Minotaur Exploration
Annual Report 2012

Plain-text annual report

Annual Report 2 0 1 2 CORPORATE DIRECTORY MINOTAUR EXPLORATION LTD ACN 108 483 601 ASX CODE MEP DIRECTORS Mr Derek N Carter Chairman Mr Andrew Woskett Managing Director Mr Richard M Bonython Non-Executive Director Dr Antonio P Belperio Executive Director COMPANY SECRETARY Mr Donald Stephens REGISTERED OFFICE c/o HLB Mann Judd (SA) Pty Ltd 167-169 Fullarton Road DULWICH SA 5065 PRINCIPAL PLACE OF BUSINESS 247 Greenhill Road DULWICH SA 5065 SHARE REGISTER Computershare Investor Securities Pty Ltd Level 5, 115 Grenfell Street ADELAIDE SA 5000 LEGAL ADVISORS O’Loughlins Lawyers Level 2, 99 Frome Street ADELAIDE SA 5000 BANKERS National Australia Bank 22–28 King William Street ADELAIDE SA 5000 AUDITORS Grant Thornton South Australian Partnership Chartered Accountants Level 1, 67 Greenhill Road WAYVILLE SA 5034 www.minotaurexploration.com.au This annual report covers both Minotaur Exploration Ltd (ABN 35 108 483 601) as an individual entity and the consolidated group (‘Group’) comprising Minotaur Exploration Ltd and its subsidiaries. The Group’s functional and presentation currency is Australian dollars. A description of the Group’s operations and of its principal activities is included in the review of operations and activities in the directors’ report on pages 15 to 16. The directors’ report is not part of the financial report. CONTENTS Highlights Chairman’s Report Managing Director’s Report Directors’ Report Auditor’s Independence Declaration Corporate Governance Financial Report ASX Additional Information Interests in Mining Tenements Information on Shareholdings 1 2 4 12 24 25 33 72 72 74 Cover images courtesy of Bryan Charlton Highlights 2012 • Continued to aggregate tenements prospective for IOCG style mineralisation in the Cloncurry region, with over 3600km 2 in grants and applications accumulated. • Confirmed discovery of a major ‘Ernest Henry’ style mineralised system at the Cotswold IOCG target. • Reported a maiden JORC resource for the Muster Dam iron deposit at the Mutooroo magnetite joint venture project. • Expanded the 2011 Exploration Target1 for Mutooroo, revealing that total tenement mineralisation could extend to 5.5 billion tonnes. • Expanded the Poochera Kaolin Pilot Plant with installation of a kiln drying circuit. Successfully produced a new line of hydrous and calcined kaolin product samples from the Carey’s Well deposit, again demonstrating its exceptionally high chemical purity and superior physical properties. • Upgraded the Carey’s Well JORC resource to Measured status, identifying a potential product yield of 8 million tonnes, sufficient to sustain 100,000 tonnes per annum of output for over 75 years. • Established a globally significant, inaugural Exploration Target1 for the regional Poochera kaolin deposits. • Successfully divested interests in the Tunkillia gold project and several IOCG style tenements in South Australia. • Reported a group profit after tax of $3.86 million. • Ended the financial year with $14.1 million in cash plus investments valued at $4.1 million and market capitalisation of $14.5 million. M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 1 Chairman’s R E P O R T Your Company, happily, maintained an active work pace despite very soft equity markets and declining investor sentiment carrying over from the previous year. While previous volatility has subsided the global outlook has deteriorated further and many commentators have called ‘the end of the mining Boom’. For junior companies, and explorers in particular, the Boom existed mainly in the media with little translation into speculative exploration stocks. Diminishing investor support for ‘small cap’ resource companies puts many of our peers under serious financial pressure. I’m pleased to say that Minotaur Exploration has been able to elevate above that turmoil, ending the fiscal year on possibly its best financial footing for the past decade. We reported a comfortable profit after tax and a strong end of year cash position. The Board constantly monitors our expenditure plans to ensure investment is applied to sound programmes in areas where real value can be created. We invest shareholders’ funds seeking to create wealth improvement through new discoveries, project advancement, asset management and good governance. We recorded satisfying levels of success on all fronts. Our technical group identified and defined new IOCG mineralising systems in the Cloncurry region and, while these have not yet shown economic grades of copper-gold, results confirm the validity of our geophysical target generation techniques and ability to pinpoint prospects under deep cover. Also, we grew the Exploration Target at the Mutooroo iron project by several million tonnes. Within Mutooroo, we reported a substantial maiden JORC iron resource. At Poochera, we reported a Measured high-grade kaolin resource and an adjacent ‘globally significant’ inaugural kaolin Exploration Target. New projects were generated, encouraging Japanese groups to enter a new joint venture for base metals exploration. The Poochera kaolin project moved further towards commercial realisation with production of a suite of high quality hydrous and calcined kaolin samples for introduction to prospective customers. As this report is being prepared product samples are on their way to numerous interested end-users in India, China and Asia. The Muster Dam magnetite resource scoping study was largely completed, subject to refinements dependent on collection of more metallurgical core for grind size optimisation. Native Title arrangements, now being finalized, will soon permit a resumption of diamond drilling for that purpose. A year ago, having regard to the parlous state of equity markets, we supported management’s decision to capture value in some of our project assets. This lead to the sale of our interests in the Tunkillia gold project and several IOCG style tenements in DEREK CARTER Chairman Minotaur Exploration Ltd 2 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 Andrew Hacon, Cubbaroo Station, Cloncurry. the Olympic Dam region, mostly for cash. Last year we also flagged our intent to reduce our exposure to industrial minerals, an objective we continue to move towards, as we focus more on copper-gold. This year we flag our aim of divesting the Muster Dam iron deposit and perhaps the entire Mutooroo project. We expect to get traction on this over the next half year as iron ore prices stabilise. The Board also endorsed management’s proposition that the Company reposition into the gold sector. We see many opportunities emerging to acquire or farm-in to advanced gold projects where operators may struggle due to cash limitations. Targets have been identified and preliminary discussions opened with potential partners. Dr Peter Gower retired at the 2011 annual general meeting and, on behalf of shareholders, I record our appreciation for his wise advice and guidance during his years of service to Minotaur Exploration. I also thank sincerely our shareholders, large and small, for their continuing interest and support as together we strive to convert prospectivity into discovery and new wealth. Yours truly, Derek Carter Chairman Diamond drilling, Cloncurry M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 3 Managing Director’s R E P O R T Oorindi Park, Cloncurry. ANDREW WOSKETT Managing Director Minotaur Exploration Ltd Cloncurry Mutooroo Border Arthurville Poochera Heathcote Stavely MINOTAUR’S PROJECT LOCATIONS I’m able to report that Minotaur enjoyed a constructive and positive 2012 financial year, in each of its exploration efforts, development projects and at a corporate level. The Company’s share price, however, has been held back for most of the period, reflecting the general drop in sentiment towards resource related stocks. Nonetheless, directors are of the view that value appreciation will prevail whereby our inherently under valued assets will be properly recognised as the market improves, or we are again able to monetise non-core assets, or discovery success is reported. 4 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 CORPORATE REVIEW The company’s goals are to seek, identify and develop new mineral deposits and, where economically viable, to advance resource assets into commercial production or to a value capturing point. Minotaur invested $9 million in prospect generation, exploration and project development during the 2012 financial year. Recoveries from joint venture operations totalled $4.8 million. Sales of exploration assets resulted in net cash inflows of $13.7 million. At 30 June the Company held a cash balance of $14.1 million. At the end of June the company had a market valuation of $14.5 million (at $0.14 per share), not at all adequately representing its cash and marked to market valuation in listed investments of $4.1 million. The Company reported a consolidated profit after income tax and impairments of $3.9 million. INVESTMENTS Shareholdings in listed investments were enhanced through the successful listing of Spencer Resources Ltd and an allotment in Mungana Goldmines Ltd as part consideration for the sale of Minotaur’s interest in the Tunkillia gold project. Minotaur’s equity investments as at 30 June 2012 were: ASX Code Holding at 30 June 2012 Minotaur % Closing price at 30 June 2012 Valuation Company ActivEX Mithril Resources AIV MTH 4,549,129 21,416,667 Mungana Goldmines MUX 3,076,923 Petratherm Platsearch Spencer Resources PTR PTS SPA 22,707,397 8,000,000 850,000 Thomson Resources TMZ 10,000,000 Total STRATEGIC DIRECTION 2.4% 9.8% 1.9% 15.3% 4.6% 4.3% 14.2% $0.017 $0.027 $0.325 $0.045 $0.066 $0.170 $0.050 $77,335 $578,250 $1,000,000 $1,021,833 $528,000 $144,500 $500,000 $3,849,918 Minotaur holds a diverse portfolio of resource assets. A rationalisation programme was initiated a year ago with the ultimate objective being to bring clarity of purpose and improve our focus on ‘hard rock’ minerals. The portfolio is segmented into distinct groups: base metals and gold; industrial minerals; and iron ore. STRATEGIC DIRECTION CONTINUED M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 5 STRATEGIC DIRECTION CONTINUED Our primary aim is to increase our exploration exposure to copper and gold. A secondary aim is to diminish our contributions to the industrial minerals and iron projects. Consistent with that aim and the plan notified in the past annual report, the Company will seek to reduce its involvement in the kaolin and gypsum projects. Similarly, a decision to divest the Mutooroo iron project was taken in conjunction with our joint venture partner. As we move towards these aims, we continue to improve and position those assets well so as to optimise value. Meanwhile, we are committed to gaining a position in an advanced gold project within Australia. A number of opportunities have been reviewed and a select target list generated. Resource drilling at Muster Dam. Figure 1: Airborne magnetic image for the Mutooroo area delineating strike extent of magnetic strata (in white bars) used for the Exploration Target. 6 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 OPERATIONS REVIEW Pursuant to the rationalisation strategy outlined above Minotaur sought to divest or relinquish several projects and build its exploration presence in the Cloncurry region of north Queensland. The following discussion is grouped within mineral types. MAGNETITE Having identified in 2011 a significant sequence of sedimentary iron mineralisation within EL3745, located on the Braemar Iron Formation in South Australia, Minotaur completed an extensive iron resource definition campaign on behalf of the Border Joint Venture (MEP 40.9%, Sumitomo Metal Mining Oceania Pty Ltd 59.1%). An inaugural JORC Inferred resource for one of the magnetite deposits, ‘Muster Dam’ (see deposit scale graphic on page 6) was released (Table 1), followed by an updated regional Exploration Target1, summarised in Table 2, for mineralisation not contained within the Muster Dam resource. Muster Dam Magnetite Resource Concentrate Grades JORC Category Billion Tonnes Magnetite DTR % Inferred 1.5 15.2 Fe % 69.8 Al2O3 % P2O5 % S% SiO2 % LOI % 0.4 0.002 0.002 2.8 -3.3 Table 1: Muster Dam Inferred Resource. Exploration Target Strike (km) Thickness (m) Volume (Bill m3) Density (t/m3) Tonnage (Bt) DTR Magnetite % Totals 16.2 to 21.3 80 to 450 0.7 to 1.4 2.96 to 3.11 2.2 to 4.2 15 to 18 Table 2: Mutooroo area Magnetite Exploration Target. A scoping study of a future magnetite mining and processing operation is being addressed. Based on extensive metallurgical samples and test results a mining scenario producing around 12.5 million tonnes per year of high-grade magnetite concentrate has been assessed. Additional core drilling for further metallurgical work is required to fine tune design and operating inputs and assumptions. Recognising the significant capital investment required for projects of this scale, the joint venture partners agreed to make the Muster Dam deposit available for sale. Preliminary discussions with a number of interested parties have been held. Subject to the form of any proposals emerging the joint venture may continue to move elements of the Exploration Target into resource status through further exploration and evaluation. COPPER-GOLD M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 7 COPPER - GOLD Minotaur’s strong orientation towards exploration for new deposits of iron oxide-copper gold (IOCG) mineralisation has been maintained. The search emphasis shifted from the Gawler Craton of South Australia towards the Cloncurry district with the sale of several tenements in the Olympic Dam region to BHP Billiton. Around Cloncurry, tenement applications are being progressively granted, solidifying Minotaur’s tenement footprint, as shown in Figure 2, which now comprises over 3,600km 2. One cluster of 14 tenements covering 515km2 north of the Ernst Henry mine is operated under joint venture with the Japan Oil, Gas and Metals National Corporation (JOGMEC), where JOGMEC is contributing $4 million by 2013 to earn a 51% interest. Nine diamond holes were completed. IOCG style mineralisation was intersected at Cormorant, Woolshed Waterhole and Clonagh with seven of the nine holes intersecting multiple bodies of sulphides, predominantly pyrrhotite but with variable amounts of chalcopyrite, resulting in broad intervals of low level (0.2 to 0.4%) copper mineralisation. Follow up drilling at Cormorant continued into the new financial year. With resolution of year-long land access formalities, we successfully drill tested the Cotswold IOCG target, a large coincident magnetic-gravity anomaly similar in amplitude to that occurring at the Cu-Au-magnetite Ernest Henry Mine 25 kilometres to the southeast. Subsequent to the end of the financial year, the Company reported a significant magnetite-breccia system had been intersected. BASE METALS: COPPER, LEAD, ZINC In New South Wales, a new joint venture was established with Mitsubishi Materials Corporation and Mitsubishi Corporation for the Arthurville base metals project, south-east of Dubbo. An airborne EM survey was completed over 77km2 of the tenement and geophysical targets generated are now being validated through field inspections. In Victoria, a limited program of roadside aircore drilling was completed to test single-line airborne EM anomalies for possible base metal mineralisation near Heathcote. The drilling confirmed interesting volcanic sequences, but no results of economic significance. New ground applications were made south of Ararat in western Victoria, considered prospective for volcanic-associated base metal mineralisation. Historic data are being collated ahead of field inspection in the next year. Other tenements and projects relinquished because of poor prospectivity or access difficulties during the year included the Cowra, Boorowa, Yorke Peninsula and Louth projects. 8 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 Top: Diamond drilling contractors, Cloncurry. Above: Gregg Morris (Senior Geologist) and Valeria Murgulov (Project Geologist) at Cloncurry. Ian Garsed (Exploration Manager). Ian Garsed (Exploration Manager) and Valeria Murgulov (Project Geologist) at Minotaur’s Cloncurry base. M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 9 Figure 2: Minotaur’s tenement position, Cloncurry, north Queensland. GOLD Granite outcrop at Cocunda Rock hole, near Poochera. Peter Soutter and Wayne Lynch operating kaolin pilot plant at Streaky Bay. Rotary calcining Kiln at Streaky Bay. The Lake Purdilla gypsum deposit is the largest undeveloped deposit in South Australia. 10 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 GOLD Minotaur sold its 55% interest in the Tunkillia gold project to ASX listed Mungana Goldmines Limited (ASX: MUX) for total consideration of $6 million comprising $4 million cash plus Mungana shares. The Company is now actively seeking gold project entry opportunities, primarily throughout the Western Australian goldfields where Minotaur has not previously had a presence. We seek advanced projects with established JORC resources where further exploration can add substantial value. INDUSTRIAL MINERALS: KAOLIN AND GYPSUM The Poochera Kaolin deposits (EL4575: MEP 100%) located 45km east of Streaky Bay on South Australia’s Eyre Peninsula were expanded through regional and deposit scale drill testing. The JORC Measured resource at Carey’s Well was reported as 16.3 million tonnes of very bright, very white kaolinised granite with an expected yield of 8 million tonnes of end product, based on analysis of both hydrous and calcined samples produced at the on-site Pilot plant. A scoping study assessment (presently incomplete) assumes a production target2 of 100,000 tonnes of product per year. The resource contains sufficient material to support a mine life in excess of 75 years at the assumed output rate. Deposits nearby were estimated to represent a globally significant Exploration Target 3 of 570-810 million tonnes of white kaolinised granite containing 40% to 60% of minus 45 micron kaolin (kaolinite ± Halloysite) with high ISO brightness (R457 (cid:1) 80). The Purdilla Gypsum deposit adjoins the Poochera Kaolin deposits and may provide a range of synergies for future co-development. An Exploration Target4 of 50-60 million tonnes of crystalline gypsum at a purity of 85-90% was estimated. Andrew Woskett Managing Director Information in this report, other than in respect of Poochera Kaolin deposits, that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Dr. A. P. Belperio, who is a full-time employee of the Company and a Fellow of the Australasian Institute of Mining and Metallurgy. Dr. A. P. Belperio has a minimum of 5 years’ experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Dr. A. P. Belperio consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Information in this report that relates to Exploration results, Exploration Targets and estimates of Mineral resources for the Poochera Kaolin deposits is based on information evaluated by Mr Lewis Barnes who is a Member of Australian Institute of Geoscientists and who has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as Competent Persons as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the “JORC Code”). Mr Barnes is a contract employee of Minotaur Exploration Pty Ltd and he consents to inclusion in the document of the information in the form and context in which they appear. M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 11 Directors’ R E P O R T Back from left: Richard Bonython, Donald Stephens (Company Secretary), Tony Belperio, Front from left: Andrew Woskett (Managing Director), Derek Carter (Chairman). Geophysical survey, Cloncurry. Your Directors present their report on the consolidated group for the financial year ended 30 June 2012. 