joint venture requirements for the next 12 months.
(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 2018, the Group had no bank guarantees in place for this
purpose (2017: $NIL).
In the directors' opinion:
(a)
the consolidated financial statements and notes set out on pages 16 to 44 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 2018 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
5 October 2018
Maximus Resources 2018 Annual Report Page 44
Grant Thornton House
Level 3, 170 Frome Street
Adelaide SA 5000
Correspondence to:
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
F +61 8 8372 6677
E info.sa@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of Maximus Resources Limited
Report on the audit of the financial report
Disclaimer Opinion
We were engaged to audit the financial report of Maximus Resources Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2018, the consolidated
statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash
flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant
accounting policies, and the directors' declaration.
We do not express an opinion on the accompanying financial report of the Group. Because of the significance of the
matter described in the Basis for Disclaimer of Opinion section of our report, we have not been able to obtain sufficient
appropriate audit evidence to provide a basis for an audit opinion on this financial report.
Basis for Disclaimer Opinion
The financial report has been prepared on a going concern basis, however the directors have not been able to provide
sufficient evidence to support their assessment of the consolidated entity’s ability to pay their debts as and when they fall
due. The director’s assessment includes the requirement for capital raising either through the issue of equity instruments
and/or a debt facility which is subject to future shareholder approval.
The consolidated entity has reported a loss before tax of $1,410,844 for the year ended June 2018 and has a current
asset deficiency of $3,299,431.
We have been unable to obtain sufficient evidence as to whether the consolidated entity may be able to raise additional
equity or realise assets through sales. As a result there is material uncertainty about the ability to continue as a going
concern for a period of 12 months from the date of this report.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
Maximus Resources 2018 Annual Report Page 45
Responsibilities of the Directors for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our responsibility is to conduct an audit of the financial report in accordance with Australian Auditing Standards and to issue
an auditor’s report. However, because of the matter described in the Basis for Disclaimer of Opinion section of our report, we
were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the financial report.
We are independent of the Group in accordance with the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages of the Directors’ report for the year ended 30 June 2018.
In our opinion, the Remuneration Report of Maximus Resources Limited, for the year ended 30 June 2018 complies with
section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
J L Humphrey
Partner – Audit & Assurance
Adelaide, 5 October 2018
Maximus Resources 2018 Annual Report Page 46
The shareholder information set out below was applicable as at 22 October 2018.
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
Maximus Resources Limited
ASX Additional Information
Total holders
126
203
216
687
1,461
2,693
There were 1,808 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.
RAW ORE PTY LTD
MCNEIL NOMINEES PTY LTD
MR NICHOLAS BARADAKIS
MRS GWENDOLINE MALAXOS
MR HAKAN BASAGAC
MR DARRYN ANTHONY
TLG TRADING PTY LTD
MR STEPHEN RONALD O'KEEFFE
JORAC PTY LTD
RMK SUPER PTY LTD
TRIPLE EIGHT GOLD PTY LTD
KENNY INVESTMENTS PTY LTD
MR ALISTAIR MARK CAMERON
J P MORGAN NOMINEES AUSTRALIA LIMITED
MR ARCHIBALD GEOFFREY LOUDON
MR QI ZHAO
LAKE PACIFIC PTY LTD
TYCHEAN RESOURCES LIMITED
ROVER INVESTMENTS PTY LTD
MR HARRY KEVIN MITCHELSON
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (TOTAL)
Total Remaining Holders Balance
C Substantial holders
304,095,000
150,000,000
130,000,000
88,000,000
76,000,000
60,000,000
54,000,000
48,757,319
45,000,000
43,276,518
43,223,482
41,800,000
36,900,000
36,056,616
33,333,333
30,000,000
25,000,000
25,000,000
24,000,000
23,625,940
1,318,068,208
2,163,328,732
8.73
4.31
3.73
2.53
2.18
1.72
1.55
1.40
1.29
1.24
1.24
1.20
1.06
1.04
0.96
0.86
0.72
0.72
0.69
0.68
37.86
62.14
As at 22 October 2018 Raw Ore Pty Ltd were a substantial shareholder with 8.73% of all ordinary fully paid shares.
Maximus Resources 2018 Annual Report Page 47
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.
Maximus Resources 2018 Annual Report Page 48