ABN 51 127 297 170
Metal Bank Limited
and its controlled entities
Annual Financial Report
For the year ended
30 June 2016
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
CONTENTS
Letter from the Chair
Review of Operations
Corporate Governance
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Audit Report to the Members of Metal Bank Limited
Additional Information for Listed Companies
Corporate Directory
1
2 – 10
11
12 – 18
19
20
21
22
23
24 – 48
49
50 – 51
52 – 54
55
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
LETTER FROM THE CHAIR
Dear Shareholder
On behalf of the Directors of Metal Bank Limited (Metal Bank, MBK or the Company), I am pleased to report on
the activities of the Company for the year ended 30 June 2016.
2016 has seen a change in focus from the Mason Valley Copper Project in Nevada, USA to the Company’s Eastern
Australian gold projects with significant exploration success at the Triumph Project, Queensland.
Near surface, high grade gold mineralisation has been intersected in drilling on both of the targets tested so far
and we are confident of further discoveries as we expand our programme and begin testing other priority targets
and move towards resource definition. We are also excited by the prospect that the high grade mineralisation
intersected to date may represent gold leakage from a significant bulk tonnage gold system.
We believe the Triumph project has compelling upside that will contribute significantly to the future growth of
Metal Bank.
The Company’s Eidsvold Project is also very prospective and is centred on an historical goldfield with past
production (circa. 1900’s) of approximately 100,000oz Au. We have secured tenure over a 250km2 igneous
complex prospective for intrusion related gold which is underexplored. This project has many similarities to the
Triumph project being centred on an historical goldfield with the surrounding prospective rocks concealed by
sedimentary cover. Initial exploration by Metal Bank in 2014 led to the discovery of high grade mineralisation
including 1m @ 17.45g/t Au, 90g/t Ag, and 2.5% Cu which confirmed our targeting and exploration model. With
renewal of the tenement for a further five years, we anticipate commencing further exploration work during the
2017 period.
The Company is also continuing to review new project opportunities with a view to identifying projects that fit
with its growth strategy and have the ability to add shareholder value.
Successful capital raisings in September 2015, March 2016 and more recently in September 2016 show investor
confidence in the Company and strong continuing support by shareholders.
Inés Scotland
Non-executive Chair
28 September 2016
1
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
REVIEW OF OPERATIONS
The operations of the consolidated entity during the year are as described below:
Figure 1: Metal Bank Limited –Project Locations (note Mason Valley JV finished in April 2016)
During the year Metal Bank focussed on its gold projects in Queensland, particularly the Triumph project
where near surface, high grade drill results were returned. MBK has invested in significant greenfields
exploration over the past five years resulting in the definition of an extensive gold camp / system
predominantly concealed by shallow cover. Only two of the targets have been drill tested so far with both
returning near surface high grade gold mineralisation. The priority on the project is to define near surface
gold resources to support an initial open pit mining scenario.
Drilling results on the Mason Valley Copper project Joint Venture (Nevada) during the year were encouraging
although not considered sufficient to justify continuing beyond Year 1 of the Joint Venture. The Joint Venture
ceased on 31 March 2016 after meeting the initial commitments.
Gold - Eastern Australia
MBK holds two gold projects prospective for intrusion related gold mineralisation within the northern New
England Orogen of eastern Australia (Error! Reference source not found.). This region hosts several gold
mines including the Cracow (3Moz Au), Mt Rawdon (2Moz Au) gold mines and Mt Carlton gold-silver-copper
mine (1.4Moz AuEq) as well as the historical Mt Morgan deposit (8Moz Au). Refer to Error! Reference source
not found. showing the intrusion related gold model and MBK projects.
The Triumph project represents the highest priority for MBK. High grade gold mineralisation intersected in
drilling this year provide strong support for multi-million ounce gold potential within a large under-explored
gold system dominantly concealed by shallow cover.
The Eidsvold project is centred on a historical goldfield (100,000oz Au historical production) with almost no
exploration completed beneath the surrounding sedimentary cover in the district. Regional airborne
magnetics provides support for large untested targets beneath the cover.
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METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
Limited surface sampling on the Mt Mackenzie project did not identify anomalous gold associated with a
Cu-Mo porphyry system (not previously sampled for gold). While other gold targets exist on the project they
are not a current core priority for MBK.
Figure 2: Location of MBK gold/copper projects in Eastern Australia
Figure 3: Intrusive related gold deposit styles showing MBK projects
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METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
Triumph Project (100% MBK)
The Triumph project (135km2) is centred about the historical high grade Norton goldfield (mined in the late
1800’s and again in the 1990’s) located between Mt Rawdon (2Moz Au) gold mine and the historical
Mt Morgan (8Moz Au and 0.4Mt Cu) mine in the Northern New England Orogen, south east Queensland
(Error! Reference source not found.).
Near surface high grade gold mineralisation has been intersected in MBK’s drilling completed this year with
only two of the priority targets tested to date. MBK has invested in a significant greenfields exploration
programme on the Triumph project over the past five years resulting in the definition of an extensive gold
camp / system predominantly concealed by shallow cover. The exploration priority on the Triumph project is
to define near-surface high grade gold resources particularly at Bald Hill and in parallel target the potential
for a bulk tonnage gold style system as part of the causative mineralising intrusive.
RC drilling was completed during 2016 on outcropping gold targets defined by soil and rock chip geochemistry
at Bald Hill and New Constitution prospects. In addition, an orientation aircore bedrock sampling programme
was completed as a first pass evaluation of broad, regional exploration target areas concealed by shallow
sedimentary cover.
RC drilling at the Bald Hill prospect (9 holes for 181m to 30 June 2016) has now defined an extensive near
surface gold mineralised system with potential for high grade gold including significant Ag and Cu
mineralisation credits. It is possible that the high grade mineralisation intersected represents leakage from a
significant bulk tonnage gold system associated with the causative mineralising intrusive.
Significant results at Bald Hill prospect during the year include1:
15m @ 10.3g/t Au, 76g/t Ag, 0.5% Cu from 9m (TDH039)
o
incl. 4m @ 34.2g/t Au, 220g/t Ag, 1.4% Cu from 14m
6m @ 2.4g/t Au, 18g/t Ag from 7m (TDH021)
15m @ 1.6g/t Au, 9g/t Ag from 7m (TDH022)
Refer to Figure 4 showing Bald Hill long section.
RC drilling at the New Constitution prospect (12 holes for 149m to 30 June 2016) targeted soil and rock chip
gold geochemical anomalies not previously drill tested. Drill results highlight potential for multiple
sub-parallel to parallel zones of gold-silver mineralisation and define a zone >600m x 600m and mostly
concealed beneath shallow cover (<4m).
Significant results at New Constitution prospect during the year include2:
18m @ 2.0g/t Au, 8g/t Ag from surface (TDH037) including
o 3m @ 3.7g/t Au, 29g/t Ag from 6m
o 4m @ 5.3g/t Au, 8g/t Ag from 13m
To date, the Company’s exploration has focussed on zones of outcropping mineralisation, which has
essentially only tested a small portion (<20%) within the 15km2 Triumph gold camp which is dominantly
(>90%) concealed beneath shallow cover.
A revision of the geological model for the Triumph gold camp now provides strong indication for a bulk
tonnage gold target. Large intrusion related gold systems in eastern Australia (and around the world) are
commonly zoned in both hydrothermal alteration and multi-element geochemistry patterns. Improved
understanding of the zoning patterns within the 15km2 Triumph gold camp has directly contributed to the
recent near surface high grade gold drilling success at both Bald Hill and New Constitution prospects. This
success underpins the Company’s confidence in the other high priority targets in the project pipeline yet to
be tested. Refer to current priority targets in Table 1 below with locations shown in Figure 5.
1 MBK ASX 20 June 2016
2 MBK ASX 21 June 2016
4
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
Figure 4: Bald Hill long section showing recent high grade gold intersections
5
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
Table 1: Priority gold targets within the Triumph gold camp (locations shown in Figure 5)
Target
Attributes
Highlights
Bald Hill
Resource definition
Up to 15m @ 10.3g/t Au, 76g/t Ag, 0.5% Cu from 9m
in drilling
New Constitution
Combined 3km strike
potential
Up to 18m @ 2.0 g/t Au, 8 g/t Ag from surface in
drilling
Advance
Historical gold camp
4500 Oz Au at 94 g/t Au historical production
Big Hans
Interpreted extension of Bald
Hill
Up to 4m @ 3.67 g/t Au from 22m historical drilling
Harmony
>1km strike potential
Up to 62.8 g/t Au and 161 g/t Ag in rockchip
Handbrake Hill
>1km strike potential
4m @ 10.55 g/t Au from historical drilling
Super Hans
100m x >500m long shear
zone
Up to 20.1 g/t Au in rockchip
Old Welcome
>800m long shear zone
Up to 32.7 g/t Au in rockchip
Cattle Creek
>1km long shear zone
Up to 53.5 g/t Au in rockchip
Bonneville
>1km strike potential
Up to 255 g/t Au in float rockchip
Rands
Southern extension of Bald
Hill
Up to 20.3 g/t Au in historical stream sediment
NE Regional
5km²
Untested area within fertile intrusive, masked by
shallow cover
D
E
C
N
A
V
D
A
S
D
L
E
I
F
N
W
O
R
B
S
D
L
E
I
F
N
E
E
R
G
6
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
Figure 5: Triumph gold camp and priority targets
7
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
Eidsvold Project (100% MBK)
The Eidsvold project is centred on the historical Eidsvold goldfield (100,000oz Au mined in the early 1900’s)
within the Eidsvold intrusive complex, located between the Cracow (3Moz Au) and Mt Rawdon (2Moz Au)
gold mines in the Northern New England Orogen (refer Figure and Figure ). Planned exploration on the
Eidsvold project was postponed following exploration success on the Triumph project. The Eidsvold project
represents an excellent greenfields opportunity for MBK and remains a priority project.
The discovery of high grade gold mineralisation including 1m @ 17.45g/t Au, 90g/t Ag, and 2.5% Cu3 as part
of an intrusion related gold system confirmed the Company’s exploration model and has opened up the
potential of the entire Eidsvold intrusive complex (250km2) which is almost entirely concealed beneath
sedimentary cover.
A renewal application of the main tenement (EPM18431) has been approved for a further 5 years.
