MINOTAUR EXPLORATION Annual Report 2017 BANKERS National Australia Bank 22-28 King William Street ADELAIDE SA 5000 AUDITORS Grant Thornton Audit Pty Ltd Level 3, 170 Frome Street ADELAIDE SA 5000 www.minotaurexploration.com.au CORPORATE DIRECTORY MINOTAUR EXPLORATION LIMITED ACN 108 483 601 ASX CODE: MEP DIRECTORS Dr Antonio Belperio Mr Derek Carter Executive Director Chairman (resigned 17 November 2016) Dr Roger Higgins Chairman (elected 31 January 2017)/ Non-Executive Director (appointed 1 July 2016) Mr George McKenzie Non-Executive Director (appointed 31 January 2017) Mr Andrew Woskett Managing Director COMPANY SECRETARY Mr Varis Lidums REGISTERED OFFICE c/o HLB Mann Judd (SA) Pty Ltd 169 Fullarton Road DULWICH SA 5065 PRINCIPAL PLACE OF BUSINESS Level 1, 8 Beulah Road NORWOOD SA 5067 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 MINOTAUR EXPLORATION CONTENTS Chairman’s Review Managing Director’s Report Directors’ Report Auditor’s Independence Declaration Financial Report Consolidated Statement of Profit or Loss and Other Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements Directors’ Declaration Independent Auditor’s Report ASX Additional Information 1 2 4 12 13 13 13 14 14 15 30 31 33 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 4 to 5 The Directors’ Report is not part of the financial report. Chairman’s R E V I E W I’m delighted to report to shareholders in my new capacity as Chairman of the Board. It is an honour to accept this stewardship role for the Company following Derek Carter’s retirement at last year’s annual general meeting. We also welcomed George McKenzie to the Board during the year and George has taken the role of Chair of the Board’s Audit and Risk Committee. As our Annual Report goes to press, we see many signs that a return to favour for commodities is flowing through to the junior sector of the listed mining company register. Positive sentiment is vital in the exploration business as it is fundamental to stepping out into the unknown in search of hidden mineral deposits. Of course, enthusiasm must be melded with the science we practice. Our discipline attracts quality joint venture partners who collectively contributed $3.73 million towards our exploration campaigns through the 2017 financial year, enabling Minotaur to sustain a 70/30 ratio between third party and internally funded work programs. We appreciate the faith that accompanies those partner contributions and strive to deliver on that support. Minotaur closed a fully subscribed private Placement at the end of September; the A$1 million raising was cornerstoned by Sprott Inc and Yarraandoo, our #1 and #2 shareholders respectively. Their active support is most gratifying and we hope that shareholders will similarly support the complementary A$1 million share purchase plan, presently underway. Proceeds from these equity issues will serve to maintain our tempo of activity in 2018. Work is continuing on our Eloise joint venture with OZ Minerals, near Cloncurry in Queensland. By the close of the 2017 calendar year OZ Minerals’ investment in the project is expected to reach A$4.2 million. Success in the drilling program, now underway, could encourage OZ Minerals to continue into 2018, working to its threshold 51% interest in the tenements which requires total expenditure by OZ Minerals of A$5 million. Our Osborne joint venture in the same district, with JOGMEC, continues using geophysics to search under deep cover sediments. This requires patience and deep technical strengths, attributes which JOGMEC brings to the partnership. In South Australia, close to OZ Minerals’ Prominent Hill mine, our collaboration with OZ Minerals has delivered a suite of encouraging basement anomalies, about to be tested by drilling. These are all within 22km of the mine itself in a highly prospective geological setting. A well mineralised drill intersection would provide great encouragement to expand the drill effort. Our package of nickel and gold prospective tenements near Kalgoorlie and Leinster in Western Australia warrant a modest amount of exploration attention, given the firming nickel price. Ultimately, the Company’s aim is to demonstrate potential for an expanded resource base, building on the May 2017 JORC resource at Saints and to leverage that promise into a vehicle for regional consolidation of surrounding tenements. At the same time we continue to stay alert for, and to seek out, value creating opportunities in the gold sector where existing resources can be upgraded through judicious exploration and advanced towards development. Chalcopyrite in drill core sample. Thank you for your continuing support of Minotaur Exploration. Roger Higgins Chairman 1 Managing Director’s R E P O R T Business Review Minotaur’s exploration pace was maintained through the 2017 financial year, due largely to our ongoing partner-funded joint ventures with OZ Minerals Ltd (ASX: OZL) and the Japan Oil, Gas and Metals National Corporation (JOGMEC). Both partners recognise the potential for discovery of new, ‘blind’ deposits in the Cloncurry region, where our geophysical techniques are proven to reveal basement mineralisation obscured under cover sediments. The region demonstrates a range of mineralisation styles, all of which tend to respond well to geophysics. Drill investigation is the ultimate, and only, definitive test method to confirm the type of mineralisation generating a conductive response is, in fact, an economic mineral type, such as chalcopyrite (a form of copper sulphide). Thus the technical approach is and must be methodical and measured, based on rigorous scientific modelling, abilities which position Minotaur well amongst its industry peers. A year on from activation of those joint ventures we, with our respective partners, have identified a number of quality targets. Some have proven to be ‘false positives’, in that the conductive anomalism has shown to be a non-economic mineralisation type, such as pyrite or graphite, in the drill core. Others have proven the integrity of the geolog- ical model, revealing highly anomalous inter- sections of copper sulphides, such as the ‘Electra’ prospect 5km north-east of the Eloise copper mine (where one intersection - EL16D08 - returned 0.4m @ 12.35% Cu and 14.3g/t Au, illustrating fertility in a sequence of rocks not previously recognised). 2 Similar early stage results gave impetus to the exploration effort around the Eloise mine, leading to a reconnaissance drilling program testing new, similar geophysical responses, underway at the time of writing and again funded by OZ Minerals. Close to OZ Mineral’s Prominent Hill mine in South Australia our joint collaboration seeking new regional targets moved into its second phase, generating positive targets in September, through use of on-ground geophysics. A new drill campaign is planned for the December Quarter of 2017 and should any drill target reveal economic grade copper mineralisation the Alliance partners will be motivated to expand the drilling scope and pace. Historic drill assays for the Saints nickel deposit near Kalgoorlie in Western Australia were re-appraised and modelled, resulting in publication of a maiden JORC 2012 Inferred mineral resource estimate. The contained metal inventory of 21,000 tonnes of nickel at 2% provides a sound base for further exploration along strike. Minotaur had previously partly completed ground electromagnetic surveys to track mineralised extensions, with favourable results. This incomplete work warrants follow up, especially as the commodity price continues to firm. When potential for expansion of the resource base is demonstrated Minotaur would seek to consolidate its nickel tenement assets in the region into a separate listed vehicle. In South Australia the Company continues its technical and marketing research into innovative uses for its kaolin and gypsum resources, mineral assets which benefit the Company with significant operational and strategic optionality. Corporate Review In line with the Accounting Standards Minotaur reviewed and impaired its exploration and evaluation assets through the financial year, with the 2017FY write-down amounting to $2.09 million (2016FY $11.42 million). Group capitalised exploration expenditure for the financial year was $1.54 million (2016FY $3.06 million) whereas total exploration expenditure (including joint venture contributions of $3.73 million) was steady at $5.3 million (2016FY $5.2 million). These figures show that Minotaur’s joint venture based business model enabled the Company to leverage its work funding by 3.4 times, thereby broadening its scope and sphere of activity. Minotaur’s exploration expenditure of $5.3 million for FY2017 was thereby outstanding relative to industry peers, particularly when taking into account the Company’s modest market capitalisation of c. A$14m (at the time of writing). Prior to the current $2 million raising activity, the Company had not raised new capital since the $2.3 million equity raising in November 2015, thus avoiding shareholder dilution in the interim. The Board’s view is that the Company’s joint venture model positions Minotaur with optimal exposure to significant discoveries. I am confident in the collective ability of Minotaur’s employees and projects to provide shareholders with market leading returns over time and we look forward to delivering on that potential. Osborne JV, QLD Barry van der Stelt, Senior Geologist, and Anna Ogilvie, Geologist, inspecting drill core at Electra Prospect, Eloise JV, QLD. Drilling at Osborne JV, QLD. Minotaur maintains a diverse array of minerals exploration tenements around Australia, totalling 10,092 km2, including Joint Venture areas. Mount Isa Cloncurry Eloise Osborne Leinster Scotia Camel Lake Prominent Hill Gawler Ranges Poochera Lake Purdilla Mutooroo Perth Adelaide Sydney Cu projects Au projects Ni projects Casterton MINOTAUR EXPLORATION Industrial Minerals projects Competent Person’s Statement Information in this section 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 (AusIMM). Dr Belperio has sufficient experience 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 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code). Dr Belperio consents to inclusion in this document of the information in the form and context in which it appears. Anna Ogilvie, Geologist, logging samples from Chameleon Gold Deposit, WA. Andrew Woskett Managing Director 3 Directors’ R E P O R T Your Directors present their report on the consolidated Group for the financial year ended 30 June 2017. Dr Roger Higgins BE (Hons), MSc, PhD, FIEAust, FAusIMM (Non-Executive Director – appointed 1 July 2016 Chairman – elected 31 January 2017) Director Details The names of the Directors in office at any time during, or since the end of, the year are: Mr Derek Carter Chairman (resigned 17 November 2016) Mr Andrew Woskett Managing Director Dr Antonio Belperio Executive Director Dr Roger Higgins Chairman (elected 31 January 2017)/ Non-Executive Director (appointed 1 July 2016) Mr George McKenzie Non-Executive Director (appointed 31 January 2017) 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 responsibilities 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. Dr Belperio is also a Director of Thomson Resources Ltd, a public company listed on the ASX. 4 Dr Higgins has over 40 years experience in mine management, project development and sustainability, and is a current director of Newcrest Mining Ltd and Metminco Ltd, and a former director of Blackthorn Resources Ltd (resigned 2014), all public companies listed on the ASX. He is also a current director and a former Managing Director of Ok Tedi Mining Limited in Papua New Guinea. 