ABN 51 127 297 170
Metal Bank Limited
and its controlled entities
Annual Financial Report
For the year ended
30 June 2018
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 of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Audit Report to the Members of Metal Bank Limited
Additional Information for Listed Companies
Corporate Directory
1
2 – 14
15
16 – 22
23
24
25
26
27
28 – 52
53
54 – 56
57 – 59
60
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 2018.
Our focus during the year continued to be the Triumph gold project where Metal Bank has achieved discovery
success on multiple prospects during the past year and is focused on uncovering large gold systems beneath
thin sediment cover. Following a project review with a leading gold intrusion expert, we have identified a
large new intrusive complex potentially representing the centre of the Triumph gold system in the west of
the project area.
Four other priority targets, interpreted as the upper halo above large intrusion related gold targets with
excellent depth potential, have also been identified within the areas drilled to date.
While the drilling throughout the year extended the near surface mineralised zones, an internal review of all
near surface resources identified to date did not support moving to a scoping study at this time. Exploration
will now focus on investigating the central intrusive complex in parallel with the four priority gold targets
already established.
Work also continued on the Eidsvold project where Metal Bank has identified multiple large-scale gold targets
located near surface around an historical goldfield with 100,000oz of past production.
In parallel, we continued to review highly prospective, advanced and near production resource opportunities
with the potential to significantly enhance the current project portfolio. This strategy has led to the recent
addition of the 8 Mile project to Metal Bank’s strong portfolio of gold assets, which is in located in close
proximity to the Mt Rawdon gold mine in south-east Queensland
We look forward to continued exploration success in the year ahead and we thank our shareholders for their
ongoing support.
Inés Scotland
Non-executive Chair
28 September 2018
1
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
REVIEW OF OPERATIONS
During the year, Metal Bank has continued to use its core exploration competence to define gold resources
associated with overlooked and underexplored intrusion related gold systems of eastern Australia, focusing
on brownfields exploration centred on historical goldfields.
➢ Primary focus has been the Triumph project where Metal Bank has achieved discovery success on
multiple prospects during the past year and is focused on uncovering large gold systems beneath
thin sediment cover.
➢ Secondary focus was the Eidsvold project where Metal Bank has identified multiple large-scale gold
targets located near-surface around an historical goldfield with 100,000oz of past production.
➢
In parallel, Metal Bank continued to review highly prospective, advanced and near-production
resource opportunities which have the potential to significantly enhance the current project
portfolio and reduce the timeline towards production. This strategy has led to the recent addition
of the 8 Mile project to Metal Bank’s strong portfolio of gold assets. This project is located in close
proximity to the Mt Rawdon gold mine in south-east Queensland.
The operations of the consolidated entity are as described below:
Three Gold Projects – South-East Queensland Gold Region
MBK holds three gold projects prospective for intrusion related gold mineralisation (IRGS) within the northern
New England Orogen of Eastern Australia. This region hosts several gold mines including the Cracow (3Moz
Au), and Mt Rawdon (2Moz Au) gold mines as well as the historical Mt Morgan deposit (8Moz Au) shown in
Figure 1. Figure 2 below shows the intrusion related gold model and MBK projects.
The Triumph project has been the highest priority for MBK. Additional high-grade gold mineralisation
intersected in drilling during the year provides further geological evidence in support of a multi-million ounce
gold system predominantly concealed by shallow cover.
The Eidsvold project is centred on an historical goldfield (100,000oz Au historical production) with minimal
previous exploration completed beneath the surrounding sedimentary cover in the district. Regional airborne
geophysics and initial drill testing during the year provide support for large scale gold targets to occur beneath
the cover.
The 8 Mile project, currently an EPM
application, is centred on large-scale
alteration targets only 15km to the
north-east of the 2Moz Mt Rawdon
gold mine in south-east Queensland.
Figure 1: Location of MBK gold
projects in South-East Queensland,
Australia. Province gold endowment
of 18Moz Au
2
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
Figure 2: Intrusion related gold model for the Triumph, Eidsvold, and 8 Mile projects in Eastern Australia
Triumph Project (100% MBK)1
➢ A 5,680m shallow reverse circulation (RC) drill programme (average hole depth 60m) was completed,
with near-surface high-grade gold defined on five key prospects: Advance, Bald Hill, Big Hans, Super
Hans and New Constitution
➢ Bedrock drilling 6,180m (average hole depth 5m) has defined a new IRGS targets across the north
of the permit area
➢ Discovery of near-surface high-grade Au-Ag mineralisation at Big Hans and Super Hans prospects,
with gold mineralisation now defined over >500m at Big Hans prospect
➢ Additional high-grade Au-Ag mineralisation identified in drilling at New Constitution prospect
extending the discovery structure to over a 200m strike length and from near-surface to a depth of
greater than 250m
➢ Bald Hill prospect Au-Ag mineralisation was defined over an area of 2.4km with up to 1.09g/t Au in
soil sampling and a new mineralised zone was intersected in drilling adjacent to main Bald Hill gold
zone
➢ Discovery of near-surface high-grade Au-Ag mineralisation at Advance prospect, with soil
geochemistry up to 1.02g/t Au defined over more than 300m (open), which is coincident with
historical workings / mines
1 MBK ASX Release 27 July 2017, 07 Aug 2017, 04 Sept 2017, 15 Aug 2017, 16 Jan 2018, 31 Jan 2018, 13 Feb 2018, 13 Mar 2018, 03 Apr
2018, 12 June 2018
3
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
➢ Significant advances made towards unlocking a multi-million-ounce intrusion related gold system
responsible for the widespread high-grade gold mineralisation intersected near-surface
➢ Gold and multi-element geochemistry from bedrock data highlighted nine intrusion related gold
centres or ‘hot spots’ interpreted to represent the Au-Cu-Bi intrusive centres with multi-million-
ounce gold potential similar to other deposits in Eastern Australia
➢ Greenfields exploration success has converted a 1km2 historical goldfield into a 15km2 gold system
predominantly concealed by shallow cover
The Triumph project, comprising an area of 135km2, is located between the 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 (Figure 1).
Exploration by MBK on the Triumph project has discovered a large underexplored gold system around a
historical goldfield. The 15km2 gold system is 95% concealed beneath shallow sediment cover, which has
presented MBK with a unique opportunity and ‘first mover’ advantage to generate and drill test targets on
this previously unrecognised large gold system. Systematic exploration over the outcropping areas, which
constitute approximately 5% of the entire gold camp, has led to the discovery of high-grade gold
mineralisation in drilling on five prospects within the past two years.
Priority Gold Targets
During the year, MBK’s principal focus continued at Triumph where near-surface, high-grade Au-Ag drill
results were returned across priority targets.