Figure 5: Location of priority target areas on
regional geology summary
Figure 6: Location of priority target areas on RTP tilt
derivative processed regional magnetics
Mt Mackenzie Project (100% MBK)
The Mt Mackenzie project is located 40km NE of the Mt Carlton Au-Ag-Cu mining operation owned by
Evolution Mining; an operation that produces approximately 85,000 gold equivalent ounces per year.
During the year a small field programme involving field geological mapping and surface geochemical sampling
including 155 soil samples and 15 rock chip samples was completed over a porphyry system identified from
historical 1970’s sampling that had been overlooked by modern exploration. While strongly anomalous
copper and molybdenum results were achieved, the lack of associated gold anomalism suggests that the gold
3 ASX Release 15/4/2014
8
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
target zone could be more distal (further away) along the main structural corridor. A review of the project
will be conducted prior to completing further exploration.
Many large porphyry style gold deposits in eastern Australia contain elevated copper and molybdenum with
examples including the Mt Leyshon (3.5Moz Au) and Kidston (3.7Moz Au) deposits.
Copper – Western USA
Mason Valley Copper Project (MBK withdrawal from JV)
MBK entered into a Joint Venture (“JV”) with GRG International in early 2015 covering the Mason Valley
Copper Project in the copper rich Yerington district of Nevada. During the first 12 months of the JV (during
2015) exploration and drilling concentrated on evaluating four historical copper mines which had been
overlooked by modern exploration. A total of 18 RC holes were completed for 1846m. Encouraging results
were returned from the drilling including:
Bluestone mine – 42m @ 1.5% Cu (oxide) from surface4
Malachite mine – 8m @ 2.7% Cu (sulphide) from 61m5
Mason Valley mine – 12m @ 0.8% Cu (sulphide) from 181m6
Copper Hill mine – 3m @ 1.2% Cu, 88g/t Ag, 1.0% Pb and 5.5% Zn (oxide) from surface7
MBK elected not to continue with the JV beyond the first sole funding period (31 March 2016) after meeting
the minimum commitments. While ore grade copper was intersected in drilling we did not see the near term
scope to support a production profile of at least 20,000t copper per year based on the exploration completed.
Furthermore, given the recent downturn in metal markets, MBK has elected not to continue with the Mason
Valley Copper Project Joint Venture on the commercial terms announced on 4 February 2016.
TonySchreck
Executive Director
28 September 2016
4 MBK ASX Release 30 July 2015
5 MBK ASX Release 17 August 2015
6 MBK ASX Release 17 December 2015
7 MBK ASX Release 24 December 2015
9
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
Schedule of Tenements
Mining Tenements
Location
Percentage Interest
Roar Resources Pty Ltd (Wholly Owned Subsidiary)
Triumph Project
EPM 18486
EPM 19343
Eidsvold Project
EPM 18431
EPM 18753
Queensland
Queensland
Queensland
Queensland
100%
100%
100%
100%
Metal Bank Limited (100% Owned)
EPM 15668
Mount Mackenzie, QLD
100%
EPM – Exploration Permit
Competent Persons Statement
The information in this Report that relates to Exploration Results is based on information compiled or reviewed
by Mr Tony Schreck, who is a Member of The Australasian Institute of Geoscientists. Mr Schreck is an employee
of the Company. Mr Schreck has sufficient experience which is relevant to the style of mineralisation and type
of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person
as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves’. Mr Schreck consents to the inclusion in the Report of the matters based on his
information in the form and context in which it applies.
The Exploration Targets described in this report are conceptual in nature and there is insufficient information
to establish whether further exploration will result in the determination of Mineral Resources. Any resources
referred to in this report are not based on estimations of Ore Reserves or Mineral Resources made in
accordance with the JORC Code and caution should be exercised
in any external technical or
economic evaluation.
10
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
CORPORATE GOVERNANCE
Metal Bank Limited (“Metal Bank”), through its board and executives, recognises the need to establish and
maintain corporate governance policies and practices that reflect the requirements of the market regulators
and participants, and the expectations of members and others who deal with Metal Bank. These policies and
practices remain under constant review as the corporate governance environment and good practices evolve.
ASX Corporate Governance Principles and Recommendations
The third edition of ASX Corporate Governance Council Principles and Recommendations (the “Principles”)
sets out recommended corporate governance practices for entities listed on the ASX.
The Company has issued a Corporate Governance Statement which discloses the Company’s corporate
governance practices and the extent to which the Company has followed the recommendations set out in the
Principles. The Corporate Governance Statement was approved by the Board on 26 September 2016 and is
available on the Company’s website: http://metalbank.com.au/corporate-governance
11
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS REPORT
Your directors present their report on Metal Bank Limited and its subsidiaries (Consolidated Entity or the
Group) for the year ended 30 June 2016.
DIRECTORS
The names of directors in office at any time during or since the end of the year are:
Current Directors
INĖS SCOTLAND
NON-EXECUTIVE
CHAIR
B App Sc
Ms Scotland was most recently the Managing Director and CEO of Ivanhoe
Australia, an ASX listed entity with a market capitalisation of $500m.
Prior to this Ms Scotland was the Managing Director and CEO of Citadel
Resource Group Limited. Ms Scotland was a founding shareholder of Citadel
and was its managing director through its growth, until its acquisition by
Equinox Minerals in January 2011.
At the time of acquisition by Equinox, Citadel was developing the Jabal Sayid
Copper Project in Saudi Arabia, had a market capitalisation of $1.3B and had
raised more than $380m on the equity markets.
Ms Scotland has worked in the mining industry for over 20 years for large scale
gold and copper companies in Australia, Papua New Guinea, USA and the
Middle East. This has included working for Rio Tinto companies, Comalco, Lihir
and Kennecott Utah Copper.
Appointed 13 August 2013.
Other current public company directorships:
None
Former directorships in the last 3 years:
St Barbara Limited
Ivanhoe Australia Limited
Citadel Resource Group Limited
ANTHONY SCHRECK
EXECUTIVE
DIRECTOR
B App Sc(Geol), GDipSc,
MAIG, GAICD
Mr Schreck has 25 years of mineral exploration experience in Australia and the
South West Pacific region (Solomon Islands). He has managed large exploration
projects in challenging terrains for major companies including North Flinders
Mines, Normandy, Newmont, Anglo Gold Ashanti and Xstrata.
Mr Schreck is credited with the grassroots discovery of the multi-million ounce
Twin Bonanza gold system (Buccaneer and Old Pirate gold deposits) in the
Northern Territory. He has been key in the successful startup and management
of a number of private resource companies.
Appointed 29 November 2013.
Mr Schreck has held no other current public company directorships or former
directorships in the last 3 years.
GUY ROBERTSON
EXECUTIVE DIRECTOR
B Com (Hons), CA.
Mr Robertson has more than 30 years’ experience as Chief Financial Officer,
Company Secretary and Director of both public and private companies in
Australia and Hong Kong.
Previous roles included Chief Financial Officer/GM Finance of Jardine Lloyd
Thompson, Colliers International Limited and Franklins Limited.
12
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS REPORT
GUY ROBERTSON
(CONTINUED)
Mr Robertson has over 8 years’ experience in ASX listed mineral exploration
companies and is currently a Director of Estrella Resources Limited and Draig
Resources Limited.
Appointed 17 September 2012.
Former directorships in the last 3 years:
Hastings Rare Metals Limited
Artemis Resources Limited
Secretary
SUE-ANN HIGGINS
(Company Secretary)
BA LLB Hons ACIS GAICD
Ms Higgins is an experienced company executive who has worked for over
25 years in the mining industry including in senior legal and commercial roles
with ARCO Coal Australia Inc, WMC Resources Ltd, Oxiana Limited and
Citadel Resource Group Limited. Ms Higgins has extensive experience in
governance and compliance, mergers and acquisitions, equity capital
markets and mineral exploration, development and operations.
Appointed 21 August 2013
Interest in the shares and options of the Company
As at the date of this report, the interests of the directors in the shares and options of Metal Bank Limited
were:
Inés Scotland
Anthony Schreck
Guy Robertson
Ordinary
Shares
72,585,647
14,584,678
-
Options
-
9,000,000
-
Performance
Rights
-
-
-
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Other than as outlined in the Chairman’s report, there were no significant changes in the state of affairs of
the Company during the year.
PRINCIPAL ACTIVITIES
The principal activity of the Company during the financial year was mineral exploration. There have been no
significant changes in the nature of the Company’s principal activities during the financial year.
SIGNIFICANT AFTER BALANCE SHEET DATE EVENTS
Subsequent to balance date the Company has completed a capital raise of $3.5 million and is undertaking a
rights issue to raise up to a further $1.9m.
Other than as outlined above there are no matters or circumstances that have arisen since the end of the
financial period that have significantly affected or may significantly affect the operations of the consolidated
entity, the results of those operations, or the state of affairs of the consolidated entity in future financial
years.
13
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS REPORT
LIKELY FUTURE DEVELOPMENTS AND EXPECTED RESULTS
The primary objective of Metal Bank is to continue its exploration activities on its current Triumph and
Eidsvold Projects in Australia and to continue to pursue new project opportunities as they arise.
The material business risks faced by the Company that are likely to have an effect on the financial prospects
of the Company, and how the Company manages these risks, are:
Future Capital Needs – the Company does not currently generate cash from its operations. The Company
will require further funding in order to meet its corporate expenses, continue its exploration activities and
complete studies necessary to assess the economic viability of its projects. The Company’s financial
position is monitored on a regular basis and processes put into place to ensure that fund raising activities
will be conducted in a timely manner to ensure the Company has sufficient funds to conduct its activities.
Exploration and Developments Risks – the business of exploration for gold and other minerals and their
development involves a significant degree of risk, which even a combination of experience, knowledge
and careful evaluation may not be able to overcome. To prosper, the Company depends on factors that
include successful exploration and the establishment of resources and reserves within the meaning of the
2012 JORC Code. The Company may fail to discover mineral resources on its projects and once
determined, there is a risk that the Company’s mineral deposits may not be economically viable. The
Company employs geologists and other technical specialists, and engages external consultants where
appropriate to address this risk.
Commodity Price Risk – as a Company which is focused on the exploration of gold and base and precious
metals, it is exposed to movements in the price of these commodities. The Company monitors historical
and forecast price information from a range of sources in order to inform its planning and decision making.