12 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 DIRECTORS The names of the Directors in office at any time during, or since the end of, the year are: Mr Derek N Carter Chairman Mr Andrew Woskett Managing Director Mr Richard M Bonython Non-Executive Director Dr Peter Gower Non-Executive Director (retired 24 November 2011) Dr Antonio P Belperio Executive Director Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. Names, qualifications, experience and special responsibilites Mr Derek Carter BSc, MSc, FAusIMM (CP) (Chairman) Derek Carter has over 40 years experience in exploration and mining geology and management. He held senior positions in the Shell Group of Companies and Burmine Ltd before founding Minotaur Gold Ltd in 1993 and is currently Chairman of Minotaur Exploration. He is the Chairman of Petratherm Ltd, is a board member of Mithril Resources Ltd, Blackthorn Resources Ltd and Toro Energy Ltd (all ASX Listed entities), and the AusIMM; is former President and Vice President of the South Australian Chamber of Mines and Energy, former board member of the Australian Gold Council, and is a member of the South Australian Resources Industry Development Board and the South Australian Minerals and Petroleum Experts Group. He received AMEC’s Prospector of the Year Award (jointly) in 2003, the AusIMM’s President Award in 2010 and is a Centenary Medalist. As Chairman of Minotaur Exploration Ltd, he is responsible for the management of the board as well as the general strategic direction of the Company. Mr Andrew Woskett B Civ Eng, M Comm Law (Managing Director) Andrew Woskett has over 30 years project and corporate experience in the mining industry. He has had senior responsibility for a variety of Australian mining landmarks, including development of the Kalgoorlie Super Pit, Kanowna Belle and Marymia gold mines and numerous expansions of the Bougainville copper/gold mine. He advised on development strategies for the proposed open pit expansion of the Olympic Dam mine and formulated several new significant iron ore projects in Western Australia. In his prior role as Managing Director of Ballarat Goldfields he consolidated five regional goldfields under single ownership and initiated the first modern underground mine development beneath Ballarat. Mr Woskett was the founding managing director of Spitfire Oil Ltd, a coal-to-liquids developer, which he listed on AIM. He is a Fellow of the Australasian Institute of Mining and Metallurgy and has a Masters degree in Commercial Law. DIRECTORS CONTINUED M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 13 Directors’ R E P O R T DIRECTORS CONTINUED Mr Richard Bonython B Ag Sc (Non-Executive Director) Richard Bonython was a director of Minotaur Gold Ltd for seven years before retiring in 2001, and retired as Chairman of Diamin Resources NL in 1999 having been a director of that company for 15 years. He was executive director of Pioneer Property Group Ltd for over 15 years and has experience of over 45 years in the building, rural and mineral industries. He is a member of the audit committee and provides administration services to the company. He is also a director of Mithril Resources Ltd and Petratherm Ltd (both ASX Listed entities). Dr Peter Gower PhD, FGS (Non-Executive Director) Retired 24 November 2011 Peter Gower holds a PhD in geology from the University of Liverpool. His subsequent career in the mining industry includes senior exploration positions in Australia, USA and Africa, working for various subsidiaries of Billiton (including Billiton International Services Ltd) and the Royal Dutch/Shell Group of Companies. He was previously a director of Rey Resources Ltd (retired 19 February 2007) and Mithril Resources Ltd (retired 18 November 2008). Dr Antonio Belperio BSc (Hons), PhD FAusIMM (Executive Director) Dr Belperio has an Honours Degree in Geology from the University of Adelaide, a PhD from James Cook University, and a diverse background in a wide variety of geological disciplines, including marine geology, environmental geology and mineral exploration. He has 35 years of experience in university, government and the mineral exploration industry. This has included senior positions in the South Australian Department of Minerals and Energy where he led the regional geological investigations group and was pivotal in the Department’s move to digital geological information systems. Dr Belperio has been Chief Geologist of the Minotaur Group since 1997, when it originated as Minotaur Gold, subsequently Minotaur Resources and currently Minotaur Exploration. He played a key role in the strategic area and target selection, and the exploration program that led to the iron oxide copper-gold discovery at Prominent Hill, 130 kilometres northeast of the Olympic Dam mine in South Australia and was awarded (jointly) AMEC’s Prospector of the Year Award in 2003. He is a member of the Company’s audit committe and a director of ASX listed Thomson Resources Ltd (ASX:TMZ) and was recently awarded the Bruce Webb Medal by the South Australian Division of the Geological Society of Australia for his contributions to Earth Sciences. COMPANY SECRETARY Donald Stephens BAcc, FCA Donald Stephens is a Chartered Accountant and corporate adviser with over 20 years experience in the accounting industry, including 14 years as a partner of HLB Mann Judd (SA) Pty Ltd, Chartered Accountants. He is a non-executive director of Papyrus Australia Ltd and Mithril Resources Ltd and is company secretary to Toro Energy Ltd and Petratherm Ltd (all ASX Listed entities). He holds other public company secretarial positions and directorships with private companies and provides corporate advisory services to a wide range of organisations. 14 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 REVIEW OF OPERATIONS Minotaur maintained a strong exploration focus during the financial year and despite trying financial conditions, ended the year in significantly better financial shape reporting a consolidated profit after income tax of $3,863,912. At the Border Joint Venture with Sumitomo Metal Mining Oceania Pty Ltd (Sumitomo 59.1%), resource definition drilling was completed at the Muster Dam Magnetite prospect culminating in a significant maiden Inferred Resource estimate (Table 1) and an updated regional Exploration Target1 (Table 2). Exhaustive metallurgical testwork is contributing to a detailed Scoping Study based on the Muster Dam JORC resource. Elsewhere on the Border Joint Venture tenements, base metal target generation is proceeding with a range of new drill targets expected to be drill tested in the next year. Muster Dam JORC Resource Concentrate Grades Category Inferred Billion Tonnes Magnetite DTR % 1.5 15.2 Fe % 69.8 Al2O3 % P2O5 % S% SiO2 % 0.4 0.002 0.002 2.8 LOI % -3.3 Table 1: Muster Dam Inferred Resource. Exploration Target Strike (km) Thickness (m) Volume (Bill m3) Density (t/m3) Tonnage (Bt) DTR Magnetite % Totals 16.2 to 21.3 80 to 450 0.7 to 1.4 2.96 to 3.11 2.2 to 4.2 15 to 18 Table 2: Magnetite Exploration Target. Elsewhere in South Australia, preparations for innovative 3D electrical geophysical work on the Aphrodite target were put on hold when the Company received a significant offer to purchase the Roxby area tenements. The Company subsequently agreed to sell the tenements to a subsidiary of BHP Billiton for net $9.5 million cash. During the year partial divestment occurred in a number of Southern Gawler Ranges tenements through the successful listing of Spencer Resources on the ASX. In addition, an offer to purchase the Company’s 55% interest in the Tunkillia Gold Project was accepted with Minotaur receiving a mix of cash and shares in Mungana Goldmines Ltd (ASX : MUX). At the Poochera Kaolin Project, processing of kaolin samples at the Company’s on-site laboratory confirmed the exceptional brightness and whiteness of both hydrous and calcined products. Infill drilling and processing allowed most of the Carey’s Well “bright white” JORC reported kaolin resource to be upgraded from Inferred to Measured status. In addition, a globally-significant Exploration Target2 of 570-810 million tonnes of white kaolinised granite with yield of 50% kaolin, was determined across several deposits within the project area. REVIEW OF OPERATIONS CONTINUED M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 15 Directors’ R E P O R T REVIEW OF OPERATIONS CONTINUED The Purdilla Gypsum Project adjoins the Poochera Kaolin deposits and may provide a range of synergies for future development. An Exploration Target3 of 50-60 million tonnes at a purity of 85-90% gypsum is estimated. With the divestment of a number of South Australian properties, exploration priorities shifted to the Cloncurry district of northwest Queensland where a large number of tenement applications are being progressively granted. One cluster of 14 Cloncurry tenements is under Joint Venture with JOGMEC, who are earning a 51% interest through expenditure of $4 million. Drilling on the JOGMEC JV tenements took place in July- August (3 holes) and October-November (6 holes). Iron oxide copper gold (IOCG) style mineralisation was intersected at Cormorant, Woolshed Waterhole and Clonagh with seven of the nine holes intersecting multiple bodies of sulphides, predominantly pyrrhotite but with variable amounts of chalcopyrite, resulting in broad intervals of low level (0.2 to 0.4%) copper mineralisation. Following extensive land access formalities, the Cotswold IOCG target, a large coincident magnetic- gravity anomaly similar in amphitude to that occurring at the Cu-Au-magnetite Ernest Henry Mine 25 kilometres to the southeast, was tested with 2 holes. Subsequent to the end of the financial year, the Company reported a significant magnetite-breccia system had been intersected. In New South Wales, Joint Venture negotiations were completed with Mitsubishi Materials Corporation and Mitsubishi Corporation for the Arthurville Base Metals Project. An airborne EM survey was completed over 77km 2 of the tenement and geophysical targets generated are now being validated through field inspections. In Victoria, a limited program of roadside aircore drilling was completed to test single-line airborne EM anomalies for possible base metal mineralisation. The drilling confirmed interesting volcanic sequences, but no results of economic significance. Further ground applications were made in western Victoria considered prospective for volcanic-associated base metal mineralisation and historic data are being collated ahead of field inspection in the next year. Other tenements and projects relinquished because of poor prospectivity or access difficulties during the year included the Cowra, Boorowa, Yorke Peninsula and Louth Projects. The Company chose to selectively return to Nova Scotia, Canada, during the year. Having relinquished its extensive tenement holdings there last year, the Company is returning under a new option agreement to drill test the Copper Lake gravity target. Advisory Statements * The term “Exploration Target” should not be misconstrued as an estimate of Mineral Resources and Reserves as defined in the JORC Code (2004) and the term has not been used in that context. The term is conceptual in nature and it is uncertain if further exploration will result in the determination of a Mineral Resource. Refer Clause 18 of the JORC Code (2004). Information in this report, other than in respect of Poochera Kaolin deposits, that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Dr. A. P. Belperio, who is a full-time employee of the Company and a Fellow of the Australasian Institute of Mining and Metallurgy. Dr. A. P. Belperio has a minimum of 5 years’ experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Dr. A. P. Belperio consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Information in this report that relates to Exploration results, Exploration Targets and estimates of Mineral resources for the Poochera Kaolin deposits is based on information evaluated by Mr Lewis Barnes who is a Member of Australian Institute of Geoscientists and who has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as Competent Persons as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the “JORC Code”). Mr Barnes is a contract employee of Minotaur Exploration Pty Ltd and he consents to inclusion in the document of the information in the form and context in which they appear. 16 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 OPERATING RESULTS The consolidated profit of the group after providing for income tax amounted to $3,863,912 (2011: Loss – $1,239,194). INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY AND RELATED BODIES CORPORATE As at the date of this report, the interests of the directors in the shares and options of Minotaur Exploration Ltd were: Number of Ordinary Shares Number of Options over Ordinary Shares Mr Derek N Carter 2,156,805 Mr Andrew Woskett - Mr Richard M Bonython 1,502,000 Dr Antonio P Belperio 830,306 1,200,000 2,000,000 900,000 1,300,000 DIVIDENDS PAID OR RECOMMENDED No dividends were paid or declared since the start of the financial year. No recommendation for payment of dividends has been made. PRINCIPAL ACTIVITIES The principal activities of the consolidated group during the financial year were: • To continue to seek extensions of areas held and to seek out new areas with potential for mineralisation; and • To evaluate results achieved through surface sampling, drilling and geophysical surveys carried out during the year. RISK MANAGEMENT The Group takes a proactive approach to risk management. The Board is responsible for ensuring that risks, and also opportunities, are identified on a timely basis and that the Group’s objectives and activities are aligned with the risks and opportunities identified by the Board. The Group believes that it is crucial for all Board members to be a part of this process, and as such the Board has not established a separate risk management committee. The Board has a number of mechanisms in place to ensure that management’s objectives and activi- ties are aligned with the risks identified by the Board. These include the following: • Board approval of a strategic plan, which encompasses the Group’s vision, mission and strategy statements, designed to meet stakeholders’ needs and manage business risk. RISK MANAGEMENT CONTINUED M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 17 Directors’ R E P O R T RISK MANAGEMENT CONTINUED • Implementation of Board approved operating plans and budgets and Board monitoring of progress against these budgets, including the establishment and monitoring of performance indicators of both a financial and non-financial nature. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years. FUTURE DEVELOPMENTS Disclosure of information regarding likely developments in the operations of the consolidated entity in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the consolidated entity. Accordingly, this information has not been disclosed in this report. ENVIRONMENTAL REGULATIONS The Group is aware of its responsibility to impact as little as possible on the environment, and where there is any disturbance, to rehabilitate sites. During the period under review the majority of work carried out was in South Australia and Queensland and the entity followed procedures and pursued objectives in line with guidelines published by the South Australian and Queensland Governments. These guidelines are quite detailed and encompass not only the impact on owners and land users, heritage, health and safety and proper restoration practices. The Group supports this approach and is confident that it properly monitors and adheres to these objectives, and any local conditions applicable, both in South Australia and elsewhere. The Group has not been in breach of any State or Commonwealth environmental rules or regulations during the period. The Company’s Canadian operations follow regulations outlined in the Nova Scotia Mining Laws. The Company is in compliance with the relevant environmental laws in Nova Scotia. SUBSEQUENT EVENTS No matters or circumstances have arisen since 30 June 2012 that has significantly affected, or may significantly affect the operations of the group. UNISSUED SHARES At the date of this report, the following options to acquire ordinary shares in the Company were on issue: 18 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 Issue Date Expiry Date Exercise Price Balance at 1 July 2011 Net Issued/ (Exercised or expired) during Year Balance at 30 June 2012 07/01/2007 12/01/2012 07/12/2007 12/12/2012 08/01/2008 13/01/2013 08/12/2008 13/12/2013 10/05/2010 15/05/2015 10/05/2010 15/08/2015 10/05/2010 16/02/2016 30/09/2011 29/09/2016 $0.80 $0.77 $0.55 $0.25 $0.40 $0.40 $0.55 $0.21 400,000 400,000 120,000 410,000 4,300,000 1,000,000 1,000,000 - 7,630,000 (400,000) - - - - - - 1,740,000 1,340,000 - 400,000 120,000 410,000 4,300,000 1,000,000 1,000,000 1,740,000 8,970,000 SHARE OPTIONS Shares issued as a result of exercise of options No shares were issued during the financial year as a result of the exercise of options (2011: 100,000 options were exercised). Lapse of options On 15 March 2012 and 4 June 2012 respectively, the Group announced that 750,000 unlisted options issued under the Company’s employee share option plan and options on issue to directors lapsed. New options issued On the 30 September 2011, the Company issued a total of 2,090,000 unlisted options to employees as an incentive. The options are exercisable at $0.21 and expire on 29 September 2016. INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS To the extent permitted by law, the Company has indemnified (fully insured) each director and the secretary of the Company for a premium of $15,694. The liabilities insured include costs and expenses that may be incurred in defending civil or criminal proceedings (that may be brought) against the officers in their capacity as officers of the Company or a related body, and any other payments arising from liabilities incurred by the officers in connection with such proceedings, other than where such liabilities arise out of conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the Company. REMUNERATION REPORT – AUDITED M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 19 Directors’ R E P O R T REMUNERATION REPORT – AUDITED This report outlines the remuneration arrangements in place for Directors and Senior Executives of Minotaur Exploration Ltd. Remuneration philosophy The Board is responsible for determining remuneration policies applicable to directors and senior executives of the Group. The broad policy is to ensure that remuneration properly reflects the individuals’ duties and responsibilities and that remuneration is competitive in attracting, retaining and motivating people with appropriate skills and experience. At the time of determining remuneration consideration is given by the Board to the Group’s financial performance. Employment contracts The employment conditions of the Managing Director, Mr Andrew Woskett, are formalised in a consultancy agreement. Mr Woskett commenced as a consultant to Minotaur on 1 March 2010 and his annual retainer is $347,000 per annum, exclusive of GST (effective 1 January 2012). The Company may terminate the consultancy agreement without cause by providing three (3) months written notice or making payment in lieu of notice, based on the annual retainer. Termination payments are generally not payable on resignation or dismissal for serious misconduct. In the instance of serious misconduct the Company can terminate the agreement at any time. The employment conditions of the executive director, Dr Antonio Belperio, are formalised in a contract of employment. Dr Belperio commenced employment on 1 January 2005 and his gross salary, inclusive of the 9% superannuation guarantee, is $275,000 per annum (effective from 1 January 2012). The Company may terminate the employment contract without cause by providing six (6) months written notice or making payment in lieu of notice, based on the annual salary component. Termination payments are generally not payable on resignation or dismissal for serious misconduct. In the instance of serious misconduct the Company can terminate employment at any time. The employment conditions of the Exploration Manager, Mr Ian Garsed, are formalised in a contract of employment. Mr Garsed commenced employment on 15 March 2011 and his gross salary, inclusive of the 9% superannuation guarantee, is $190,000 per annum (effective from 1 January 2012). The Company may terminate the employment contract without cause by providing one (1) month written notice or making payment in lieu of notice, based on the annual salary component. Termination payments are generally not payable on resignation or dismissal for serious misconduct. In the instance of serious misconduct the Company can terminate employment at any time. The employment conditions of the Commercial Manager, Mr Varis Lidums, are formalised in a contract of employment. Mr Lidums commenced employment on 1 March 2011 and his gross salary, inclusive of the 9% superannuation guarantee, is $190,000 per annum (effective from 1 January 2012). 20 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 The Company may terminate the employment contract without cause by providing one (1) month written notice or making payment in lieu of notice, based on the annual salary component. Termination payments are generally not payable on resignation or dismissal for serious misconduct. In the instance of serious misconduct the Company can terminate employment at any time. Key management personnel remuneration and equity holdings The Board currently determines the nature and amount of remuneration for board members and senior executives of the Group. The policy is to align director and executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long-term incentives. The non-executive directors and other executives receive a superannuation guarantee contribution required by the government, which is currently 9%, and do not receive any other retirement benefits. Some individuals, however, may choose to sacrifice part of their salary to increase payments towards superannuation. All remuneration paid to directors and executives is expensed as incurred. Executives are also entitled to participate in the Group share option scheme. Options are valued using the Black-Scholes methodology. The board policy is to remunerate non-executive directors at market rates based on comparable companies for time, commitment and responsibilities. The board determines payments to non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. Director remuneration for the year ended 30 June 2012 and 30 June 2011 Primary Benefits Post Employment Share-based Payments Salary & Fees Bonus Superannuation Options Mr Derek Carter Mr Andrew Woskett Mr Richard Bonython Dr Peter Gower Dr Antonio Belperio Total 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 68,000 80,000 337,846 309,231 66,925 85,780 - 42,000 225,412 198,589 698,183 715,600 - - 41,250 - - - - - 32,500 - 73,750 - 21,380 7,200 - - - - 18,312 3,780 42,088 49,041 81,780 60,021 - - - 133,777 - - - - - - - 133,777 Total $ 89,380 87,200 379,096 443,008 66,925 85,780 18,312 45,780 300,000 247,630 853,713 909,398 REMUNERATION REPORT – AUDITED CONTINUED M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 21 Directors’ R E P O R T REMUNERATION REPORT – AUDITED CONTINUED Remuneration of key management personnel for the year ended 30 June 2012 and 30 June 2011 Primary Benefits Post Employment Share-based Payments Total Mr Ian Garsed Mr Richard Flint Mr Varis Lidums Total Salary & Fees Bonus Superannuation 2012 2011 2012 2011 2012 2011 2012 2011 170,156 50,269 155,257 146,082 169,725 55,046 495,138 251,397 10,000 - 10,000 - 10,000 - 30,000 - 17,494 4,524 17,243 16,417 15,275 4,954 50,012 25,895 Options 17,650 - 5,295 - 17,650 - 40,595 - $ 215,300 54,793 187,795 162,499 212,650 60,000 615,745 277,292 Bonuses Key management personnel were awarded bonus payments for superlative performance related to a redefinition of roles and objectives early in the financial year. Options granted as part of remuneration 30 June 2012 Grant Date Grant Number Vesting Date Value per Option at Grant Date Exercise Price Total Fair Value % of Remuneration Mr Ian Garsed 30/09/2011 250,000 30/09/2011 Mr Richard Flint 30/09/2011 75,000 30/09/2011 Mr Varis Lidums 30/09/2011 250,000 30/09/2011 $0.071 $0.071 $0.071 $0.21 $0.21 $0.21 17,650 5,295 17,650 8.2 2.8 8.3 HLB Mann Judd (SA) Pty Ltd has received professional fees for accounting, taxation and secretarial services provided during the year amounting to $149,204 (2011: $143,377) (inclusive of GST). Donald Stephens, the Company Secretary, is a consultant with HLB Mann Judd (SA) Pty Ltd. USE OF RMUNERATION CONSULTANTS During the financial year, there were no remuneration recommendations made in relation to key management personnel for the Company by any remuneration consultants. VOTING AND COMMENTS MADE AT THE COMPANY’S 2011 ANNUAL GENERAL MEETING Minotaur Exploration Ltd received more than 96% of “yes” votes on its remuneration report for the 2011 financial year by proxy. The company did not receive any specific feedback at the AGM on its remuneration report. 22 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 DIRECTORS’ MEETINGS The number of meetings of directors (including meetings of committees of directors) held during the year and the number of meetings attended by each director were as follows: Director Mr Derek Carter Mr Andrew Woskett Mr Richard Bonython Dr Peter Gower Dr Antonio Belperio Directors’ Meetings Audit Committee* Eligible Attended Eligible Attended 11 11 11 5 11 11 11 11 4 11 - 1 2 1 - - 1 2 1 - PROCEEDINGS ON BEHALF OF THE GROUP No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of those proceedings. AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES Grant Thornton South Australian Partnership, in its capacity as auditor for Minotaur Exploration Ltd, has not provided any non-audit services throughout the reporting period. The auditor’s independence declaration for the year ended 30 June 2012 as required under section 307C of the Corporations Act 2001 has been received and can be found on page 24. Signed in accordance with a resolution of the directors Derek Carter Chairman 21 September 2012 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 23 Auditor’s Independence Declaration T O T H E D I R E C T O R S O F M I N O T A U R E X P L O R A T I O N L I M I T E D Level 1, 67 Greenhill Rd Wayville SA 5034 GPO Box 1270 Adelaide SA 5001 T 61 8 8372 6666 F 61 8 8372 6677 E info.sa@au.gt.com W www.grantthornton.com.au AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF MINOTAUR EXPLORATION LIMITED In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Minotaur Exploration Limited for the year ended 30 June 2012, I declare that, to the best of my knowledge and belief, there have been: a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b no contraventions of any applicable code of professional conduct in relation to the audit. GRANT THORNTON SOUTH AUSTRALIAN PARTNERSHIP Chartered Accountants J L Humphrey Partner Adelaide, 21 September 2012 Grant Thornton South Australia Partnership ABN 27 244 906 724 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia. Liability limited by a scheme approved under Professional Standards Legislation 24 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 Corporate G O V E R N A N C E INTRODUCTION The board of directors is responsible for the corporate governance of Minotaur Exploration Ltd (the Company) and its controlled entities (the Group). The Group operates in accordance with the corporate governance principles as set out by the ASX corporate governance council and required under ASX listing rules. The Group details below the corporate governance practices in place at the end of the financial year, all of which comply with the principles and recommendations of the ASX corporate governance council unless otherwise stated. Some of the charters and policies that form the basis of the corporate governance practices of the Group may be located on the Group’s website, www.minotarexploration.com.au The ASX Corporate Governance Council has released amendments dated 30 June 2010 to the second edition Corporate Governance Principles and Recommendations (Principles and Recommendations) in relation to diversity, remuneration, trading policies and briefings. The Group has addressed the amended principles within this statement. PRINCIPLE 1: Lay solid foundations for management and oversight Board Responsibilities The Board is accountable to the Shareholders for the performance of the Group and has overall responsibility for its operations. Day to day management of the Group’s affairs and the implementation of the corporate strategy and policy initiatives, are formally delegated by the Board to the Managing Director and ultimately to senior executives. The key responsibilities of the Board include: • Approving the strategic direction and related objectives of the Group and monitoring management performance in the achievementof these objectives; • Adopting budgets and monitoring the financial performance of the Group; • Reviewing annually the performance of the Managing Director and senior executives against the objectives and performance indicators established by the Board; • Overseeing the establishment and maintenance of adequate internal controls and effective monitoring systems; • Overseeing the implementation and management of effective safety and environmental performance systems; • Ensuring all major business risks are identified and effectively managed; and • Ensuring that the Group meets its legal and statutory obligations. Board Responsibilities CONTINUED M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 25 Corporate G O V E R N A N C E Board Responsibilities CONTINUED For the purposes of the proper performance of their duties, the Directors are entitled to seek independent professional advice at the Group’s expense, unless the Board determines otherwise. The Board schedules meetings on a regular basis and other meetings as and when required. The Board has not publicly disclosed a statement of matters reserved for the Board, or the board charter and therefore the Group has not complied with recommendation 1.3 of the Corporate Governance Council. Given the experience and skills of the Board of Directors, the Group has not considered it necessary to formulate a board charter. Recommendation 1.2: Performance evaluation of Senior Management The Managing Director and senior management participate in annual performance reviews. The performance of staff is measured against the objectives and performance indicators established by the Board. A performance evaluation for senior management took place for the current reporting period in accordance with the Group’s documented process. The performance of senior management is reviewed by comparing performance against agreed measures, examining the effectiveness and results of their contribution and identifying areas for potential improvement. In accordance with recommendations 1.2 and 1.3 of the ASX Corporate Governance Council, the Group has not disclosed a description of the performance evaluation process in addition to the disclosure above. PRINCIPLE 2: Structure the Board to add value Size and composition of the Board At the date of this statement the Board consists of two non-executive Directors and two Executives. Directors are expected to bring independent views and judgement to the Board’s deliberations. • Mr Derek Carter Non-Executive Chairman • Mr Andrew Woskett Managing Director • Mr Richard Bonython Non-Executive Director • Dr Antonio Belperio Executive Director The Board considers this to be an appropriate composition given the size and development of the Group at the present time. The names of Directors, including details of their qualifications and experience, are set out in the Directors’ Report of this Annual Report. Top: Lachlan Harvey (Field Assistant) cutting core samples. 26 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 Recommendation 2.1: Independence The Board is conscious of the need for independence and ensures that where a conflict of interest may arise, the relevant Director(s) leave the meeting to ensure a full and frank discussion of the matter(s) under consideration by the rest of the Board. Those Directors who have interests in specific transactions or potential transactions do not receive board papers related to those transactions or potential transactions, do not participate in any part of a Directors’ meeting which considers those transactions or potential transactions, are not involved in the decision making process in respect of those transactions or potential transactions, and are asked not to discuss those transactions or potential transactions with other Directors. Each Director is required by the Company to declare on an annual basis the details of any financial or other relevant interests that they may have in the Company. At the date of this statement the Board consists of two non-executive Directors, Mr Derek Carter, who is also Chairman of the Board and Mr Richard Bonython. Mr Bonython has no other material relationship with the Group or its subsidiaries other than his directorship. Mr Carter and his associates beneficially hold 2.03% of the issued capital of Minotaur Exploration Ltd. The Company therefore has one independent director as that relationship is currently defined. The Board does not consist of a majority of independent directors and therefore the Group has not complied with recommendation 2.1 of the Corporate Governance Council. The Company considers the current structure to be an appropriate composition of the required skills and experience, given the size and development of the Group at the present time. Recommendations 2.2 and 2.3: Role of the Chairman The role of the Chairman is to provide leadership to the Board and facilitate the efficient organisation and conduct of the Board’s functioning. Mr Derek Carter, the Chairman of the Group, does not also perform the role of the Managing Director, in accordance with recommendation 2.3 of the Corporate Governance Council. He is however not independent and therefore the Group has not complied with recommendation 2.2. Recommendation 2.4: Nomination, retirement and appointment of Directors The Board has not established a nomination and remuneration committee in accordance with recommendation 2.4 of the Corporate Governance Council. The Board takes ultimate responsibility for these matters and continues to monitor the composition of the committee and the roles and responsibilities of the members. Accordingly, the Group has not established remuneration and nomination committee charter in accordance with recommendations 2.4 and 2.6 of the ASX Corporate Governance Council. Recommendation 2.5 Gregg Morris (Senior Geologist), analysing Cloncurry core samples. M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 27 Corporate G O V E R N A N C E Recommendation 2.5: Evaluation of Board performance The Board continues to review performance against appropriate measures and identify ways to improve performance. A performance evaluation of the Board, its committees and individual directors took place for the current reporting period. The Board has not formally disclosed the process in accordance with recommendations 2.5 and 2.6 of the ASX Corporate Governance Council. The Board takes ultimate responsibility for these matters and does not consider the disclosure of the performance evaluation necessary at this stage. Recommendation 2.6: Additional information concerning the Board and Directors The disclosures required by Recommendation 2.6 are included in this annual report. There are procedures in place, agreed by the Board, to enable Directors, in furtherance of their duties, to seek independent professional advice at the Company’s expense. PRINCIPLE 3: Promote ethical and responsible decision making Recommendation 3.1: Code of Conduct The Board recognises the need for Directors and employees to observe the highest standards of behaviour and business ethics when engaging in corporate activity. The Group intends to maintain a reputation for integrity and is highly committed to demonstrating appropriate corporate practices and decision making. The Group’s officers and employees are required to act in accordance with the law and with the highest ethical standards. The Board has not adopted and disclosed a formal code of conduct applying to the Board and all employees in accordance with recommendations 3.1 and 3.3 of the Corporate Governance Council. The Board takes ultimate responsibility for these matters and does not consider the disclosure of the code necessary at this stage. Securities Trading Policy The Company has established a policy concerning trading in the Company’s shares by the Company’s officers, employees and contractors and consultants to the Company while engaged in work for the Company (Representatives). This policy provides that it is the responsibility of each Representative to ensure they do not breach the insider trading prohibition in the Corporations Act. Breaches of the insider trading prohibition will result in disciplinary action being taken by the Company. Representatives must also obtain written consent from the Chairman (or, in the case of the Chairman, from the Board) prior to trading in the Company’s securities. 