A 5,680m shallow RC drill programme (average hole depth 60m) was completed during the year with
near-surface high grade gold defined on five key prospects: Advance, Bald Hill, Big Hans, Super Hans and
New Constitution. The results from these key prospects represent a significant advancement towards
unlocking a multi-million-ounce IRGS, interpreted as responsible for the widespread high-grade gold
mineralisation intersected near-surface.
Significant results from the drill programme include:2
•
Big Hans and Super Hans - initial and follow-up drill holes returning:
o 18m @ 4.0g/t Au, 15g/t Ag from surface
o 3m @ 6.5g/t Au, 13g/t Ag from 6m
o 3m @ 10.9g/t Au from 42m
o 2m @ 6.5g/t Au, 13g/t Ag from 33m
o 2m @ 7.5g/t Au from 1m
o 24m @ 1.1g/t Au from 12m
• New Constitution - additional near-surface high grade mineralisation intersected returning:
o 4m @ 13.2g/t Au, 21g/t Ag from 87m including 2m @ 25.6g/t Au, 40g/t Ag from 88m
o 6m @ 4.2g/t Au, 15g/t Ag from 112m
o 3m @ 6.3g/t Au, 10g/t Ag, 0.2% Zn from 53m
• Advance - additional near-surface high grade mineralisation intersected returning:
o 3m @ 25g/t Au, 17g/t Ag, 0.2% Pb, 0.2% Zn from 17m
•
Bald Hill - additional near-surface high grade mineralisation intersected returning:
o 2m @ 14.8g/t Au from 43m on a new mineralised zone
The gold mineralisation intersected during the drill programme is typical of outer halo or leakage above large
intrusion related gold deposits.
2 MBK ASX Release 27 July 2017, 07 Aug 2017, 04 Sept 2017, 15 Aug 2017, 16 Jan 2018, 31 Jan 2018, 13 Feb 2018, 13 Mar 2018, 03 Apr
2018, 12 June 2018
4
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
The exploration strategy at Triumph has been two-pronged; firstly, to investigate near-surface high-grade
gold mineralisation across multiple prospects and secondly, to use that drilling data to target the large
intrusion related gold systems and the associated multi-million-ounce gold potential.
Bedrock drilling (6,180m, average hole depth 5m) over structural targets revealed new kilometre-scale gold
anomalies across the northern area of the project and extensions to existing high-grade gold zones over the
southern area. In addition, gold and multi-element geochemistry from the bedrock data highlighted nine
intrusion related gold centres or ‘hot spots’ interpreted to represent the Au-Cu-Bi intrusive centres with
multi-million-ounce gold potential similar to other deposits in Eastern Australia. Each of the interpreted
centres are haloed by near-surface gold mineralisation which indicates ‘leakage’ above the interpreted ‘hot
spot’ intrusive centres.
A comprehensive review3 of the Triumph Project in conjunction with a leading intrusion related gold
consultant was completed in July/August 2018. This has resulted in the identification of a large new intrusive
complex potentially representing the centre of the entire gold system and located to the immediate west of
the Norton tonalite, which has been the focus of all exploration to this point. Nine gold centres have been
identified within the Norton tonalite as leakage off a central intrusive complex as apophyses or spines. Refer
to Figure 3.
Figure 3: Triumph Gold Camp – Intrusion Related Gold Targets
Triumph Project – Big Hans / Super Hans Prospects - High-Grade Au-Ag
Near-surface high-grade Au-Ag mineralisation was intersected in an initial drill programme at Big Hans and
Super Hans prospects defining a new target corridor over 1.5km long and 0.4km wide and predominantly
concealed by shallow cover. Initial results from Big Hans prospect returned up to 18m @ 4.0g/t Au from
surface. Super Hans prospect returned 3m @ 6.5g/t Au from 6m. Figure 4 shows the location of Big Hans and
Super Hans within the target corridor.
Follow-up drilling at Big Hans defined two main parallel high-grade Au structures each extending over >300m
and open along strike. Follow-up drilling at Super Hans defined a broad zone of near-surface gold
mineralisation >130m in length with a true width of 10m and open at depth and along strike to the north-
east.
Triumph Project – New Constitution Prospect - High-Grade Au-Ag
Drilling during the year continued to define additional near-surface high-grade Au-Ag mineralisation within a
200m long x 70m wide section of the >1.5km target mineralised zones at New Constitution. Over 1.5km of
prospective strike has been identified along two main parallel structural trends (‘discovery trend’ and the
3 MBK ASX Release 06 Aug 2018
5
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
‘western trend’) at New Constitution, with only 200m of strike systematically drilled on the ‘discovery trend’
to date (refer to Figure 4).
Drill results from the programme include:4
o 3m @ 9.5g/t Au from 23m
o 4m @ 13.2g/t Au from 87m, including 2m @ 25.6g/t Au from 88m
o 6m @ 4.2g/t Au from 112m
o 3m @ 6.3g/t Au from 53m
These drill results highlighted a broad vein network of high-grade mineralised structures (multiple subparallel
and crosscutting veins) not previously recognised. Potential exists to define further extensions to the
mineralized zone. Only very limited drilling has been completed to date on the other parallel structures which
have returned 1m @ 20.4g/t, 0.6% Zn from 266m and 1m @ 30g/t Au, 63g/t Ag, 0.9% Zn from 188m
highlighting two parallel structures. Refer to Figure 4 which shows target structures.
The RC drill programme has highlighted metal zoning within the target zone, providing greater confidence
that the mineralisation style is transitioning from the high-grade Au-Ag (Zn) style towards bulk tonnage Au-
Cu-Mo style. Drill core analysis has confirmed a direct connection between the widespread high-grade Au-Ag
(± Zn) mineralisation interpreted as ‘leakage’ from bulk tonnage Au-Cu-Mo systems.
The New Constitution prospect consistently shows elevated Zn associated with the high-grade gold
mineralisation. This is interpreted to represent the ‘outer halo leakage’ similar to other large intrusion related
gold deposits of eastern Australia, with drilling to date intersecting only the peripheral or ‘outer zones’ of a
potentially larger gold system. Metal zoning patterns within large intrusion related deposits of Eastern
Australia provide a useful targeting tool to guide exploration towards the centre of the system. The Mt Wright
Au deposit (1.3Moz Au) in North Queensland is an example of discovery through the definition of an outer Zn
halo above the gold deposit.
Figure 4: New Constitution, Big Hans and Super Hans prospect summary
4 MBK ASX Release 15 Aug 2017, 16 Jan 2018
6
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
Triumph Project – Bald Hill Prospect - High-Grade Au-Ag
Results from surface geochemical sampling (soil and rock sampling) completed at Bald Hill have delineated a
1.7km extension to the outcropping Au-Ag mineralization, with the system now defined over 2.4km of strike.
