2019ANNUALREPORT CORPORATE DIRECTORYThis 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 presentational currency is Australian dollars.The description of the Group’s operations and of its principle activities is included in the review of operations and activities in the Directors’ Report on pages 8 to 18. The Directors’ Report is not part of the financial report.Minotaur Exploration LimitedACN 108 483 601ASX MEPDirectorsDr Antonio Belperio Executive DirectorDr Roger Higgins Non-Executive ChairmanMr George McKenzie Non-Executive DirectorMr Andrew Woskett Managing DirectorCompany SecretaryMr Varis LidumsRegistered OfficeC/- O’Loughlins LawyersLevel 2, 99 Frome StreetAdelaide SA 5000Principal Place of BusinessLevel 1, 8 Beulah RoadNorwood SA 5067Share RegisterComputershare Investor Securities Pty LtdLevel 5, 115 Grenfell StreetAdelaide SA 5000Legal AdvisorsO’Loughlins LawyersLevel 2, 99 Frome StreetAdelaide SA 5000BankersNational Australia Bank22-28 King William StreetAdelaide SA 5000AuditorsGrant Thornton Audit Pty LtdLevel 3, 170 Frome StreetAdelaide SA 5000www.minotaurexploration.com.au CONTENTSChairman’s ReviewManaging Director’s ReportDirectors’ ReportRemuneration ReportFinancial ReportAuditor’s Independence DeclarationConsolidated Statement of Profit or Lossand Other Comprehensive IncomeConsolidated Statement of Financial PositionConsolidated Statement of Changes in EquityConsolidated Statement of Cash FlowsNotes to the Consolidated Financial StatementsDirectors’ DeclarationIndependent Auditor’s ReportASX Additional Information5681319192021222425545558 DECEMBER 2018Eloise JV steps up for stellar 2019 field seasonMinotaur Exploration reported completion of 2018 field season with assays from final 3 drill holes extending Jericho’s mineralised footprint.APRIL 2019Drilling resumes at Jericho copper discovery at Eloise JVDrilling recommenced at Jericho and continued over the next four months.AUGUST 2019Jericho drill results reveal high-grade copper shootsJericho drill program finishes strongly with 8.9m @ 4.4% Cu and 1.5g/5Au intersected in second last hole.2018/2019 HIGHLIGHTSDECEMBER 2018CEI grant recognises Highlands copper potential, NW QLDMinotaur Exploration was awarded a CEI grant for its Highlands project.MAY 2019OZ Minerals to ‘loan carry’ Minotaur for Jericho copper depositOZ Minerals to ‘loan carry’ Minotaur’s funding share from 1 April 2019 through exploration, feasibility and to commercial production.MAY 2019Eloise JV restructured and OZ Mineral’s funding increasedOZ Mineral’s funding towards Eloise Joint Venture increased by an additional A$3M over 24 months.MAY 2019OZ Minerals and Minotaur to form Cloncurry Regional AllianceOZ Minerals and Minotaur formed an exclusive strategic Alliance over the Cloncurry district, QLD.MAY 2019Minotaur and Andromeda collaborate to develop halloysite nano-technologiesMinotaur and Andromeda Metals established a research and development partnership to develop halloysite nanotechnologies.MAY 2019Minotaur Exploration sells WA nickel assetsMinotaur signed a binding term sheet to sell Saints and Leinster tenements to Auroch Minerals for scrip.4 | Minotaur Exploration Annual Report 2019SEPTEMBER 2019Minotaur and OZ Minerals formalise three Cloncurry joint venturesThree joint ventures were executed. The formal documentation cements several robust partnerships in the Cloncurry district.JULY 2019Jericho copper assays - updateAssays for another 13 holes continued to show strong copper-gold values with every hole intersecting mineralisation.SEPTEMBER 2019IP survey reveals Hastings anomaly for Windsor JV, Charters Towers, QldIP geophysical survey defined very strong ‘Hastings’ chargeability anomaly, +3km long and open east along strike. JUNE 2019Jericho deposit continues to reveal strong copper values46 holes completed into Jericho deposit since April, with 2 rigs operating. Assays for 13 holes replicate earlier strong copper-gold results.NOVEMBER 2018Eloise JV continues to drill into Jericho copper discoveryThe diamond rig was diverted from regional EM targets to place 2 additional holes in Jericho.MAY 2019Minotaur undertakes A$1.25M placementMinotaur completed a placement to raise A$1.25million to fund exploration activities across Highlands, Windsor and Peake & Denison. CHAIRMAN’S REVIEWMinotaur maintains its focus on exploration for base metals within Australia. Our view is that mineral systems – and unknown metal deposits – exist in abundance but obscured below surficial cover over