28 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 Subject to these restrictions, the policy provides that Directors, the Company Secretary and employees of, or contractors to, the Company that have access to the Company’s financial information or drilling results are permitted to trade in the Company’s securities throughout the year except during the following periods: a) the period between the end of the March, June, September and December quarters and the release of the Company’s quarterly report to ASX for so long as the Company is required by the Listing Rules to lodge quarterly reports; and b) 24 hours after the following events: i) Any major announcements; ii) The release of the Company’s quarterly, half yearly and annual financial results to the ASX; and iii) the Annual General Meeting and all other General Meetings. In exceptional circumstances the Board may waive the requirements of the Share trading Policy to allow Representatives to trade in the shares of the Company, provided to do so would not be illegal. Directors must advise the Company Secretary of changes to their shareholdings in the Company within two (2) business days of the change. Recommendations 3.2 and 3.3: Diversity Policy The ASX Corporate Governance Council has released amendments dated 30 June 2010 to the 2nd edition Corporate Governance Principles and Recommendations in relation to diversity. For the purpose of the amendments diversity includes, but is not limited to, gender, age, ethnicity and cultural background. The Company continues to strive towards achieving objectives established towards increasing gender diversity. The Company will assess all staff and Board appointments on their merits with consideration to diversity a driver in decision making. The Company has not yet developed or disclosed a formal diversity policy and therefore has not complied with the recommendations 3.2 and 3.3 of the Corporate Governance Council effective from 1 January 2011. The Board is ultimately responsible for reviewing the achievement of this policy. Recommendations 3.4 and 3.5: Reporting in Annual Report At the date of this Annual Report, the Company employs 20 staff members (excluding the Non-Executive Directors), of which four are female. The Board of Directors consists of four male directors. The Company has disclosed the information suggested in Recommendation 3.5 in this Annual Report. PRINCIPLE 4 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 29 Corporate G O V E R N A N C E PRINCIPLE 4: Safeguard integrity in financial reporting The Group has structured financial management to independently verify and safeguard the integrity of their financial reporting. The structure established by the Group includes: • Review and consideration of the financial statements by the audit committee; and • A process to ensure the independence and competence of the Group’s external auditors. Recommendations 4.1, 4.2 and 4.3: Audit Committee The audit, risk and compliance committee comprises Mr Richard Bonython (Chairman) and Dr Antonio Belperio. Mr Richard Bonython is considered independent. The board will annually confirm the membership of the committee. The committee’s primary responsibilities are to: • oversee the existence and maintenance of internal controls and accounting systems; • oversee the management of risk within the Group; • oversee the financial reporting process; • review the annual and half-year financial reports and recommend them for approval by the Board of Directors; • nominate external auditors; • review the performance of the external auditors and existing audit arrangements; and • ensure compliance with laws, regulations and other statutory or professional requirements, and the Group’s governance policies. The Group has not complied with recommendation 4.2 of the Corporate Governance Council because it does not consist of a majority of independent directors and only has two committee members. Given the skills and experience of the audit committee, the Board believes the structure and process to be adequate. The Board continues to monitor the composition of the committee and the roles and responsibilities of the members. In addition, the Board has not adopted and disclosed a formal committee charter in accordance with recommendations 4.3 and 4.4 of the Corporate Governance Council. PRINCIPLE 5: Make timely and balanced disclosure The Group has a policy that all shareholders and investors have equal access to the Group’s information. The Board ensures that all price sensitive information is disclosed to the ASX in accordance with the continuous disclosure requirements of the Corporation’s Act and ASX Listing Rules. The Company 30 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 Secretary has primary responsibility for all communications with the ASX and is accountable to the Board through the Chair for all governance matters. Recommendations 5.1: Disclosure policy The Group has not publicly disclosed a formal disclosure policy in accordance with recommendations 5.1 and 5.2 of the Corporate Governance Council. The Board takes ultimate responsibility for these matters and does not consider disclosure of a disclosure policy to be appropriate at this stage. PRINCIPLE 6: Respect the rights of shareholders The Board strives to ensure that Shareholders are provided with sufficient information to assess the performance of the Group and its Directors, and to make well-informed investment decisions. Recommendations 6.1: Communications policy Information is communicated to Shareholders through: • annual, half-yearly and quarterly financial reports; • annual and other general meetings convened for Shareholder review and approval of Board proposals; • continuous disclosure of material changes to ASX for open access to the public; and • the Group maintains a website where all ASX announcements, notices and financial reports are published as soon as possible after release to ASX. All information disclosed to the ASX is posted on the Group’s website www.minotaurexploration.com.au The auditor is invited to attend the annual general meeting of Shareholders. The Chairman will permit Shareholders to ask questions about the conduct of the audit and the preparation and content of the audit report. The Group has not publicly disclosed a communications policy in accordance with recommendations 6.1 and 6.2 of the Corporate Governance Council. The Board takes ultimate responsibility for these matters and does not consider disclosure of a communications policy to be appropriate at this stage. PRINCIPLE 7: Recognise and manage risk The Board has identified the significant areas of potential business and legal risk of the Group. In addition the Board has developed the culture, processes and structures of the Company to encourage a framework of risk management which identifies, monitors and manages the material risks facing the organisation. Recommendations 7.1 and 7.2 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 31 Corporate G O V E R N A N C E Recommendations 7.1 and 7.2: Risk management policy The identification, monitoring and, where appropriate, the reduction of significant risk to the Group is the responsibility of the Managing Director and the Board. The Board has also established the audit, risk and compliance committee which addresses the risks of the Group. The Board reviews and monitors the parameters under which such risks will be managed. Management accounts are prepared and reviewed with the Managing Director at subsequent board meetings. Budgets are prepared and compared against actual results. Management and the Board monitor the Group’s material business risks and reports are considered at regular meetings. The Group has not publicly disclosed a policy for the oversight and management of material business risks in accordance with recommendations 7.1 and 7.4 of the Corporate Governance Council. The Board takes ultimate responsibility for these matters and does not consider disclosure of a risk management policy to be appropriate at this stage. Recommendations 7.3: Statement from Managing Director and Company Secretary The Managing Director and the Company Secretary are required to state in writing to the Board that the Group’s financial reports present a true and fair view, in all material respects, of the Company’s financial condition and operational results are in accordance with relevant accounting standards. Included in this statement is a confirmation that the Company’s risk management and internal controls are operating efficiently and effectively. This statement has been received for the year ended 30 June 2012. PRINCIPLE 8: Remunerate fairly and responsibly The Chairman and the non-executive Directors are entitled to draw Directors fees and receive reimbursement of reasonable expenses for attendance at meetings. The Group is required to disclose in its annual report details of remuneration to Directors. The maximum aggregate annual remuneration which may be paid to non-executive Directors is $300,000. This amount cannot be increased without the approval of the Group’s shareholders. Please refer to the remuneration report within the directors’ report for details regarding the remuneration structure of the managing director and senior management. Recommendation 8.1: Remuneration Committee The Board has not established a remuneration committee or disclosed a committee charter on the Company website and therefore has not complied with recommendations 8.1 and 8.3 of the Corporate Governance Council. The Board takes ultimate responsibility for these matters and does not consider a remuneration committee to be appropriate at this stage. 32 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 Financial Report F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 2 CONTENTS Consolidated Statement of 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 Auditor’s Report 34 35 36 37 38 69 70 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 33 Consolidated Statement of Comprehensive Income F O R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 2 Revenue Gain on reclassification of non-current asset Other income Impairment of exploration and evaluation assets Impairment of available-for-sale assets Employee benefits expense Depreciation expense Finance costs Share of losses of associates accounted for using the equity method Other expenses Profit/(Loss) before income tax expense Note 4(a) 4(c) 4(b) 4(d) 4(d) 4(e) 4(d) 4(d) 4(d)/12 4(f) Consolidated Group 2012 $ 503,410 - 8,370,582 (874,242) (3,092,107) (304,715) (111,517) (11,314) - 2011 $ 429,993 4,214,545 254,724 (1,730,333) (2,299,000) (306,565) (149,259) (13,251) (743,806) (959,708) (1,155,630) 3,520,389 (1,498,582) Income tax benefit/(expense) 5 (11,947) 268,149 Profit/(Loss) from continuing operations 3,508,442 (1,230,433) Discontinued operations Profit/(Loss) for the year from discontinued operations 23 355,470 (8,761) Profit/(Loss) for the year 3,863,912 (1,239,194) Other comprehensive income Exchange differences arising on translation of foreign operations Gain/(loss) on available-for-sale investments taken to equity 20(b) 20(c) (2,566) (338,000) (97,090) 48,000 Total comprehensive income for the period 3,523,346 (1,288,284) Earnings per share (Continuing operations): Basic earnings per share Diluted earnings per share Earnings per share (Discontinued operations): Basic earnings per share Diluted earnings per share Cents 3.48 3.48 Cents 3.84 3.84 Cents (1.37) (1.37) Cents (1.38) (1.38) The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes. 34 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 Consolidated Statement of Financial Position A S A T 3 0 J U N E 2 0 1 2 CURRENT ASSETS Cash and cash equivalents Trade and other receivables Other current assets Held-for-sale assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Available-for-sale investments Investments accounted for using the equity method Property, plant and equipment Exploration and evaluation assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Short-term borrowings Short-term provisions TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Long-term borrowings Long-term provisions TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Retained earnings TOTAL EQUITY Consolidated Group Note 2012 $ 2011 $ 7 8 9 10 11 12 13 14 16 17 18 17 18 19 20 21 14,069,291 2,231,064 278,788 320,280 - 764,906 376,349 142,345 14,668,359 3,514,664 2,859,067 4,605,000 - 560,516 8,666,703 - 549,995 11,345,820 12,086,286 16,500,815 26,754,645 20,015,479 2,043,506 32,983 392,696 684,306 33,898 317,229 2,469,185 1,035,433 149,484 62,412 211,896 118,936 62,070 181,006 2,681,081 1,216,439 24,073,564 18,799,040 30,816,748 848,443 29,213,124 1,120,401 (7,591,627) (11,534,485) 24,073,564 18,799,040 The above Statement of Financial Position should be read in conjunction with the accompanying notes. M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 35 Consolidated Statement of Changes in Equity F O R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 2 Issued Capital Ordinary $ Note Consolidated Group Share Option Reserve $ Other Components of Equity (Note 20) $ Retained Earnings $ Total Equity $ Balance at 1 July 2010 25,930,647 820,394 171,055 (49,090) (10,325,125) 16,596,971 (1,239,194) (1,288,284) Total comprehensive income for the year Issue of shares by way of private placement Issue of shares upon exercise of options Transfer from share based payment reserve upon exercise of options Transaction costs (net of tax) Cost of share based payment Transfer from available for sale revaluation reserve upon disposal of investments Transfer from share based payment reserve upon lapse of options Balance at 30 June 2011 Balance at 1 July 2011 Total comprehensive income for theyear Issue of shares under Share Purchase Plan Transaction costs (net of tax) Cost of share based payment Transfer from share option reserve upon lapse of options 19 19 20 19 15 20 20 19 19 15 20 - - - (11,182) - 133,777 - 3,382,242 25,000 11,182 (135,947) - - - - 1,631,500 (27,876) - - - - - 147,554 (78,946) - 85,281 (29,834) - 29,834 - 29,213,124 913,155 207,246 (11,534,485) 18,799,040 29,213,124 913,155 207,246 (11,534,485) 18,799,040 (340,566) 3,863,912 - - - - - - - - - - - - - - - 3,382,242 25,000 - (135,947) 133,777 85,281 3,523,346 1,631,500 (27,876) 147,554 - - - 78,946 - Balance at 30 June 2012 30,816,748 981,763 (133,320) (7,591,627) 24,073,564 The above Statement of Changes in Equity should be read in conjunction with the accompanying notes. 36 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 Consolidated Statement of Cash Flows F O R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 2 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Interest received Finance costs Receipt of Research and Development Tax Concession Consolidated Group Note 2012 $ 2011 $ 337,037 (1,763,980) 144,829 (10,572) 872,556 227,611 (1,655,928) 234,325 (13,198) 312,150 NET CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES 7 (420,130) (895,040) CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of property, plant and equipment Payments for property, plant and equipment Purchase of investments in associates Purchase of available-for-sale investments Proceeds from sale of available-for-sale investments Proceeds from sale of an investment in an associate Proceeds from sale of exploration and evaluation assets Proceeds from the sale of subsidiary Exploration related government grants Joint venture receipts Payments for exploration activities 132,368 (285,662) - (10,983) 60,440 147,742 10,450,000 4,220,000 70,662 4,786,884 (8,925,724) - (219,526) (500,000) (24,000) 368,774 - - - - 2,280,739 (6,045,992) NET CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES 10,645,727 (4,140,005) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares Payment of transaction costs of issue of shares Proceeds from borrowings Repayment of borrowings 1,631,500 (38,103) 195,617 (177,485) 3,407,242 (212,121) - (34,766) NET CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES 1,611,529 3,160,355 Net increase/(decrease) in cash and cash equivalents Net foreign exchange differences Cash at the beginning of the period CASH AT THE END OF THE PERIOD 11,837,126 1,101 2,231,064 (1,874,690) (16,368) 4,122,122 14,069,291 2,231,064 The above Statement of Cash Flows should be read in conjunction with the accompanying notes. M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 37 Notes to the Financial Statements F O R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 2 These consolidated financial statements and notes represent Non-controlling interests, being the equity in a subsidiary not those of Minotaur Exploration Ltd and Controlled Entities (the attributable, directly or indirectly, to a parent, are reported ”consolidated group” or “group”). The separate financial statements of the parent entity, Minotaur Exploration Ltd, have not been presented within this financial report as permitted by the Corporations Act 2001. 