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 George McKenzie BA LLB (cum laude), FAICD, MtB (Order of Merit) (Non-Executive Director – appointed 31 January 2017 George McKenzie is a commercial lawyer with over 25 years experience representing many of South Australia’s explorers and mine developers. He is a long standing Councillor of the South Australian Chamber of Mines and Energy Inc. (SACOME), having served as Vice-President and member of the Executive Committee of the Chamber. Mr McKenzie has also been a member of the Minerals and Energy Advisory Council which advises the Minister of Mineral Resources and Energy on strategic issues, since inception of the Council in 2000. Mr Andrew Woskett B Eng, M Comm Law (Managing Director) Andrew Woskett has over 35 years project and corporate experience in the mining industry. He held senior development responsibility roles for a variety of Australian mining landmarks in gold, copper, iron ore and coal. He has had several roles as managing director of resource development companies culminating in his tenure as managing director of Minotaur since early 2010. Andrew is a Fellow of the Australasian Institute of Mining and Metallurgy. Varis Lidums BEc, LLB, CA, MBA (Company Secretary – appointed 1 July 2016) Mr Lidums is a Chartered Accountant and qualified lawyer with over 20 years experience in the resources, energy and accounting industries. He has held senior roles with BP, Shell and ConocoPhillips and has been the Commercial Manager at Minotaur Exploration Ltd since 1 March 2011. Review of Operations Corporate The 2017 financial year concluded with the Group holding $2.33 million in cash and term deposits plus $0.72 million equity holdings in ASX listed explorers. No equity issues were required to support the Group’s active work programs, largely due to ongoing and substantial exploration investments by our joint venture allies. Sprott Group remains the Company’s key shareholder with 13% of the issued shares. OZ Minerals Ltd’s (ASX: OZL) investment in the Eloise Joint Venture, in which OZ Minerals may earn up to 70% interest through expenditure of $10 million, exceeded $3.2 million in total by the close of the financial year. OZ Minerals continues to fund Eloise joint venture research into copper and base metal prospects through the remainder of calendar 2017. Rotary mud pre-collar samples, Osborne Project, QLD. OZ Minerals also endorsed Minotaur’s proposed work plan to explore its tenements around the Prominent Hill copper-gold mine in South Australia. This alliance opens up new horizons for Minotaur to deploy its copper-gold targeting expertise. Exploration Exploration activity continued to focus on copper-gold targets in Queensland and South Australia. The joint venture with OZ Minerals across the Eloise area tenements honed in on new EM anomalies at Iris North and Iris South, where four diamond holes intersected moderate to low grades of copper sulphides. The EM surveys identified a 2.7km zone of interest encompassing Iris-Electra, along which a new four-hole drill campaign satisfactorily established the cause of the Electra geophysical response. Sub economic copper mineralisation was encountered in all holes, showing extent of fertility along the Levuka Shear structure and within 5km of the Eloise copper mine. The new joint venture, with Japan Oil, Gas and Metals National Corporation (JOGMEC), over Minotaur’s tenements surrounding the Osborne copper mine, south of Cloncurry was activated, seeking both Cannington-style and sulphide hosted copper targets through new ground EM surveys. Several targets were generated from the data and these were being drill tested at the close of the financial year. Minotaur’s alliance with OZ Minerals around Prominent Hill made valuable progress during the financial year. A number of geophysical targets, all within 50km of the mine, were tested and Minotaur’s proposition that iron sulphide hosted copper mineralisation could exist was validated. Follow-up work will progress during the 2018 financial year. A gold deposit near Kalgoorlie, named Chameleon, identified and drilled by previous operators, was advanced to a maiden JORC Ava Stephens, student geologist, Artemis drill core, QLD. Drilling at Osborne JV, QLD. mineral resource. A sale transaction over the asset was agreed and is in train for completion by the end of calendar 2017, with the balance of sale proceeds also expected by that date. Nickel rights held over third party tenements west of Kambalda, WA, were sold to a private group. Likely developments, business strategies and prospects Minotaur maintains its commitment to discovery through assiduous exploration and the opportunity to convert economic grade deposits into mineable propositions. While assays emanating from the recent Eloise drilling have disappointed, the joint venture believes that they establish confidence in the targeting technique and demonstrate prospectivity of the geology to potentially deliver an Eloise mine scale repetition. For those reasons a new ground EM campaign is underway along the mine’s flanks and is expected to reveal new drill targets. The same target generation approach is being applied to the regional work around Prominent Hill. Minotaur maintains a primary focus on its copper-gold prospects near Cloncurry and has a positive outlook on the upcoming work around Prominent Hill in collaboration with tenement holder OZ Minerals. The Company’s business model is substantially founded on continuing support from joint venture partners. This enables Minotaur to maintain a high level of exploration activity, compared to its peers, and constrains self funded administration costs to well under 20% of its exploration spend. Additionally, the Company self funds a modest program each year in order to generate new opportunities or present new openings for prospective joint venture involvement. Information in this report 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 which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. 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. 5 Directors’ Operating Results The consolidated loss of the Group after providing for income tax amounted to $3,820,416 (2016: $11,750,383). 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 Antonio Belperio Roger Higgins George McKenzie Andrew Woskett 1,712,750 - 59,100 205,000 2,800,000 2,500,000 - 5,000,000 Dividends Paid or Recommended Risk Management 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 secure new tenements with potential for mineralisation; and • To evaluate results achieved through surface sampling, drilling and geophysical surveys carried out during the year. 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 other than the Audit, Business Risk and Compliance Committee. The Board has a number of mechanisms in place to ensure that management’s objectives and activities are aligned with the 6 risks identified by the Board. These include the following: • Board approval of a strategic plan designed to meet stakeholders’ needs and manage business risk. • 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 On 31 March 2017, Minotaur Gold Solutions Pty Ltd completed a share buy back and cancellation of all the shares held by its minority interest holder, Golden Fields Resources Pty Ltd. As a result of the share buy back and cancellation, Minotaur Gold Solutions Pty Ltd became a wholly owned subsidiary of the Group, with Minotaur Exploration Limited owning 100% of its issued shares. No other significant changes occurred during the year. 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 year the majority of work carried out was in Queensland and the Group followed procedures and pursued objectives in line with guidelines published by the Queensland Government. These guidelines are quite detailed and encompass the impact on owners and land users, heritage, health and safety and proper restoration practices. The Group adheres to regulatory guidelines, 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. Events since the end of the Reporting Period On 3 July 2017, the following unlisted options issued under the Company’s Employee Share Option Plan expired: Issue Date Expiry Date Exercise Price Number of option 04/07/2012 03/07/2017 $0.25 1,575,000 No matter or circumstance has arisen since 30 June 2017 that has significantly affected the Group’s operations, results or state of affairs, or may do so in the future. Drilling, Eloise JV, QLD. Unissued Shares Under Option Unissued ordinary shares of Minotaur Exploration Limited under option at the date of this report are: Date Options Granted Unlisted 05/07/2013 20/11/2014 19/11/2015 07/09/2016 18/11/2016 Listed 08/01/2016 Expiry Date 04/07/2018 19/11/2019 30/11/2017 06/09/2021 17/11/2019 30/11/2017 Exercise Price of Shares $ Number Under Option 0.300 0.190 0.095 0.115 0.250 0.095 2,083,333 5,505,000 14,285,715 2,685,000 10,250,000 17,937,777 52,746,825 Shares Issued as a Result of Exercise of Options During or since the end of the financial year, the Company issued ordinary shares as a result of the exercise of listed options as follows (there were no amounts unpaid on the shares issued): Grant Date of Options 08/01/2016 08/01/2016 08/01/2016 08/01/2016 08/01/2016 08/01/2016 Issue Date of Shares 14/07/2016 25/07/2016 24/10/2016 29/11/2016 08/02/2017 09/06/2017 Issue Price of Shares $ Number of Shares Issued 0.095 0.095 0.095 0.095 0.095 0.095 3,274 1,000 33,837 1,325 1,858 1,000 42,294 Indemnification and Insurance of Directors and Officers Remuneration R E P O R T AUDITED To the extent permitted by law, the Company has indemnified (fully insured) each director and the secretary of the Company for an annual premium of $15,750. 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. Surface copper sample, Artemis Prospect, QLD. This report outlines the remuneration arrangements in place for directors and other key management personnel of Minotaur Exploration Limited in accordance with the requirements of the Corporations Act 2001 (the Act) and its regulations. This information has been audited as required by section 308(3C) of the Act. Introduction The remuneration report details the remuner- ation arrangements for key management personnel (KMP) who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or indirectly, including any director (whether executive or otherwise) of the Parent. These are as follows: Dr Antonio Belperio Executive Director Mr Derek Carter Dr Roger Higgins Mr Varis Lidums Chairman (resigned 17 November 2016) Chairman (elected 31 January 2017)/ Non-Executive Director (appointed 1 July 2016) Commercial Manager and Company Secretary Mr Glen Little Mr George McKenzie Non-Executive Director Exploration Manager (appointed 31 January 2017) Mr Andrew Woskett Managing Director 7 Directors’ Remuneration R E P O R T AUDITED 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 $355,675 per annum, exclusive of GST. The Company may terminate the consultancy agreement without cause by providing three (3) months written notice and paying a severance amount equal to nine (9) months’ 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 8 The table below details the conditions under which non-executive directors of the Company are remunerated: Non-Executive Directors Annual Retainer $ Dr Roger Higgins Non-Executive Chairman 90,000 Mr George McKenzie Non-Executive Director 45,000 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 executive directors and other executives receive a superannuation guarantee contribution when required by law, which is currently 9.5%, 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 other key management personnel is expensed as incurred. Key management are also entitled to participate in the Group’s 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. and his gross salary, inclusive of the 9.5% superannuation guarantee, is $225,500 per annum. 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 Glen Little, are formalised in a contract of employment. Mr Little commenced employment on 28 October 2014 and his gross salary, inclusive of the 9.5% superannuation guarantee, is $192,000 per annum. Mr Little is also entitled to the lease of a motor vehicle, with the total cost to the Company totalling $20,000 per annum. If in a particular year the cost to the Company is less than $20,000, the difference will be paid to Mr Little as additional remuneration. 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 and Company Secretary (effective 1 July 2016), 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 9.5% superannuation guarantee, is $195,000 per annum. 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. Table 1: Director remuneration for the year ended 30 June 2017 and 30 June 2016 Short Term Employee Benefits Post Employment Share-based Payments Salary & Fees Bonus Superannuation Antonio Belperio Richard Bonython (i) Derek Carter (ii) Roger Higgins (iii) George McKenzie (iv) Andrew Woskett Total 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 205,936 205,936 - 16,305 38,150 86,982 67,500 - 18,750 - 355,675 337,891 686,011 647,114 - - - - - - - - - - - - - - 19,564 19,564 - 1,549 - - - - - - - - 19,564 21,113 Options 82,225 - - - - - 74,750 - - - 149,500 - 306,475 - Table 2: Remuneration of other key management personnel for the year ended 30 June 2017 and 30 June 2016 Short Term Employee Benefits Post Employment Share-based Payments Salary & Fees Bonus Superannuation Options Varis Lidums Glen Little Total 2017 2016 2017 2016 2017 2016 178,082 169,178 182,391 171,011 360,473 340,189 - - - - - - 16,918 16,072 17,327 16,246 34,245 32,318 16,280 - 10,175 - 26,455 - Share based payments, being options issued to directors and employees under the Company’s Employee Share Option Plan, are recognised at fair value using the Black-Scholes pricing model. Totals $ 307,225 225,000 - 17,854 38,150 86,982 142,250 - 18,750 - 505,175 337,891 1,012,050 668,227 Totals $ 211,280 185,250 209,893 187,257 421,173 372,507 Performance Based % of Remuneration - - - - - - - - - - - - - - Performance Based % of Remuneration - - - - - - Andrew Thompson, Chief Geophysicist (right), with Zonge collecting EM data, SA. Other transactions with key management personnel Throughout the year $53,500 (2016: $53,078) (inclusive of GST) was paid to a related entity of Dr Antonio Belperio under a commercial lease agreement for the use of warehouse space located at Magill, South Australia. Bonuses No bonuses were paid during the 2017 financial year. Share-based remuneration Options may be granted to Key Management Personnel at the discretion of the Board under an Employee Share Option Plan. All options refer to options over ordinary shares of the Company, which are exercisable on a one-for- one basis under the terms of the agreements. All options expire on the earlier of their expiry date or termination of the individual’s employment. 