Title and permit risks - each permit or licence under which exploration activities can be undertaken is
issued for a specific term and carries with it work commitments and reporting obligations, as well as other
conditions requiring compliance. Consequently, the Company could lose title to, or its interests in, one
or more of its tenements if conditions are not met or if sufficient funds are not available to meet work
commitments. Any failure to comply with the work commitments or other conditions on which a permit
or tenement is held exposes the permit or tenement to forfeiture or may result in it not being renewed
as and when renewal is sought. The Company monitors compliance with its commitments and reporting
obligations using internal and external resources to mitigate this risk.
PERFORMANCE IN RELATION TO ENVIRONMENTAL REGULATION
The consolidated entity will comply with its obligations in relation to environmental regulation on its
Queensland projects and when it undertakes exploration in the future. The Directors are not aware of any
breaches of any environmental regulations during the period covered by this report.
OPERATING RESULTS AND FINANCIAL REVIEW
The loss of the consolidated entity after providing for income tax amounted to $1,980,229 (2015: loss of
$965,138). The result for the year was impacted by the following:
The Group’s operating income decreased to $2,988 (2015 - $6,415) primarily the result of a reduction in
interest income given less funds on hand.
Expenses increased to $1,983,217 (2015 - $971,553). The expenses for the period included a write off of
exploration expenditure in the amount of $1,354,065 relating to the Mason Valley copper project.
Exploration costs decreased to $3,426,949 (2015 - $4,057,883) reflecting the write off of exploration
expenditure on the Mason Valley Copper Project.
14
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS REPORT
Net assets decreased to $3,013,882 (2015 - $3,889,271) reflecting a capital raise of approximately $1.1 million
and the result for the year.
DIVIDENDS PAID OR RECOMMENDED
The directors do not recommend the payment of a dividend and no amount has been paid or declared by
way of a dividend to the date of this report.
REMUNERATION REPORT
Remuneration Policy
The Board determines, on a case by case basis, the terms and conditions of employment of company
executives and consultants, including remuneration.
The Board’s policy for determining the nature and amount of remuneration for Board members and
executives (Remuneration Policy) is as follows:
The terms and conditions for the executive directors and other senior staff members, are developed by
the Chair and Company Secretary and approved by the Board;
Remuneration for directors and senior executives is determined and reviewed by the Board by reference
to the Company’s performance, the individual’s performance, as well as comparable information from
listed companies in similar industries;
In determining competitive remuneration rates, the Board may seek independent advice on local and
international trends among comparative companies and industry generally. It examines terms and
conditions for employee incentive schemes, benefit plans and share plans. Independent advice may be
obtained to confirm that executive remuneration is in line with market practice and is reasonable in the
context of Australian executive reward practices;
The Company is a mineral exploration company and does not generate cash from its operations. In order
to preserve cash for exploration activities, the Board has determined, where possible, to pay a base
remuneration less than market rates to its executive directors, employees and individual contractors
with base remuneration to be supplemented by options and performance incentives to ensure
attraction, retention and ongoing incentives for its directors and executives;
All remuneration paid to directors is valued at the cost to the Company and expensed. Where
appropriate, shares given to directors and executives are valued as the difference between the market
price of those shares and the amount paid by the director or executive. Options are valued using the
Black-Scholes methodology;
Issue of performance rights are subject to the terms of Metal Bank Performance Rights Plan and their
vesting is subject to vesting conditions and performance hurdles relating to the performance of both the
Company and the individual as determined and assessed by the Board;
The Board policy is to remunerate non-executive directors at market rates for comparable companies for
time, commitment and responsibilities. The Board determines payments to the non-executive directors
and reviews their remuneration annually, based on market practice, duties and accountability.
The Company has not tabled figures for earnings and shareholders’ funds for the last five years as, being an
exploration company, these historical figures have no relevance in determining remuneration structure.
15
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS REPORT
DIRECTORS' AND EXECUTIVE OFFICERS’ EMOLUMENTS –
(a) Details of Directors and Key Management Personnel
(i)
(ii)
(iii)
Current Directors
Inés Scotland – Non-Executive Chair (appointed 13 August 2013)
Anthony Schreck – Executive Director (appointed 29 November 2013)
Guy Robertson – Executive Director (appointed 17 September 2012)
Company Secretary
Sue-Ann Higgins (appointed 21 August 2013)
Key Management Personnel
Trevor Wright (appointed 4 July 2016)
Other than the directors and the company secretary, the Company had no Key Management Personnel for
the financial year ended 30 June 2016. Mr Trevor Wright was appointed as Exploration Manager after the
end of the reporting period.
Directors’ remuneration and other terms of employment are reviewed annually by the Board having regard
to performance against goals set at the start of the year, relative comparative information and independent
expert advice, where appropriate.
Except as detailed in Notes (a) – (c) to the Remuneration Report, no director or officer has received or become
entitled to receive, during or since the financial year, a benefit because of a contract made by the Company
or a related body corporate with a director, a firm of which a director is a member or an entity in which a
director has a substantial financial interest. This statement excludes a benefit included in the aggregate
amount of emoluments received or due and receivable by directors and shown in Notes (a) – (c) to the
Remuneration Report, prepared in accordance with the Corporations Regulations, or the fixed salary of a full
time employee of the Company.
(b) Remuneration of Directors and Key Management Personnel
Remuneration Policy
The Company’s Remuneration Policy is outlined above. Remuneration of Directors of the Group and Key
Management Personnel is set out below.
Parent & Group Key Management Personnel –
2016
2015
Base
Salary
and Fees
Share
Based
Payments
Super-
annuation
Total
Base
Salary
and Fees
Share
Based
Payments¹
Super-
annuation
Total
I. Scotland
A. Schreck
G. Robertson
S. Higgins
Totals
-
165,000
50,000
90,220
305,220
-
-
-
-
-
-
-
38,139
-
15,675
180,675
155,000
37,500
-
-
50,000
90,220
15,675
320,895
50,000
-
109,230
352,369
-
37,500
3,624
14,725
-
-
18,349
41,763
207,225
50,000
109,230
408,218
¹Performance rights were granted to Tony Schreck, the executive director responsible for the Company’s
exploration activities on 2 July 2015. Details of the number and terms of the performance rights issued are
set out in Note (c) below.
16
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS REPORT
During the year 1,271,186 shares were issued to Mr Tony Schreck on the vesting of performance rights during
the performance period. The Performance Period ended on 9 March 2016, and the balance of performance
rights on issue lapsed as at this date.
There are no other employment benefits, either short term, post-employment or long term, non-monetary
or otherwise other than those outlined above.
(c) Employee Related Share-based compensation
Options
To ensure that the Company has appropriate mechanisms to continue to attract and retain the services of
directors and employees of a high calibre, the Company has a policy of issuing options that are exercisable in
the future at a certain fixed price.
No options were issued to employees or to directors or executives as part of their remuneration for the year
ended 30 June 2016
Performance Rights
The Metal Bank Performance Rights Plan (the Rights Plan) and issue of securities under the Rights Plan was
first approved by shareholders at the Annual General Meeting of the Company held on 30 November 2012
and this approval was renewed by shareholders at the Annual General Meeting of the Company held on 12
November 2015.
To be eligible to participate in the Rights Plan, a person must be a full or part time employee, contractor or
consultant (approved by the Board) of the Company or any subsidiary of the Company or a director.
No performance rights were issued under the Rights Plan during the reporting period.
During the year 1,271,186 shares were issued to Mr Tony Schreck on the vesting of performance rights during
the performance period. The Performance Period ended on 9 March 2016, and the balance of performance
rights on issue lapsed as at this date.
MEETINGS OF DIRECTORS
The number of directors' meetings (including committees) held during the financial period, each director who
held office during the financial period and the number of meetings attended by each director are:
Director
I. Scotland
A. Schreck
G. Robertson
Directors Meetings
Meetings Attended
Number Eligible
to Attend
4
5
5
5
5
5
In addition to the board meetings there were three circular resolutions by the board during the financial
period.
INDEMNIFYING OFFICERS
In accordance with the constitution, except as may be prohibited by the Corporations Act 2001, every officer
or agent of the Company shall be indemnified out of the property of the Company against any liability incurred
by him or her in his or her capacity as officer or agent of the Company or any related corporation in respect
17
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS REPORT
of any act or omission whatsoever and howsoever occurring or in defending any proceedings, whether civil
or criminal.
The Company paid insurance premiums of $9516 in September 2016 in respect of directors’ and officers’
liability. The insurance premiums relate to:
costs and expenses incurred by the relevant officers in defending legal proceedings, whether civil or
criminal and whatever their outcome;
other liabilities that may arise from their position, with the exception of conduct involving wilful breach
of duty or improper use of information to gain a personal advantage.
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any
proceeding 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. The Company was not a party to any such proceedings during the
year.
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration under Section 307C in relation to auditor’s independence for
the year ended 30 June 2016 has been received and can be found on the following page.
NON-AUDIT SERVICES
The Board of Directors advises that no non-audit services were provided by the Company’s auditors during
the year.
This report is made in accordance with a resolution of the directors.
Guy Robertson
Director
Sydney, 28 September 2016
18
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Metal Bank Limited for the year ended 30 June 2016, I
declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
C J HUME
Partner
Sydney NSW
Dated: 28 September 2016
19
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
Revenue
Administration expenses
Personnel costs
Compliance and regulatory expenses
Legal fees
Occupancy costs
Marketing
Directors fees
Management and consulting fees
Travel expenses
Exploration expenditure written off
Depreciation
Finance costs
Unrealised foreign exchange loss
Share based payments
(LOSS) BEFORE INCOME TAX
Income tax expense
Note
2
2016
$
2,988
2015
$
6,415
(53,302)
(187,363)
(80,239)
(13,299)
(26,185)
(1,920)
(50,000)
(143,149)
(11,927)
(1,354,065)
(762)
(28,000)
(33,006)
-
(53,331)
(31,064)
(48,624)
-
(4,776)
-
(91,756)
(236,187)
(31,266)
(431,517)
(532)
(5,000)
-
(37,500)
(1,980,229)
(965,138)
-
-
10
3
4
(LOSS) FOR THE YEAR
(1,980,229)
(965,138)
(LOSS) ATTRIBUTABLE TO MEMBERS OF
METAL BANK LIMITED
(1,980,229)
(965,138)
OTHER COMPREHENSIVE INCOME
-
-
TOTAL COMPREHENSIVE
INCOME/(LOSS)
Loss for the year is attributable to:
Owners of Metal Bank Limited
Total Comprehensive income for the year is
attributable to:
Owners of Metal Bank Limited
Earnings per share
Basic and diluted loss per share
(cents per share)
(1,980,229)
(965,138)
(1,980,229)
(965,138)
(1,980,229)
(965,138)
20
(0.52)
(0.32)
The Consolidated Statement of Profit or Loss and Other Comprehensive Income are to be read in conjunction
with the attached notes
20
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Financial assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Exploration and evaluation expenditure
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Borrowings
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued Capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
2016
$
2015
$
5
6
7
8
10
11
12
12
367,846
38,902
1,250
407,998
544,445
35,975
1,250
581,670
2,111
3,426,949
3,429,060
2,873
4,057,883
4,060,756
3,837,058
4,642,426
120,322
702,854
823,176
-
-
823,176
111,307
-
111,307
641,848
641,848
753,155
3,013,882
3,889,271
13
14
11,720,252
137,520
(8,843,890)
10,577,912
175,020
(6,863,661)
3,013,882
3,889,271
The Consolidated Statement of Financial Position are to be read in conjunction with the attached notes.