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 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Preparation since that date. b) Income Tax The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income). other authoritative pronouncements of the Australian Accounting Current income tax expense charged to profit or loss is the Standards Board (AASB) and the Corporations Act 2001. tax payable on taxable income. Current tax liabilities Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. containing relevant and reliable information about transactions, Deferred income tax expense reflects movements in deferred events and conditions. Compliance with Australian Accounting tax asset and deferred tax liability balances during the year Standards ensures that the financial statements and notes also as well unused tax losses. comply with International Financial Reporting Standards as issued by the IASB. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless otherwise stated. Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates to items that are recognised outside profit or loss. Except for business combinations, no deferred income tax The financial statements have been prepared on an accruals basis is recognised from the initial recognition of an asset or and are based on historical costs, modified, where applicable, liability, where there is no effect on accounting or taxable by the measurement at fair value of selected non-current assets, profit or loss. financial assets and financial liabilities. a) Principle of Consolidation The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Minotaur Exploration Ltd at the end of the reporting period. A controlled entity is any entity over which Minotaur 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 and their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. Exploration Ltd has the ability and right to govern the Deferred tax assets relating to temporary differences and financial and operating policies so as to obtain benefits from unused tax losses are recognised only to the extent that it is the entity’s activities. Where controlled entities have entered or left the Group probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised. during the year, the financial performance of those entities Where temporary differences exist in relation to investments is included only for the period of the year that they were in subsidiaries, branches, associates, and joint ventures, controlled. A list of controlled entities is contained in Note 26 deferred tax assets and liabilities are not recognised where 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. 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. 38 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 Current tax assets and liabilities are offset where a legally amount is assessed on the basis of the expected net cash enforceable right of set-off exists and it is intended that net flows that will be received from the asset’s employment settlement or simultaneous realisation and settlement of the and subsequent disposal. The expected net cash flows have respective asset and liability will occur. Deferred tax assets been discounted to their present values in determining and liabilities are offset where: recoverable amounts. a) a legally enforceable right of set-off exists; and The cost of fixed assets constructed within the consolidated b) the deferred tax assets and liabilities relate to income group includes the cost of materials, direct labour, taxes levied by the same taxation authority on either the borrowing costs and an appropriate proportion of fixed and same taxable entity or different taxable entities where variable overheads. 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. Tax consolidation The parent entity and its Australian wholly-owned entities are Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred. part of a tax-consolidated group under Australian taxation Depreciation law. The head entity within the tax consolidation group for the purposes of the tax consolidation system is Minotaur Exploration Ltd. The depreciable amount of all fixed assets including buildings and capitalised lease assets, but excluding freehold land, is depreciated on a straight-line and diminishing value basis Minotaur Exploration Ltd and each of its own wholly-owned over the asset’s useful life to the consolidated group subsidiaries recognise the current and deferred tax assets commencing from the time the asset is held ready for use. and deferred tax liabilities applicable to the transactions Leasehold improvements are depreciated over the shorter undertaken by it, after elimination of intra-group of either the unexpired period of the lease or the estimated transactions. Minotaur Exploration Ltd recognises the entire useful lives of the improvements. tax-consolidated group’s retained tax losses. c) Property, Plant and Equipment Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses. Plant and equipment Plant and equipment are measured on the cost basis and The useful life for each class of depreciable assets are: Class of Fixed Asset Plant and equipment Motor Vehicles Useful life 2 - 20 years 6 - 15 years The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. therefore carried at cost less accumulated depreciation and An asset’s carrying amount is written down immediately any accumulated impairment. In the event the carrying to its recoverable amount if the asset’s carrying amount is amount of plant and equipment is greater than the estimated greater than its estimated recoverable amount. recoverable amount, the carrying amount is written down immediately to the estimated recoverable amount and impairment losses are recognised either in profit or loss or as a revaluation decrease if the impairment losses relate to a revalued asset. A formal assessment of recoverable amount is made when impairment indicators are present. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income. When revalued assets are sold, amounts included in the revaluation surplus relating to that asset are transferred to retained earnings. M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 39 Notes to the Financial Statements F O R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 2 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Lease payments are allocated between the reduction of the d) Exploration and Development Expenditure Exploration, evaluation and development expenditures incurred are capitalised in respect of each identifiable area of interest. These costs are only capitalised to the extent that lease liability and the lease interest expense for the period. Leased assets are depreciated on a diminishing value basis over the shorter of their estimated useful lives or the lease term. they are expected to be recovered through the successful Lease payments for operating leases, where substantially all development of the area or where activities in the area have the risks and benefits remain with the lessor, are recognised not yet reached a stage that permits reasonable assessment as expenses in the periods in which they are incurred. of the existence of economically recoverable reserves. Lease incentives under operating leases are recognised Accumulated costs in relation to an abandoned area are as a liability and amortised on a straight-line basis over the written off in full against profit in the year in which the lease term. 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 f) Financial Instruments Recognition and initial measurement area according to the rate of depletion of the economically Financial assets and financial liabilities are recognised when recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to capitalise costs in relation to that area of interest. Costs of site restoration are provided over the life of the project 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 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. building structures, waste removal, and rehabilitation of the Classification and subsequent measurement site in accordance with local laws and regulations and clauses of the permits. Such costs have been determined using estimates of future costs, current legal requirements and technology on an undiscounted basis. Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation. Accordingly the costs have been determined on the basis that the restoration will be completed within one year of abandoning the site. e) Leases Finance 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 amortisation 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 Leases of fixed assets where substantially all the risks and recent arm’s length transactions, reference to similar benefits incidental to the ownership of the asset, but instruments and option pricing models. not the legal ownership that is transferred to entities in the consolidated group, are classified as finance leases. The effective interest method is used to allocate interest income or interest expense over the relevant period and is Finance leases are capitalised by recognising an asset and equivalent to the rate that discounts estimated future cash a liability at the lower of the amounts equal to the fair value payments or receipts (including fees, transaction costs and of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. 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 40 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 financial asset or financial liability. Revisions to expected The carrying amount of the investment includes goodwill future net cash flows will necessitate an adjustment to the relating to the associate. Any discount on acquisition carrying value with a consequential recognition of an income whereby the Group’s share of the net fair value of the 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 associate exceeds the cost of investment is recognised in profit or loss in the period in which the investment is acquired. requirements of Accounting Standards specifically applicable Profits and losses resulting from transactions between to financial instruments. i) 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. ii) 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 (ie gains or losses) recognised in other comprehensive income (except for impairment losses and foreign exchange gains and losses). When the financial asset is derecognised, 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. g) Investments in Associates Associates are companies in which the Group has significant influence through holding, directly or indirectly, 20% or more of the voting power of the Group. Investments in associates are accounted for in the financial statements by applying the equity method of accounting, whereby the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the Group’s share of net assets of the associate company. In addition, the Group’s share of the profit or loss of the associate company is included in the Group’s profit or loss. the Group and the associate are eliminated to the extent of the Group’s interest in the associate. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group discontinues recognising its share of further losses unless it has incurred legal or constructive obligations or made payments on behalf of the associate. When the associate subsequently makes profits, the Group will resume recognising its share of those profits once its share of the profits equals the share of the losses not recognised. Details of the Group’s investments in associates are provided in Note 12. h) Interests in Joint Ventures A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control. A jointly controlled operation involves use of assets and other resources of the venturers rather than establishment of a separate entity. The Group recognises its interest in the jointly controlled operations by recognising the assets that it controls and the liabilities that it incurs. The Group also recognises the expenses that it incurs and its share of the income that it earns from the sale of goods or services by the jointly controlled operation. The Company has entered into a number of Joint Ventures with various parties to explore on certain tenements that the Group has a beneficial interest in. A full list of these Joint Ventures, as well as the parties involved, can be found at the end of this report. i) Foreign Currency Transactions and Balances Functional and presentation currency The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional and presentation currency. M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 41 Notes to the Financial Statements F O R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 2 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES i) Foreign Currency Transactions and Balances CONTINUED outflows to be made for those benefits. In determining the liability, consideration is given to employee wages increases Transactions and balances and the probability that the employee may satisfy vesting requirements. Those cash flows are discounted using Foreign currency transactions are translated into functional market yields on national government bonds with terms to currency using the exchange rates prevailing at the date of maturity that match the expected timing of cash flows. the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary Equity-settled compensation items measured at historical cost continue to be carried at the The Group operates an employee share option plan. exchange rate at the date of the transaction. Non-monetary Share-based payments to employees are measured at the items measured at fair value are reported at the exchange fair value of the instruments issued and amortised over the rate at the date when fair values were determined. vesting periods. Share-based payments to non-employees Exchange differences arising on the translation of monetary items are recognised in profit or loss, except where deferred in equity as a qualifying cash flow or net investment hedge. Exchange differences arising on the translation of are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is etermined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is recorded non-monetary items are recognised directly in other to the option reserve. The fair value of options is determined comprehensive income to the extent that the underlying using the Black-Scholes pricing model. The number of gain or loss is recognised in other comprehensive options expected to vest is reviewed and adjusted at the end income; otherwise the exchange difference is recognised of each reporting period such that the amount recognised for in profit or loss. Group companies The financial results and position of foreign operations, whose functional currency is different from the Group’s presentation currency, are translated as follows: • assets and liabilities are translated at exchange rates prevailing at the end of the reporting period; • • income and expenses are translated at average exchange rates for the period; and retained earnings are translated at the exchange rates prevailing at the date of the transaction. Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars are recognised in other comprehensive income and included in the foreign currency translation reserve in the statement of financial position. These differences are recognised in profit or loss in the period in which the operation is disposed. j) Employee Benefits Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be settled within year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than year have been measured at the present value of the estimated future cash 42 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 services received as consideration for the equity instruments granted is based on the number of equity instruments that eventually vest. k) Provisions Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period. l) Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits available on demand with banks, other short-term highly liquid investments with original maturities of 6 months or less, and bank overdrafts. Bank overdrafts are reported within short-term borrowings in current liabilities in the statement of financial position. m) Revenue and Other Income Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. When the inflow of consideration is deferred, it is treated as the provision of financing and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately received is interest revenue. Revenue from the sale of goods is recognised at the point of Grants relating to assets are credited to deferred income delivery as this corresponds to the transfer of significant risks at fair value and are credited to income over the expected and rewards of ownership of the goods and the cessation of useful life of the asset on a straight-line basis. all involvement in those goods. Interest revenue is recognised using the effective interest rate method. q) Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation Revenue recognition relating to the provision of services is for the current financial year. determined with reference to the stage of completion of the transaction at the end of the reporting period, where r) Critical Accounting Estimates and Judgments outcome of the contract can be estimated reliably. Stage The directors evaluate estimates and judgments incorporated of completion is determined with reference to the services into the financial statements based on historical knowledge performed to date as a percentage of total anticipated and best available current information. Estimates assume a services to be performed. Where the outcome cannot be reasonable expectation of future events and are based on estimated reliably, revenue is recognised only to the extent current trends and economic data, obtained both externally that related expenditure is recoverable. and within the Group. All revenue is stated net of the amount of goods and Key estimates services tax (GST). n) Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. i) Impairment The Group assesses impairment at the end of each reporting period by evaluating conditions and events specific to the Group that may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using value-in-use calculations which incorporate various key assumptions. ii) Exploration and evaluation expenditure All other borrowing costs are recognised in profit or loss in The Group capitalises expenditure relating to exploration the period in which they are incurred. o) Goods and Services Tax (GST) and evaluation where it is considered likely to be recoverable or where the activities have not reached a stage that permits a reasonable assessment of the Revenues, expenses and assets are recognised net of the existence of reserves. While there are certain areas of amount of GST, except where the amount of GST incurred is interest from which no reserves have been extracted, not recoverable from the Australian Taxation Office (ATO). the directors are of the continued belief that such Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of expenditure should not be written off since feasibility studies