basement geology, which occurs for 75% of Australia’s land mass. Increasingly, mineable resources will have to be sourced from such ‘blind’ deposits as surface assets are depleted.I wrote last year that we saw a declining investor appetite for metals exploration as the threat of a global trade war emerged, depressing commodity prices. While continuing tensions across the international geopolitical spectrum heighten those anxieties, they have also contributed to a record gold price, fueling interest in Australian gold stocks. A spin off benefit towards base metals explorers is perceptible, if not yet manifest. Meanwhile, Minotaur continues to pursue its discovery objectives with vigor.A package of new joint venture arrangements with OZ Minerals Ltd (ASX: OZL) was negotiated and established for common interests in the Cloncurry region of north-west Queensland. These capitalized on discovery success at the Jericho copper-gold system and reinforced OZ Minerals’ commitment to ongoing activity in the vicinity. Also in Queensland, Minotaur advanced its farm-in to the Windsor joint venture tenements south of Charters Towers where first pass ground geophysics identified a potential VMS style target under-cover, potentially a zinc-lead occurrence similar to the Thalanga orebody just 17km west along a regional stratigraphic sequence. Scout drilling late in 2019 will determine the validity of this hypothesis and, if successful, will warrant aggressive exploration over some 175km2 of JV ground.Minotaur continued to develop exploration prospects with a view to securing solid joint venture alliances, such as those with OZ Minerals, which underpin the sustainability of our operations. A case in point is innovative research into copper prospects in the Peake and Dennison Inlier of South Australia, a region peripheral to the Olympic Dam Domain. The R&D phase of investigation showed potential for magnetite hosted copper systems similar in age and provenance to Ernest Henry style mineralisation, a theory well worth pursuing.Efforts to dispose of our nickel tenements near Kalgoorlie were fruitful, those being vended into listed company Auroch Minerals Ltd (ASX: AOU) in return for which Minotaur now has a substantial holding in Auroch. At the time of writing Auroch had commenced its initial drilling program to follow up past work by Minotaur where geophysics suggested strike extensions of the Saints nickel lodes could exist. The firming nickel price has assisted Auroch’s strategy to reposition itself as a nickel developer.Joint venture partner Andromeda Metals Ltd (ASX: ADN) is making significant progress towards commercialisation of Minotaur’s kaolin deposits in South Australia. Extensive product sales marketing to kaolin consumers overseas and especially in China generated commercial channels for sale of run-of-mine kaolin material and high-halloysite grade kaolin into the Asian ceramic markets. Andromeda has instituted scoping studies and mine permitting activities and is positioned to earn its initial 51% tenement interest by April 2020 and then 75% through total investment of $6 million by 2023. Should product sales eventuate Minotaur will potentially receive 25% of revenues.These activities demonstrate that your Company is active, innovative and collaborative, willing to share risk and reward at the project level and ready to divest non-core assets when circumstances are right to do so. They illustrate your Board is attuned to both strategic pathways and field activities, and open to opportunities that can improve shareholder value.Dr Roger HigginsChairman Minotaur Exploration Annual Report 2019 | 5 6 Minotaur Exploration Annual Report 2019MANAGING DIRECTOR’S REPORTBusiness ReviewOngoing investigation of the Jericho copper deposit caused OZ Minerals Limited’s (ASX: OZL) investment in the Eloise Joint Venture to reach $10 million by the end of March 2019, entitling OZ Minerals to 70% interest in the joint venture tenements. By end August 2019 $10 million had been applied into the Jericho discovery itself, additional to over $4 million previously directed into the Eloise JV project area; substantial amounts that Minotaur has been able to attract on behalf of shareholders.Constructive discussions with OZ Minerals during the earn-in phase led to a formal joint venture agreement encompassing Jericho - the Jericho Joint Venture - whereby relative interests are set at 80% OZ Minerals and 20% Minotaur, from 1 April 2019. In return, the Company is ‘loan carried’ through to commercial production and positive cash flow from any future production operation at Jericho. A rapid sequence of 5 drill campaigns (between September 2017 and July 2019) accounted for ~30km of drilling into the J1 and J2 lodes, revealing the presence of 3 high-grade shoots in the zones of most intense drilling. These shoots have only been tested to ~350m below surface, are open and could develop into wider, higher-grade geometry down dip and down plunge. A further 10km of drilling may be required to sufficiently describe the shoots to JORC standard.Significant extents of the +3.7km strike remain to be drill tested as substantial gaps in the drilling exist in both lode systems. The Eloise Joint Venture was restructured such that OZ Minerals will invest a further $3 million into exploration on the Eloise JV tenements and hold its interest at 70%. Several intriguing EM targets have been identified, each of which needs to be drill investigated. Separately, the ‘Cloncurry Alliance’ was implemented, requiring OZ Minerals to fund Minotaur to $1 million over 2 years for project generation activities that may identify opportunities complementary to a mineral resource defined at Jericho.Elsewhere in Queensland, south of Charters Towers, we initiated ground work on the ‘Windsor’ joint venture exploration tenements extending east-west over an interpreted alignment of a regionally-significant feature named the Trooper Creek Formation (TCF). Though there are three known VMS stratigraphic horizons within the TCF - each delivering high-grade orebodies such as Thalanga, Liontown, Waterloo and Highway-Reward - the area received scant exploration attention over the past several decades, due primarily to the highly conductive characteristics of the cover sequence overlying the basement. Minotaur trialed use of the induced polarisation (IP) geophysical technique to locate sulphide hosting stratigraphy and, potentially, zinc mineralisation. That effort was rewarded with exposure of a very strong anomaly, having similar characteristics to known VMS systems. Named ‘Hastings’, the IP response requires drill testing to confirm its source, pending introduction of a joint venture funding partner.Andromeda Metals Limited’s (ASX: ADN) earn-in to Minotaur’s Poochera Kaolin project is proceeding apace and Andromeda may ultimately earn 75% interest in the tenement assets through expenditure of $6 million by June 2023. Andromeda is actively working to secure off-take arrangements with halloysite-kaolin consumers in Asia to underpin a mine development case and its current market capitalisation of ~$80 million demonstrates market enthusiasm for its efforts so far. When the project is in commercial operation Minotaur will be entitled to 25% of the project’s cash flow. The contractual arrangement with Andromeda typifies Minotaur’s business model to engage joint venture partners to fund its projects, alleviating use of shareholders’ funds.6 | Minotaur Exploration Annual Report 2019Minotaur maintains a diverse array of minerals exploration tenements around Australia, totalling 7,011km2, including Joint Venture areasWindsor JVEloise JVHighlandsMutoorooPeake & DenisonPoocheraCamel LakeLake Purdilla Corporate ReportThe 2019 financial year concluded with the Group holding $3.99 million in cash and term deposits plus $0.5 million equity holdings in ASX listed explorers. Pre-paid exploration investment by OZ Minerals in the Jericho JV accounted for $2.5 million of the cash holdings at 30 June. A Share Purchase Plan in November 2018 resulted in proceeds of $1.9 million and a follow up private placement to new and existing shareholders raised $1.25 million (before costs) in May 2019. Sprott Group and affiliates continue to be the Company’s key shareholder with 12.3% of the issued shares. Sale of the Company’s nickel tenements near Kalgoorlie and Leinster in Western Australia was achieved. Completion in September 2019 resulted in Minotaur receiving 13.95% of the capital in the acquirer, Auroch Minerals Limited (ASX: AOU). The sale concludes disposal of legacy assets acquired through the takeover of Breakaway Resources Ltd.The Company’s JV relationships continue to provide financial benefits: through the 2019 financial year Minotaur’s total exploration expenditure increased to $7.6 million ($6.5 million in 2018) of which Minotaur sole funded $0.9 million ($2.9 million in 2018). In that way, Minotaur leveraged its work funding by 8½ times through