9 Directors’ Remuneration R E P O R T AUDITED Details of options over ordinary shares in the Company that were granted during the year as remuneration to each key management personnel are set out below: Directors Antonio Belperio Derek Carter (i) Roger Higgins (ii) Number granted 2,750,000 - Grant date 18/11/16 - 2,500,000 18/11/16 George McKenzie (iii) - - Andrew Woskett 5,000,000 18/11/16 Other key management Varis Lidums Glen Little 400,000 250,000 07/09/16 07/09/16 Options held by key management personnel Value per option at grant date Value of options at grant date Number vested Exercise price $ 0.0299 - 0.0299 - 0.0299 0.0407 0.0407 82,225 - 74,750 - 149,500 16,280 10,175 2,750,000 - 2,500,000 - 5,000,000 400,000 250,000 0.25 - 0.25 - 0.25 0.115 0.115 Last exercise date 17/11/19 - 17/11/19 - 17/11/19 06/09/21 06/09/21 The number of options to acquire shares in the Company held during the 2017 reporting period by each of the key management personnel of the Group; including their related parties are set out below: Directors – Unlisted options Balance at beginning of period Granted as remuneration Exercised Net change other Antonio Belperio Derek Carter (i) Roger Higgins (ii) George McKenzie (iii) Andrew Woskett Directors – Listed options Antonio Belperio Derek Carter (i) Roger Higgins (ii) George McKenzie (iii) Andrew Woskett - - - - - 225,000 226,171 - - 50,000 2,750,000 - 2,500,000 - 5,000,000 - - - - - - - - - - - - - - - - - - - - (175,000) (226,171) - - (50,000) Balance at end of period 2,750,000 - Expiry date 17/11/19 - 2,500,000 17/11/19 - - 5,000,000 17/11/19 First exercise date 18/11/16 - 18/11/16 - 18/11/16 50,000 30/11/17 05/1/16 - - - - - - - - - - - - 10 Options held by key management personnel continued Other key management Unlisted options Balance at beginning of period Granted as remuneration Exercised Varis Lidums Varis Lidums Varis Lidums Varis Lidums Glen Little Glen Little 250,000 250,000 450,000 - 1,000,000 - - - - 400,000 - 250,000 - - - - - - Net change other (250,000) - - - - - Balance at end of period - 250,000 450,000 400,000 1,000,000 250,000 Expiry date 29/09/16 03/07/17 21/11/19 06/09/21 21/11/19 06/09/21 First exercise date 30/09/12 04/07/12 20/11/14 07/09/16 20/11/14 07/09/16 Shares held by key management personnel Use of remuneration consultants The number of fully paid ordinary shares in the Company held during the 2017 reporting period by each of the key management personnel of the Group; including their related parties are set out below: Directors Antonio Belperio Derek Carter (i) Roger Higgins (ii) George McKenzie (iii) Andrew Woskett Other key management Varis Lidums Glen Little Balance at 1 July 2016 1,537,750 2,487,872 - 59,100 255,000 - 58,956 On exercise of options - - - - - - - Net change other 175,000 (2,487,872) - - (50,000) - - Balance at 30 June 2017 1,712,750 - - 59,100 205,000 - 58,956 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 2016 Annual General Meeting Minotaur Exploration Ltd received more than 96.9% of “yes” votes on its remuneration report for the 2016 financial year by proxy. The Company did not receive any feedback at the Annual General Meeting on its remuneration report. 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: Directors’ Meetings Audit Committee Director Eligible Attended Eligible Attended Antonio Belperio Derek Carter Roger Higgins George McKenzie Andrew Woskett 6 2 6 4 6 6 1 6 4 6 2 - 2 1 - 2 - 2 1 - Proceeds 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. End of audited remuneration report. Non -audit Services During the year, Grant Thornton, the Company’s auditors, performed certain other services in addition to their statutory audit duties. The Board has considered the non- audit services provided during the year by the auditor and is satisfied that the provision of those non-audit services during the year is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons: 11 Directors’ Auditor’s Independence DECLARATION to the Directors of Minotaur Exploration Limited Non -audit Services continued • all non-audit services were subject to the corporate governance procedures adopted by the Company to ensure they do not impact upon the impartiality and objectivity of the auditor; and • the non-audit services do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards. Details of the amounts paid to the auditors of the Company, Grant Thornton, and its related practices for audit and non-audit services provided during the year are set out in Note 23 to the Financial Statements. A copy of the Auditor’s Independence Declaration as required under s307C of the Corporations Act 2001 is included on page 12 of this financial report and forms part of this Directors’ Report. Signed in accordance with a resolution of the Directors: 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 2017, 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 House Level 3, 170 Frome Street Adelaide SA 5000 Correspondence to: GPO Box 1270 Adelaide SA 5001 T 61 8 8372 6666 F 61 8 8372 6677 E info.sa@au.gt.com W www.grantthornton.com.au GRANT THORNTON AUDIT PTY LTD Chartered Accountants I S Kemp Partner – Audit & Assurance Adelaide, 21 August 2017 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 Roger Higgins Chairman ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Dated this 21st day of August 2017 Liability limited by a scheme approved under Professional Standards Legislation. 12 Financial R E P O R T Consolidated Statement of Profit or Loss and Other Comprehensive Income F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 7 Consolidated Statement of Financial Position A S AT 3 0 J U N E 2 0 1 7 Revenue Other income Impairment of exploration and evaluation assets Impairment of available-for-sale investments Project generation costs Employee benefits expense Depreciation expense Finance costs Other expenses Loss before income tax expense Income tax benefit Loss for the year Other comprehensive income (net of tax) Items that may be reclassified to profit or loss Fair value gains on available-for-sale assets Total comprehensive income for the year Loss for the year is attributable to: Members of the parent entity Non-controlling interest Consolidated Group 2017 $ 2016 $ 268,923 253,508 (2,091,726) (25,041) (1,056,673) (810,590) (164,135) (700) (889,457) (4,515,891) 695,475 342,384 466,680 (11,420,788) (9,728) (324,458) (313,706) (187,627) (2,075) (878,666) (12,327,984) 577,601 Note 4(a) 4(b) 4(c) 4(c) 4(c) 4(d) 4(c) 4(c) 4(e) 5 CURRENT ASSETS Cash and cash equivalents Trade and other receivables Other current assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Available-for-sale investments Property, plant and equipment Exploration and evaluation assets TOTAL NON-CURRENT ASSETS (3,820,416) (11,750,383) TOTAL ASSETS 19(b) 46,585 208,146 (3,773,831) (11,542,237) 20 21 (3,814,220) (6,196) (11,082,042) (668,341) CURRENT LIABILITIES Trade and other payables Borrowings Short-term provisions TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Borrowings Long-term provisions (3,820,416) (11,750,383) TOTAL NON-CURRENT LIABILITIES Total comprehensive income for the year is attributable to: Members of the parent entity Non-controlling interest Earnings per share Basic earnings per share (cents) Diluted earnings per share (cents) (3,767,635) (6,196) (10,873,896) (668,341) (3,773,831) (11,542,237) 6 6 (1.80) (1.80) (5.58) (5.58) TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses PARENT INTEREST Non-controlling interest TOTAL EQUITY Consolidated Group 2017 $ 2016 $ Note 7 8 9 11 12 13 15 16 17 16 17 18 19 20 21 2,331,267 704,123 110,767 3,146,157 718,494 753,448 8,969,026 4,471,763 34,431 78,846 4,585,040 636,971 947,716 10,217,052 10,440,968 11,801,739 13,587,125 16,386,780 1,839,818 - 505,478 2,345,296 392,000 66,365 458,365 1,298,599 14,933 500,084 1,813,616 394,574 41,067 435,641 2,803,661 2,249,258 10,783,464 14,137,522 42,935,000 1,433,207 (33,584,743) 42,930,982 1,044,644 (29,842,301) 10,783,464 14,133,325 - 4,197 10,783,464 14,137,522 The above statement should be read in conjunction with the accompanying notes. The above statement should be read in conjunction with the accompanying notes. MIN OTAUR EXPLOR ATION LIMITED ANNUAL REPORT 2 017 13 Financial R E P O R T Consolidated Statement of Changes in Equity F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 7 Consolidated Group Issued Capital $ Note Other Share Components Option Reserve $ Non- of Equity Accumulated Controlling Interest (Note 19) $ $ Losses $ Total Equity $ Balance at 1 July 2016 Comprehensive income Total comprehensive income for the year Total comprehensive income for the year Transactions with owners, in their capacity as owners, and other transfers Issue of shares through exercise of options Issue of unlisted options to employees and directors Adjustment upon increase in ownership percentage in controlled entity Transfer from share option reserve upon lapse of options 42,930,982 836,498 208,146 (29,842,301) 4,197 14,137,522 - - 18 4,018 - - - - - - 415,755 - (73,777) 4,018 341,978 19(a) 46,585 (3,814,220) (6,196) (3,773,831) 46,585 (3,814,220) (6,196) (3,773,831) - - - - - - - - - 4,018 415,755 (1,999) 1,999 73,777 - - - 71,778 1,999 419,773 Balance at 30 June 2017 42,935,000 1,178,476 254,731 (33,584,743) - 10,783,464 Balance at 1 July 2015 Comprehensive income Total comprehensive income for the year Total comprehensive income for the year Transactions with owners, in their capacity as owners, and other transfers Issue of shares through Share Placement and Rights Issue Transaction costs (net of tax) Issue of shares through exercise of options Conversion of non-controlling interest loan to equity in controlled entity Adjustment upon increase in ownership percentage in controlled entity Transfer from share option reserve upon lapse of options 40,781,387 1,024,418 - (18,975,019) 184,472 23,015,258 - - 18 18 2,258,744 (109,337) 188 - - - 19(a) - - - - - - - (187,920) 2,149,595 (187,920) 208,146 (11,082,042) (668,341) (11,542,237) 208,146 (11,082,042) (668,341) (11,542,237) - - - - - - - - - - - - - - 2,258,744 (109,337) 188 514,906 514,906 26,840 (26,840) 187,920 - - - 214,760 488,066 2,664,501 Balance at 30 June 2016 42,930,982 836,498 208,146 (29,842,301) 4,197 14,137,522 Consolidated Statement of Cash Flows F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 7 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Interest received Finance costs R&D tax incentive received Consolidated Group 2017 $ 2016 $ Note 242,689 (1,402,976) 31,490 (1,501) 695,475 285,003 (1,552,420) 56,674 (2,075) 624,460 NET CASH USED IN OPERATING ACTIVITIES 7 (434,823) (588,358) CASH FLOWS FROM INVESTING ACTIVITIES Payments for property, plant and equipment Proceeds from sale of property, plant and equipment Purchase of available-for-sale investments Proceeds from sale of available-for-sale investments Payment for Scotia Project Gold JV interest Buy back of shares in controlled entity Proceeds from sale of tenements Joint Venture receipts Government grants received for exploration activities Payment for exploration activities (3,622) 10,000 (140,757) 155,000 - (6,471) 360,000 3,006,449 178,065 (5,250,848) (11,006) 38,366 (103,328) 962,039 (50,000) - - 2,711,268 80,573 (4,973,070) NET CASH USED IN INVESTING ACTIVITIES (1,692,184) (1,345,158) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares through Share Purchase Plan and Share Placement Proceeds from exercise of listed options Funds received from GFR Payment of transaction costs for issue of shares Repayment of borrowings NET CASH (USED IN)/PROVIDED BY FINANCING ACTIVITIES Net (decrease)/increase in cash and cash equivalents Cash at the beginning of the year - 4,018 - - (17,507) (13,489) (2,140,496) 4,471,763 CASH AT THE END OF THE YEAR 7 2,331,267 2,258,931 - 152,653 (156,195) (14,089) 2,241,300 307,784 4,163,979 4,471,763 The above statement should be read in conjunction with the accompanying notes. The above statement should be read in conjunction with the accompanying notes. 14 MINOTAUR E XPLO R ATIO N LI MI TED ANN UAL RE PORT 201 7 Notes to the Consolidated Financial Statements F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 7 These consolidated financial statements and notes represent those of Minotaur Exploration Ltd and Controlled Entities (the ”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. 1 Summary of Significant Accounting Policies Basis of Preparation The consolidated financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards. Minotaur Exploration Limited is the Group’s Ultimate Parent Company. Minotaur Exploration Limited is a Public Company incorporated and domiciled in Australia. The address of its registered office is C/- HLB Mann Judd (SA) Pty Ltd, 169 Fullarton Road, Dulwich SA 5065 and its principal place of business is Level 1, 8 Beulah Road, Norwood SA 5067. Australian Accounting Standards set out accounting policies that the Australian Accounting Standards Board has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB). Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless stated otherwise. Except for cash flow information, the financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The consolidated financial statements for the year ended 30 June 2017 were approved and authorised for issue by the Board of Directors on 21st August 2017. 