in such areas have not yet concluded. Such capitalised expenditure is carried at the end of the year at $8,666,703. financial position. s) Changes in accounting policies Cash flows are presented on a gross basis. The GST Adoption of AASB’s and improvements in AASB’s 2011 – components of cash flows arising from investing or financing AABS 1054 and AASB 2011-11 activities which are recoverable from, or payable to, the ATO are presented as operating cash flows included in receipts from customers or payments to suppliers. p) Government Grants Government grants are recognised at fair value where there is reasonable assurance that the grant will be received and all grant conditions will be met. Grants relating to expense items are recognised as income over the periods necessary to match the grant to the costs they are compensating. The AASB has issued AASB 1054 Australian Additional Disclo- sures and 2011-1 Amendments to Australian Accounting Standards arising from the Trans-Tasman Convergence Project, and made several minor amendments to a number of AASBs. These standards eliminate a large portion of the differences between the Australian and New Zealand accounting standards and IFRS and retain only additional disclosures considered necessary. These changes also simplify some current disclosures for Australian entities and remove others. M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 43 Notes to the Financial Statements F O R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 2 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AASB 12 Disclosure of Interests in Other Entities (AASB 12) t) Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted early by the group At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published but are not yet effective, and have not been adopted early by the Group. Management anticipates that all of the relevant pronouncements will be adopted in the Group's accounting policies for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the Group’s financial statements is provided below. Certain other new standards and interpretations have been issued but are not expected to have a material impact on the Group's financial statements. Consolidation standards AASB 12 integrates and makes consistent the disclosure requirements for various types of investments, including unconsolidated structured entities. It introduces new disclosure requirements about the risks to which an entity is exposed from its involvement with structured entities. Consequential amendments to AASB 127 Separate Financial Statements (AASB 127) and AASB 128 Investments in Associates and Joint Ventures (AASB 128) AASB 127 Consolidated and Separate Financial Statements was amended to AASB 127 Separate Financial Statements which now deals only with separate financial statements. AASB 128 brings investments in joint ventures into its scope. However, AASB 128’s equity accounting methodology remains unchanged. AASB 13 Fair Value Measurement (AASB 13) AASB 13 does not affect which items are required to be fair- valued, but clarifies the definition of fair value and provides related guidance and enhanced disclosures about fair value measurements. It is applicable for annual periods beginning A package of consolidation standards are effective for on or after 1 January 2013. The Group’s management have annual periods beginning or after 1 January 2013. yet to assess the impact of this new standard. Information on these new standards is presented below. The Group’s management have yet to assess the impact of these new and revised standards on the Group’s consolidated financial statements. AASB 10 Consolidated Financial Statements (AASB 10) AASB 2011-9 Amendments to Australian Accounting Standards Presentation of Items of Other Comprehensive Incomes (AASB 101 Amendments) The AASB 101 Amendments require an entity to group items presented in other comprehensive income into those that, AASB 10 supersedes the consolidation requirements in in accordance with other IFRSs: (a) will not be reclassified AASB 127 Consolidated and Separate Financial Statements subsequently to profit or loss and (b) will be reclassified (AASB 127) and Interpretation 112 Consolidation – Special subsequently to profit or loss when specific conditions are Purpose Entities. It revised the definition of control together met. It is applicable for annual periods beginning on with accompanying guidance to identify an interest in a or after 1 July 2012. The Group’s management expects subsidiary. However, the requirements and mechanics of this will change the current presentation of items in other consolidation and the accounting for any non-controlling comprehensive income; however, it will not affect the interests and changes in control remain the same. measurement or recognition of such items. AASB 11 Joint Arrangements (AASB 11) AASB 11 supersedes AASB 131 Interests in Joint Ventures (AASB 131). It aligns more closely the accounting by the AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements (AASB 124 Amendments) investors with their rights and obligations relating to the AASB 2011-4 makes amendments to AASB 124 Related Party joint arrangement. It introduces two accounting categories Disclosures to remove individual key management personnel (joint operations and joint ventures) whose applicability is disclosure requirements, to achieve consistency with determined based on the substance of the joint arrangement. the international equivalent (which includes requirements In addition, AASB 131’s option of using proportionate to disclose aggregate (rather than individual) amounts consolidation for joint ventures has been eliminated. of KMP compensation), and remove duplication with the AASB 11 now requires the use of the equity accounting method for joint ventures, which is currently used for investments in associates. Corporations Act 2011. The amendments are applicable for annual periods beginning on or after 1 July 2013. The Group’s management have yet to assess the impact of these amendments. 44 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 2 PARENT INFORMATION FINANCIAL POSITION Assets Current Assets Non-current Assets Total Assets Liabilities Current Liabilities Non-current Liabilities Total Liabilities Equity Issued Capital Reserves Retained Earnings Total Equity FINANCIAL PERFORMANCE (Loss) for the year Other Comprehensive Income Total Comprehensive Income Guarantees 2012 $ 2011 $ 13,819,405 12,353,662 2,370,380 17,466,911 26,173,067 19,837,291 1,887,607 211,896 2,099,503 551,480 81,006 632,486 30,816,748 981,763 29,213,124 913,154 (7,724,947) (11,327,238) 24,073,564 18,799,040 3,602,291 (1,203,003) - - 3,602,291 ( 1,203,003) Minotaur Exploration Ltd has not entered into any guarantees, in the current or previous financial year, in relation to the debts of its subsidiaries. Contingent Liabilities Contingent liabilities of the parent entity have been incorporated into the Group information in Note 24. The contingent liabilities of the parent are consistent with that of the Group. Contractual Commitments Contractual Commitments of the parent entity have been incorporated into the Group information in Note 22. The contractual commitments of the parent are consistent with that of the Group. M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 45 Notes to the Financial Statements F O R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 2 3 OPERATING SEGMENTS Information reported to the chief operating decision maker (identified as the board) for the purposes of resource allocation and assessment of segment performance focuses on types of business segments encountered by the Group. The Group’s reportable Investment: that being strategic investment by the Group in equity instruments of associates and other similar entities; segments under AASB 8 are therefore as follows: • • • The following is an analysis of the Group’s revenue and results from continuing operation by reportable segment. Exploration activities conducted in Australia; and Exploration activities conducted in Canada. Continuing Operations Investments Mineral Exploration – Australia Mineral Exploration – Canada Discontinued operations Finance costs Administration/Corporate Depreciation Consolidated revenue Profit/(Loss) before income tax Income tax benefit/(expense) Profit/(Loss) for period Segment Revenue Segment Result Financial Year ended 30 June 2011 $ 30 June 2012 $ Financial Year ended 30 June 2012 $ 30 June 2011 $ 308,083 8,546,645 - - 4,528,277 370,985 - (8,141) (2,777,992) 1,485,471 7,672,403 (213,431) - (1,145,297) 355,470 (8,761) 8,854,728 4,891,121 5,249,881 117,982 - 19,264 - - - - (11,314) (13,251) (1,251,191) (1,462,815) (111,517) (149,259) 8,873,992 4,891,121 3,875,859 (1,507,343) (11,947) 268,149 3,863,912 (1,239,194) The revenue reported above represents revenue generated from financial institutions and joint venture partners. There were no intersegment sales during the period. Segment profit/(loss) represents the profit earned by each segment without allocation of central administration costs, finance costs, depreciation and income tax(expense)/benefit. This is the measure reported to the chief operating decision maker for the purposes of resources allocation and assessment of segment performance. 46 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 3 OPERATING SEGMENTS CONTINUED 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. The Group has not reported on segment liabilities as such amounts are not regularly provided to the chief operating decision maker. The following is an analysis of the Group’s assets by reportable operating segment. Opening Balance 1 July 2011 $ Capital Expenditure/ Investment $ Impairment and Share of loss $ Revaluations Disposals $ $ Closing Balance 30 June 2012 $ Continuing Operations Investments 5,805,000 12,033,278 (3,093,580) (338,000) (65,000) 14,341,698 Mineral Exploration – Australia 11,345,820 4,663,796 Mineral Exploration – Canada - 41,818 (940,356) (33,831) - - (6,410,543) 8,658,717 - 7,987 Total Segment Assets 17,150,820 16,738,892 (4,067,767) (338,000) (6,475,543) 23,008,402 Other Administration/Corporate 1,648,220 18,799,040 Opening Balance 1 July 2010 $ Capital Expenditure/ Investment $ Impairment and Share of loss $ Revaluations Disposals $ $ 1,065,162 24,073,564 Closing Balance 30 June 2011 $ Continuing Operations Investments Mineral Exploration – Australia Mineral Exploration – Canada 5,377,329 8,550,163 848,006 695,000 (3,042,806) 4,262,545 (1,487,068) 5,805,000 3,424,154 (585,036) 297,291 (1,145,297) - - (43,461) 11,345,820 - - Total Segment Assets 14,775,498 4,416,445 (4,773,139) 4,262,545 (1,530,529) 17,150,820 Other Administration/Corporate 2,875,553 17,651,051 1,648,220 18,799,040 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 47 Notes to the Financial Statements F O R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 2 Consolidated 2012 $ 2011 $ 337,037 166,373 503,410 19,264 8,209,608 (6,032) 147,742 8,370,582 212,686 217,307 429,993 - 158,299 96,425 - 254,724 - (8,141) 8,370,582 246,583 - - - 1,784,951 2,429,594 4,214,545 874,242 3,092,107 1,730,333 2,299,000 3,966,349 4,029,333 71,028 40,489 111,517 102,431 46,828 149,259 4 REVENUE AND EXPENSES a) Revenue Administration fees Bank interest received or receivable b) Other income From continuing operations Net gains on disposal of motor vehicles Net gains on disposal of tenements* Net gain/(loss) on disposal of available-for-sale investments Net gains on disposal of associates From discontinued operations Net gains on disposal of motor vehicles c) Gain on reclassification of non-current asset Gain on reclassification of investment in Thomson Resources Ltd – refer Note 11 Gain on reclassification of investment in Mithril Resources Ltd – refer Note 11 d) Expenses Impairment of non-current assets Capitalised tenement costs written off Impairment of available-for-sale financial assets Total impairment of non-current assets Depreciation of non-current assets Plant and equipment Motor vehicles Total depreciation 48 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 4 REVENUE AND EXPENSES CONTINUED Consolidated Finance expenses Finance costs Interest applicable to hire-purchase Total borrowing costs Losses from associates Mithril Resources Ltd Petratherm Ltd Thomson Resources Ltd Total losses from associates e) Employees benefits expense Wages, salaries, directors fees and other remuneration expenses Superannuation expense Transfer to/(from) annual leave provision Transfer to/(from) long service leave provision Share-based payments expense Transfer to capitalised tenements f) Other expenses From continuing operations Secretarial, professional and consultancy Employee taxes and levies Occupancy costs Insurance costs ASX/ASIC costs Share register maintenance Communication costs Promotion and advertising Audit fees Other expenses From discontinued operations Other expenses 2012 $ 175 11,139 11,314 - - - - 2,939,647 222,181 12,704 63,105 147,554 2011 $ 180 13,071 13,251 403,893 300,000 39,913 743,806 1,924,903 161,163 17,003 32,606 133,777 (3,080,476) (1,962,887) 304,715 306,565 335,947 141,420 143,611 107,959 34,605 52,179 23,882 38,939 37,700 43,466 576,875 110,091 154,350 39,674 29,379 29,950 47,413 22,946 30,520 114,432 959,708 1,155,630 9,272 620 968,980 1,156,250 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 49 Notes to the Financial Statements F O R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 2 5 INCOME TAX EXPENSE The major components of income tax expense are: Statement of Comprehensive Income Current income tax Current income tax charge/(benefit) research and Development Tax offset Income tax expense/(benefit) reported in the income statement A reconciliation between tax expense and the product of accounting profit before income tax multiplied by the Group’s applicable income tax rate is as follows: Consolidated 2012 $ 2011 $ 11,947 - 11,947 58,263 (326,412) (268,149) Accounting profit before income tax 3,520,389 (1,498,582) At the Group’s statutory income tax rate of 30% (2011: 30%) Immediate write off of capital expenditure Expenditure not allowable for income tax purposes Non-assessable income Assessable income in relation to sale of exploration and evaluation assets Capital gains Utilisation of tax losses Tax losses not recognised due to not meeting recognition criteria Tax portion of share issue costs The Group has tax losses arising in Australia of $1,478,753 (2011: $9,813,012) that are available indefinitely for offset against future taxable profits of the companies in which the losses arose. Tax consolidation Minotaur Exploration Ltd and its 100% owned Australian resident subsidiaries have formed a tax consolidated group with effect from 5 February 2005. Minotaur Exploration Ltd is the head entity of the tax consolidated group. 1,056,117 (1,426,781) 1,248,883 (2,511,175) 2,832,000 1,759,575 (2,958,619) - 11,947 11,947 (449,575) (1,153,689) 1,489,079 (1,338,337) - 170,632 - 1,281,890 58,263 58,263 50 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 Consolidated 2012 $ 2011 $ 6 EARNINGS PER SHARE Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. The following reflects the income and share data used in the basic and diluted earnings per share computations: Net profit/(loss) attributable to ordinary equity holders of the parent entity 3,863,912 (1,239,194) Weighted average number of ordinary shares for basic earnings per share 100,732,806 89,639,133 Effect of dilution Share options - N/A Weighted average number of ordinary shares adjusted for the effect of dilution 100,732,806 89,639,133 In accordance with AASB 133 ‘Earnings per Share’, as potential ordinary shares may only result in a situation where their conversion results in an increase in loss per share or decrease in profit per share from continuing operations, no dilutive effect has been taken into account for 2011. There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of completion of these financial statements. 7 CASH AND CASH EQUIVALENTS Cash at bank and in hand Short-term deposits Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods between one day and six months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rate. Reconciliation to Statement of Cash Flows For the purposes of the Statement of Cash Flows, cash and cash equivalents comprise the following at 30 June: Cash at banks and in hand Short-term deposits 198,747 13,870,544 870,064 1,361,000 14,069,291 2,231,064 198,747 13,870,544 870,064 1,361,000 14,069,291 2,231,064 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 51 Notes to the Financial Statements F O R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 2 Consolidated 2012 $ 2011 $ 3,863,912 (1,239,194) 111,517 4,066,294 - - (8,835,269) 11,947 147,554 409,614 (17,649) (243,860) (9,999) 75,809 (420,130) 278,788 - - - 278,788 72,908 242,072 5,300 320,280 - - 149,259 4,029,333 (4,214,545) 743,806 (246,583) 58,263 133,777 (89,075) (32,087) (261,159) 23,556 49,609 (895,040) 76,708 409,614 72,270 206,314 764,906 59,729 316,620 - 376,349 142,345 142,345 7 CASH AND CASH EQUIVALENTS CONTINUED Reconciliation of net profit/loss after tax to net cash flows from operations Net profit/(loss) Adjustments for non-cash items: Depreciation Impairment of non-current assets Gain on reclassification of non-current asset Share of associates’ net (profits)/losses Net (gain)/loss on disposal property plant and equipment, available-for-sale financial instruments and tenements Non-cash income tax expense/(benefit) Share options expensed Changes in assets and liabilities: (Increase)/decrease in trade and other receivables (Increase)/decrease in prepayments (Decrease)/increase in trade and other payables (Decrease)/increase in withholding tax payable (Decrease)/increase in employee provisions Net cash from operating activities 8 TRADE AND OTHER RECEIVABLES Trade receivables (i) Research and Development tax refund receivable Goods and Services Tax receivable Sundry debtors i) Trade receivables are non-interest bearing and are generally on 30-90 day terms. An allowance for doubtful debts is made when there is objective evidence that a trade receivable is impaired. No impairment was recognised in 2011 and 2012 and no receivables are past due at balance date. Information regarding the credit risk of current receivables is set out in Note 27. 