21
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
Issued
Capital
$
Reserves
Accumulated
Losses
$
Total
$
10,577,912
-
175,020
-
(6,863,661)
(1,980,229)
3,889,271
(1,980,229)
-
-
1,107,665
-
-
-
37,500
(2,825)
(37,500)
-
-
-
(1,980,229)
(1,980,229)
-
-
-
1,107,665
-
(2,825)
11,720,252
137,520
(8,843,890)
3,013,882
Issued
Capital
$
Reserves
Accumulated
Losses
$
Total
$
9,817,912
-
494,885
-
(6,255,888)
(965,138)
4,056,909
(965,138)
-
-
-
-
-
-
(965,138)
(965,138)
-
-
760,000
37,500
(357,365)
-
-
357,365
-
37,500
-
760,000
10,577,912
175,020
(6,863,661)
3,889,271
Balance as at 1 July 2015
Loss for the year
Other comprehensive
income for the year
Total comprehensive
income for the year
Issue of capital
Issue of capital on vesting
performance rights
Cost of issue of capital
Balance as at 30 June
2016
Balance as at 1 July 2014
Loss for the year
Other comprehensive
income for the year
Total comprehensive
income for the year
Transfer to share based
payments reserve
Expiry of options
Issue of share capital
Balance as at 30 June
2015
The Consolidated Statement of Changes in Equity are to be read in conjunction with the attached notes.
22
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
NET CASH USED IN OPERATING ACTIVITIES
22
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for fixed assets
Proceeds from sale of projects
Payment for exploration and evaluation
NET CASH PROVIDED BY INVESTING
ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares and options
Cost of share issue
Proceeds from borrowings
NET CASH PROVIDED BY FINANCING
ACTIVITIES
2016
$
2015
$
(532,956)
805
(532,151)
-
-
(706,123)
(471,555)
6,415
(465,140)
(1,335)
50,000
(1,273.,387)
(706,123)
(1,224,722)
1,064,500
(2,825)
-
760,000
-
636,848
1,061,675
1,396,848
NET DECREASE IN CASH HELD
(176,599)
(293,014)
Cash at the beginning of the financial year
CASH AT THE END OF THE FINANCIAL YEAR
544,445
367,846
837,459
544,445
The Consolidated Statement of Cash Flows are to be read in conjunction with the attached notes.
23
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
This financial report includes the consolidated financial statements and notes of Metal Bank Limited and its
controlled entities (Consolidated Group or Group), and a separate note on the accounts of Metal Bank
Limited as the parent entity (Parent).
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PREPARATION
The financial report is a general purpose financial report that has been prepared in accordance with
Australian Accounting Standards, Australian Accounting
Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a
financial report containing relevant and reliable information about transactions, events and conditions.
Compliance with Australian Accounting Standards ensures that the financial statements and notes also
comply with International Financial Reporting Standards. Material accounting policies adopted in the
preparation of this financial report are presented below and have been consistently applied unless
otherwise stated.
This financial report is presented in Australian Dollars.
The financial report has been prepared on an accruals basis and is based on historical costs, modified, where
applicable, by the measurement at fair value of selected non-current assets, financial assets and financial
liabilities.
The financial report covers the Group of Metal Bank Limited and controlled entities. Metal Bank Limited is
a public listed company, incorporated and domiciled in Australia.
a.
Principles of Consolidation
The consolidated financial statements incorporate the assets, liabilities and results of entities
controlled by Metal Bank Limited at the end of the reporting period. A controlled entity is any entity
over which Metal Bank Limited has the ability and right to govern the financial and operating policies
so as to obtain benefits from the entity’s activities.
Where controlled entities have entered or left the Group during the year, the financial performance
of those entities is included only for the period of the year that they were controlled. A list of
controlled entities is contained in Note 9 to the financial statements.
In preparing the consolidated financial statements, all inter-group balances and transactions between
entities in the consolidated group have been eliminated in full on consolidation.
Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a
parent, are reported separately within the equity section of the consolidated statement of financial
position and statement of comprehensive income. The non-controlling interests in the net assets
comprise their interests at the date of the original business combination and their share of changes in
equity since that date.
Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisition method, unless it is a combination
involving entities or businesses under common control. The business combination will be accounted
for from the date that control is attained, whereby the fair value of the identifiable assets acquired
and liabilities (including contingent liabilities) assumed is recognised (subject to certain limited
exemptions).
When measuring the consideration transferred in the business combination, any asset or liability
resulting from a contingent consideration arrangement is also included. Subsequent to initial
recognition, contingent consideration classified as equity is not remeasured and its subsequent
settlement is accounted for within equity. Contingent consideration classified as an asset or liability is
remeasured each reporting period to fair value, recognising any change to fair value in profit or loss,
unless the change in value can be identified as existing at acquisition date.
24
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
All transaction costs incurred in relation to the business combination are expensed to the statement
of comprehensive income.
The acquisition of a business may result in the recognition of goodwill or a gain from a bargain
purchase.
b. Going Concern
The financial statements have been prepared on the going concern basis, which contemplates continuity
of normal business activities and the realisation of assets and discharge of liabilities in the normal course
of business.
As disclosed in the financial statements, the consolidated entity had incurred a loss of $1,980,229 and
had net cash outflows from operating and investing activities of $1,238,274 for the year ended 30 June
2016. As at that date the consolidated entity had net current liabilities of $415,178.
The Directors believe that it is reasonably foreseeable that the consolidated entity will continue as a
going concern and that it is appropriate to adopt the going concern basis in the preparation of the
financial report after consideration of the following factors:
The consolidated entity had net assets of $3,013,882 as at 30 June 2016;
Subsequent to year end the company announced a capital raising of up to $5.4 million. The raising
is comprised of a placement of $3.5 million and a rights issue of up to $1.9 million. The Company
expects that these raisings will be successfully completed in accordance with a timetable lodged with
the ASX (Note 24);
Subsequent to year end the loan holder has advised their intention to convert the loan and interest
of $702,854 (note 12) to equity, subject to shareholder approval;
The ability of the Company to raise further capital to enable the consolidated entity to meet
scheduled exploration expenditure requirements.
The company has successfully raised capital of $1,064,500 during the year (per note 13); and
The directors have assessed and satisfied themselves that the company will have adequate funding
over the next 12 months to meet its obligations as and when these fall due.
c. Adoption of New and Revised Accounting Standards
Changes in accounting policies on initial application of Accounting Standards
In the year ended 30 June 2016, the Group has reviewed all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to its operations and effective for the current
annual reporting period.
It has been determined by Directors of the Group that there is no impact, material or otherwise, of the
new and revised Standards and Interpretations on its business and, therefore, no change is necessary
to Group accounting policies.
The Directors have also reviewed all new Standards and Interpretations that have been issued but are
not yet effective for the year ended 30 June 2016. As a result of this review the Directors have
determined that there is no impact, material or otherwise, of the new and revised Standards and
Interpretations on its business and, therefore, no change necessary to Group accounting policies.
d.
Income Taxes
The income tax expense (revenue) for the year comprises current income tax expense (income) and
deferred tax expense (income). Current income tax expense charged to the profit or loss is the tax
payable on taxable income calculated using applicable income tax rates enacted, or substantially
enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the amounts
expected to be paid to (recovered from) the relevant taxation authority.
25
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability
balances during the year as well unused tax losses. Current and deferred income tax expense (income)
is charged or credited directly to equity instead of the profit or loss when the tax relates to items that
are credited or charged directly to equity. Deferred tax assets and liabilities are ascertained based on
temporary differences arising between the tax bases of assets and liabilities and their carrying amounts
in the financial statements. Deferred tax assets also result where amounts have been fully expensed but
future tax deductions are available. No deferred income tax will be recognised from the initial
recognition of an asset or liability, excluding a business combination, where there is no effect on
accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted
at reporting date. Their measurement also reflects the manner in which management expects to
recover or settle the carrying amount of the related asset or liability. Deferred tax assets relating to
temporary differences and unused tax losses are recognised only to the extent that it is probable that
future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and
joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of
the temporary difference can be controlled and it is not probable that the reversal will occur in the
foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is
intended that net settlement or simultaneous realisation and settlement of the respective asset and
liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-
off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable entities where it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur in
future periods in which significant amounts of deferred tax assets or liabilities are expected to be
recovered or settled.
e.
Property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment
losses.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:
Plant and equipment – over 5 years
The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if
appropriate, at each financial year end.
(i) Impairment
The carrying values of plant and equipment are reviewed for impairment at each balance date, with
recoverable amount being estimated when events or changes in circumstances indicate that the
carrying value may be impaired.
The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value
in use.
An impairment exists when the carrying value of an asset exceeds its estimated recoverable amount.
The asset is then written down to its recoverable amount.
For plant and equipment, impairment losses are recognised in the statement of comprehensive
income.
26
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
An annual transfer from the asset revaluation reserve to retained earnings is made for the difference
between depreciation based on the re-valued carrying amounts of the assets and depreciation based
on the assets’ original costs. Additionally, any accumulated depreciation as at the revaluation date is
eliminated against the gross carrying amounts of the assets and the net amounts are restated to the
re-valued amounts of the assets.