Only the western 400m of the system has been drilled to date returning near-surface high-grade Au-Ag
mineralisation. Highlights from the surface geochemical results include a 500m long strongly anomalous gold
zone of >100ppb Au (maximum 1.0g/t Au) with rock chip sampling returning up to 15.2g/t Au. Refer to
Figure 5.
Figure 5: Bald Hill and Advance mineralised trend and geochemistry
Triumph Project –Advance Prospect - High-Grade Au-Ag
During the year, soil sampling was undertaken over a window of outcrop exposed through shallow cover,
which defined a >100ppb Au in-soil anomaly over 300m in length (open) at the Advance prospect. The soil
sampling programme was the first systematic modern exploration ever undertaken on the prospect and is
coincident with a series of historical mines which, during the 1890’s, reported underground mining to depths
of approximately 100m and production of 4,500oz Au at an average grade of 93g/t.
An initial shallow drill programme was completed during the year which intersected high-grade gold
mineralisation and multiple underground stopes/workings associated with five high-grade gold mines over
an area of 400m x 400m (refer Figure 6 below). An undercut drill hole completed beneath high-grade
intersection of 1m @ 69.8g/t Au returned 1m @ 45g/t Au a further 20m down dip.
Drill results include:5
o 3m @ 25.0g/t Au from 17m, including 1m @ 69.8/t Au from 17m
o 1m @ 45.5g/t Au from 28m (down plunge extension of 1m @ 69.8g/t Au from 17m)
o 3m @ 9.6g/t Au from 14m
o 2m @ 8.9g/t Au from 19m
o 1m @ 8.9g/t Au from 31m (2m stope / void intersected immediately adjacent)
5 MBK ASX Release 13 Feb 2018, 03 April 2018
7
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
Figure 6: Drill plan showing results highlights and historical mines
The drill results indicate that Advance represents another major hydrothermal centre at the Triumph project
with the potential for significant addition to the project’s gold inventory. The high-grade gold mineralisation
Au (Pb-Zn) at Advance is typical of the ‘upper/outer’ halo of large intrusion related gold deposits within
Queensland.
Multi-element geochemistry and alteration intersected in the initial drill programme provided data to support
strong analogues between the near-surface mineralisation at Advance prospect and the ‘upper/outer’ halo
of the 1.3Moz Mt Wright deposit. IP geophysical anomalies (low resistivity moderate chargeability) 200m
below surface at Advance defined a target zone interpreted to represent the more intense/broad alteration
and mineralisation associated with a bulk tonnage style gold system also similar to Mt Wright6.
A pipeline of targets has been identified from exploration completed to date, which is summarised in Table
1.
6 Derek Webb and Barry James (2001) The application of Electrical Geophysics to Gold Exploration at Mt Wright, North Queensland.
ASEG Extended Abstracts 2001: 15th Geophysical Conference: pp. 1-4.
8
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
Table 1: Triumph project pipeline of targets.
Target
Attributes
Highlights
Bald Hill
Shallow high-grade Au-Ag - >400m
strike (open)
Up to 15m @ 10.3g/t Au, 76g/t Ag, 0.5% Cu from 9m in drilling
New Constitution
Shallow high-grade Au-Ag >400m
strike (open) – multiple parallel high-
grade structures
Up to 10m @ 26.9g/t Au, 165g/t Ag and 6% Zn from 51m in drilling
Advance
Historical gold mine (max. depth
100m)
3m @ 25.0g/t Au from 17m
Bald Hill East
1.7km extension to Bald Hill
30m @ 0.5g/t Au from surface (open)
Big Hans – Super Hans
New corridor 1.5km x 400m
Up to 18m @ 4.0g/t Au, 15g/t Ag from surface
Bonneville
>1km strike potential bulk tonnage
target
Up to 255g/t Au in float rock chips with coincident IP anomaly. No
previous drilling
Handbrake Hill
>1km strike potential
4m @ 10.55g/t Au from historical drilling
Old Welcome
>800m long shear zone
Up to 32.7g/t Au in rock chip
Cattle Creek
>1km long shear zone
Up to 53.5g/t Au in rock chip
SW Moly
500m x 500m bulk tonnage target
Strong Mo soil anomaly with rock chips to 14g/t Au
NE Regional
5km² untested area entirely
undercover within prospective
intrusive rocks
Untested area within fertile intrusive, masked by shallow cover.
Structures and alteration identified in detailed airborne magnetics data
D
E
C
N
A
V
D
A
l
s
d
e
i
f
n
w
o
r
B
S
D
L
E
I
F
N
E
E
R
G
Figure 7: Triumph gold camp showing prospect locations, high-grade Au-Ag structures, and bulk tonnage
targets.
9
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
Eidsvold Project (100% MBK)7
➢
Interpretation of airborne EM and magnetic geophysical survey results identified large-scale targets
concealed by cover sediments
➢ Large-scale untested gold targets were defined, with
intersecting gold
mineralisation beneath sediment cover associated with regional magnetic lows along strike from
historical goldfield
initial drill holes
➢ Drilling was successful in intersecting gold mineralisation associated with magnetic lows
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 1).
New airborne electromagnetics and magnetics geophysical data has identified large-scale gold targets
concealed beneath sedimentary cover and interpreted to represent breccia-style gold systems similar to
Mt Leyshon or Kidston gold mines in Queensland. Refer to Figure 8 showing the current priority targets.
During the year a preliminary RC drill programme was completed (five holes for 684m) targeting regional
geophysical anomalies beneath sediment cover. Two of the five drill holes targeted broad regional scale
magnetic lows, (airborne magnetics 400m line spacing), beneath cover sediment and intersected alteration
and mineralisation up to 3m @ 2.3g/t Au from 37m. Refer to Figure 8. These results are a significant
development for the project, affirming the exploration strategy of targeting magnetic lows as representing
alteration associated with gold mineralisation within the Eidsvold intrusive complex. This is a common
geophysical response in many Eastern Queensland intrusion-related gold deposits.
The Eidsvold intrusive complex extends over an area of 280km2; 85% of which is concealed by extensive
sediment cover. The entire complex is secured under exploration tenements held by Metal Bank.
Figure 8: Eidsvold Project high priority gold targets
7 MBK ASX Release 18 Sept 2018
10
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
8 Mile Project (EPM Application)8
8 Mile Project is centred on large-scale alteration targets only 15km to the north-east of the 2Moz Mt
Rawdon gold mine in south-east Queensland. Strong geophysical and geochemical data present similarities
to the upper portions of the Mt Rawdon gold deposit; a concept not identified or tested by past explorers.