joint venture contributions and the year-on-year trend is evident in the accompanying graphic.Minotaur’s own exploration expenditure represents just 12% of its total exploration spend, the balance of 88% being contributed by JV partners. Importantly, for a junior, Administration expenses of $1.8 million represented only 20% of total expenditure, consistent with prior years. The Company will continue to seek out new joint venture arrangements for its own pipeline of projects and maintain strong leverage off its project generation efforts.Minotaur Exploration Board members at a Jericho drill site. L to R: Varis Lidums, Roger Higgins, George McKenzie, Andrew Woskett, Tony Belperio1.35.01.44.86.51.67.61.8ExpenditureFY16FY17FY18FY190.60.70.50.32.73.04.78.22.92.52.90.9Funding SourceExplorationAdministrationR&D tax incentiveJV repaymentsMinotaur net spend 8 Minotaur Exploration Annual Report 20198 Minotaur Exploration Annual Report 2019DIRECTORS’ REPORTYour directors present their report on the consolidated group for the financial year ended 30 June 2019.Director DetailsThe names of the directors in office at any time during, or since the end of, the year are:Mr Andrew Woskett Managing DirectorDr Antonio Belperio Executive DirectorDr Roger Higgins Non-Executive ChairmanMr George McKenzie Non-Executive DirectorDirectors have been in office since the start of the financial year to the date of this report unless otherwise stated.Review of OperationsCorporateThe 2019 financial year concluded with the Group holding $3.986 million in cash and term deposits. A Share Purchase Plan in November 2018 resulted in proceeds of $1.9 million and a follow up private placement to new and existing shareholders raised $1.25 million (before costs) in May 2019. Sprott Group continues to be the Company’s key shareholder with 12.3% of the issued shares. OZ Minerals Limited’s (ASX: OZL) investment in the Eloise Joint Venture reached $10 million by the end of March 2019, entitling OZ Minerals to 70% interest in the joint venture tenements.Constructive discussions with OZ Minerals during the earn-in phase concluded with a binding Term Sheet agreed in May, whereby relative interests in a new joint venture - the Jericho Joint Venture - are set at 80% OZ Minerals : 20% Minotaur from 1 April 2019. In return, the Company is loan carried through to production.Additional arrangements were also enacted to restructure the Eloise Joint Venture and to establish the ‘Cloncurry Alliance’. OZ Minerals has undertaken to invest a further $3 million into exploration on the Eloise JV tenements and will hold its interest at 70%. The Alliance provides for OZ Minerals to fund Minotaur to $1 million over 2 years for project generation activities that may identify opportunities complementary to a mine development at Jericho.A sale agreement for the Company’s nickel tenements near Kalgoorlie and Leinster in Western Australia was achieved. Completion in September 2019 resulted in Minotaur holding ~14% of the capital in the acquirer Auroch Minerals Limited (ASX: AOU).Minotaur’s Poochera Kaolin project was placed into joint venture with Andromeda Metals Limited (ASX: ADN) under which Andromeda may earn 75% interest in the assets through expenditure of $6 million over 5 years. Andromeda is actively working to secure off-take arrangements with kaolin users in Asia to underpin a mine development case.ExplorationExploration activity remained focused on copper-gold prospects in Queensland.The joint venture with OZ Minerals across the Eloise area tenements concentrated on the Jericho copper-gold discovery 3km south of the Eloise copper mine. By June 2019 Jericho had been intersected by 96 holes for 29,740m of drilling, with most holes returning significant copper grades. Results encouraged negotiation of the ‘stand-alone’ Jericho Joint Venture with revised interest levels (as above). From April 2019 OZ Minerals is providing all expenditure attributable to Minotaur’s 20% interest, through exploration and until commercial production arises from a potential mining operation at Jericho. The amounts advanced will accrue in an interest bearing ‘loan account’ until positive cash flow permits payments to commence. By end June 2019 the loan provision was $0.64 million.8 | Minotaur Exploration Annual Report 2019 A joint venture with Japan Oil, Gas Metals Corporation (JOGMEC) over Minotaur’s tenements south of the Century zinc mine, south of Cloncurry, was terminated by mutual agreement after research