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. The parent entity controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. Where controlled entities have entered or left the Group during the year, the financial performance of those entities is included only for the period of the year that they were controlled. A list of controlled entities is contained in Note 25 to the financial statements. In preparing the consolidated financial statements, all inter-group balances and transactions between entities in the consolidated group have been eliminated in full on consolidation. Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are reported separately within the equity section of the consolidated statement of financial position and statement of profit or loss and other comprehensive income. The non-controlling interests in the net assets comprise their interests at the date of the original business combination and their share of changes in equity since that date. Non-controlling interests Non-controlling interests (i.e. equity in a subsidiary not attributable directly or indirectly to a parent) are present in the consolidated statement of financial position within equity separately from the equity of the owners of the parent. b) Income Tax The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income). Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well unused tax losses. Current and deferred income tax expense (income) is charged or credited 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 is recognised from the initial recognition of an asset or liability, where there is no effect on accounting or taxable profit or loss. Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled and their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised. Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future. Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where: a) a legally enforceable right of set-off b) exists; and the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. Tax consolidation The parent entity and its Australian wholly- owned entities are part of a tax-consolidated group under Australian taxation law. The head entity within the tax consolidation group for the purposes of the tax consolidation system is Minotaur Exploration Ltd. Minotaur Exploration Ltd and each of its own wholly-owned subsidiaries recognise the current and deferred tax assets and deferred tax liabilities applicable to the transactions undertaken by it, after elimination of intra-group transactions. MIN OTAUR EXPLOR ATION LIMITED ANNUAL REPORT 2 017 15 Financial R E P O R T Notes to the Consolidated Financial Statements F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 7 1 b) Summary of Significant Accounting Policies Income Tax Tax consolidation Minotaur Exploration Ltd recognises the entire tax-consolidated group’s retained tax losses. Research and development tax incentive To the extent that research and development costs are eligible activities under the “Research and development tax incentive” programme, a 45% refundable tax offset is available for companies with annual turnover of less than $20 million. The Group recognises refundable tax offsets received in the financial year as an income tax benefit, in profit or loss, resulting from the monetisation of available tax losses that otherwise would have been carried forward. c) Property, Plant and Equipment Each class of property, plant and equipment is carried at cost as indicated less, where applicable, any accumulated depreciation and impairment losses. Land and buildings Buildings are measured on the cost basis and therefore carried at cost less accumulated depreciation for buildings and any accumulated impairment. In the event the carrying amount of buildings is greater than the estimated 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. Plant and equipment Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated depreciation and any accumulated 16 MINOTAUR E XPLO R ATIO N LI MI TED ANN UAL RE PORT 201 7 impairment. In the event the carrying amount of plant and equipment is greater than the estimated 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 property, plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. The cost of fixed assets constructed within the consolidated group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads. 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 profit or loss and other comprehensive income during the financial period in which they are incurred. Depreciation 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 over the asset’s useful life to the consolidated group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. The useful life for each class of depreciable assets are: Class of Fixed Asset Useful life Leasehold improvements 3 -7 years Buildings Plant and equipment Motor Vehicles 20 years 2 -20 years 6 -10 years The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of profit or loss and other comprehensive income. 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 they are expected to be recovered through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made. When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to 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 building structures, waste removal, and rehabilitation of the 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 Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that is transferred to entities in the consolidated group, are classified as finance leases. Finance leases are capitalised by recognising an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period. value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models. Leased assets are depreciated on a diminishing value basis over the shorter of their estimated useful lives or the lease term. Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised as expenses in the periods in which they are incurred. f) Financial Instruments Recognition and initial measurement Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the company commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted). Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified "at fair value through profit or loss", in which case transaction costs are expensed to profit or loss immediately. Classification and subsequent measurement 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 The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense item in profit or loss. The Group does not designate any interests in subsidiaries, associates or joint venture entities as being subject to the requirements of Accounting Standards specifically applicable to financial instruments. i) 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. Gains or losses are recognised in profit or loss through the amortisation process and when the financial asset is derecognised. 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 investments Available-for-sale investments are non- derivative financial assets that are either not capable of being 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 any remeasurements other than impairment losses and foreign exchange gains and losses recognised in other comprehensive income. 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 classified as non-current assets when they are expected to be sold after 12 months from the end of the reporting period. All other available-for-sale financial assets are classified as current assets. iii) Financial liabilities Non-derivative financial liabilities other than financial guarantees are subsequently measured at amortised cost. Gains or losses are recognised in profit or loss through the amortisation process and when the financial liability is derecognised. g) Investments in Associates and Joint Ventures Associates are those entities over which the Group is able to exert significant influence but which are not subsidiaries. A joint venture is an arrangement that the Group controls jointly with one or more other investors, and over which the Group has rights to a share of the arrangement’s net assets rather than direct rights to underlying assets and obligations for underlying liabilities. A joint arrangement in which the Group has direct rights to underlying assets and obligations for underlying liabilities is classified as a joint operation. Investments in associates and joint ventures are accounted for using the equity method. Interests in joint operations are accounted for by recognising the Group’s assets (including its share of any assets held jointly), its liabilities (including its share of any liabilities incurred jointly), its revenue from the sale of its share of the output arising from the joint operation, its share of the revenue from the sale of the output by the joint operation and its expenses (including its share of any expenses incurred jointly). Any goodwill or fair value adjustment attributable to the Group’s share in the associate or joint venture is not recognised separately and is included in the amount recognised as investment. The carrying amount of the investment in associates and joint ventures is increased or decreased to recognise the Group’s share of the profit or loss and other comprehensive income of the associate and joint venture, adjusted where necessary to ensure consistency with the accounting policies of the Group. Unrealised gains and losses on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group’s interest in those entities. Where unrealised losses are eliminated, the underlying asset is also tested for impairment. h) Business Combinations The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred. MIN OTAUR EXPLOR ATION LIMITED ANNUAL REPORT 2 017 17 Financial R E P O R T Notes to the Consolidated Financial Statements F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 7 Summary of Significant Accounting Policies 1 h) Business Combinations The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognised in the acquiree’s financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values. Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of (a) fair value of consideration transferred, (b) the recognised amount of any non-controlling interest in the acquire, and (c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. i) Foreign Currency Transactions and Balances 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 non-monetary items are recognised directly in other comprehensive income to the extent that the underlying gain or loss is recognised in other comprehensive income; otherwise the exchange difference is recognised in profit or loss. j) Employee Benefits Short-term employee benefits Short-term employee benefits are benefits, other than termination benefits, that are expected to be settled wholly within twelve (12) months after the end of the period in which the employees render the related service. Short-term employee benefits are measured at the undiscounted amounts expected to be paid when the liabilities are settled. Functional and presentation currency Other long-term employee benefits 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. Transactions and balances Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined. The Group’s liabilities for annual leave and long service leave are included in other long-term benefits as they are not expected to be settled wholly within twelve (12) months after the end of the period in which the employees render the related service. They are measured at the present value of the expected future payments to be made to employees. The expected future payments incorporate anticipated future wage and salary levels, experience of employee departures and periods of service, and are discounted at rates determined by reference to market yields at the end of the reporting period on high quality corporate bonds that have maturity dates that approximate the timing of the estimated future cash outflows. Any re-measurements arising from experience adjustments and changes in assumptions are recognised in profit or loss in the periods in which the changes occur. The Group presents employee benefit obligations as current liabilities in the statement of financial position if the Group does not have an unconditional right to defer settlement for at least twelve (12) months after the reporting period, irrespective of when the actual settlement is expected to take place. Equity-settled compensation The Group operates an employee share option plan. Share-based payments to employees are measured at the fair value of the instruments issued and amortised over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined 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 to the option reserve. The fair value of options is determined using the Black-Scholes pricing model. The number of options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognised for 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 six (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 The Group generates revenues from management fees charged to joint operation partners for the management of exploration activities. This revenue is recognised when the management services are provided. Rental income from operating leases is recognised on a straight-line basis over the lease term. Interest income is reported on an accruals basis using the effective interest method. All revenue is stated net of the amount of goods and services tax (GST). n) Trade and Other Payables Trade and other payables represent the liabilities for goods and services received by the entity that remain unpaid at the end of the reporting period. The balance is recognised as a current liability with the amounts normally paid within 30-90 days of recognition of the liability. o) 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. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. 18 MINOTAUR EXPLOR ATION LIM ITED ANN UAL RE PORT 201 7 p) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). 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 financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the ATO are presented as operating cash flows included in receipts from customers or payments to suppliers. q) 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. Grants relating to capitalised exploration and evaluation expenditure are credited against the exploration and evaluation assets to which they relate in order to match the grants received with the expenditure the grants are intended to compensate. r) Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. s) Critical Accounting Estimates and Judgments The directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group. Key estimates 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 fair value less cost of disposal calculations which incorporate various key assumptions. ii) Exploration and evaluation expenditure The Group capitalises expenditure relating to exploration 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 existence of reserves. While there are certain areas of interest from which no reserves have been extracted, the directors are of the continued belief that such expenditure should not be written off since feasibility studies in such areas have not yet concluded. Such capitalised expenditure is carried at the end of the year at $8,969,026 (2016: $10,217,052). t) Changes in accounting policies New and amended standards adopted by the Group A number of new and revised standards became effective for the first time to annual periods beginning on or after 1 July 2016. Information on the more significant standard(s) is presented below. AASB 2014-3 Amendments to Australian Accounting Standards – Accounting for Acquisitions of Interests in Joint Operations Additionally, the amendments provide guidance in the application of the diminishing balance method for property, plant and equipment. The amendments to AASB 11 Joint Arrangements state that an acquirer of an interest in a joint operation in which the activity of the joint operation constitutes a ‘business’, as defined in AASB 3 Business Combinations, should: • apply all of the principles on business combinations accounting in AASB 3 and other Australian Accounting Standards except principles that conflict with the guidance of AASB 11. This requirement also applies to the acquisition of additional interests in an existing joint operation that results in the acquirer retaining joint control of the joint operation (note that this requirement applies to the additional interest only, i.e. the existing interest is not re-measured) and to the formation of a joint operation when an existing business is contributed to the joint operation by one of the parties that participate in the joint operation; and • provide disclosures for business combinations as required by AASB 3 and other Australian Accounting Standards. AASB 2014-3 is applicable to annual reporting periods beginning on or after 1 January 2016. The adoption of these amendments has not had a material impact on the Group. AASB 2014-4 Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of Depreciation and Amortisation The amendments to AASB 116 prohibit the use of a revenue-based depreciation method for property, plant and equipment. The amendments to AASB 138 present a rebuttable presumption that a revenue-based amortisation method for intangible assets is inappropriate. This rebuttable presumption can be overcome (i.e. a revenue-based amortisation method might be appropriate) only in two (2) limited circumstances: • the intangible asset is expressed as a measure of revenue, for example when the predominant limiting factor inherent in an intangible asset is the achievement of a revenue threshold (for instance, the right to operate a toll road could be based on a fixed total amount of revenue to be generated from cumulative tolls charged); or • when it can be demonstrated that revenue and the consumption of the economic benefits of the intangible asset are highly correlated. AASB 2014-4 is applicable to annual reporting periods beginning on or after 1 January 2016. The adoption of these amendments has not had a material impact on the Group. AASB 2014-9 Amendments to Australian Accounting Standards – Equity Method in Sepa- rate Financial Statements The amendments introduce the equity method of accounting as one of the options to account for an entity’s investments in subsidiaries, joint ventures and associates in the entity’s separate financial statements. AASB 2014-9 is applicable to annual reporting periods beginning on or after 1 January 2016. The adoption of these amendments has not had a material impact on the Group. MI NOTAUR EXPLOR ATI ON LIMI TED ANNUAL REPORT 2 017 19 Financial R E P O R T Notes to the Consolidated Financial Statements F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 7 Summary of Significant Accounting Policies 1 t) Changes in accounting policies New and amended standards adopted by the Group u) Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted early by the Group AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101 The Standard makes amendments to AASB 101 Presentation of Financial Statements arising from the IASB’s Disclosure Initiative project. The amendments: • clarify the materiality requirements in AASB 101, including an emphasis on the potentially detrimental effect of obscuring useful information with immaterial information • • • • clarify that AASB 101’s specified line items in the statement(s) of profit or loss and other comprehensive income and the statement of financial position can be disaggregated add requirements for how an entity should present subtotals in the statement(s) of profit and loss and other comprehensive income and the statement of financial position clarify that entities have flexibility as to the order in which they present the notes, but also emphasise that understandability and comparability should be considered by an entity when deciding that order remove potentially unhelpful guidance in AASB 101 for identifying a significant accounting policy AASB 2015-2 is applicable to annual reporting periods beginning on or after 1 January 2016. The adoption of these amendments has not had a material impact on the Group. 20 MINOTAUR EXPLOR ATION LIM ITED ANN UAL RE PORT 201 7 AASB 9 Financial Instruments (December 2014) AASB 9 introduces new requirements for the classification and measurement of financial assets and liabilities and includes a forward-looking ‘expected loss’ impairment model and a substantially-changed approach to hedge accounting. These requirements improve and simplify the approach for classification and measurement of financial assets compared with the requirements of AASB 139. The main changes are: a) Financial assets that are debt instruments will be classified based on: i) ii) the objective of the entity’s business model for managing the financial assets; and the characteristics of the contractual cash flows. b) Allows an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income (instead of in profit or loss). Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument. Introduces a ‘fair value through other c) comprehensive income’ measurement category for particular simple debt instruments. d) Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing so eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities, or recognising the gains and losses on them, on different bases. e) Where the fair value option is used for financial liabilities the change in fair value is to be accounted for as follows: • the change attributable to changes in credit risk are presented in Other Comprehensive Income (OCI) • the remaining change is presented in profit or loss. If this approach creates or enlarges an accounting mismatch in the profit or loss, the effect of the changes in credit risk are also presented in profit or loss. Otherwise, the following requirements have generally been carried forward unchanged from AASB 139 into AASB 9: • classification and measurement of financial liabilities; and • derecognition requirements for financial assets and liabilities. AASB 9 requirements regarding hedge accounting represent a substantial overhaul of hedge accounting that enable entities to better reflect their risk management activities in the financial statements. Furthermore, AASB 9 introduces a new impairment model based on expected credit losses. This model makes use of more forward-looking information and applies to all financial instruments that are subject to impairment accounting. The Group is yet to undertake a detailed assessment of the impact of AASB 9. However, based on the Group’s preliminary assessment, the Standard is not expected to have a material impact on the transactions and balances recognised in the financial statements when it is first adopted for the year ending 30 June 2019. AASB 16 Leases AASB 16: • replaces AASB 117 Leases and some lease-related Interpretations • • • • requires all leases to be accounted for ‘on-balance sheet’ by lessees, other than short-term and low value asset leases provides new guidance on the application of the definition of lease and on sale and lease back accounting largely retains the existing lessor accounting requirements in AASB 117 requires new and different disclosures about leases. The Group is yet to undertake a detailed assessment of the impact of AASB 16. However, based on the entity’s preliminary assessment, the Standard is not expected to have a material impact on the transactions and balances recognised in the financial statements when it is first adopted for the year ending 30 June 2020. AASB 2014-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2014) AASB 2014-7 incorporates the consequential amendments arising from the issuance of AASB 9. AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture The amendments address a current inconsistency between AASB 10 Consolidated Financial Statements and AASB 128 Investments in Associates and Joint Ventures. The amendments clarify that, on a sale or contribution of assets to a joint venture or associate or on a loss of control when joint control or significant influence is retained in a transaction involving an associate or a joint venture, any gain or loss recognised will depend on whether the assets or subsidiary constitute a business, as defined in AASB 3 Business Combinations. Full gain or loss is recognised when the assets or subsidiary constitute a business, whereas gain or loss attributable to other investors’ interests is recognised when the assets or subsidiary do not constitute a business. This amendment effectively introduces an exception to the general requirement in AASB 10 to recognise full gain or loss on the loss of control over a subsidiary. The exception only applies to the loss of control over a subsidiary that does not contain a business, if the loss of control is the result of a transaction involving an associate or a joint venture that is accounted for using the equity method. Corresponding amendments have also been made to AASB 128. AASB 2016-5 Amendments to Australian Accounting Standards – Classification and Measurement of Share-based Payment Transactions This Standard amends AASB 2 Share-based Payment to address: a) The accounting for the effects of vesting and non-vesting conditions on the measurement of cash-settled share-based payments; and b) The classification of share-based payment transactions with a net settlement feature for withholding tax obligations. The accounting for a modification to the terms and conditions of a share-based payment that changes the classification of the transaction from cash-settled to equity-settled. When these amendments are first adopted for the year ending 30 June 2019, there will be no material impact on the financial statements. When these amendments are first adopted for the year ending 30 June 2019, there will be no material impact on the financial statements. AASB 2017-2 Amendments to Australian Accounting Standards – Further Annual Improvements 2014-2016 Cycle AASB 2016-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107 AASB 2016-2 amends AASB 107 Statement of Cash Flows to require entities preparing financial statements in accordance with Tier 1 reporting requirements to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. When these amendments are first adopted for the year ending 30 June 2018, there will be no material impact on the financial statements. This Standard clarifies the scope of AASB 12 Disclosure of Interests in Other Entities by specifying that the disclosure requirements apply to an entity’s interests in other entities that are classified as held for sale, held for distribution to owners in their capacity as owners or discontinued operations in accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operations. When these amendments are first adopted for the year ending 30 June 2018, there will be no material impact on the financial statements. Although AASB 121 The Effects of Changes in Foreign Exchange Rates sets out requirements about which exchange rate to use when recording a foreign currency transaction on initial recognition in an entity’s functional currency, the IFRS Interpretations Committee had observed diversity in practice in circumstances in which an entity recognises a non-monetary liability arising from advance consideration. The diversity resulted from the fact that some entities were recognising revenue using the spot exchange rate at the date of the receipt of the advance consideration while others were using the spot exchange rate at the date that revenue was recognised. Interpretation 22 addresses this issue by clarifying that the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income (or part of it) is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration. If there are multiple payments or receipts in advance, the entity shall determine a date of the transaction for each payment or eceipt of advance consideration. When this interpretation is adopted for the year ending 30 June 2019, there will be no material impact on the financial statements. IFRIC 23 Uncertainty Over Income Tax Treatments IFRIC 23 clarifies how the recognition and measurement requirements of IAS 12 Income Taxes are applied where there is uncertainty over income tax treatments. Interpretation 22 Foreign Currency Transactions and Advance Consideration The entity has not yet assessed the full impact of this Interpretation. Interpretation 22 looks at what exchange rate to use for translation when payments are made or received in advance of the related asset, expense or income. 