Upon disposal, any revaluation reserve relating to the particular asset being sold is transferred to
retained earnings.
(ii) Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future
economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of
the asset (calculated as the difference between the net disposal proceeds and the carrying amount of
the asset) is included in the statement of comprehensive income in the year the asset is derecognised.
f.
Exploration and Evaluation Costs
Exploration, evaluation and development expenditure incurred is accumulated in respect of each
identifiable area of interest. These costs are only carried forward to the extent that they are expected
to be recouped through the successful development of the area or where activities in the area have not
yet reached a stage that permits reasonable assessment of the existence of economically recoverable
reserves. Accumulated costs in relation to an abandoned area are written off in full against profit in the
year in which the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised
over the life of the area according to the rate of depletion of the economically recoverable reserves. A
regular review is undertaken of each area of interest to determine the appropriateness of continuing to
carry forward costs in relation to that area of interest. Costs of site restoration are provided over the
life of the facility from when exploration commences and are included in the costs of that stage. Site
restoration costs include the dismantling and removal of mining plant, equipment and building
structures, waste removal, and rehabilitation of the site in accordance with clauses of the mining
permits. Such costs have been determined using estimates of future costs, current legal requirements
and technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the
costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to
community expectations and future legislation. Accordingly the costs have been determined on the
basis that the restoration will be completed within one year of abandoning the site.
g.
Financial Instruments
Recognition and initial measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the
contractual provisions to the instrument. For financial assets, this is equivalent to the date that the
company commits itself to either the purchase or sale of the asset (i.e. trade date accounting is
adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the
instrument is classified “at fair value through profit or loss”, in which case transaction costs are expensed
to profit or loss immediately.
Classification and subsequent measurement
Financial instruments are subsequently measured at fair value, amortised cost using the effective interest
rate method, or cost.
27
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Amortised cost is the amount at which the financial asset or financial liability is measured at initial
recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative
recognised of the difference between that initial amount and the maturity amount calculated using the
effective interest method.
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are
applied to determine the fair value for all unlisted securities, including recent arm’s length transactions,
reference to similar instruments and option pricing models.
The effective interest method is used to allocate interest income or interest expense over the relevant
period and is equivalent to the rate that discounts estimated future cash payments or receipts (including
fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot
be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the
financial asset or financial liability. Revisions to expected future net cash flows will necessitate an
adjustment to the carrying value with a consequential recognition of an income or expense item in profit
or loss.
The Group does not designate any interests in subsidiaries, associates or joint venture entities as being
subject to the requirements of Accounting Standards specifically applicable to financial instruments.
(i) Financial assets at fair value through profit or loss
Financial assets are classified at “fair value through profit or loss” when they are held for trading for the
purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated
as such to avoid an accounting mismatch or to enable performance evaluation where a Group of financial
assets is managed by key management personnel on a fair value basis in accordance with a documented
risk management or investment strategy. Such assets are subsequently measured at fair value with changes
in carrying value being included in profit or loss.
(ii)
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market and are subsequently measured at amortised cost.
Loans and receivables are included in current assets, where they are expected to mature within 12
months after the end of the reporting period.
(iii) Held-to-maturity investments
Held-to-maturity investments are included in non-current assets where they are expected to mature within
12 months after the end of the reporting period. All other investments are classified as current assets.
(iv) (Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be
classified into other categories of financial assets due to their nature, or they are designated as such by
management. They comprise investments in the equity of other entities where there is neither a fixed
maturity nor fixed or determinable payments.
They are subsequently measured at fair value with changes in such fair value (i.e. gains or losses) recognised
in other comprehensive income (except for impairment losses and foreign exchange gains and losses).
When the financial asset is recognised, the cumulative gain or loss pertaining to that asset previously
recognised in other comprehensive income is reclassified into profit or loss.
Available-for-sale financial assets are included in non-current assets where they are expected to be sold
within 12 months after the end of the reporting period. All other financial assets are classified as current
assets.
28
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
(v) Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at
amortised cost.
Derivative instruments
The Group designates certain derivatives as either:
i. hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge); or
ii. hedges of highly probable forecast transactions (cash flow hedges).
At the inception of the transaction the relationship between hedging instruments and hedged items, as
well as the Group’s risk management objective and strategy for undertaking various hedge transactions, is
documented.
Assessments, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in
hedging transactions have been and will continue to be highly effective in offsetting changes in fair values
or cash flows of hedged items, are also documented.
(i) Fair value hedge
Changes in the fair value of derivatives that are designated and qualified as fair value hedges are
recorded in the statement of comprehensive income, together with any changes in the fair value of
hedged assets or liabilities that are attributable to the hedged risk.
(ii) Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash
flow hedges is deferred to a hedge reserve in equity. The gain or loss relating to the ineffective portion
is recognised immediately in the statement of comprehensive income.
Amounts accumulated in the hedge reserve in equity are transferred to the statement of comprehensive
income in the periods when the hedged item will affect profit or loss.
Impairment
At the end of each reporting period, the Group assesses whether there is objective evidence that a financial
instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline
in the value of the instrument is considered to determine whether an impairment has arisen. Impairment
losses are recognised in profit or loss. Also, any cumulative decline in fair value previously recognized in
other comprehensive income is reclassified to profit or loss at this point
Financial guarantees
Where material, financial guarantees issued that require the issuer to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due are
recognized as a financial liability at fair value on initial recognition.
The guarantee is subsequently measured at the higher of the best estimate of the obligation and the
amount initially recognised less, when appropriate, cumulative amortisation in accordance with
AASB 118: Revenue. Where the entity gives guarantees in exchange for a fee, revenue is recognised
under AASB 118.
29
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
The fair value of financial guarantee contracts has been assessed using a probability-weighted
discounted cash flow approach. The probability has been based on:
(ii) the likelihood of the guaranteed party defaulting in a year period;
(iii) the proportion of the exposure that is not expected to be recovered due to the guaranteed
party defaulting; and
(iv) the maximum loss exposed if the guaranteed party were to default.
Derecognition
Financial assets are recognised where the contractual rights to receipt of cash flows expire or the asset
is transferred to another party whereby the entity no longer has any significant continuing involvement
in the risks and benefits associated with the asset. Financial liabilities are recognised where the related
obligations are discharged, cancelled or expired. The difference between the carrying value of the
financial liability extinguished or transferred to another party and the fair value of consideration paid,
including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.
h.
Impairment of Assets
At each reporting date, the Company reviews the carrying values of its tangible and intangible assets to
determine whether there is any indication that those assets have been impaired. If such an indication
exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell
and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over
its recoverable amount is expensed to the consolidated statement of comprehensive income.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
Where it is not possible to estimate the recoverable amount of an individual asset, the Company
estimates the recoverable amount of the cash-generating unit to which the asset belongs. In the case
of available-for-sale financial instruments, a prolonged decline in the value of the instrument is
considered to determine whether impairment has arisen.
i.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly
liquid investments with original maturities of 3 months or less, and bank overdrafts. Bank overdrafts are
shown within short-term borrowings in current liabilities on the statement of financial performance.
j.
Revenue Recognition
Interest revenue is recognised using the effective interest method. It includes the amortisation of any
discount or premium.
k. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of
GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is
recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables
and payables in the statement of financial position are shown inclusive of GST. Cash flows are presented
in the statement of cash flows on a gross basis, except for the GST component of investing and financing
activities, which are disclosed as operating cash flows.
l.
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
30
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
m. Significant judgements and key assumptions
The directors evaluate estimates and judgements 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.
n. Key judgements and estimates
Key Judgement Exploration Expenditure
The Company capitalises expenditure relating to exploration and evaluation where it is considered likely
to be recoverable or where the activities have not reached a stage which permits a reasonable
assessment of the existence of reserves. While there are certain areas of interest from which no
reserves have been extracted, the directors are of the continued belief that such expenditure should
not be written off since feasibility studies in such areas have not yet concluded. Such capitalised
expenditure is carried at reporting date at $3,426,949.
Key Judgement Environmental Issues
Balances disclosed in the financial statements and notes thereto are not adjusted for any pending or
enacted environmental legislation, and the directors understanding thereof. At the current stage of the
company’s development and its current environmental impact the directors believe such treatment is
reasonable and appropriate.
Key Estimate Taxation
Balances disclosed in the financial statements and the notes thereto, relating to taxation, are based on
the best estimates of directors. These estimates take into account both the financial performance and
position of the company as they pertain to current income taxation legislation, and the directors
understanding thereof. No adjustment has been made for pending or future taxation legislation. The
current income tax position represents that directors’ best estimate, pending an assessment by the
Australian Taxation Office.
Key Estimate Share based payment transactions
The Company measures the cost of equity-settled transactions by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by reference to
the market price. Refer note 25.
Standards and Interpretations in issue not yet adopted
The Directors have reviewed all new Standards and Interpretations that have been issued but are not
yet effective for the year ended 30 June 2016. As a result of this review the Directors have determined
that there is no material impact, of the new and revised Standards and Interpretations on the Group
and, therefore, no change is necessary to Group accounting policies.
2. REVENUE AND OTHER INCOME
Interest received
Other income
2016
$
811
2,177
2,988
2015
$
6,415
-
6,415
31
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
3. LOSS FOR THE YEAR
Loss for the year is after charging:
Wages and salaries
Superannuation
Other employment related costs
Less capitalised exploration costs
Less transferred to Directors fees
Personnel costs
4. INCOME TAX EXPENSE
2016
$
252,410
21,613
52
274,075
(86,712)
-
187,363
2015
$
209,139
19,869
-
229,008
(156,181)
(41,763)
31,064
(a) No income tax is payable by the parent or consolidated entity as they recorded losses for income tax
purposes for the period.