failed to locate significant copper or zinc mineralisation.Research & DevelopmentMinotaur maintains an active R&D plan, mainly through the services of specialist agencies such as CSIRO and University of Newcastle’s research laboratories. Minotaur’s primary exercise is investigation into new industrial applications for nanoparticles; halloysite nanoclays within the kaolin complex. A joint ownership company, Natural Nanotech Pty Ltd, was incorporated to pursue technology developments and commercial opportunities.Likely developments, business strategies and prospectsThe Company’s business benefited from continuing support by its joint venture partners. This significantly helped constrain Minotaur’s net administration costs within 20% of its total expenditure of $9.4 million, of which 88% was contributed by JV partners. The Company’s self funded exploration level in the financial year was $0.9 million; to generate new opportunities or present new openings for prospective joint venture involvement.Such efforts resulted in formation of the Windsor Joint Venture where Minotaur may earn 80% project interest for expenditure of $4 million over 5 years. Site investigations commenced in August 2019 seeking targets representative of zinc-copper mineralisation under conductive cover.Most interest will focus on progress at the Jericho copper discovery. A pause in drilling during the latter half of 2019 switches the impetus to desk top modelling of resource parameters and preliminary metallurgical assessment. A JORC estimate for the central zone of J1 and J2 lodes will require further 6,000 - 10,000m of drilling to support underground mine proposals.The expanded Eloise JV will investigate new anomalies - potential Jericho analogues - proximal to the Eloise mine. Minotaur, on behalf of the Cloncurry Alliance, initiated research into several assets thought to be suitable elements for a production hub centered on Jericho.Board members George McKenzie, Andrew Woskett and Roger Higgins reviewing drill plans, facing Glen Little, Exploration and Business Development manager, and Barry van der Stelt, Senior GeologistInformation 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. 10 | Minotaur Exploration Annual Report 2019Names, qualifications, experience and special responsibilitiesDr Antonio Belperio BSc (Hons), PhD, FAusIMM Executive DirectorDr 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 over 35 years’ experience in university, government and the minerals exploration industry. Dr Roger Higgins BE (Hons), MSc, PhD, FIEAust, FAusIMM Non-Executive ChairmanDr Higgins has over 40 years’ experience in mine management and project development, and is a non-executive director of Newcrest Mining Ltd and WorleyParsons Ltd, and a former director of Metminco Ltd (resigned 2019), 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 DirectorGeorge McKenzie is a commercial lawyer with over 25 years’ experience representing many of South Australia’s explorers and mine developers. He was 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 was also a member of the Minerals and Energy Advisory Council which advises the Minister of Mineral Resources and Energy on strategic issues, from inception of the Council in 2000 until 30 June 2019.Mr Andrew Woskett B Eng, M Comm Law Managing DirectorAndrew 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.Mr Varis Lidums BEc, LLB, CA, MBA Company SecretaryVaris Lidums is a Chartered Accountant and qualified lawyer with over 25 years’ experience in the resources, energy and accounting industries. He held senior roles with BP, Shell and ConocoPhillips and is a current Councillor of the South Australian Chamber of Mines and Energy Inc. (SACOME). Varis Lidums has been the Commercial Manager at Minotaur Exploration Ltd since 1 March 2011.Operating ResultsThe consolidated loss of the group after providing for income tax amounted to $4,160,504 (2018: $2,516,051).Interests in the shares and options of the company and related bodies corporateAs at the date of this report, the interests of the directors in office in the shares and options of Minotaur Exploration Limited were: Directors’ ReportNumber of ordinary sharesNumber of options over ordinary sharesAntonio Belperio2,477,0362,750,000Roger Higgins1,000,0002,500,000George McKenzie1,059,1002,000,000Andrew Woskett205,0005,000,000 Minotaur Exploration Annual Report 2019 | 11Dividends paid or recommendedNo dividends were paid or declared since the start of the financial