2 Parent Information Assets Current assets Non-current assets Liabilities Current liabilities Non-current liabilities Equity Issued capital Reserves – Share option Retained earnings Financial performance Loss for the year Other comprehensive income 2017 $ 2016 $ 1,710,076 10,427,329 4,060,552 11,771,528 12,137,405 15,832,080 895,576 458,365 1,258,918 435,641 1,353,941 1,694,559 42,935,000 1,178,476 (33,330,012) 42,930,982 836,499 (29,629,960) 10,783,464 14,137,521 (3,771,830) - (10,624,654) - (3,771,830) (10,624,654) Guarantees 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. MI NOTAUR EXPLOR ATI ON LIMI TED ANNUAL REPORT 2 017 21 Financial R E P O R T Notes to the Consolidated Financial Statements F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 7 3 Operating Segments The Board has considered the requirements of AASB 8 Operating Segments and the internal reports that are reviewed by the chief operating decision maker (the Managing Director) in allocating resources and have concluded, due to the Group being solely focused on exploration activity, at this time that there are no separately identifiable segments. 4 Revenue and Expenses Revenue a) Administration fees Rent received Bank interest received or receivable b) Other income Net gains on disposal of available-for-sale investments Net (loss)/gain on disposal of property, plant and equipment Initial recognition of listed shares Net gain on disposal of exploration assets Expenses c) Impairment of non-current assets Impairment of exploration and evaluation assets Impairment of available-for-sale financial assets Total impairment of non-current assets Project generation costs Project generation costs Total project generation costs Depreciation of non-current assets Buildings Leasehold improvements Plant and equipment Motor vehicles 4 Revenue and Expenses Consolidated Group 2017 $ 2016 $ c) Expenses Finance expenses Finance costs Interest applicable to hire-purchase contracts Total finance expenses Employee benefits expense d) Wages, salaries, directors fees and other remuneration expenses Superannuation expense Transfer to annual leave provision Transfer to/(from) long service leave provision Employee share options expense Transfer to exploration assets e) Other expenses Secretarial, professional and consultancy Employee taxes and levies Occupancy costs Insurance costs ASX/ASIC costs Share register maintenance Communication costs Promotion and seminars Audit fees Other expenses 220,054 22,635 26,234 268,923 28,915 (316) 44,221 180,688 253,508 260,086 24,917 57,381 342,384 449,511 17,169 - - 466,680 2,091,726 25,041 11,420,788 9,728 2,116,767 11,430,516 1,056,673 1,056,673 7,937 92,173 48,945 15,080 324,458 324,458 7,937 92,361 64,168 23,161 5 Income Tax Benefit The major components of income tax benefit are: Statement of comprehensive income Current income tax Current income tax charge Tax portion of capital raising costs Research and development tax incentive Total depreciation of non-current assets 164,135 187,627 Income tax benefit reported in the Statement of Profit or Loss 22 MINOTAUR E X PLOR ATION L IM ITED ANN UAL RE PORT 201 7 Consolidated Group 2017 $ 2016 $ 55 645 700 2,267,164 166,951 22,370 8,322 415,755 (2,069,972) 150 1,925 2,075 2,195,445 163,633 48,798 (17,662) - (2,076,508) 810,590 313,706 228,755 113,192 251,981 53,248 37,873 48,163 11,023 22,393 44,178 78,651 889,457 249,908 114,576 252,394 59,957 36,035 73,824 9,400 28,883 44,500 9,189 878,666 - - (695,475) (695,475) - 46,859 (624,460) (577,601) 5 Income Tax Benefit 6 Earnings per Share Consolidated Group As no dilutive effect has been taken into account for 2017, 54,321,825 potential ordinary shares have not been included in the calculation. 2017 $ 2016 $ 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. A reconciliation between tax expense and the product of accounting loss before income tax multiplied by the Group’s applicable income tax rate is as follows: Accounting loss before income tax At the Group’s statutory income tax rate of 27.5% (2016: 30%) Expenditure not allowable for income tax purposes Research and development tax incentive Tax effect of transactions recorded directly to equity Tax losses not recognised due to not meeting recognition criteria (4,515,891) (12,327,984) (1,241,870) 115,689 (695,475) - 1,126,181 (3,698,395) 2,316,395 (624,460) 46,859 1,382,000 (695,475) (577,601) 7 Cash and Cash Equivalents Cash and cash equivalents Cash at bank and on hand Short-term deposits Consolidated Group 2017 $ 2016 $ 2,153,167 178,100 2,331,267 3,487,034 984,729 4,471,763 The Group has tax losses arising in Australia of $83,582,234 (2016: $83,949,507) that are available indefinitely for offset against future taxable profits generated by the Group. In addition, the Group has $8,122,131 (2016: $8,195,267) capital losses available. These losses include $72,537,535 tax losses and $2,323,426 capital losses transferred by members to the tax consolidated group. The utilisation of these losses will be restricted to their available fraction. Tax losses of $1,223,333 (2016: $1,899,773) were cancelled upon issue of EDI credits to shareholders pursuant to the announcement dated 29 March 2017. Tax consolidation Minotaur Exploration Ltd and its 100% owned Australian resident subsidiaries have formed a tax consolidated group with effect from 5 February 2005. Breakaway Resources Ltd and its subsidiaries were included in the tax consolidated group upon their acquisition on 5 December 2013. Minotaur Gold Solutions Pty Ltd joined the income tax consolidated group on 31 March 2017. Minotaur Exploration Ltd is the head entity of the tax consolidated group. 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 loss attributable to ordinary equity holders of the parent Weighted average number of ordinary shares for basic earnings per share Effect of dilution Share options Consolidated Group 2017 2016 ($3,814,220) 212,373,155 ($11,082,042) 198,646,744 - - Weighted average number of ordinary shares adjusted for the effect of dilution 212,373,155 198,646,744 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 taking into account for 2017. Included in short-term deposits is $178,100 relating to deposits to secure tenements and rental tenancy and as such is restricted for this use. Cash at bank earns interest at floating rates based on daily deposit rates. Short-term deposits are made for varying periods between one month 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 on hand Short-term deposits Reconciliation of net loss after tax to net cash flows used in operating activities Net loss Adjustments for non-cash items: Depreciation Impairment of non-current assets and project generation costs Net gain on disposal of property plant and equipment, available-for-sale financial instruments and tenements Share options expensed Initial recognition of listed shares 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 employee provisions Net cash used in operating activities 2,153,167 178,100 2,331,267 3,487,034 984,729 4,471,763 (3,820,416) (11,750,383) 164,135 3,173,440 187,627 11,754,974 (209,287) 415,755 (44,221) 6,624 3,481 (155,025) 30,691 (434,823) (466,680) - - 2,331 13,256 (360,619) 31,136 (588,358) MIN OTAUR EXPLOR ATION LIMITED ANNUAL REPORT 2 017 23 Financial R E P O R T Notes to the Consolidated Financial Statements F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 7 8 Trade and Other Receivables Trade receivables (i) Sale of tenements receivable (ii) i) ii) 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 2016 and 2017 and no receivables are past due at balance date. On 2 March 2017, Minotaur Gold Solutions Pty Ltd entered into a tenement sale and purchase agreement with Shine Resources Pty Ltd for the sale of P29/2121, E29/661 and M24/336 for a total consideration of $550,000. As at balance date the Group had received a total of $250,000 with the balance of $300,000 due to be received at completion, anticipated in December 2017. Information regarding the credit risk of current receivables is set out in Note 27. 9 Other Current Assets Prepayments Accrued income Net GST and PAYG receivable Other 10 Held-for-Sale Assets Opening balance Additions through expenditure capitalised Transfers to exploration and evaluation assets During the year ended 30 June 2016 the marketing process undertaken for the sale of various non-core assets of the Group drew to a close. No sale transaction was entered into as a result of this process. The assets were reclassified to exploration and evaluation assets and their carrying value impaired to $Nil as at 30 June 2016. 24 MINOTAUR EXPLOR ATION LIM ITED ANN UAL RE PORT 201 7 Consolidated Group 2017 $ 404,123 300,000 704,123 2016 $ 34,431 - 34,431 53,053 687 42,027 15,000 110,767 56,535 5,940 - 16,371 78,846 - - - - 4,758,158 58,720 (4,816,878) - 1 1 Available-for-Sale Investments At fair value – Shares, listed: Opening balance Revaluations Disposals Initial recognition of listed shares Acquisitions Impairments 12 Property, Plant and Equipment Consolidated Group 2017 $ 2016 $ 636,971 76,586 (155,000) 44,221 140,757 (25,041) 718,494 839,083 208,146 (503,858) - 103,328 (9,728) 636,971 30 June 2017 Cost Opening balance Additions Disposals Accumulated depreciation Opening balance Depreciation for the year Disposals Net book value 30 June 2016 Cost Opening balance Additions Disposals Accumulated depreciation Opening balance Depreciation for the year Disposals Net book value Land and buildings Leasehold improvements Plant and equipment Kaolin Pilot Plant Motor Vehicles Total 508,723 - - 508,723 15,874 7,937 - 23,811 484,912 508,723 - - 508,723 7,937 7,937 - 15,874 492,849 611,218 - - 611,218 336,734 92,173 - 428,907 182,311 611,218 - - 611,218 244,373 92,361 - 336,734 274,484 398,926 3,622 (49,890) 283,765 - - 187,253 - - 1,989,885 3,622 (49,890) 352,658 283,765 187,253 1,943,617 302,301 48,945 (39,574) 260,326 23,439 - 126,934 15,080 - 1,042,169 187,574 (39,574) 311,672 283,765 142,014 1,190,169 40,986 - 45,239 753,448 411,799 11,006 (23,879) 398,926 262,012 64,168 (23,879) 302,301 96,625 283,765 - - 283,765 244,700 15,626 - 260,326 23,439 245,950 - (58,697) 2,061,455 11,006 (82,576) 187,253 1,989,885 141,276 23,161 (37,503) 126,934 60,319 900,298 203,253 (61,382) 1,042,169 947,716 12 Property, Plant and Equipment Property is measured at historical cost less accumulated depreciation. Land and buildings with a net book value of $484,912 (2016: $492,849) is offered as security against a mortgage of $392,000. No motor vehicles as at balance date were offered as security against hire purchase contracts as all hire purchase contracts pertaining to motor vehicles were extinguished during the year (30 June 2016: Motor vehicles with a net book value of $25,737 was offered as security against hire purchase contracts of $17,507). 13 Exploration and Evaluation Assets Exploration, evaluation and development costs carried forward in respect of mining areas of interest Exploration and evaluation phase – Joint Operations Exploration and evaluation phase – Other Consolidated Group 2017 $ 2016 $ 5,597,913 3,371,113 6,322,354 3,894,698 8,969,026 10,217,052 Capitalised tenement expenditure movement reconciliation – Consolidated Group: 30 June 2017 Balance at beginning of year Additions through expenditure capitalised Reductions through joint operation contributions Write-off of tenements relinquished Disposals Project generation costs Transfers between categories Exploration Joint Operations $ Exploration Other $ 6,322,354 3,836,889 (3,727,296) (871,879) (6,080) - 43,925 3,894,698 1,429,671 - (1,219,847) (473,232) (216,252) (43,925) Total $ 10,217,052 5,266,560 (3,727,296) (2,091,726) (479,312) (216,252) - Balance at end of year 5,597,913 3,371,113 8,969,026 30 June 2016 Balance at beginning of year Additions through expenditure capitalised Reductions through joint operation contributions Write-off of tenements relinquished Transfers from held-for-sale assets Transfers between categories 1,740,419 2,839,867 (2,046,544) (1,525,696) - 5,314,308 12,019,323 2,267,897 - (9,895,092) 4,816,878 (5,314,308) 13,759,742 5,107,764 (2,046,544) (11,420,788) 4,816,878 - Balance at end of year 6,322,354 3,894,698 10,217,052 The impairment expense of $2,091,726 (2016: $11,420,788) arose from a review of the Group’s capitalised costs and the relevant tenements to which the costs related. 