9 OTHER CURRENT ASSETS Prepayments Accrued income Other 10 HELD-FOR-SALE ASSETS Exploration and evaluation phase costs 52 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 Consolidated 2012 $ 2011 $ 4,605,000 (338,000) (65,000) 1,750,647 (3,093,580) - - 993,068 48,000 (187,068) 195,000 (2,299,000) 1,640,455 4,214,545 2,859,067 4,605,000 11 AVAILABLE-FOR-SALE INVESTMENTS At fair value – Shares and rights, listed: Opening balance Revaluations Disposals Acquisitions Impairments Transfer from investments in associates Gain on reclassification of non-current assets (a) Available-for-sale investments consist of investments in ordinary shares in listed entities. The investments are 4,549,129 fully paid ordinary shares in the capital of ActivEX Limited (ASX code AIV), 8,000,000 fully paid ordinary shares in the capital of Platsearch NL (ASX Code PTS), 10,000,000 fully paid ordinary shares in the capital of Thomson Resources Ltd (ASX Code TMZ) and 21,466,667 fully paid ordinary shares in the capital of Mithril Resources Ltd (ASX Code MTH). In accordance with AASB 139 ’Financial Instruments: Recognition and Measurement’, the securities are measured at fair value, which is determined to be closing bid price for the securities. As at 30 June 2012, the final bid price was $0.017, $0.066, $0.05 and $0.027 respectively. a) During the 2011 financial year, the Company changed the classification of its investments in Mithril Resources Ltd and Thomson Resources Ltd due to dilution of Minotaur’s interest in both entities following a share placement and initial public offering respectively. In accordance with Accounting Standards both investments were revalued to their market value on the date of the change in classification with a gain of $2,429,594 for Mithril and $1,784,951 for Thomson recognised in the Statement of Comprehensive Income. 12 INVESTMENT ACCOUNTED FOR USING THE EQUITY METHOD Investment in associates Interest in Associates Petratherm Ltd i) Principal activity Petratherm Ltd (incorporated in Australia) – Geothermal exploration - - Ownership interest held by consolidated enity Balance date 2012 % 30 June 2012 15.27 2011 % 18.54 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 53 Notes to the Financial Statements F O R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 2 12 INVESTMENT ACCOUNTED FOR USING THE EQUITY METHOD CONTINUED Share of associates’ statements of financial position Current assets Non-current assets Current liabilities Non-current liabilities Net assets Share of associates commitments Operating Leases Hire Purchases Exploration licences Reconciliation of movement in carrying amount of investment in associates Balance at beginning of period Acquisitions of investments in associates Share of net profit/(loss) after income tax Transfer to available-for-sale investments 13 PROPERTY, PLANT AND EQUIPMENT Plant and equipment Cost Opening balance Additions Transfer to Kaolin Pilot Plant Consolidated 2012 $ 2011 $ 216,555 2,918,904 392,378 3,322,880 3,135,459 3,715,258 (30,569) (443,841) (474,410) (128,805) (552,831) (681,636) 2,661,049 3,033,622 < 1 year 20,213 1,016 587,895 609,124 > 1 year but < 5 years - - - - - - - - - 1,884,261 500,000 (743,806) (1,640,455) - 743,412 30,967 - 774,379 683,942 66,937 (7,467) 743,412 54 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 13 PROPERTY, PLANT AND EQUIPMENT CONTINUED Accumulated depreciation Opening balance Depreciation for the year Disposals Net book value of plant and equipment Kaolin Pilot Plant Cost Opening balance Transfer from plant and equipment Additions Disposals Accumulated depreciation Opening balance Depreciation for the year Disposals Consolidated 2012 $ 2011 $ 512,362 71,028 - 583,390 190,989 170,431 - 123,334 - 293,765 - 99,538 - 99,538 409,931 102,431 - 512,362 231,050 - 7,467 162,964 - 170,431 - - - - Net book value of kaolin pilot plant 194,227 170,431 Net book value of property, plant and equipment 385,216 401,481 Motor Vehicles Cost Opening balance Additions Disposals Accumulated depreciation Opening balance Depreciation for the year Disposals Net book value of motor vehicles 233,001 180,379 (186,673) 226,707 84,487 40,489 (73,569) 51,407 175,300 231,401 1,600 - 233,001 37,659 46,828 - 84,487 148,514 Total net book value of property, plant and equipment 560,516 549,995 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 55 Notes to the Financial Statements F O R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 2 Consolidated 2012 $ 2011 $ 4,770,046 3,896,657 7,003,800 4,342,020 8,666,703 11,345,820 Exploration Joint Venture $ Exploration Other $ 7,003,800 7,562,203 (4,795,331) (99,945) (4,900,681) - - 4,342,020 1,493,889 - (874,242) - (733,597) (331,413) Total $ 11,345,820 9,056,092 (4,795,331) (974,187) (4,900,681) (733,597) (331,413) 4,770,046 3,896,657 8,666,703 14 EXPLORATION AND EVALUATION ASSETS Exploration, evaluation and development costs carried forward in respect of mining areas of interest Exploration and evaluation phases – Joint Ventures Exploration and evaluation phases – Other The ultimate recoupment of costs carried forward for exploration and evaluation phases is dependent on the successful development and commercial exploitation or sale of the respective mining areas. Consolidated Group Capitalised tenement expenditure movement reconciliation Balance at beginning of year Additions through expenditure capitalised Reductions through joint venture contributions Write off of tenements relinquished Sale of Tunkillia Sale of tenements to BHPB Sale of other tenements Balance at end of year 15 SHARE-BASED PAYMENTS Employee Share Option Plan The Company has established the Minotaur Exploration Ltd Employee Share Option Plan and a summary of the Rules of the Plan are set out below: • All employees (full and part time) will be eligible to participate in the Plan after a qualifying period of 12 months employment by a member of the Group, although the Board may waive this requirement. • Options are granted under the Plan at the discretion of the board and if permitted by the Board, may be issued to an employee’s nominee. • Each option is to subscribe for one fully paid ordinary share in the Company and will expire 5 years from its date of issue. An option is exercisable at any time from its date of issue. Options will be issued free. The exercise price of options will be determined by the Board, subject to a minimum price equal to the market value of the Company’s shares at the time the Board resolves to offer those options. The total number of shares the subject of options issued under the Plan, when aggregated with issues during the previous 5 years pursuant to the Plan and any other employee share plan, must not exceed 5% of the Company’s issued share capital. 56 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 15 SHARE-BASED PAYMENTS Employee Share Option Plan CONTINUED • If, prior to the expiry date of options, a person ceases to be an employee of a Group company for any reason other than retirement at age 60 or more (or such earlier age as the Board permits), permanent disability, redundancy or death, the options held by that person (or that person’s nominee) automatically lapse on the first to occur of a) the expiry of the period of 6 months from the date of such occurrence, and b) the expiry date. If a person dies, the options held by that person will be exercisable by that person’s legal personal representative. • Options cannot be transferred other than to the legal personal representative of a deceased option holder. • The Company will not apply for official quotation of any options. Shares issued as a result of the exercise of options will rank equally with the Company’s previously issued shares. • Option holders may only participate in new issues of securities by first exercising their options. The Board may amend the Plan Rules subject to the requirements of the Listing Rules. The expense recognised in the Statement of Comprehensive Income in relation to share-based payments is disclosed in Note 4 (e). The following table illustrates the number (No.) and weighted average exercise prices (WAEP) and movements in share options under the Company’s Employee Share Option Plan issued during the year: Outstanding at the beginning of the year Granted during the year Exercised during the year Expired or lapsed during the year Outstanding at the end of the year Exercisable at the end of the year No. 2012 WAEP 2012 No. 2011 930,000 2,090,000 - (750,000) 2,270,000 2,270,000 0.53 0.21 - 0.53 0.24 0.24 1,280,000 - (100,000) (250,000) 930,000 930,000 WAEP 2011 0.52 - 0.25 0.61 0.53 0.53 The outstanding balance as at 30 June 2012 is represented by: • • • A total of 120,000 options exercisable at any time until 30 Jan 2013 with an exercise price of $0.55. A total of 410,000 options exercisable at any time until 2 Dec 2013 with an exercise price of $0.25. A total of 1,740,000 options exercisable at any time until 29 Sep 2016 with an exercise price of $0.21. The weighted average remaining contractual life for the share options outstanding as at 30 June 2012 is 3.55 years (2011: 1.969 years). The range of exercise prices for options outstanding at the end of the year was $0.21 - $0.55 (2011: $0.25 - $0.80). The weighted average fair value of options granted during the year was $0.0706 (2011: Nil). The fair value of the equity-settled share options granted under the option plan is estimated as at the date of grant using a Black-Scholes model taking into account the terms and conditions upon which the options were granted. Historical volatility (%) Risk-free interest rate (%) Expected life of option (years) 67.90% 3.81% 5.00 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 57 Notes to the Financial Statements F O R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 2 Consolidated 2012 $ 2011 $ 803,976 938,269 301,261 2,043,506 510,525 - 173,781 684,306 32,983 32,983 149,484 149,484 122,209 12,704 134,913 195,020 62,763 257,783 392,696 62,070 342 62,412 33,898 33,898 118,936 118,936 105,206 17,003 122,209 159,038 35,982 195,020 317,229 65,446 (3,376) 62,070 16 TRADE AND OTHER PAYABLES Trade payables (i) Net GST and PAYG Payable Other payables (ii) i) Trade payables are non-interest bearing and are normally settled on 30-day terms. ii) Other payables are non-interest bearing and are normally settled within 30 – 90 days. Information regarding the credit risk of current payables is set out in Note 27. 17 BORROWINGS Current Obligations hire purchase contracts Non-current Obligations hire purchase contracts 18 PROVISIONS Current Annual leave provision Balance at 1 July Net increase/(decrease in provision) Closing Balance 30 June Long Service Leave Balance at 1 July Net increase/(decrease in provision) Closing Balance 30 June Non-current Long Service Leave Balance at 1 July Net increase/(decrease in provision) Closing Balance 30 June 58 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 19 ISSUED CAPITAL 103,585,709 fully paid ordinary shares (2011: 92,709,018) Consolidated 2012 $ 2011 $ 30,816,748 29,213,124 30,816,748 29,213,124 2012 2011 Number $ Number $ Ordinary shares Balance at beginning of financial year 92,709,018 29,213,124 Issued 1 October 2010 pursuant to private placement Issued 1 October 2010 to an employee upon exercise of options - - - - Issued on 5 October 2011 under a Share Purchase Plan 10,876,691 1,631,500 Transaction from share-based payments reserve Transaction costs on shares issued - - - (27,876) 80,529,581 12,079,437 100,000 - - - 25,930,647 3,382,242 25,000 - 11,182 (135,947) Balance at end of financial year 103,585,709 30,816,748 92,709,018 29,213,124 Effective 1 July 1998, the Corporations legislation in place abolished the concepts of authorised capital and par value shares. Accordingly, the Parent does not have authorised capital nor par value in respect of its issued shares. Fully paid ordinary shares carry one vote per share and carry the right to dividends (in the event such a dividend was declared). 20 RESERVES Share option reserve (a) Foreign currency translation reserve (b) Available-for-sale revaluation (c) a) Share option reserve Balance at beginning of financial year Issue of options to employees and officers under Employee Share Option Plan Transfer to issued capital upon exercise of options Transfer to retained earnings upon lapse of options Balance at end of financial year b) Foreign currency translation reserve Balance at beginning of financial year Translation of foreign subsidiary Balance at end of financial year Consolidated 2012 $ 2011 $ 981,763 (133,320) - 913,155 (130,754) 338,000 848,443 1,120,401 913,155 147,554 - (78,946) 981,763 820,394 133,777 (11,182) (29,834) 913,155 (130,754) (2,566) (33,664) (97,090) (133,320) (130,754) M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 59 Notes to the Financial Statements F O R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 2 20 RESERVES CONTINUED c) Available-for-sale revaluation Balance at beginning of financial year Revaluation increment/(decrement) Transfer to Statement of Comprehensive Income upon sale of available-for-sale investments Balance at end of financial year 21 RETAINED EARNINGS Balance at beginning of financial year Net profit/(loss) attributable to members of the parent entity Transfer from share option reserve Balance at end of financial year 22 COMMITMENTS FOR EXPENDITURE Operating leases Not longer than 1 year Longer than 1 year and not longer than 5 years Hire purchase commitments Not longer than 1 year Longer than 1 year and not longer than 5 years Less: future finance charges Terms of lease arrangements Consolidated 2012 $ 2011 $ 338,000 (338,000) - - 204,719 48,000 85,281 338,000 (11,534,485) 3,863,912 78,946 (10,325,125) (1,239,194) 29,834 (7,591,627) (11,534,485) 90,470 - 90,470 43,412 161,453 204,865 (22,398) 182,467 133,467 90,740 224,207 44,468 124,897 169,365 (16,531) 152,834 The Group has an operating lease in place for its principal place of business. The lease commenced 1 March 2008 and expires within 5 years from commencement. The lease has a term for renewal and has an escalation clause linked to CPI. Future minimum lease payments under hire purchase contracts together with the present value of the net minimum lease payments are listed above in the above table. Exploration leases In order to maintain current rights of tenure to exploration tenements the Group will be required to outlay in the year ending 30 June 2013 amounts of approximately $2,500,000 in respect of tenement lease rentals and to meet minimum expenditure requirements. Pursuant to various Joint Venture agreements, it is expected that of this minimum expenditure requirement, $1,100,000 will be funded by Minotaur’s Joint Venture partners. The net obligation to the Minotaur Exploration Group is expected to be fulfilled in the normal course of operations. 60 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 23 DISCONTINUED OPERATIONS During the 2012 financial year, Minotaur Exploration Ltd made the strategic decision to dispose of its investment in the Tunkillia Project, contained within its wholly-owned subsidiary Minotaur Ventures Pty Ltd. Revenue and expenses, gains and losses relating to the discontinuation of the Tunkillia Project have been eliminated from profit or loss from the Group's continuing operations and are shown as a single line item on the face of the statement of comprehensive income (see loss for the year from discontinued operations). On 17 January 2012, Minotaur Ventures Pty Ltd was sold to Mungana Goldmines Ltd (ASX: MUX, ‘Mungana’) for a total consideration of AU$4,000,000 and 3,076,923 fully paid ordinary shares in Mungana (valued at $1,538,462 at the date of disposal). The operating loss of Minotaur Ventures Pty Ltd until the date of disposal and the profit or loss from the disposal of assets and liabilities classified as held for sale is summarised as follows: Impairment expense Other income Other expenses Loss before income tax Tax expense Loss for the period/year Profit after tax on disposal Profit/(Loss) for the period/year The carrying amount of the net assets of Minotaur Ventures Pty Ltd recognised at the date of disposal (17 January 2012) and breakdown of considerations is detailed as follows: Non current-assets – Exploration and evaluation assets Net assets at date of disposal Consideration received in cash Consideration received in shares Costs incurred in sale Net consideration received Net gain on disposal Period ended 17 Jan 2012 $ Year ended 30 Jun2011 $ (99,945) - (9,272) (109,217) - (8,141) (620) (8,761) - - (109,217) (8,761) 464,687 355,470 - (8,761) 4,900,681 4,900,681 3,980,000 1,538,462 (153,094) 5,365,368 464,687 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 61 Notes to the Financial Statements F O R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 2 Consolidated 2012 $ 2011 $ 24 CONTINGENT LIABILITIES AND CONTINGENT ASSETS At the date of signing this report, the Group is not aware of any Contingent Asset or Liability that should be disclosed in accordance with AASB 137. It is however noted that the Company has established various bank guarantees in place with a number of State Governments in Australia, totalling $201,000 at 30 June 2012 (2011: $161,000). These guarantees are designed to act as collateral over the tenements which Minotaur explores on and can be used by the relevant Government authorities in the event that Minotaur does not sufficiently rehabilitate the land it explores on. It is noted that the bank guarantees have as at the date of signing this report never been utilised by any State Government. 25 AUDITOR’S REMUNERATION Audit or review of the financial report No other services have been provided. 26 CONTROLLED ENTITIES Parent entity Minotaur Exploration Limited (i) Subsidiaries Minotaur Operations Pty Ltd (ii) Minotaur Ventures Pty Ltd (ii) Minotaur Resources Investments Pty Ltd (ii) Minotaur Industrial Minerals Pty Ltd (ii) Great Southern Kaolin Pty Ltd (ii) Minotaur Atlantic Exploration Ltd Minotaur Gold Solutions Ltd (ii) i) Minotaur Exploration Ltd is the head entity within the tax-consolidated group. ii) These companies are members of the tax-consolidated group. 62 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 37,700 37,700 29,620 29,620 Country of incorporation 2012 % 2011 % Ownership interest Australia Australia Australia Australia Australia Australia Canada Australia 100 - 100 100 100 100 100 100 100 100 100 100 100 - Consolidated 2012 $ 2011 $ 14,069,291 278,788 2,859,067 - 2,043,506 182,467 2,231,064 764,906 4,605,000 - 684,306 152,834 27 FINANCIAL RISK MANAGEMENT Credit risk management The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders. The capital structure of the Group consists of cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued capital, reserves and accumulated losses as disclosed in Notes 19, 20 and 21 respectively. Proceeds from share issues are used to maintain and expand the Group’s exploration activities and fund operating costs. Financial assets Cash and cash equivalents Trade receivables Available-for-sale financial instruments Investment in associates Financial liabilities Payables Borrowings Credit risk management Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from activities. The Group does not have any significant credit risk exposure to any single counterparty or any Group of counterparties having similar characteristics. The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies. The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the Group’s maximum exposure to credit risk. Interest rate risk The tables listed below detail the Group’s interest bearing assets, consisting solely of cash on hand and on short term deposit (with all maturities less than one year in duration). 