Porphyry-style gold mineralisation has been intersected in previous drilling including 38m @ 0.46g/t Au
from 14m (PK1) and 22m @ 0.7g/t Au from surface (PK2) associated with one of the new large-scale
alteration targets.
The addition of the 8 Mile project enhances MBK’s strong gold portfolio in south-east Queensland.
Figure 9: 8 Mile EPM application showing large scale alteration targets identified in reprocessed airborne
magnetics data and along trend from the Mt Rawdon gold mine
8 MBK ASX Release 31 July 2018, 21 Aug 2018
11
METAL BANK LIMITED AND ITS CONTROLLED ENTITIES
REVIEW OF OPERATIONS
New Opportunities
The Company continues 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.
Corporate
Rights Issue Completion and Placement
Following very strong investor interest, the Company completed a pro-rata non-renounceable rights issue
and placement during the period to raise $3,355,365 (before costs). The shortfall was heavily over-subscribed
with strong demand from investors.
The funds raised have been used to accelerate and expand the Company’s exploration programmes at the
Triumph and Eidsvold Projects and for general working capital, including costs of the Rights Issue and
Placement.
The Company’s share capital after the completion of the rights issue and placement was as follows:
Shares on issue prior to Rights Issue
Rights Issue Shares
Placement Shares
Total Share Capital
Total 3 cent Options exercisable on or before 24 May
2019
Total 3 cent Options exercisable on or before 30
November 2018
713,841,427
142,768,285
25,000,000
881,609,712
167,768,285
15,000,000
The Company continues to be well funded to undertake its planned exploration programmes but may also
consider alternative funding structures for developing its projects which reduce risk and add shareholder
value.
Tony Schreck
Managing Director
28 September 2018
12
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
EPM 26660
8 Mile Project
Queensland
Queensland
Queensland
Queensland
Queensland
100%
100%
100%
100%
100%
EPM 26945 (Application)
Queensland
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.
13
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 25 September 2018 and is
available on the Company’s website: http://metalbank.com.au/corporate-governance
14
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 2018.
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
•
•
ANTHONY SCHRECK
EXECUTIVE DIRECTOR
B App Sc(Geol), GDipSc,
MAIG, GAICD
Mr Schreck has more than 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.
15
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS REPORT
GUY ROBERTSON
(CONTINUED)
Mr Robertson has over 9 years’ experience in ASX listed mineral exploration
companies and is currently a Director of Hastings Technology Metals Ltd.
Appointed 17 September 2012.
Other current public company directorships:
• Hastings Technology Metals Ltd
Former directorships in the last 3 years:
• Bellevue Gold 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
108,936,780
17,501,330
-
Options
12,676,000
9,250,000
-
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
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.
LIKELY FUTURE DEVELOPMENTS AND EXPECTED RESULTS
The primary objective of Metal Bank is to continue its exploration activities on its current exploration 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:
16
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS REPORT
• 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 $779,139 (2017: loss of
$541,340).
The Group’s operating income decreased to $53,694 (2017: $55,943) and relates purely to interest on funds
at bank.
Expenses increased to $832,833 (2017: $597,283) attributable to a write off of the Mt McKenzie project
relinquished, in the amount of $163,566.
Exploration costs increased to $7,984,603 (2017: $5,578,343) reflecting the exploration work during the work
on the Triumph project.
Net assets increased to $10,841,788 (2017: $8,412,892) reflecting a capital raise during the year of $3,355,365
(before costs), 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.
17
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS 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 performance incentives to ensure attraction, retention
and ongoing incentives for its directors and executives;
The Board determines payments to the non-executive directors and reviews their remuneration
annually, based on market practice, duties and accountability;
• 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; and
•
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 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.
DIRECTORS' AND EXECUTIVE OFFICERS’ EMOLUMENTS –
(a) Details of Directors and Key Management Personnel
(i)
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)
(ii)
Company Secretary
Sue-Ann Higgins (appointed 21 August 2013)
Remuneration report (continued)
(iii)
Key Management Personnel
Trevor Wright - Exploration Manager (appointed 4 July 2016)
18
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS REPORT
Other than the directors, the company secretary and the Exploration Manager, the Company had no Key
Management Personnel for the financial year ended 30 June 2018.
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.
Service Contracts
The Company has a service contract with the Managing Director providing for a salary of $230,000 plus
superannuation. The contract is cancellable by either party giving six months’ notice.
The Company has a service contract with the Company Secretary providing an annual fee of $84,000, and
cancellable by either party giving one months’ notice.
Parent & Group Key Management Personnel
2018
2017
Base
Salary
and Fees
Share
Based
Payments
Super-
annuation
Total
Base
Salary
and Fees
Share
Based
Payments
Super-
annuation
I. Scotland
A. Schreck
-
-
-
-
-
-
-
217,500
10,830
20,662
248,992
194,167
12,500
18,446
G. Robertson
50,000
-
T. Wright
S. Higgins
Totals
183,061
114,940
565,501
7,590
6,580
-
-
-
25,000
20,662
50,000
190,651
121,520
611,163
50,000
-
168,000
10,752
91,850
9,856
-
-
-
504,017
33,108
18,446
There are no other employment benefits, either short term, post-employment or long term, non-monetary
or otherwise other than those outlined above.
19
Total
-
226,113
50,000
178,752
101,706
555,571
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS REPORT
Remuneration report (continued)
(c) Employee Related Share-based compensation
Options
No options were issued to employees or to directors or executives as part of their remuneration for the year
ended 30 June 2018.
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.
During the reporting the Company issued 3,737,184 performance rights to a director and employees of the
Company. An amount of $25,000 was expensed to profit and loss in respect of these performance rights
during the period.
The Performance Period for the 2018 Performance Rights ended on 31 August 2018. After assessing the
vesting conditions, the Board determined that 1,254,585 of the 2018 Performance Rights had vested with
1,254,585 shares being issued on 20 September 2018. The balance of performance rights on issue lapsed as
at this date.
The Company is an exploration company and has no revenue from sales of product. Consequently,
earnings/loss and return to shareholders over the previous five years is not an appropriate benchmark for
the determination of executive remuneration, and has not been tabled.
Remuneration report – end.
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
5
5
5
5
5
5
In addition to the board meetings there were seven circular resolutions by the board and informal board
conferences during the financial period.
20
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS REPORT
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
of any act or omission whatsoever and howsoever occurring or in defending any proceedings, whether civil
or criminal.
The Company paid insurance premiums of $13,967 in September 2018 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.
INDEMNITY AND INSURANCE OF AUDITOR
The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the
auditor of the company or any related entity against a liability incurred by the auditor.
During the financial year, the company has not paid a premium in respect of a contract to insure the auditor
of the company or any related entity.