(b) Reconciliation between income tax expense and prima facie tax on accounting profit (loss)
Accounting profit (loss)
Tax at 30%
Tax effect of other (deductible)/non-deductible
items
Deferred tax asset not recognised
Income tax expense
(c) Deferred tax assets
Revenue tax losses
Deferred tax assets not recognised
Set off deferred tax liabilities
Income tax expense
(d) Deferred tax liabilities
Exploration expenditure
Set off deferred tax assets
(e) Tax losses
Unused tax losses for which no deferred tax
asset has been recognised
2016
$
(1,980,229)
(594,069)
396,387
2015
$
(965,138)
(289,541)
25,467
197,682
-
264,074
-
263,143
(197,682)
(65,461)
-
65,461
(65,461)
-
393,421
(264,074)
(129,347)
-
129,347
(129,347)
-
6,107,116
5,230,610
Potential deferred tax assets attributable to tax losses and exploration expenditure carried forward have not
been brought to account at 30 June 2016 because the directors do not believe it is appropriate to regard
realisation of the deferred tax assets as probable at this point in time. These benefits will only be obtained if:
the Company derives future assessable income of a nature and of an amount sufficient to enable the
benefit from the deductions for the loss and exploration expenditure to be realised;
the Company continues to comply with conditions for deductibility imposed by law; and
no changes in tax legislation adversely affect the company in realising the benefit from the deductions
for the loss and exploration expenditure.
The applicable tax rate is the national tax rate in Australia for companies, which is 30% at the reporting date.
32
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
5. CASH AND CASH EQUIVALENTS
Cash and cash equivalents
367,846
544,445
2016
$
2015
$
6. TRADE AND OTHER RECEIVABLES
CURRENT
Other receivables
GST Receivable
7. FINANCIAL ASSETS
CURRENT
ASX Listed Shares
Financial assets available for sale¹
¹ Shares in Locality Planning Energy Holdings Limited.
8. PLANT AND EQUIPMENT
Office equipment
At Cost
Accumulated depreciation
Office equipment
Opening balance
Purchases
Depreciation
Closing balance
33
2016
$
16,542
22,360
38,902
2015
$
26,770
9,205
35,975
2016
$
2015
$
1,250
1,250
1,250
1,250
2016
$
2015
$
3,635
(1,524)
2,111
2,873
-
(762)
2,111
3,635
(762)
2,873
2,300
1,335
(532)
2,873
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
9. CONTROLLED ENTITY
Parent Entity:
Metal Bank Limited
Subsidiary:
Roar Resources Pty Ltd
MBK Resources USA Inc.
Country of
Incorporation
Ownership %
2016
Ownership %
2015
Australia
Australia
United States of
America
-
100
100
-
100
100
10. EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation expenditure
3,426,949
4,057,883
2016
$
2015
$
Reconciliation of carrying amount
Balance at beginning of financial year
Project acquisition
Expenditure in current year
Proceeds on project disposal
Exploration expenditure written off
Balance at end of financial period
11. TRADE AND OTHER PAYABLES
CURRENT
Unsecured liabilities:
Trade payables
Sundry payables and accrued expenses
4,057,883
-
723,131
-
(1,354,065)
3,426,949
3,425,211
321,000
793,189
(50,000)
(431,517)
4,057,883
2016
$
2015
$
67,484
52,838
120,322
49,047
62,260
111,307
34
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
12. BORROWINGS
CURRENT
Borrowings
NON CURRENT
Borrowings
2016
$
2015
$
702,854
-
-
641,848
Borrowings are denominated in US $500,000 (US $500,000), and are repayable by 3 February 2017. The
loan is unsecured with interest payable at LIBOR plus 3%.
13. SHARE CAPITAL
509,536,630 (2015 – 330,929,445)
fully paid ordinary shares
2016
$
2015
$
11,720,252
10,577,912
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion
to the number of shares held. At shareholders’ meetings each ordinary share is entitled to one vote when a
poll is called, otherwise each shareholder has one vote on a show of hands.
Reconciliation of movements in share capital during the year:
2016
No. Shares
2015
No. Shares
2016
$
2015
$
330,929,445
23,333,333
10,000,000
25,000,000
1,271,186
116,125,000
2,877,666
-
-
-
292,929,445
-
-
-
-
-
-
25,500,000
12,500,000
-
10,577,912
350,000
150,000
100,000
37,500
464,500
43,165
-
-
(2,825)
9,817,912
-
-
-
-
-
-
510,000
250,000
-
509,536,630
330,929,445
11,720,252
10,577,912
Opening balance – start of
reporting period
Share Issue – 8 September 2015
Share Issue – 16 November 2015
Share Issue – 30 March 2016
Share Issue – 11 April 2016
Share issue – 11 May 2016
Share issue – 30 June 2016
Share Issue – 20 February 2015
Share Issue – 30 June 2015
Cost of raising capital
Capital Management
The Company’s objectives when managing capital are to safeguard its ability to continue as a going concern,
so that it may continue to provide returns for shareholders and benefits for other stakeholders.
The Company’s capital includes ordinary share capital and financial liabilities, supported by financial assets.
Due to the nature of the Company’s activities, being mineral exploration, it does not have ready access to
credit facilities, with the primary source of funding being equity raisings. Accordingly, the objective of the
Company’s capital risk management is to balance the current working capital position against the
requirements of the Company to meet exploration programmes and corporate overheads. This is achieved
by maintaining appropriate liquidity to meet anticipated operating requirements, with a view to initiating
appropriate capital raisings as required.
35
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Cash and cash equivalents
Trade and other receivables
Financial assets
Trade and other payables
Working capital position
Share options
Movements in share options
At 1 July
Company options issued during the year - unlisted
Options expired during the year
At 30 June
2016
2015
$
$
367,846
544,445
38,902
1,250
35,975
1,250
(823,176)
(111,307)
(415,178)
470,363
2016
No.
2015
No.
15,000,000
61,000,000
-
-
-
(46,000,000)
15,000,000
15,000,000
The Company has the following options outstanding as at 30 June 2016.
Grant/Issue Date
Expiry Date
Exercise Price
Number
Listed/Unlisted
2 December 2013
30 November 2018
3 cents
15,000,000
Unlisted
The following table illustrates the number (No.) and weighted average exercise prices of and movements in
share options issued during the year:
Weighted
average exercise
price
Weighted average
exercise price
2016
No.
2016
$
2015
No.
15,000,000
$0.03
61,000,000
-
-
-
-
-
-
$0.03
$0.03
-
(46,000,000)
-
15,000,000
15,000,000
Outstanding at the beginning of the
year
Granted during the year
Expired during the year
Exercised during the year
Outstanding at the end of the year
Exercisable at the end of the year
15,000,000
15,000,000
36
2015
$
$0.037
-
(0.39)
-
$0.03
$0.03
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
The share options outstanding at the end of the year had a weighted average exercise price of $0.03 (2015:
$0.03) and weighted average remaining contractual life of 0.42 years (2015: 1.42 years).
The following share-based payment arrangements are in place during the current and prior periods:
Series
Number
Grant/Issue
Date
Expiry date
Exercise
Price
Fair Value at Grant
Date
Series 1
15,000,000
2/12/13
30/11/18
3 cents
137,520
Listed/
Unlisted
Unlisted
Series 1
78%
3.31%
6.0
3 cents
1.7 cents
Expected volatility (%)
Risk-free interest free (%)
Expected life of option (years)
Exercise price ($)
Grant date share price
14. RESERVES
Option issue reserve
Movements in options issue reserve
Opening balance
Transferred to options reserve
Issue of shares on vesting of performance rights
Transfer from options reserve on options expiry
Closing balance
2016
$
2015
$
175,020
175,020
175,020
-
(37,500)
494,885
37,500
-
-
(357,365)
137,520
175,020
15. FINANCIAL RISK MANAGEMENT
The group’s principal financial instruments comprise mainly of borrowings and deposits with banks and
shares in listed companies shown as financial assets at fair value through profit and loss. The main purpose
of the financial instruments is to achieve optimal funding for the group with limited risk and earn the
maximum amount of interest at a low risk to the group. The group also has other financial instruments such
as trade debtors and creditors which arise directly from its operations.
37
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
The consolidated entity holds the following financial instruments at the end of the reporting period:
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial assets at fair
value through profit and
loss
Financial liabilities
Trade and other payables
Borrowings
2016
$
2015
$
367,846
38,902
544,445
35,975
1,250
1.250
581,670
407,998
120,322
702,854
823,176
111,307
641,848
753,155
The main risks arising from the Company’s financial instruments are market risk, credit risk and liquidity risk.
The Board reviews and agrees policies for managing each of these risks and they are summarised below:
a. Market risk
Cash flow and fair value interest rate risk
The group’s main interest rate risk arises from borrowings and cash deposits to be applied to
exploration and development areas of interest. Borrowings are primarily to bridge the gap between
funding requirements and obtaining shareholder approval for equity issues. It is the group’s policy
to invest cash in short term deposits to minimise the group’s exposure to interest rate fluctuations.
The group’s deposits were denominated in Australian dollars throughout the year. The group did not
enter into any interest rate swap contracts.
b. Credit Risk
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in
financial loss to the group. The group has adopted the policy of only dealing with credit worthy
counterparties and obtaining sufficient collateral or other security where appropriate, as a means of
mitigating the risk of financial loss from defaults. The cash transactions of the group are limited to
high credit quality financial institutions.
The group does not have any significant credit risk exposure to any single counterparty or any group
of counterparties having similar characteristics. The carrying amount of financial assets recorded in
the financial statements, net of any provisions for losses, represents the group’s maximum exposure
to credit risk.
All cash holdings within the Group are currently held with AA rated financial institutions.
c. Liquidity Risk
The group manages liquidity risk by continuously monitoring forecast and actual cash flows and
matching the maturity profiles of financial assets and liabilities. Surplus funds when available are
generally only invested in high credit quality financial institutions in highly liquid markets.
Financial Instrument composition and maturity analysis
The tables below reflect the undiscounted contractual settlement terms for financial instruments of a fixed
period of maturity, as well as management’s expectations of the settlement period for all other financial
instruments. As such, the amounts may not reconcile to the statement of financial position.
38
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Within 1 year
1 to 5 years
Over 5 years
Total
2016
$
2015
$
2016
$
2015
$
2016
$
2015
$
2016
$
2015
$
120,322
111,307
702,754
641,848
823,076
753,155
367,846
544,445
38,902
1,250
35,975
1,250
407,998
581,670
(415,078)
(171,485)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
120,322
111,307
702,754
641,848
823,076
753,155
367,846
544,445
38,902
1,250
35,975
1,250
407,998
581,670
-
(415,078)
(171,485)
Consolidated
Group
Financial liabilities
- due for payment:
Trade and other
payables
Borrowings
Total contractual
outflows
Financial assets –
cash flows
realisable
Cash and cash
equivalents
Trade and other
receivables
Financial assets
Total anticipated
inflows
Net
(outflow)/inflow
on financial
instruments
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity
and profit or loss by the amounts shown below.