2012 Variable interest rate 2011 Variable interest rate Weighted average effective interest rate Less than 1 year % $ 4.82 14,069,291 4.78 2,231,064 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 63 Notes to the Financial Statements F O R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 2 27 FINANCIAL RISK MANAGEMENT CONTINUED At reporting date, if interest rates had been 50 basis points higher or lower and all other variables were held constant, the Group’s: • net loss would increase or decrease by $17,254 which is mainly attributable to the Group’s exposure to interest rates on its variable bank deposits. Liquidity risk management Ultimate responsibility for liquidity risk management rests with the Board, which has built an appropriate liquidity risk management framework for the management of the Group’s short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves. Liquidity and interest risk tables The following table details the Company’s and the Group’s remaining contractual maturity for its non-derivative financial liabilities. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows. Consolidated 2012 Interest bearing Non-interest bearing 2011 Interest bearing Non-interest bearing Weighted average effective interest rate Less than 1 year than Longer than 1 year and not longer 5 years % $ $ 6.22 0.00 7.69 0.00 32,983 2,043,506 152,834 - 33,898 684,306 118,936 - Available-for-sale financial instrument risk management Ultimate responsibility for the Group’s investments in available-for-sale financial instruments rests with the Board. The Board actively manages its investments by reviewing the market value of the Group’s portfolio at each board meeting and making appropriate investment decisions. Fair value measurements 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 (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). 64 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 27 FINANCIAL RISK MANAGEMENT CONTINUED Financial assets at fair value Available-for-sale investments – – – ActiveX Ltd - 4,549,129 Shares Platsearch NL - 8,000,000 Shares Thomson Resources Ltd - 10,000,000 Shares – Mithril Resources Ltd - 21,416,667 Shares – Mungana Goldmines Ltd - 3,076,923 Shares – Spencer Resources Ltd - 850,000 Shares Investments in associates – Petratherm Ltd - 22,707,397 Shares Level 1 $ Level 2 $ Level 3 $ Total $ 77,335 528,000 500,000 578,250 1,000,000 175,482 - 2,859,067 - - - - - - - - - - - - - - - - 77,335 528,000 500,000 578,250 1,000,000 175,482 - 2,859,067 Included within Level 1 of the hierarchy are listed investments. The fair values of these financial assets have been based on the closing quoted bid prices at the end of the reporting period, excluding transaction costs. The fair value of financial instruments that are not traded in an active market is determined using valuation methodologies. Quoted market prices for similar instruments is a method used to determine the fair value. These instruments are included in Level 2. In the circumstances where a valuation technique is based on significant unobservable inputs, such instruments are included in Level 3. 28 RELATED PARTY DISCLOSURE AND KEY MANAGEMENT PERSONNEL REMUNERATION The following individuals are classified as key management personnel in accordance with AASB 124 ‘Related Party Disclosures’: Mr Derek N Carter, Chairman Mr Andrew Woskett, Managing Director Mr Richard M Bonython, Non-Executive Director Dr Peter J Gower, Non-Executive Director (Retired 24 November 11) Dr Antonio P Belperio, Executive Director Mr Donald Stephens, Company Secretary Mr Richard Flint, Chief Geologist Mr Ian Garsed, Exploration Manager Mr Varis Lidums, Commercial Manager Short-term employee benefits Post employment benefits Share-based payments Consolidated Group 2012 $ 1,297,071 131,792 40,595 2011 $ 966,997 85,916 133,777 1,469,458 1,186,690 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 65 Notes to the Financial Statements F O R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 2 28 RELATED PARTY DISCLOSURE AND KEY MANAGEMENT PERSONNEL REMUNERATION CONTINUED a) Option holdings of Key Management Personnel Balance at beginning of period Granted as remuneration Exercised Net change other Balance at end of period Expiry Date First Exercise Date Last Exercise Date 30 June 2011 Directors Derek Carter 1,200,000 Richard Bonython Peter Gower Antonio Belperio Andrew Woskett Executives Donald Stephens Richard Flint 30 June 2012 Directors 900,000 900,000 900,000 400,000 1,000,000 1,000,000 400,000 50,000 100,000 50,000 100,000 Balance at beginning of period Derek Carter 1,200,000 Richard Bonython 900,000 Peter Gower Antonio Belperio Andrew Woskett Executives 900,000 900,000 400,000 1,000,000 1,000,000 Donald Stephens 400,000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (50,000) - - - Granted as remuneration Exercised Net change other 1,200,000 17/05/15 18/05/10 17/05/15 900,000 900,000 900,000 400,000 1,000,000 1,000,000 17/05/15 18/05/10 17/05/15 17/05/15 18/05/10 17/05/15 17/05/15 02/12/12 29/08/15 27/02/16 18/05/10 03/12/07 30/08/10 28/02/11 17/05/15 02/12/12 29/08/15 27/02/16 400,000 17/05/15 18/05/10 17/05/15 - 100,000 50,000 100,000 Balance at end of period 31/12/10 18/01/12 30/01/13 02/12/13 01/01/06 19/01/07 31/01/08 03/12/08 31/12/10 18/01/12 30/01/13 02/12/13 Expiry Date First Exercise Date Last Exercise Date - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1,200,000 17/05/15 18/05/10 17/05/15 900,000 17/05/15 18/05/10 17/05/15 900,000 17/05/15 18/05/10 17/05/15 900,000 400,000 1,000,000 1,000,000 17/05/15 02/12/12 29/08/15 27/02/16 18/05/10 03/12/07 30/08/10 28/02/11 17/05/15 02/12/12 29/08/15 27/02/16 400,000 17/05/15 18/05/10 17/05/15 (100,000) - - - - 50,000 100,000 75,000 18/01/12 30/01/13 02/12/13 29/09/16 19/01/07 31/01/08 03/12/08 30/09/12 18/01/12 30/01/13 02/12/13 29/09/16 - - 250,000 29/09/16 30/09/12 29/09/16 250,000 29/09/16 30/09/12 29/09/16 Richard Flint Varis Lidums Ian Garsed 100,000 50,000 100,000 - - - - - - 75,000 250,000 250,000 66 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 28 RELATED PARTY DISCLOSURE AND KEY MANAGEMENT PERSONNEL REMUNERATION CONTINUED b) Shareholdings of Key Management Personnel 30 June 2011 Directors Derek Carter Andrew Woskett Richard Bonython Peter Gower Antonio Belperio Executives Donald Stephens Richard Flint Varis Lidums Ian Garsed 30 June 2012 Directors Derek Carter Andrew Woskett Richard Bonython Peter Gower Antonio Belperio Executives Donald Stephens Richard Flint Varis Lidums Ian Garsed Associates Balance at 1 July 10 On Exercise of Options Net Change Other Balance 30 June 11 2,056,805 - 1,452,000 600,000 680,306 305,000 - - - - - - - - - - - - - - - - - - - - - 2,056,805 - 1,452,000 600,000 680,306 305,000 - - - Balance at 1 July 11 On Exercise of Options Net Change Other Balance 30 June 12 2,056,805 - 1,452,000 600,000 680,306 305,000 - - - - - - - - - - - - 100,000 2,156,805 - 50,000 100,000 150,000 - - - - - 1,502,000 700,000 830,306 305,000 - - - Throughout the year, Minotaur invoiced its associate Mithril Resources Ltd (’Mithril’) for the provision of technical staff and equipment, as well as reimbursements for expenditure jointly incurred. These transactions were undertaken on an arms length basis and in aggregate for the year ended 30 June 2012 totalled $1,540 (2011: $29,420) exclusive of GST. No amounts were owed by Mithril at the end the end of the year. M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 67 Notes to the Financial Statements F O R T H E F I N A N C I A L Y E A R E N D E D 3 0 J U N E 2 0 1 2 28 RELATED PARTY DISCLOSURE AND KEY MANAGEMENT PERSONNEL REMUNERATION CONTINUED Director related entities In addition, Minotaur invoiced Toro Energy Ltd and its wholly owned subsidiary Minotaur Uranium Pty Ltd (Derek Carter, the Company’s Chairman is a board member of Toro) for reimbursements relating to exploration expenditure jointly incurred. These transactions were undertaken on an arms length basis and in aggregate for the year ended 30 June 2012 totalled $11,167 (2011: $7,315), exclusive of GST. Wholly owned group transactions The wholly owned Group consists of Minotaur Exploration Ltd and its wholly owned controlled entities Minotaur Operations Pty Ltd, Minotaur Resources Investments Pty Ltd, Minotaur Atlantic Exploration Ltd, Minotaur Industrial Minerals Pty Ltd and Great Southern Kaolin Pty Ltd. Ownership interests in these controlled entities are set out in note 26. Transactions between Minotaur Exploration Ltd and other entities in the wholly owned Group during the year consisted of loans advanced by Minotaur Exploration Ltd to fund exploration and investment activities. The closing value of all loan amounts to wholly owned members of the Group is contained within the Statement of Financial Position under other receivables and cash movements throughout the year are detailed within the body of the Statement of Cash Flows under loans to wholly owned subsidiaries. 29 SUBSEQUENT EVENTS On 4 July 2012, the Company announced the issue of 2,420,000 unlisted options to employees under the Employee Share Option Plan. The options have an exercise price of $0.25 and expire on 3 July 2017. 68 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 Directors’ Declaration The Directors of the Company declare that: 1 the financial statements and notes, as set out on pages 34 to 68, are in accordance with the Corporations Act 2001 and: a) comply with Accounting Standards, which, as stated in accounting policy Note 1 to the financial statements, constitutes explicit and unreserved compliance with International Financial Reporting Standards (IFRS); and b) give a true and fair view of the financial position as at 30 June 2012 and of the performance for the year ended on that date of the Company and consolidated Group; 2 the Managing Director and Company Secretary have each declared that: a) the financial records of the Company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001; b) the financial statements and notes for the financial year comply with Accounting Standards; and c) the financial statements and notes for the financial year give a true and fair view; and 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. This declaration is made in accordance with a resolution of the Board of Directors. Mr Derek N Carter Director 21 September 2012 Independent Auditor’s Report T O T H E M E M B E R S O F M I N O T A U R E X P L O R A T I O N L I M I T E D Level 1, 67 Greenhill Rd Wayville SA 5034 GPO Box 1270 Adelaide SA 5001 T 61 8 8372 6666 F 61 8 8372 6677 E info.sa@au.gt.com W www.grantthornton.com.au INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MINOTAUR EXPLORATION LIMITED Report on the financial report We have audited the accompanying financial report of Minotaur Exploration Limited (the “Company”), which comprises the consolidated statement of financial position as at 30 June 2012 the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the consolidated entity comprising the Company and the entities it controlled at the year’s end or from time to time during the financial year. Directors’ responsibility for the financial report The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determines 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. The Directors also state, in the notes to the financial report, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, the financial statements comply with International Financial Reporting Standards. Auditor’s responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require us to comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 70 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. Auditor’s opinion In our opinion: a the financial report of Minotaur Exploration Limited is in accordance with the Corporations Act 2001, including: i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2012 and of its performance for the year ended on that date; and ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and b the financial report also complies with International Financial Reporting Standards as disclosed in the notes to the financial statements. Report on the remuneration report We have audited the remuneration report included in the directors’ report for the year ended 30 June 2012. 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. Auditor’s opinion on the remuneration report In our opinion, the remuneration report of Minotaur Exploration Limited for the year ended 30 June 2012, complies with section 300A of the Corporations Act 2001. GRANT THORNTON SOUTH AUSTRALIAN PARTNERSHIP Chartered Accountants J L Humphrey Partner Adelaide, 21 September 2012 Grant Thornton South Australia Partnership ABN 27 244 906 724 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia. Liability limited by a scheme approved under Professional Standards Legislation. M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 71 ASX Additional Information Lease ID Lease Name State Holding Company MinotaurEquity or EquityEarned JV Partner Mitsubishi Corporation, Mitsubishi Materials Corporation 0% BHPBilliton NSR, JOGMEC 0% JOGMEC 0% JOGMEC 0% JOGMEC 0% JOGMEC 0% JOGMEC 0% JOGMEC 0% JOGMEC 0% JOGMEC 0% JOGMEC 0% JOGMEC 0% JOGMEC 0% BHPBilliton NSR, JOGMEC 0% EL 7588 ARTHURVILLE NSW Minotaur Operations 100% EL 7929 EPM 12463 WALLABY CREEK CLONAGH NSW Minotaur Operations Minotaur Operations QLD EPM 14296 EPM 16479 EPM 16594 EPM 16927 EPM 16975 EPM 16977 EPM 17286 EPM 18017 EPM 18268 EPM 18283 EPM 18315 EPM 18367 EPM 18571 EPM 18572 EPM 18573 EPM 18574 EPM 18575 EPM 18576 EPM 18624 EPM 18802 EPM 19500 EPM 8608 EPMA 18068 EPMA 18317 EPMA 18720 EPMA 18861 EPMA 19050 EPMA 19061 EPMA 19066 EPMA 19096 EPMA 19205 EPMA 19383 EPMA 19412 EPMA 19505 EPMA 19530 EPMA 19690 EPMA 19775 CLONAGH NORTH SHAG ROCK FOUR MILE BORE RACECOURSE CATTLE CREEK DRY CREEK JACKYS CREEK COTSWOLD MOUSE HINKLER WELL CAMEL WELL COTSWOLD HOMESTEAD SANDY CREEK NORTH OSBORNE GUM CREEK MOMEDAH CREEK CARBO CREEK PATHUNGRA CREEK OORINDI PARK EAST RACECOURSE ELOISE NORTH BENDIGO PARK GIDYEA BORE NINE MILE BORE CUCKADOO DONALDSON WELL DATCHET WINDSOR LUCIA STRATHFIELD ERNEST HENRY WEST MOUNT CAROL MIDDLE CREEK YANINGERRY BORE CORELLA HUDSONS TANK MOUNT MARGARET QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD QLD Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations 100% 99% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 99% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 72 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 Lease ID Lease Name State Holding Company MinotaurEquity or EquityEarned JV Partner EL 3745 MUTOOROO EL 4203 EL 4270 SCEALES WOODVILLE DAM EL 4352 COLLINS TANK EL 4388 EL 4435 EL 4478 EL 4575 EL 4692 EL 4697 EL 4708 EL 4745 EL 4776 EL 4843 EL 4844 BLINMAN WHITING WILKAWILLINA TOOTLA PANDURRA YANERBIE KOOLCUTTA BONYTHON HILL MOUNT DOUBLE YUDNAPINNA MINGARY EL 4980 EL 4981 EL 5016 ELA 180/2012 ELA 181/2012 ELA 301/2011 MUTOOROO OOLGELIMA CREEK LAKE CADI WHICHELBY KOOLUNGA RHYNIE ELA 232/2010 ELA 244/2012 ELA 286/2011 ELA 287/2011 ELA 367/2010 ML 4386 ML 5856 EL 5253 EL 5296 EL 5402 EL 5403 EDIACARA PELTABINNA HILL YANDOOLKA WELL DIESEL DAM CAMEL LAKE THIRD PLAIN EAREA DAM DOOKIE ROCHESTER CHATSWORTH LEXINGTON SA SA SA SA SA SA SA SA SA SA SA SA SA SA SA SA SA SA SA SA SA SA SA SA SA SA SA SA VIC VIC VIC VIC Minotaur Operations 41% Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Great Southern Kaolin Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations 100% 41% 41% 49% 100% 49% 100% 20% 100% 20% 100% 30% 20% 41% 100% 100% 100% 100% 100% 41% 49% 100% 100% 100% 100% 49% 100% 100% 100% 100% 100% Sumitomo Metal Mining Oceania 59% Sumitomo Metal Mining Oceania 59% Sumitomo Metal Mining Oceania 59% Perilya Ltd 51% Perilya Ltd 51% Spencer Resources 80% Spencer Resources 80% Spencer Resources 70% Spencer Resources 80% Sumitomo Metal Mining Oceania 59% Sumitomo Metal Mining Oceania 59% Perilya Ltd 51% Perilya Ltd 51% ASX Additional Information Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this report is as follows. The information is current as at 30 September 2012. Distribution of equity securities Ordinary share capital 103,585,709 fully paid ordinary shares are held by 2,720 individual shareholders. There are no restricted and unquoted ordinary shares. All issued ordinary fully paid shares carry one vote per share. Options 8,970,000 unlisted options are held by 14 individual option holders. One holder, Mr Andrew Woskett, holds 2,000,000 unlisted options (equivalent to 22.30% of total unlisted options). The number of shareholders, by size of holding, in each class are: Fully paid ordinary shares Unlisted Options 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over Holding less than a marketable parcel Substantial shareholders Ordinary shareholders OZ Minerals Limited Newmont Capital Pty Ltd 429 850 405 872 164 2,720 877 - - - 9 15 24 - Fully paid Number 8,041,670 5,320,000 13,361,670 Percentage 7.76% 5.14% 12.90% Fully Paid Ordinary Shares TWENTY LARGEST HOLDERS OF QUOTED EQUITY SECURITIES OZ Minerals Limited Newmont Capital Pty Ltd Yarraandoo Pty Ltd Bell Potter Nominees Ltd Miningnut Pty Ltd Locantro Speculative Investments Limited Kimbriki Nominees Pty Ltd Dorica Nominees Pty Ltd HSBC Custody Nominees (Australia) Limited Mr Nicholas James Carter + Mrs Susan Mary Carter Mr Nicholas Carter Locantro Speculative Investments Limited JP Morgan Nominees Australia Limited Mr Derek Northleigh Carter Valnera Holdings Pty Ltd PFH Super Pty Ltd Maniciti Pte Ltd Mrs Susan Mary Carter Romadak Pty Ltd M&S Brooke Pty Ltd Number 8,041,670 5,320,000 3,662,129 3,090,109 2,854,584 2,360,000 1,857,000 1,502,000 1,356,859 1,231,000 1,067,181 960,100 935,101 900,000 800,000 750,000 700,000 628,000 608,334 600,000 Percentage 7.76% 5.14% 3.54% 2.98% 2.76% 2.28% 1.79% 1.45% 1.31% 1.19% 1.03% 0.93% 0.90% 0.87% 0.77% 0.72% 0.68% 0.61% 0.59% 0.58% 39,224,067 37.87% 74 M I N O T A U R E X P L O R A T I O N A N N U A L R E P O R T 2 0 1 2 www.minotaurexploration.com.au 

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