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 2018 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 2018
21
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Metal Bank Limited for the year ended 30 June 2018, 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
Gary N Sherwood
Partner
Sydney NSW
Dated: 28 September 2018
22
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
Note
2
10
3
4
Revenue
Administration expenses
Personnel costs
Compliance and regulatory expenses
Directors fees
Management and consulting fees
Travel expenses
Exploration expenditure written off
Finance costs
Unrealised foreign exchange loss
Share based payments
LOSS BEFORE INCOME TAX
Income tax expense
LOSS FOR THE YEAR
LOSS ATTRIBUTABLE TO MEMBERS OF
METAL BANK LIMITED
2018
$
53,694
(101,890)
(171,993)
(119,060)
(50,000)
(183,228)
(18,096)
(163,566)
-
-
(25,000)
2017
$
55,943
(55,924)
(157,340)
(104,958)
(50,000)
(147,847)
(33,790)
(185)
(5,000)
(14,649)
(27,590)
(779,139)
(541,340)
-
-
(779,139)
(541,340)
(779,139)
(541,340)
OTHER COMPREHENSIVE INCOME
-
-
TOTAL COMPREHENSIVE LOSS
(779,139)
(541,340)
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)
(779,139)
(541,340)
(779,139)
(541,340)
20
(0.10)
(0.08)
The Consolidated Statement of Profit or Loss and Other Comprehensive Income are to be read in conjunction
with the attached notes
23
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
Note
2018
$
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
Employee benefit obligations
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
5
6
7
8
10
11
12
2017
$
2,983,672
53,403
1,250
3,038,325
10,062
5,578,343
5,588,405
2,980,581
76,406
1,250
3,058,237
32,649
7,984,603
8,017,252
11,075,489
8,626,730
220,139
13,562
233,701
233,701
202,814
11,024
213,838
213,838
10,841,788
8,412,892
13
14
20,827,582
162,520
(10,148,314)
17,633,012
165,110
(9,385,230)
10,841,788
8,412,892
The Consolidated Statement of Financial Position are to be read in conjunction with the attached notes.
24
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
Issued
Capital
$
Reserves
Accumulated
Losses
$
Note
Total
$
Balance as at 1 July 2017
Loss for the year
Other comprehensive income for
the year
Total comprehensive loss for the
year
17,633,012
-
165,110
-
(9,385,230)
(779,139)
8,412,892
(779,139)
-
-
-
-
-
-
(779,139)
(779,139)
Issue of capital
Cost of issue of capital
Transfer from share based payment
Share based payment
Balance as at 30 June 2018
13
13
14
14
3,355,365
(172,330)
11,535
-
20,827,582
-
-
(27,590)
25,000
162,520
-
-
16,055
-
(10,148,314)
3,355,365
(172,330)
-
25,000
10,841,788
Balance as at 1 July 2016
Loss for the year
Other comprehensive
income for the year
Total comprehensive loss
for the year
Issue of capital
Cost of issue of capital
Share based payment
Balance as at 30 June
2017
11,720,252
-
137,520
-
(8,843,890)
(541,340)
3,013,882
(541,340)
-
-
13
13
14
6,086,465
(173,705)
-
-
-
-
27,590
-
-
(541,340)
(541,340)
-
-
-
6,086,465
(173,705)
27,590
17,633,012
165,110
(9,385,230)
8,412,892
The Consolidated Statement of Changes in Equity are to be read in conjunction with the attached notes.
25
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
NET CASH USED IN OPERATING ACTIVITIES
22
2018
$
2017
$
(621,080)
52,135
(568,945)
(531,854)
54,412
(477,442)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for fixed assets
Payment for exploration and evaluation
NET CASH USED IN INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares and options
Cost of share issue
NET CASH PROVIDED BY FINANCING
ACTIVITIES
(28,337)
(2,588,844)
(2,617,182)
(9,975)
(2,101,662)
(2,111,637)
3,355,366
(172,330)
5,378,610
(173,705)
3,183,036
5,204,905
NET (DECREASE)/INCREASE IN CASH HELD
(3,091)
2,615,826
Cash at the beginning of the financial year
CASH AT THE END OF THE FINANCIAL YEAR
5
2,983,672
2,980,581
367,846
2,983,672
The Consolidated Statement of Cash Flows are to be read in conjunction with the attached notes.
26
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
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.
b. 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.
27
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
Statement of significant accounting policies (continued)
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.
c. 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 $779,139 and had
net cash outflows from operating and investing activities of $3,186,127 for the year ended 30 June 2018.
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 cash at year-end of $2,980,581.
The consolidated entity had net assets of $10,841,788 as at 30 June 2018;
The ability of the Company to raise further capital to enable the consolidated entity to meet scheduled
exploration expenditure requirements, or to curtail exploration activity in order to conserve cash if
necessary.
The company has successfully raised capital of $3,355,365, before costs, 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.
d. Adoption of New and Revised Accounting Standards
Changes in accounting policies on initial application of Accounting Standards
In the year ended 30 June 2018, 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 2018. 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.
e.
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.
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
28
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
Statement of significant accounting policies (continued)
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.
f.
Current and Non-Current Classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or
consumed in the consolidated entity's normal operating cycle; it is held primarily for the purpose of
trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or
cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months
after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity's
normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12
months after the reporting period; or there is no unconditional right to defer the settlement of the liability
for at least 12 months after the reporting period. All other liabilities are classified as non-current.
g.
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.
29
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
Statement of significant accounting policies (continued)
(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.
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.
h.
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.
30
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
Statement of significant accounting policies (continued)
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.
i.
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.
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.
31
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
Statement of significant accounting policies (continued)
(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.
(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
32
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
Statement of significant accounting policies (continued)
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.
The fair value of financial guarantee contracts has been assessed using a probability-weighted
discounted cash flow approach. The probability has been based on:
the likelihood of the guaranteed party defaulting in a year period;
(i)
(ii) the proportion of the exposure that is not expected to be recovered due to the guaranteed
party defaulting; and
(iii) 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.
j.
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.
k.
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.
l.
Trade and Other Payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the
end of the financial year and which are unpaid. Due to their short-term nature they are measured at
amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days
of recognition.
33
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
Statement of significant accounting policies (continued)
m. Revenue Recognition
Interest revenue is recognised using the effective interest method. It includes the amortisation of any
discount or premium.
n. 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.
o.
Earnings Per Share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Metal Bank
Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted number of
ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares
issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to
take into account the after income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares and the weighted average number of ordinary shares assumed to have been
issued for no consideration in relation to dilutive potential ordinary shares.
p. Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes
in presentation for the current financial year.
q.
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.
r.
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 $7,984,603.
34
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
Statement of significant accounting policies (continued)
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 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.