30 June 2016
Cash and cash equivalents
Borrowings
30 June 2015
Cash and cash equivalents
Borrowings
Carrying
Value
$
367,846
(702,854)
(335,008)
544,445
(641,848)
(97,403)
Change in profit
Change in equity
100bp
Increase
$
100bp
decrease
$
100bp
increase
$
100bp
decrease
$
3,678
(7,028)
(3,350)
5,444
(6,418)
(974)
(3,678)
7,028
3,350
(5,444)
6,418
974
3,678
(7,028)
(3,350)
5,444
(6,418)
(974)
(3,678)
7,028
3,350
(5,444)
6,418
974
39
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Maturity of financial assets and liabilities
The note below summarises the maturity of the group’s financial assets and liabilities as per the director’s
expectations. The amounts disclosed are the contractual undiscounted cash flows. There are no derivatives.
30 June 2016
Trade and other receivables
Trade and other payables
Borrowings
30 June 2015
Trade and other receivables
Trade and other payables
Borrowings
1- 5 years
>5 years
Total
< 6 months
$
38,902
120,322
-
6 – 12
months
$
-
-
702,854
$
$
-
-
-
$
38,902
120,322
702,854
35,975
111,307
641,848
-
-
-
-
-
-
35,975
111,307
-
-
-
-
-
-
641,848
Fair value of financial assets and financial liabilities
There is no difference between the fair values and the carrying amounts of the group’s financial instruments.
The Group has no unrecognised financial instruments at balance date.
Financial Instruments Measured at Fair Value
The financial instruments recognised at fair value in the statement of financial position have been analysed
and classified using a fair value hierarchy reflecting the significance of the inputs used in making the
measurements. The fair value hierarchy consists of the following levels:
quoted prices in active markets for identical assets or liabilities (Level 1);
inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices) (Level 2); and
inputs for the asset or liability that are not based on observable market data (unobservable inputs)
(Level 3).
Sensitivity analysis on changes in market rates
A change of 20% in equity prices at the reporting date would increase/(decrease) equity and profit or loss as
shown below:
Carrying
Value
$
Change in profit
20%
increase
$
20%
decrease
$
Change in equity
20%
20%
decrease
increase
$
$
30 June 2016 & 30 June 2015
Financial assets available for sale
ASX listed investments
1,250
250
(250)
250
(250)
40
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
16. COMMITMENTS
The consolidated group currently has commitments for expenditure at 30 June 2016 on its
Australian exploration tenements, up to the date of expiry, as follows:
Not later than 12 months
Between 12 months and 5 years
Greater than 5 years
2016
$
242,000
650,000
-
892,000
2015
$
382,000
730,000
100,000
1,212,000
17. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
There are no contingent liabilities or assets in existence at balance sheet date.
18. RELATED PARTY DISCLOSURES
Refer to the Remuneration Report contained in the Directors Report for details of the remuneration paid or
payable to each member of the Group’s key management personnel for the year ended 30 June 2016. Other
than the Directors and secretary, the Company had no key management personnel for the financial period
ended 30 June 2016.
The total remuneration paid to key management personnel of the company and the group during the year
are as follows:
Short term employee benefits
Superannuation
Share based payments
2016
$
305,220
15,675
-
320,895
2015
$
352,369
18,349
37,500
408,218
DIRECTORS' AND EXECUTIVE OFFICERS’ EMOLUMENTS
(a) Details of Directors and Key Management Personnel
(i) Directors
Inés Scotland (Non-Executive Chairman) (Appointed 13 August 2013)
Anthony Schreck (Executive Director) (Appointed 29 November 2013)
Guy Robertson (Executive Director) (Appointed 17 September 2012)
(ii) Company secretary
Sue-Ann Higgins (Company Secretary) (Appointed 21 August 2013)
(iii) Directors’ remuneration
Directors’ remuneration and other terms of employment are reviewed annually by the Board having regard
to performance against goals set at the start of the year, relative comparative information and, where
applicable, independent expert advice.
Except as detailed in Notes (a) – (c) to the Remuneration Report in the Director’s Report, no director has
received or become entitled to receive, during or since the financial period, a benefit because of a contract
made by the Company or a related body corporate with a director, a firm of which a director is a member or
41
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
an entity in which a director has a substantial financial interest. This statement excludes a benefit included
in the aggregate amount of emoluments received or due and receivable by directors and shown in Notes
(a) - (c) to the Remuneration Report, prepared in accordance with the Corporations regulations, or the fixed
salary of a full time employee of the Company.
(b) Key Management Personnel
Other than the Directors and secretary, the Company had no key management personnel for the financial
period ended 30 June 2016.
(c) Remuneration Options: Granted and vested during the financial year ended 30 June 2016
There were no remuneration options granted during the financial year ended 30 June 2016.
(d) Share and Option holdings
All equity dealings with directors have been entered into with terms and conditions no more favourable than
those that the entity would have adopted if dealing at arm’s length.
Shares held by Directors and Officers
Period from 1 July 2015 to 30 June 2016
Balance at
beginning
of period
37,585,647
10,952,381
-
48,538,028
Received as
Remuneration
Purchased
Net Change
Other
Balance at
end of year
-
35,000,000
1,271,186
-
1,271,186
2,361,111
-
37,361,111
-
-
-
-
72,585,647
14,584,678
-
87,170,325
I. Scotland
A. Schreck
G. Robertson
Period from 1 July 2014 to 30 June 2015
Balance at
beginning
of period
17,500,000
10,952,381
-
28,452,381
I. Scotland
A. Schreck
G. Robertson
Received as
Remuneration
Purchased
Net Change
Other
Balance at
end of year
-
-
-
-
20,085,647
-
-
20,085,647
-
-
-
-
37,585,647
10,952,381
-
48,538,028
42
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Options held by Officers and Directors
Period from 1 July 2015 to 30 June 2016
Balance at
beginning
of period
-
9,000,000
-
9,000,000
I. Scotland
A. Schreck
G. Robertson
Received as
Remuneration
Net Change
Other
Expired during
period
Balance at
end of year
-
-
-
-
-
-
-
-
-
-
-
-
-
9,000,000
-
9,000,000
Period from 1 July 2014 to 30 June 2015
Balance at
beginning
of period
3,000,000
9,000,000
-
12,000,000
I. Scotland
A. Schreck
G. Robertson
Performance Rights
Received as
Remuneration
Net Change
Other
Expired during
period
Balance at
end of year
-
-
-
-
-
-
-
-
(3,000,000)
-
-
9,000,000
-
(3,000,000)
-
9,000,000
During the year 1,271,186 performance rights vested as at the performance date of 9 March 2016.
The balance of the performance rights on issue as at that date lapsed.
19. SEGMENT INFORMATION
The group’s operations are in one business segment being the resources sector. The group operates in
Australia and the United States of America (from February 2015). All subsidiaries in the group operate within
the same segment.
Basis of accounting for purposes of reporting by operating segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors as the chief decision maker with
respect to operating segments are determined in accordance with accounting policies that are consistent to
those adopted in the annual financial statements of the Company.
Inter-segment transactions
Inter-segment loans payable and receivable are initially recognised at the consideration received net of
transaction costs. If inter-segment loans receivable and payable are not on commercial terms, these are not
43
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
adjusted to fair value based on market interest rates. This policy represents a departure from that applied to
the statutory financial statements
Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives the
majority of economic value from the asset. In the majority of instances, segment assets are clearly identifiable
on the basis of their nature and physical location.
Unless indicated otherwise in the segment assets note, investments in financial assets, deferred tax assets
and intangible assets have not been allocated to operating segments.
Segment liabilities
Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and
the operations of the segment. Borrowings and tax liabilities are generally considered to relate to the
Company as a whole and are not allocated. Segment liabilities include trade and other payables and certain
direct borrowings.
Unallocated items
Administration and other operating expenses are not allocated to operating segments as they are not
considered part of the core operations of any segment.
44
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Project segments
30 June 2016
Revenue
Interest and other income
Total segment revenue
Expenses
Exploration expenditure
written off
Administration
Total segment expenses
Income tax benefit
Segment result
Exploration costs incurred for
the year
Segment assets
Segment liabilities
Interest is earned in Australia.
Project segments
30 June 2015
Revenue
Interest and other income
Total segment revenue
Expenses
Exploration expenditure
written off
Administration
Total segment expenses
Income tax benefit
Segment result
Acquisition cost of
tenements/project interest
Exploration costs incurred for
the year
Segment assets
Segment liabilities
Australian
Projects
$
United States
of America
Project
$
Administration
Costs
$
Unallocated
$
Total
$
2,988
2,988
2,988
2,988
-
-
-
-
-
(1,354,065)
(629,152)
(1,983,217)
-
(1,980,229)
-
(629,152)
(629,152)
-
(629,152)
-
-
-
-
359,031
823,176
723,588
3,837,058
823,176
-
-
-
-
-
218,202
3,426,949
-
(1,354,065)
-
(1,354,065)
-
(1,354,065)
505,386
51,078
-
Australian
Projects
$
United States
of America
Project
$
Administration
Costs
$
Unallocated
$
Total
$
-
-
(431,517)
-
(431,517)
-
(431,517)
-
-
-
-
-
-
-
-
321,000
241,410
3,208,747
-
528,136
849,136
-
-
-
-
(540,036)
(540,036)
-
(540,036)
-
-
-
-
6,415
6,415
-
-
-
-
6,415
-
6,415
6,415
(431,517)
(540,036)
(971,553)
-
(965,138)
321,000
-
584,543
753,155
769,546
4,642,426
753,155
45
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
20. EARNINGS PER SHARE
Reconciliation of earnings per share
Basic and diluted earnings per share
2016
Cents
2015
Cents
(0.52)
(0.32)
Profit/(loss) used in the calculation of the basic
earnings per share
(1,980,229)
(965,138)
Weighted average number of ordinary shares:
Used in calculating basic earnings per ordinary
share
Dilutive potential ordinary shares
Used in calculating diluted earnings per share
21. AUDITORS REMUNERATION
Auditor of parent entity
Audit or review of financial reports
Non-audit services
22. CASH FLOW INFORMATION
376,640,710
302,066,431
-
376,640,710
-
302,066,431
2016
$
27,100
-
27,100
2015
$
20,000
-
20,000
Reconciliation of net cash used in operating activities with profit after income tax
2016
$
(1,980,229)
43,165
1,354,065
762
61,006
(2,928)
(7,992)
(532,151)
2015
$
(965,138)
37,500
431,517
532
-
33,776
(3,327)
(465,140)
Loss after income tax
Non-cash flows in loss:
Share based payments
Exploration written off
Depreciation
Other non-cash items
Changes in assets and liabilities:
Decrease/(Increase) in trade and other receivables
(Decrease)/Increase in trade and other payables
Net cash (outflow) from operating activities
Non-cash Financing and Investing Activities
There were no non cash financing and investing activities.