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. 14 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. 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 1 month 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 profit or loss and other comprehensive income in relation to share-based payments is disclosed in Note 4 (d). The following table illustrates the number 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 Expired during the year Outstanding at the end of the year Exercisable at the end of the year 2017 Number 8,125,000 2,685,000 (1,045,000) 9,765,000 9,765,000 2017 WAEP 0.20 0.03 0.20 0.18 0.18 2016 Number 8,125,000 - - 8,125,000 8,125,000 2016 WAEP 0.20 - - 0.20 0.20 A total of 1,575,000 options exercisable at any time until 3 July 2017 with an exercise price of $0.25. A total of 5,505,000 options exercisable at any time until 21 November 2019 with an exercise price of $0.19. A total of 2,685,000 options exercisable at any time until 6 September 2021 with an exercise price of $0.115. The outstanding balance as at 30 June 2017 is represented by: • • • The weighted average remaining contractual life for the share options outstanding as at 30 June 2017 is 2.50 years (2016: 3.53 years). The range of exercise prices for options outstanding at the end of the year was $0.115 - $0.25 (2016: $0.19 - $0.25). The fair value of options granted during the year was $109,280 (2016: $Nil). MIN OTAUR EXPLOR ATION LIMITED ANNUAL REPORT 2 017 25 Financial R E P O R T Notes to the Consolidated Financial Statements F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 7 15 Trade and Other Payables Trade payables (i) Net GST and PAYG Payable Joint operation income received in advance Accrued expenses Other payables (ii) i) ii) Trade payables are non-interest bearing and are normally settled on 30-day terms. 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. 16 Borrowings Current Hire purchase contracts Non-current Hire purchase contracts Bank borrowings Bank borrowings reflect a secured 5 year interest only loan. There are no annual renewal or review terms. 17 Provisions Current Annual leave provision Long service leave provision Non-current Long service leave provision 26 MIN OTAU R E XPLOR ATI ON LIM ITED ANN UAL R EPORT 2017 Consolidated Group 2017 $ 2016 $ 1,130,962 - 253,456 431,167 24,233 1,839,818 450,687 6,995 608,312 206,989 25,616 1,298,599 - - - 392,000 392,000 183,381 322,097 505,478 66,365 66,365 14,933 14,933 2,574 392,000 394,574 161,011 339,073 500,084 41,067 41,067 Consolidated Group 2017 $ 2016 $ 18 Issued Capital 212,386,616 fully paid ordinary shares (2016: 212,344,322) 42,935,000 42,930,982 Balance at beginning of financial year Issue of shares through Share Placement, Rights Issue and Share Purchase Plan Issue of shares through exercise of options Transaction costs on shares issued 2017 2016 Number $ Number $ 212,344,322 42,930,982 180,074,588 40,781,387 - 42,294 - - 4,018 - 32,267,760 1,974 - 2,258,744 188 (109,337) Balance at end of financial year 212,386,616 42,935,000 212,344,322 42,930,982 Fully paid ordinary shares carry one vote per share and carry the right to dividends (in the event such a dividend was declared). 19 Reserves Share option reserve (a) Available-for-sale revaluation reserve (b) Share option reserve a) Balance at beginning of financial year Issue of options to employees and officers under Employee Share Option Plan Issue of options to directors of the Company Transfer to retained earnings upon lapse of options Balance at end of financial year The share option reserve comprises the fair value of options issued to employees under the Company’s Employee Share Option Plan and to directors of the Company. b) Available-for-sale revaluation reserve Balance at beginning of financial year Net revaluation increment Balance at end of financial year The available-for-sale revaluation reserve comprises the cumulative net change in the fair value of available-for-sale financial assets until the assets are derecognised or impaired. Consolidated Group 2017 $ 2016 $ 1,178,476 254,731 1,433,207 836,498 109,280 306,475 (73,777) 1,178,476 836,498 208,146 1,044,644 1,024,418 - - (187,920) 836,498 208,146 46,585 254,731 - 208,146 208,146 20 Accumulated Losses Balance at beginning of financial year Net loss attributable to members of the parent entity Transfer from share option reserve – lapsed options Adjustment upon increase in ownership percentage in controlled entity Balance at end of financial year 21 Non-controlling Interest Balance at beginning of financial year Conversion of non-controlling interest loan to equity in controlled entity Adjustment upon increase in ownership percentage in controlled entity Net loss attributable to non-controlling interest 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 The Group has in place an operating lease for its principal place of business. The lease expires on 9 July 2019 and includes 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 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 2017 amounts of approximately $3.07 million in respect of exploration licence rentals and to meet minimum expenditure requirements. It is expected that of this minimum expenditure requirement, $1.68 million will be funded by Minotaur’s current and potential joint venture partners. The net obligation to the Group is expected to be fulfilled in the normal course of operations. Consolidated Group 2017 $ 2016 $ (29,842,301) (3,814,220) 73,777 (1,999) (18,975,019) (11,082,042) 187,920 26,840 23 Auditor’s Remuneration Audit or review of the financial report Taxation compliance Total auditor’s remuneration (33,584,743) (29,842,301) 24 Contingent Liabilities and Contingent Assets Consolidated Group 2017 $ 44,178 9,500 53,678 2016 $ 44,500 1,000 45,600 4,197 - 1,999 (6,196) - 184,472 514,906 (26,840) (668,341) 4,197 356,357 356,963 713,320 346,967 700,196 1,047,163 - - - - - 15,558 2,594 18,152 (645) 17,507 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 $165,000 at 30 June 2017 (2016: $177,200). 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 Controlled Entities Parent entity Minotaur Exploration Limited (i) Subsidiaries Minotaur Operations Pty Ltd (ii) Minotaur Resources Investments Pty Ltd (ii) Minotaur Industrial Minerals Pty Ltd (ii) Great Southern Kaolin Pty Ltd (ii) Breakaway Resources Pty Ltd (ii) Scotia Nickel Pty Ltd (ii) Altia Resources Pty Ltd (ii) Levuka Resources Pty Ltd (ii) BMV Properties Pty Ltd (ii) Minotaur Gold Solutions Pty Ltd (ii) Ownership interest Country of incorporation 2017 % 2016 % Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 73 i) ii) Minotaur Exploration Limited is the head entity within the tax consolidated Group. These companies are members of the tax consolidated Group. On 31 March 2017, Minotaur Gold Solutions Pty Ltd completed a share buy back and cancellation of all the shares held by its minority interest holder, Golden Fields Resources Pty Ltd. As a result of the share buy back and cancellation, Minotaur Gold Solutions Pty Ltd became a wholly owned subsidiary of the Group, with Minotaur Exploration Limited owning 100% of its issued shares. On the same date, Minotaur Gold Solutions Pty Ltd jointed the tax consolidated group. MIN OTAUR EXPLOR ATION LIMITED ANNUAL REPORT 2 017 27 (Carried at amortised cost) Other financial instruments Financial R E P O R T Notes to the Consolidated Financial Statements F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 7 26 Financial Assets and Liabilities Note 1(f) provides a description of each category of financial assets and financial liabilities and the related accounting policies. The carrying amounts of financial assets and financial liabilities in each category are as follows: 30 June 2017 Financial assets Cash and cash equivalents Trade and other receivables Available-for-sale assets Financial liabilities Trade and other payables Non-current borrowings 30 June 2016 Financial assets Cash and cash equivalents Trade and other receivables Available-for-sale assets Financial liabilities Trade and other payables Current borrowings Non-current borrowings Note 7 8 11, 28 Note 15 16, 26(a) Note 7 8 11, 28 Note 15 16, 26(a) 16, 26(a) AFS $ Cash $ Loans and Receivables $ Total $ (Carried at fair value) (Carried at amortised cost) - - 718,494 718,494 2,331,267 - - 2,331,267 Payables $ - 704,123 - 704,123 2,331,267 704,123 718,494 3,753,884 Borrowings $ Total $ 1,839,818 - 1,839,818 AFS $ Cash $ - 392,000 392,000 Loans and Receivables $ (Carried at fair value) (Carried at amortised cost) - - 636,971 636,971 4,471,763 - - 4,471,763 Payables $ - 34,431 - 34,431 1,839,818 392,000 2,231,818 Total $ 4,471,763 34,431 636,971 5,143,165 Borrowings $ Total $ (Carried at amortised cost) 1,298,599 - - 1,298,599 - 14,933 394,574 409,507 1,298,599 14,933 394,574 1,708,106 A description of the Group’s financial instrument risks, including risk management objectives and policies is given in Note 27. The methods used to measure financial assets and liabilities reported at fair value are described in Note 28. 28 MINOTAUR EXPLOR ATION LIM ITED ANN UAL RE PORT 201 7 26 Financial Assets and Liabilities 26(a) Borrowings Borrowings include the financial liabilities: Financial liabilities Fair value Finance lease liabilities Bank borrowings All borrowings are denominated in AUD. Borrowings at amortised cost Current Non-Current 2016 $ 14,933 - 14,933 2017 $ 2016 $ - 392,000 392,000 2,574 392,000 394,574 2017 $ - - - Bank borrowings are secured by land and buildings owned by the Group (see Note 12). Current interest rates are variable and average 4.95% (2016: 4.69%). The carrying amount of bank borrowings is considered to be a reasonable approximation of the fair value. The carrying amount of the following financial assets and liabilities is considered to be a reasonable approximation of the fair value: • • • Trade and other receivables; Cash and cash equivalents; and Trade and other payables 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 18, 19, 20 respectively. Proceeds from share issues are used to maintain and expand the Groups exploration activities and fund operating costs. Financial assets Cash and cash equivalents Trade and other receivables Available-for-sale assets Financial liabilities Payables Borrowings Consolidated Group 2017 $ 2016 $ 2,331,267 704,123 718,494 1,839,818 392,000 4,471,763 34,431 636,971 1,298,599 409,507 27 Financial Risk Management Credit risk 27 Financial Risk Management Available-for-sale financial instrument risk management 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. 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. 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). Consolidated 2017 Variable interest rate 2016 Variable interest rate Weighted average effective interest rate % Less than 1 year $ 1.10 1.66 2,331,267 4,471,763 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 $17,008 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 2017 Interest bearing Non-interest bearing 2016 Interest bearing Non-interest bearing Weighted average effective interest rate % Less than 1 year $ Longer than 1 year and not longer than 5 years $ 4.95 - 4.75 - - 1,839,818 14,933 1,298,599 392,000 - 394,574 - 28 Fair Value Measurement Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three Levels of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as follows: • • • level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly level 3: unobservable inputs for the asset or liability The following table shows the Levels within the hierarchy of financial assets and liabilities measured at fair value on a recurring basis at 30 June 2017 and 30 June 2016: Level 1 $ Level 2 $ Level 3 $ Total $ 30 June 2017 Financial assets at fair value Available-for-sale investments Listed securities 30 June 2016 Financial assets at fair value Available-for-sale investments Listed securities 718,494 718,494 636,971 636,971 - - - - - - - - 718,494 718,494 636,971 636,971 There were no transfers between Level 1 and Level 2 in 2017 or 2016. 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. 