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 2018. 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
3. LOSS FOR THE YEAR
Loss for the year is after charging:
Wages and salaries
Superannuation
Other employment related costs
Less capitalised exploration costs
Personnel costs
2018
$
53,694
-
53,694
2018
$
439,699
41,850
4,549
486,098
(314,105)
171,993
2017
$
55,943
-
55,943
2017
$
217,672
20,624
11,835
250,131
(92,791)
157,340
35
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
4. INCOME TAX EXPENSE
(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 27.5% (2017:27.5%)
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
2018
$
(779,139)
(214,263)
(9,500)
204,763
-
911,467
(204,763)
(706,704)
-
706,704
(706,704)
-
2017
$
(541,340)
(148,869)
-
148,869
-
816,819
(148,869)
(667,950)
-
667,950
(667,950)
-
(e) Tax losses
Unused tax losses for which no deferred tax asset
has been recognised
14,451,967
11,012,791
Potential deferred tax assets attributable to tax losses and exploration expenditure carried forward have not
been brought to account at 30 June 2018 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 27.5% at the reporting date.
5. CASH AND CASH EQUIVALENTS
Cash and cash equivalents
2,980,581
2,983,672
2018
$
2017
$
36
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
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.
2018
$
2017
$
17,438
58,968
76,406
20,024
33,379
53,403
2018
$
2017
$
1,250
1,250
1,250
1,250
8. PLANT AND EQUIPMENT
Cost
Opening balance, 1 July 2016
Additions
Closing balance, 30 June 2017
Opening balance, 1 July 2017
Additions
Closing balance, 30 June 2018
Depreciation
Opening balance, 1 July 2016
Depreciation
Closing balance, 30 June 2017
Opening balance, 1 July 2017
Depreciation
Closing balance, 30 June 2018
Written Down Value 30 June 2017
Written down value 30 June 2018
Motor Vehicle
Office Equipment
Total
-
-
-
-
23,955
23,955
-
-
-
-
(1,345)
(1,345)
-
22,610
3,635
9,975
13,610
13,610
4,382
17,992
(1,524)
(2,024)
(3,548)
(3,548)
(4,405)
(7,953)
10,062
10,039
3,635
9,975
13,610
13,610
28,337
41,947
(1,524)
(2,024)
(3,548)
(3,548)
(5,750)
(9,298)
10,062
32,649
37
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
9. CONTROLLED ENTITY
Parent Entity:
Metal Bank Limited
Subsidiary:
Roar Resources Pty Ltd
MBK Resources USA Inc.
Country of
Incorporation
Ownership %
2018
Ownership %
2017
Australia
Australia
United States of
America
-
100
100
-
100
100
10. EXPLORATION AND EVALUATION EXPENDITURE
2018
$
2017
$
Exploration and evaluation expenditure
7,984,603
5,578,343
Reconciliation of carrying amount
Balance at beginning of financial year
Expenditure in current year
Exploration expenditure written off
Balance at end of financial period
5,578,343
2,569,826
(163,566)
7,984,603
3,426,949
2,151,579
(185)
5,578,343
11. TRADE AND OTHER PAYABLES
CURRENT
Unsecured liabilities:
Trade payables
Sundry payables and accrued expenses
2018
$
2017
$
110,530
109,609
220,139
123,058
79,756
202,814
12. EMPLOYEE BENEFIT OBIGATIONS
CURRENT
Provision for annual leave, opening balance
Provision for year
Provision for annual leave, closing balance
2018
$
2017
$
11,024
2,538
13,562
-
11,024
11,024
38
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
13. SHARE CAPITAL
881,609,712 (2017 – 712,418,760)
fully paid ordinary shares
2018
2017
20,827,582
17,633,012
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:
2018
2017
No. Shares
No. Shares
2018
$
2017
$
712,418,760
-
-
509,536,630
116,666,667
62,620,330
17,633,012
-
-
11,720,252
3,500,000
1,878,610
-
23,595,133
-
707,855
1,422,667
142,768,285
25,000,000
-
-
-
-
-
11,535
2,855,365
500,000
(172,330)
-
-
-
(173,705)
881,609,712
712,418,760
20,827,582
17,633,012
Opening balance – start of
reporting period
Share Issue – 30 September 2016
Share Issue – 21 October 2016
Share issued on conversion of loan
25 Nov 2016
Vesting of performance rights – 4
September 2017
Rights issue – 24 November 2017
Share
issue placement – 29
November 2017
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.
Cash and cash equivalents
Trade and other receivables
Financial assets
Trade and other payables
Working capital position
2018
2017
$
$
2,980,581
2,983,672
76,406
1,250
53,403
1,250
(233,701)
(213,838)
2,824,536
2,824,487
39
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
Share capital (continued)
Share options
Movements in share options
At 1 July
Issued during the year
At 30 June
2018
No.
2017
No.
15,000,000
15,000,000
167,768,285
-
182,768,285
15,000,000
Grant/Issue Date
Expiry Date
Exercise Price
Number
Listed/Unlisted
2 December 2013
30 November 2018
3 cents
15,000,000
Unlisted
24 & 29 November 2017
24 May 2019
3 cents
167,768,285
Unlisted
The following table illustrates the number (No.) and weighted average exercise prices of and movements in
share options issued during the year:
Outstanding at the beginning of the
year
Granted during the year
Expired during the year
Exercised during the year
2018
No.
15,000,000
167,768,285
-
-
Outstanding at the end of the year
Exercisable at the end of the year
182,768,285
182,768,285
Weighted average
exercise price
2018
$
$0.03
$0.03
-
-
$0.03
$0.03
2017
No.
15,000,000
-
-
-
15,000,000
15,000,000
Weighted average
exercise price
2017
$
$0.03
-
-
-
$0.03
$0.03
Share options (continued)
The share options outstanding at the end of the year had a weighted average exercise price of $0.03 (2017:
$0.03) and weighted average remaining contractual life of 0.87 years (2017: 0.42 years).
Options granted during the year were free attaching options to rights issue shares.
The following share-based payment arrangements are in place during the current and prior periods:
Series
Number
Grant/Issue
Date
Expiry date
Exercise
Price
Fair Value at Grant
Date
Series 1
15,000,000
2/12/13
30/11/18
3 cents
137,520
Listed/
Unlisted
Unlisted
Expected volatility (%)
Risk-free interest free (%)
Expected life of option (years)
Exercise price ($)
Grant date share price
Series 1
78%
3.31%
6.0
3 cents
1.7 cents
40
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
Share capital (continued)
Performance rights
Movements in performance rights
At 1 July
Performance rights issued¹
Performance rights vested
Performance rights lapsed
At 30 June
2018
No.
2017
No.