46
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
23. PARENT ENTITY DISCLOSURES
Financial Position
Current Assets
Cash and cash equivalents
Trade and other receivables
Financial assets
Total Current Assets
Non-current Assets
Office equipment
Financial assets
Evaluation and exploration expenditure
Total Non-current assets
Total Assets
Current Liabilities
Trade and other payables
Borrowings
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Total loss
Total comprehensive loss
i. Financial Performance
2016
$
2015
$
315,621
881,762
1,250
1,198,633
2,111
2,269,836
152,838
2,424,785
395,667
1,864,778
1,250
2,261,695
2,873
2,269,836
99,804
2,372,513
3,623,418
4,634,208
93,350
702,854
796,204
89,678
641,848
731,526
796,204
731,526
2,827,214
3,902,682
11,720,252
137,520
(9,030,558)
10,577,913
175,020
(6,850,251)
2,827,214
3,902,682
(1,829,476)
(951,727)
(1,829,476)
(951,727)
The subsidiary acquired did not trade from the date of acquisition with the result that the result of the Group
equates to the result of the parent for the year.
ii. Contingent liabilities and contingent assets
The parent entity is responsible for the contingent liabilities and contingent assets outlined in note 17.
iii. Commitments
The parent entity is responsible for the commitments outlined in note 16.
iv. Related parties
An interest in subsidiary is set out in note 9.
Disclosures relating to key management personnel are set out in note 18.
47
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
24. SIGNIFICANT AFTER BALANCE DATE EVENTS
Subsequent to balance date the Company announced a capital raising of up to $5.4 million which is comprised
of placement of $3.5 million and a rights issue to raise up to a further $1.9m. The Company expects that these
raisings will be successfully completed in accordance with the timetable lodged with the ASX.
Other than as outlined above there are currently no matters or circumstances that have arisen since the end
of the financial period that have significantly affected or may significantly affect the operations of the
consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future
financial years.
25. SHARE BASED PAYMENTS
Performance Rights
The Company granted 6,355,932 performance rights to a director on 2 July 2015. Of these rights 1,271,186
vested on 9 March 2016, with the balance lapsing as at this date.
48
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
In accordance with a resolution of the directors of Metal Bank Limited, the directors of the company declare
that:
1.
the financial statements and notes, as set out on pages 21 to 48, are in accordance with the Corporations
Act 2001 and:
a. comply with Australian Accounting Standards, which, as stated in accounting policy Note 1 to the
financial statements, constitutes compliance with International Financial Reporting Standards (IFRS);
and
b. give a true and fair view of the financial position as at 30 June 2016 and of the performance for the
year ended on that date of the consolidated group;
2.
3.
in the directors’ opinion 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 directors have been given the declarations required by s295A of the Corporations Act 2001 from the
Chief Executive Officer and Chief Financial Officer.
Guy Robertson
Director
Sydney, 28 September 2016
49
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
METAL BANK LIMITED
Report on the Financial Report
We have audited the accompanying financial report of Metal Bank Limited, which comprises the consolidated
statement of financial position as at 30 June 2016, and the consolidated statement of profit or loss and other
comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows
for the year then ended, notes comprising a summary of significant accounting policies and other explanatory
information, and the directors' declaration of the consolidated entity comprising the company and the entities it
controlled at the year’s end or from time to time during the financial year.
Directors’ Responsibility 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 is free from
material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with
Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with
International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in
accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant
ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable
assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report. The procedures selected depend on the auditor's judgement, including the assessment of the
risks of material misstatement of the financial report, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of
the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a bases for our
audit opinions.
50
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of Metal Bank Limited, would be in the same terms if given to the directors as at the time of this
auditor's report
Opinion
In our opinion:
(a)
the financial report of Metal Bank Limited is in accordance with the Corporations Act 2001, including:
(i)
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2016 and of
its performance for the year ended on that date; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b)
the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 15 to 18 of the directors’ report for the year ended
30 June 2016. 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.
Opinion
In our opinion the Remuneration Report of Metal Bank Limited for the year ended 30 June 2016 complies with
section 300A of the Corporations Act 2001.
RSM AUSTRALIA PARTNERS
C J HUME
Partner
Sydney NSW
Dated: 28 September 2016
51
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
ADDITIONAL INFORMATION FOR LISTED COMPANIES
AS AT 27 SEPTEMBER 2016
The following additional information is required by the Australian Securities Exchange pursuant to Listing Rule
4.10. The information provided is current as at 27 September 2016 unless otherwise stated.
a. Distribution of Shareholders
Number held
1 – 1,000
1,001 ‐ 5,000
5,001 ‐ 10,000
10,001 ‐ 100,000
100,001+
Total
Number of
share holders
Number of
shares
% of number of
shares
11
9
52
252
249
573
797
25,933
511,571
12,857,218
496,141,111
509,536,630
0.00%
0.01%
0.10%
2.52%
97.37%
100.00%
b. The number of shareholders who hold less than a marketable parcel is 76.
c. Substantial shareholders
The names of the substantial shareholders in the Company, the number of equity securities to which
each substantial shareholder and substantial holder’s associates have a relevant interest, as disclosed
in substantial holding notices given to the Company are:
Indigo Pearl Capital Ltd
Celtic Stars Capital Ltd
Aristo Jet Capital Ltd
Greenvale Asia Limited
No of shares
%
71,785,647
14.09%
41,202,314
43,702,313
8.09%
8.58%
72,360,647
14.20%
52
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
ADDITIONAL INFORMATION FOR LISTED COMPANIES
AS AT 27 SEPTEMBER 2016
d. Twenty largest holders of each class of quoted equity security
Company: METAL BANK LIMITED
ACN 127 297 170
Top Listing ‐ Grouped
Rank Name
1
2
3
4
5
.
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
PERSHING AUSTRALIA NOMINEES PTY LTD
BERNE NO 132 NOMINEES PTY LTD <600835 A/C>
BERNE NO 132 NOMINEES PTY LTD <602987 A/C>
BERNE NO 132 NOMINEES PTY LTD <601299 A/C>
GROUP # 889634
CITICORP NOMINEES PTY LIMITED
MR TREVOR DEAN WRIGHT + MRS JOHANNA HELEN WRIGHT
MR ANTHONY WILLIAM SCHRECK
EUROPE RESOURCES LIMITED
COSMOS NOMINEES PTY LTD
MR MATTHEW JAMES SACHR
SEAMOOR PTY LTD
MR ANTHONY GERARD SMITH + MS THERESE ANNE SMITH
MR SAMUEL THOMAS HENDERSON
MR MARK HENRY WINTER
MR BRETT BUTLIN
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
LITWICK ENTERPRISES PTY LTD
MR JOHN CHRISTOPHER SINGH BEDI
BLACK SWAN GLOBAL PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
Shares
% Held
Units % of Units
16.66
14.09
13.6
4.77
3.18
3.18
2.41
2.4
2.36
1.96
1.96
1.78
1.38
1.18
1.07
1.05
1.02
0.83
0.74
0.63
0.6
84,904,627
71,785,647
69,285,647
24,285,647
16,187,845
16,187,845
12,277,381
12,223,567
12,000,000
10,000,000
10,000,000
9,078,898
7,027,302
6,000,000
5,465,499
5,334,401
5,215,823
4,250,000
3,768,047
3,200,000
3,075,000
Totals: Top 20 holders of MBK ORDINARY FULLY PAID
Total Remaining Holders Balance
Total Holders Balance
375,365,331
134,171,299
509,536,630
73.67
26.33
100
e. Restricted Securities
There are no restricted securities.
f. Unquoted equity securities
The Company has the following unlisted options on issue:
15,000,000 unlisted options exercisable at 3 cents with expiry 30 November 2018
The Company has no unlisted Performance Rights on issue
53
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
ADDITIONAL INFORMATION FOR LISTED COMPANIES
AS AT 28 SEPTEMBER 2016
1.
Company Secretary
The name of the company secretary is Ms Sue-Ann Higgins.
2.
Address and telephone details of entity’s registered and administrative office
Suite 2508, Level 25
31 Market Street
Sydney NSW 2000
AUSTRALIA
Ph: (02) 8268 8691
Fax: (02) 8268 8699
Mailing Address
GPO Box 128
Queen Victoria Building
NSW 1230
AUSTRALIA
3.
Address and telephone details of the office at which the register of securities is kept
Advanced Share Registry Ltd
110 Stirling Highway
Nedlands WA 6009
Telephone: +(619) 9389 8033
Facsimile: +(619) 9262 3723
4.
Stock exchange on which the Company’s securities are quoted
The Company’s listed equity securities are quoted on the Australian Securities Exchange.
Home Exchange – Melbourne; ASX Code: MBK.
5.
Review of Operations
A review of operations is contained in the Review of Operations report.
6.
On-market buy-back
There is currently no on-market buy-back.
54
DIRECTORS
Inès Scotland (Non-Executive Chairman)
Anthony Schreck (Executive Director)
Guy Robertson (Executive Director)
COMPANY SECRETARY
Sue-Ann Higgins
REGISTERED OFFICE
Suite 2508, Level 25
31 Market Street
Sydney NSW 2000
AUSTRALIA
Ph: (02) 8268 8691
Fax: (02) 8268 8699
Mailing Address
GPO Box 128
Queen Victoria Building
NSW 1230
AUSTRALIA
SHARE REGISTRY
Advanced Share Registry Ltd
110 Stirling Highway,
NEDLANDS WA 6009
Ph: (08) 9389 8033
Fax: (08) 9262 3723
www.advancedshare.com.au
AUDITORS
RSM Australia Pty Ltd
Level 13, 60 Castlereagh Street
Sydney NSW 2000
BANKERS
Westpac
WEBSITE
www.metalbank.com.au
55