29 Related Party Disclosure and Key Management Personnel Remuneration Transactions with key management personnel The following individuals are classified as key management personnel in accordance with AASB 124 ’Related Party Disclosures’: Directors Mr Derek Carter, Chairman (Resigned 17 November 2016) Dr Antonio Belperio, Executive Director Dr Roger Higgins, Chairman (Elected 31 January 2017)/ Non-Executive Director (Appointed 1 July 2016) Mr Richard Bonython, Non-Executive Director (Resigned 25 November 2015) Mr George McKenzie, Non-Executive Director (Appointed 31 January 2017) Mr Andrew Woskett, Managing Director MIN OTAUR EXPLOR ATION LIMITED ANNUAL REPORT 2 017 29 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. Roger Higgins Chairman Dated this 21st day of August 2017 Financial R E P O R T Notes to the Consolidated Financial Statements F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 7 Directors’ Declaration 29 Related Party Disclosure and Key Management Personnel Remuneration The Directors of the Company declare that: 3 Other key management personnel Mr Varis Lidums, Commercial Manager (Company Secretary appointed 1 July 2016) Mr Glen Little, Exploration Manager Mr Donald Stephens, Company Secretary (resigned 1 July 2016) Key management personnel remuneration includes the following expenses: Salaries including bonuses Total short-term employee benefits Superannuation Total post-employment benefits Share-based payments Total share-based payments Total remuneration Transactions with associates 1 the consolidated financial statements and notes, as set out on pages 13 to 30, 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 2017 and of the performance for the year ended on that date of the Company and consolidated Group; 2017 $ 1,046,484 1,046,484 53,809 53,809 332,930 332,930 2016 $ 987,303 987,303 53,431 53,431 - - 1,433,223 1,040,734 Throughout the year no transactions took place between Minotaur Exploration Limited and any associates (2016: $Nil). In addition, no amounts were owed by any associates at the end of the year (2016: $Nil). 2 the Managing Director and Company Secretary have each declared that: Director and key management personnel related entities Throughout the year $53,500 (2016: $53,078) (inclusive of GST) was paid to a related entity of Dr Antonio Belperio under a commercial lease agreement for the use of warehouse space located at Magill, South Australia. Throughout the year, no other transactions took place between Minotaur Exploration Limited and any director or key management personnel related entities. Wholly-owned group transactions The entities comprising the wholly-owned Group and ownership interests in these controlled entities are set out in Note 25. Transactions between Minotaur Exploration Limited and other entities in the wholly-owned Group during the year consisted of loans advanced by Minotaur Exploration Limited to fund exploration activities. 30 Post-reporting Date Events No matter or circumstance has arisen since 30 June 2017 that has significantly affected the Group’s operations, results or state of affairs, or may do so in the future. a) b) c) the financial records of the Company for the financial year have been properly maintained in accordance with s 286 of the Corporations Act 2001; the financial statements and notes for the financial year comply with Accounting Standards; and the financial statements and notes for the financial year give a true and fair view; and 30 MIN OTAU R E XPLOR ATI ON LIM ITED ANN UAL RE PORT 201 7 Independent Auditor’s REPORT to the Members of Minotaur Exploration Limited Grant Thornton House Level 3, 170 Frome Street Adelaide SA 5000 Correspondence to: GPO Box 1270 Adelaide SA 5001 T 61 8 8372 6666 F 61 8 8372 6677 E info.sa@au.gt.com W www.grantthornton.com.au INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MINOTAUR EXPLORATION LIMITED Report on the audit of the financial report Opinion We have audited the financial report of Minotaur Exploration Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2017, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies, and the directors’ declaration. In our opinion, the accompanying financial report of the Group, is in accordance with the Corporations Act 2001, including: a b Giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its performance for the year ended on that date; and Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matter How our audit addressed the key audit matter Valuation of exploration and evaluation assets Notes 1, 4, 13 In accordance with AASB 6 Exploration for and Evaluation of Mineral Resources, the company is required to assess at each reporting date if there are any triggers for impairment which may suggest the carrying value is in excess of the recoverable value. The process undertaken by management to assess whether there are any impairment triggers in each area of interest involves an element of management judgement. This area is a key audit matter due to the significant judgement involved in determining the existence of impairment triggers. Our procedures included, amongst others: • Obtaining the management reconciliation of capitalised exploration and evaluation expenditure and agreeing to the general ledger; • Reviewing management’s area of interest considerations against AASB 6; • Conducting a detailed review of management’s assessment of trigger events prepared in accordance with AASB 6 including; - Tracing projects to statutory registers, exploration licenses and third party confirmations to determine whether a right of tenure existed; - Enquiry of management regarding their intentions to carry out exploration and evaluation activity in the relevant exploration area, including review of management’s budgeted expenditure; - Understanding whether any data exists to suggest that the carrying value of these exploration and evaluation assets are unlikely to be recovered through development or sale; - Assessing the accuracy of impairment recorded for the year as it pertained to exploration interests that are to be relinquished; and • Reviewing the appropriateness of the related financial statement disclosures. MIN OTAUR EXPLOR ATION LIMITED ANNUAL REPORT 2 017 31 Independent Auditor’s Information Other than the Financial Report and Auditor’s Report Thereon The Directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2017, but does not include the financial report and our auditor’s report thereon. The annual report is expected to bemade available to us after the date of this auditor’s report. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Report The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. 32 MINOTAUR E X PLOR ATION L IM ITED ANN UAL R EPORT 2017 A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our auditor’s report. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2017. In our opinion, the Remuneration Report of Minotaur Exploration Limited, for the year ended 30 June 2017, complies with section 300A of the Corporations Act 2001. Responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. GRANT THORNTON AUDIT PTY LTD Chartered Accountants I S Kemp Partner – Audit & Assurance Adelaide, 21 August 2017 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation. ASX Additional INFORMATION Minotaur Exploration Limited Interests in Mining Tenements as at 30 September 2017 Lease ID Lease Name State Holding Company Border Joint Venture EL5079 Mutooroo SA Minotaur Operations Cloncurry (Regional) EPM8608 EPM16975 EPM19530 EPM18861 MDL432 EPM18068 EPMA26509 EPM19412 EPM25889 EPMA26521 Bendigo Park Cattle Creek Corella Donaldson Well Eloise Gidyea Bore Gold Reef Middle Creek Sedan Sybellah Eloise Joint Venture (OZ Minerals) MDL431§ Eloise EPM19500 EPM18442 EPM25389 EPM17838§ EPM25237 EPM25801 EPM18624 EPM26233 EPM25238 Eloise North Eloise Northwest Fullarton Levuka Levuka Masai Oorindi Park Route 66 Saxby Osborne Joint Venture (JOGMEC) EPM18575 EPM18720 EPM25886 EPM25960 EPM26230 EPM18571 EPM25888 EPM25699 EPM25856 Carbo Creek Cuckadoo Hennes Bore Jubilee Nithsdale Sandy Creek Tripod Tank Warburton Creek Wilgunya Victoria Copper Project (Stavely Minerals) EL5403 EL5450 Lexington Roxborough 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 VIC VIC Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Levuka Resources Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Levuka Resources Minotaur Operations Levuka Resources Minotaur Operations Levuka Resources Minotaur Operations Levuka Resources 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 Equity Equity Earned % JV Partner Lease ID Lease Name State Holding Company Minotaur Equity Equity Earned % JV Partner Sumitomo Metal Mining Oceania 53% BHPBilliton NSR Sandfire Resources 60% Sandfire Resources has 60% equity in portion of the tenement Sandfire Resources has 60% equity in portion of the tenement 47 100 100 100 100 40 100 0 100 100 0 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Industrial Minerals Project EL5906 ELA5502 EL5869 EL5911 EL5395 EL5308 EL5905 EL5885 EL5398 EL5814 EL5710 ELA116/2017 (EL5016) EL5787 ELA175/2017 (EL5095) Acraman Casterton South Coober Pedy Giddina Creek Kyancutta Mount Hall Narlaby Oolgelima Sceales Tootla Waurea Whichelby Yanerbie Camel Lake Gawler Ranges Project EL5887 ELA165/2017 ELA166/2017 Scotia Project E 29/00661 M 24/00336 M 29/00245 M 29/00246 P 29/02121 Leinster Project E 36/899 E 37/909 M 36/475 Other Projects EL5542 EL5117 ML4386 EL5723 Mt Double Lake Everard East Lake Everard West Goongarrie 3 Goongarrie 6 Goongarrie 13 Goongarrie 14 Goongarrie 12 Fly Bore Leinster 2 Leinster 10 Blinman Ediacara Third Plain Wilkawillina SA VIC SA SA SA SA SA SA SA SA SA SA SA SA SA SA SA WA WA WA WA WA WA WA WA SA SA SA SA Minotaur Operations Minotaur Industrial Minerals BMV Properties BMV Properties Minotaur Operations Minotaur Operations Minotaur Operations BMV Properties Minotaur Operations Great Southern Kaolin Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Operations Minotaur Gold Solutions Minotaur Gold Solutions Minotaur Gold Solutions Minotaur Gold Solutions Minotaur Gold Solutions Altia Resources Scotia Nickel Altia Resources Perilya Perilya Perilya Perilya 100 0 100 100 100 100 100 100 100 100 100 100 100 100 100 0 0 100 100 100 100 100 0 100 100 10 10 10 10 Perilya Ltd 90%, MEP 10% free carried to BFS completion Perilya Ltd 90%, MEP 10% free carried to BFS completion Perilya Ltd 90%, MEP 10% free carried to BFS completion Perilya Ltd 90%, MEP 10% free carried to BFS completion MI NOTAUR EXPLOR ATI ON LIMI TED ANNUAL REPORT 2 017 33 ASX Additional INFORMATION Minotaur Exploration Limited Interests in Mining Tenements as at 30 September 2017 Shareholdings A S AT 3 0 S E P T E M B E R 2 0 1 7 Lease ID Lease Name State Holding Company Minotaur Equity Equity Earned % JV Partner Additional information required by the Australian Securities Exchange (ASX) and not shown elsewhere in this report is as follows. The information is current as at 30 September 2017. ELA170/2016 (EL4961) EPM17061 M15 1828 M15 395 M15 703 L15 128 L15 255 E15 967 E15 968 P15 5860 Moonta Mt Osprey Spargos Reward West Kambalda West Kambalda West Kambalda West Kambalda West Kambalda West Kambalda West Kambalda # Diluting interest Ni 100% = 100% interest in Nickel rights only SA QLD WA WA WA WA WA WA WA WA Peninsula Resources Birla Mt Gordon Minex Australia, Corona Minerals Tychean Resources Tychean Resources Tychean Resources Tychean Resources Tychean Resources Tychean Resources Tychean Resources 10 #22.9 Ni 100% Peninsula Resources Capricorn Copper Ni 100% +1.5% NSR Ni 100% +1.5% NSR Ni 100% +1.5% NSR Ni 100% +1.5% NSR Ni 100% +1.5% NSR Ni 100% +1.5% NSR Ni 100% +1.5% NSR Ni 100% +1.5% NSR = 100% interest in Nickel rights and 1.5% NSR all other minerals § Sandfire Resources earning up to 80% interest in portion of the tenement Distribution of equity securities Ordinary share capital 212,394,016 fully paid ordinary shares are held by 2,307 individual shareholders. All issued ordinary shares carry one (1) vote per share and carry the rights to dividend. Options 17,930,377 listed options are held by 454 option holders. 34,609,048 unlisted options are held by 28 option holders. The number of shareholders, by size of holding, in each class are: Range Fully paid ordinary shares Listed Options Unlisted Options 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over Total Holdings less than a marketable parcel Substantial shareholders Ordinary shareholders Merrill Lynch (Australia) Nominees Pty Limited Yarraandoo Pty Ltd139 150 325 1,359 334 2,307 435 140 145 50 90 29 454 - - - - 4 24 28 - Fully paid Number 27,223,483 13,256,726 Percentage 12.82% 6.24% 36 MINOTAUR E X PLOR ATION L IM ITED ANN UAL R EPORT 2017 Shareholdings A S AT 3 0 S E P T E M B E R 2 0 1 7 Substantial shareholders TWENTY LARGEST HOLDERS OF QUOTED EQUITY SECURITIES Merrill Lynch (Australia) Nominees Pty Limited Yarraandoo Pty Ltd OZ Minerals Limited Citicorp Nominees Pty Limited Mr Ian Richard Kerr Gemmell FMR Investments Pty Limited Sandfire Resources NL HSBC Custody Nominees (Australia) Limited Mr Robert Gemelli Mr Peter Francis Hasenkam Mr Nicholas James Carter + Mrs Susan Mary Carter Dorica Nominees Pty Ltd Bydown Fund Management Pty Ltd Romsup Pty Ltd Mr Robert Lloyd Blesing PRB Superannuation Pty Ltd Syslinx Pty Ltd Mr Nicholas Carter Phoebe Bella Pty Ltd Mr Derek Northleigh Carter + Mrs Carlsa Joyce Carter Fully Paid Ordinary Shares Number 27,223,483 13,256,726 8,041,670 3,979,015 3,079,527 2,672,303 2,608,695 2,035,832 1,935,584 1,754,896 1,688,396 1,500,000 1,478,000 1,457,064 1,427,292 1,300,000 1,250,000 1,185,095 1,083,893 1,073,874 Percentage 12.82% 6.24% 3.79% 1.87% 1.45% 1.26% 1.23% 0.96% 0.91% 0.83% 0.79% 0.71% 0.70% 0.69% 0.67% 0.61% 0.59% 0.56% 0.51% 0.51% 80,031,345 37.68% MINOTAUR EXPLORATION www.minotaurexploration.com.au u m .a n .c o u re x plo r a tio o t a w . m in w w