3,402,667
-
3,737,184
3,402,667
(1,422,667)
(1,980,000)
-
-
3,737,184
3,402,667
¹An amount of $25,000 was expensed during the year relating to these performance rights (see Note 14).
The Company has the following options outstanding as at 30 June 2018.
The performance rights granted during the year have a performance period of one year to 31 August 2018.
50% of the vesting of performance rights is subject to achieving share price hurdles, with the balance of 50%
vesting on achieving certain exploration objectives and regulatory compliance. Each performance right on
vesting is converted into one ordinary share.
14. RESERVES
Option issue reserve
Movements in options issue reserve
Opening balance
Share based payment
Issue of shares on vesting of performance rights
Lapse of performance rights
Closing balance
2018
$
2017
$
162,520
165,110
165,110
25,000
(11,535)
(16,055)
162,520
137,520
27,590
-
-
165,110
41
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
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.
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
Provisions
2018
$
2,980,581
76,406
1,250
2017
$
2,983,672
53,403
1,250
3,058,237
3,038,325
220,139
13,562
233,701
202,814
11,024
213,838
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.
42
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
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.
Consolidated
Group
Financial liabilities
- due for payment:
Trade and other
payables
Provisions
Total contractual
outflows
Financial assets –
cash flows
realisable
Cash and cash
equivalents
Trade and other
receivables
Financial assets
Total anticipated
inflows
Net
inflow/(outflow)
on financial
instruments
Within 1 year
1 to 5 years
Over 5 years
Total
2018
$
2017
$
2018
$
2017
$
2018
$
2017
$
2018
$
2017
$
220,139
202,814
13,562
11,024
233,701
213,838
2,980,581
2,983,672
76,406
1,250
53,403
1,250
3,058,237
3,038,325
2,824,536
2,824,487
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
220,139
202,814
13,562
11,024
233,701
213,838
2,980,581
2,983,672
76,406
1,250
53,403
1,250
3,058,237
3,038,325
-
2,824,536
2,824,487
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 2018
Cash and cash equivalents
Borrowings
30 June 2017
Cash and cash equivalents
Borrowings
Carrying
Value
$
2,980,581
-
2,980,581
$
2,983,672
-
2,983,672
Change in profit
Change in equity
100bp
Increase
$
100bp
decrease
$
100bp
increase
$
100bp
decrease
$
29,806
-
29,806
$
29,8036
-
29,836
(29,806)
-
(29,806)
$
(29,836)
-
(29,836)
29,806
-
29,806
$
29,836
-
29,836
(29,806)
-
(29,806)
$
(29,836)
-
(29,836)
43
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
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 2018
Trade and other receivables
Trade and other payables
Provisions
30 June 2017
Trade and other receivables
Trade and other payables
Provisions
< 6 months
$
76,406
220,139
13,562
$
53,403
202,814
11,024
6 – 12
months
$
-
-
-
$
-
-
-
1- 5 years
>5 years
Total
$
$
-
-
-
$
-
-
-
$
76,406
220,139
13,562
$
53,403
202,814
11,024
-
-
-
$
-
-
-
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:
30 June 2018
Financial assets available for sale
ASX listed investments
30 June 2017
Financial assets available for sale
ASX listed investments
Carrying
Value
$
Change in profit
20%
increase
$
20%
decrease
$
Change in equity
20%
20%
decrease
increase
$
$
1,250
250
(250)
250
(250)
1,250
250
(250)
250
(250)
44
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
16. COMMITMENTS
The consolidated group currently has commitments for expenditure at 30 June 2018 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
2018
$
260,000
970,000
-
1,230,000
2017
$
160,000
490,000
-
650,000
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 2018. Other
than the Directors, secretary and exploration manager, the Company had no key management personnel for
the financial period ended 30 June 2018.
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
2018
$
565,501
20,662
25,000
611,163
2017
$
286,017
18,446
27,590
332,053
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
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.
45
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
Related Party Disclosures (continued)
(b) Key Management Personnel
Other than the Directors, Company Secretary and Exploration Manager, the Company had no key management
personnel for the financial period ended 30 June 2018.
(c) Remuneration Options: Granted and vested during the financial year ended 30 June 2018
There were no remuneration options granted during the financial year ended 30 June 2018.
(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 2017 to 30 June 2018
Balance at
beginning
of period
96,260,780
16,043,147
-
13,505,120
2,226,667
128,035,714
Received as
Remuneration
Purchased
Balance at
end of year
-
12,676,000
108,936,780
666,667
250,000
16,959,814
-
448,000
308,000
1,422,667
-
-
13,953,120
584,250
13,510,250
3,118,917
142,968,631
I. Scotland
A. Schreck
G. Robertson
T. Wright
S. Higgins
Period from 1 July 2016 to 30 June 2017
Balance at
beginning
of period
72,585,647
14,584,678
-
-
-
87,170,325
I. Scotland
A. Schreck
G. Robertson
T. Wright
S. Higgins
Received as
Remuneration
Purchased
Net Change
Other
Balance at
end of year
-
-
-
-
-
-
23,675,133
1,458,469
-
-
-
25,133,602
-
-
-
96,260,780
16,043,147
-
13,505,120
13,505,120
2,226,667
15,731,787
2,226,667
128,035,714
Options held by Officers and Directors
Period from 1 July 2017 to 30 June 2018
Balance at
beginning
of period
-
9,000,000
-
-
-
9,000,000
I. Scotland
A. Schreck
T. Wright
G. Robertson
S. Higgins
Received as
Remuneration
Net Change
Other
Expired during
period
Balance at
end of year
12,676,000
250,000
-
-
808,000
13,734,000
-
-
-
-
-
-
46
-
-
-
-
-
-
12,676,000
9,250,000
-
-
808,000
22,734,000
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
Related Party Disclosures (continued)
Period from 1 July 2016 to 30 June 2017
Balance at
beginning
of period
-
9,000,000
-
9,000,000
I. Scotland
A. Schreck
G. Robertson
Performance Rights
Received as
Remuneration
Net Change
Other
Expired during
period
Balance at
end of year
-
-
-
-
-
-
-
-
-
-
-
-
-
9,000,000
-
9,000,000
During the year 3,737,184 performance rights were issued. The rights had a performance period which expired
on 31 August 2018. After assessing the vesting conditions, the Board determined that 1,254,585 of the 2018
Performance Rights had vested and the balance of performance rights on issue have lapsed.
19. SEGMENT INFORMATION
The group’s operations are in one business segment being the resources sector. The group operates in
Australia. 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
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.
47
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
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.
Project segments
30 June 2018
Revenue
Interest and other income¹
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
¹Interest is earned in Australia.
30 June 2017
Revenue
Interest and other income¹
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
20. EARNINGS PER SHARE
Australian
Projects
$
Administration
Costs
$
Unallocated
$
Total
$
-
-
-
-
53,694
53,694
53,694
53,694
(163,566)
-
(163,566)
-
(163,566)
2,569,832
7,984,603
-
-
-
-
-
-
-
-
-
(669,267)
(669,267)
-
(644,267)
-
-
-
-
53,694
(163,566)
(669,267)
(832,833)
-
(779,139)
-
-
-
-
-
-
(597,283)
(597,283)
-
(597,283)
-
2,569,832
3,090,886 11,075,489
233,701
233,701
55,943
55,943
55,943
55,943
-
-
-
-
-
-
(597,283)
(597,283)
-
(597,283)
2,151,574
5,578,343
-
-
-
-
-
3,048,387
213,838
2,151,574
8,626,730
213,838
Reconciliation of earnings per share
Basic and diluted earnings per share
Profit/(loss) used in the calculation of the basic
earnings per share
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
48
2018
Cents
2017
Cents
(0.10)
(0.08)
(779,139)
(541,340)
813,156,811
654,187,284
-
813,156,811
-
654,187,284
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
21. AUDITORS REMUNERATION
Auditor of parent entity
Audit or review of financial reports
Non-audit services
2018
$
31,600
-
31,600
2017
$
31,100
-
31,100
22. CASH FLOW INFORMATION
Reconciliation of net cash used in operating activities with profit after income tax
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:
Increase in trade and other receivables
Increase/(decrease) 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.
2018
$
(779,139)
2017
$
(541,340)
25,000
163,566
5,750
186
27,590
-
2,024
16,984
(23,003)
38,694
(568,945)
(14,501)
31,801
(477,442)
49
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
DIRECTORS DECLARATION
23. PARENT ENTITY DISCLOSURES
Financial Position
Current Assets
Cash and cash equivalents
Trade and other receivables
Financial assets
Total Current Assets
Non-current Assets
Plant and equipment
Financial assets
Evaluation and exploration expenditure
Total Non-current assets
2018
$
2,977,683
5,717,161
1,250
8,696,094
32,649
2,269,836
-
2,302,485
2017
$
2,979,253
3,245,677
1,250
6,226,180
10,062
2,269,836
24,912
2,304,810
Total Assets
10,998,579
8,530,990
Current Liabilities
Trade and other payables
Employee benefit obligations
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Total loss
Total comprehensive loss
i. Contingent liabilities and contingent assets
143,229
13,562
156,791
107,074
11,024
118,098
156,791
118,098
10,841,788
8,412,892
20,827,582
162,520
(10,148,314)
17,633,012
165,110
(9,385,230)
10,841,788
8,412,892
(962,550)
(706,097)
(962,550)
(706,097)
The parent entity is responsible for the contingent liabilities and contingent assets outlined in note 17.
ii. Commitments
The parent entity is responsible for the commitments outlined in note 16.
iii. Related parties
Interest in subsidiaries is set out in note 9.
Disclosures relating to key management personnel are set out in note 18.
24. SIGNIFICANT AFTER BALANCE DATE EVENTS
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.
50
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 23 to 50, 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 2018 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.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the
Corporations Act 2001.
Guy Robertson
Director
Sydney, 28 September 2018
51
INDEPENDENT AUDITOR’S REPORT
To the Members of Metal Bank Limited
Opinion
We have audited the financial report of Metal Bank Limited (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 30 June 2018, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash
flows for the year then ended, and notes to the financial statements, including a summary of significant accounting
policies, and the directors' declaration.
In our opinion the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the Group's financial position as at 30 June 2018 and of its financial
performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
52
Key Audit Matter
How our audit addressed this matter
Carrying value of capitalised exploration and evaluation
Refer to Note 10 in the financial statements
As disclosed in Note 10, the Group held capitalised
exploration
of
evaluation
$7,984,603 as at 30 June 2018 which represents a
significant asset of the Group.
expenditure
and
The carrying value of exploration and evaluation
assets is subjective based on Group’s ability, and
intention, to continue to explore the asset. The
carrying value may also be impacted if the mineral
reserves and resources are commercially viable for
extraction, or where the carrying value of the asset
is not likely to be recouped through sale or
successful development. This creates a risk that the
amounts stated in the financial statements may not
be recoverable.
Our audit procedures included the following:
• Ensuring that the Group had the right to explore in
the relevant exploration area, which included
obtaining and assessing independent searches of
the company’s tenement holdings
• Assessing the Group’s intention to carry out
significant exploration and evaluation activity in the
relevant exploration area, which included an
assessment of the Group's future cash flow
forecasts, and enquiry of management and the
Board of Directors as to the intentions and strategy
of the Group
• Assessing the results of recent exploration activity
in the Group’s areas of interest, to determine if
there are any negative indicators that would
suggest a potential impairment of the capitalised
exploration and evaluation expenditure
• Assessing the ability to finance any planned future
exploration and evaluation activity.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2018, but does not include the financial report and the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
53
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar2.pdf.
This description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 18 to 21 of the directors' report for the year ended
30 June 2018.
In our opinion, the Remuneration Report of Metal Bank Limited for the year ended 30 June 2018, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM Australia Partners
Gary N Sherwood
Partner
Sydney NSW
28 September 2018
54
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
ADDITIONAL INFORMATION FOR LISTED COMPANIES
AS AT 21 SEPTEMBER 2018
The following additional information is required by the Australian Securities Exchange pursuant to Listing Rule
4.10. The information provided is current as at 21 September 2018 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
32
7
47
489
660
1,833
21,111
456,236
26,657,212
855,727,905
1,235
882,864,297
0.00%
0.00%
0.05%
3.02%
96.93%
100.00%
b. The number of shareholders who hold less than a marketable parcel is 246.
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
%
107,880,780
12.24%
52,442,814
53,072,545
5.95%
6.02%
91,596,712
10.39%
55
METAL BANK LIMITED AND ITS CONTROLLED ENTITY
ADDITIONAL INFORMATION FOR LISTED COMPANIES
AS AT 21 SEPTEMBER 2016
a. 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
BERNE NO 132 NOMINEES PTY LTD <600835 A/C>
PERSHING AUSTRALIA NOMINEES PTY LTD
BERNE NO 132 NOMINEES PTY LTD <602987 A/C>
CAPRICORN MINING PTY LTD
BERNE NO 132 NOMINEES PTY LTD <601299 A/C>
MR TREVOR DEAN WRIGHT + MRS JOHANNA HELEN WRIGHT
MR ANTHONY WILLIAM SCHRECK
PERSHING AUSTRALIA NOMINEES PTY LTD
Continue reading text version or see original annual report in PDF format above