year. No recommendation for payment of dividends has been made.Principal activitiesThe 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 yearRisk managementThe 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 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 affairsNo significant changes occurred during the year.Environmental regulationsThe 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.Barry van der Stelt, Senior Geologist, and Anna Ogilvie, Geologist, using the XRF to test RC drill samples Events since the end of the reporting periodNo matter or circumstance has arisen since 30 June 2019 that has significantly affected the Group’s operations, results or state of affairs, or may do so in the future.Unissued shares under optionUnissued ordinary shares of Minotaur Exploration Limited under option at the date of this report are: Shares issued as a result of exercise of optionsDuring or since the end of the financial year, the Company did not issue any ordinary shares as a result of the exercise of options (2018: 797,755).Indemnification and insurance of directors and officersTo the extent permitted by law, the Company has indemnified (fully insured) each director and the secretary of the Company for an annual premium of $15,516. The liabilities insured include costs and expenses that may be incurred in defending civil Directors’ ReportDate options grantedExpiry dateExercise price of shares $Number underoptionUnlisted20/11/201419/11/20190.19005,105,00007/09/201606/09/20210.11502,530,00018/11/201617/11/20190.250010,250,00005/10/201731/10/20190.06801,800,00027/10/201731/10/20190.06802,500,00008/12/201730/11/20200.25002,000,00012/12/201831/12/20210.05257,500,00031,685,000 or criminal proceedings (that may be brought) against the officers in their capacity as officers of the Company or a related body, and any other payments arising from liabilities incurred by the officers in connection with such proceedings, other than where such liabilities arise out of conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the Company.Remuneration report - AuditedThis 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.IntroductionThe remuneration report details the remuneration arrangements for key management personnel 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 DirectorDr Roger Higgins Non-Executive ChairmanMr Varis Lidums Commercial Manager and Company SecretaryMr Glen Little Exploration and Business Development ManagerMr George McKenzie Non-Executive DirectorMr Andrew Woskett Managing DirectorRemuneration philosophyExecutive remuneration policies and structuresThe 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 individual’s duties and responsibilities and that remuneration is competitive in attracting, retaining and motivating people with appropriate skills and experience. When determining remuneration the Board has regard to the Group’s financial performance and capacity.How executive remuneration policies and structures are determinedDecisions about executive remuneration are guided by the following four principles:• Fairness: provide a fair level of reward to all employees • Outcomes: ensure correlation between reward and performance • Alignment: as far as possible align employee and shareholder interests • Corporate Culture: facilitate leadership standards that create a culture aligned to shareholders’ interests. Fixed remunerationFixed remuneration consists of base salary, superannuation and other non-monetary benefits and is designed to reward for:• The scope of the executive’s role;• The executive’s skills, experience and qualifications; and• Individual performance.It is set with reference to comparable roles in similar companies.Employment contractsThe 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. Minotaur Exploration Annual Report 2019 | 13 14 | Minotaur Exploration Annual Report 2019The employment conditions of the Executive Director, Dr Antonio Belperio, are formalised in a contract of employment. Dr Belperio commenced employment on 1 January 2005 and his gross salary, inclusive of the 9.5% 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 and Business Development 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.The table below details the conditions under which non-executive directors of the Company are remunerated: Key management personnel remuneration and equity holdingsThe 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.Directors’ ReportNon-Exeuctive DirectorsAnnual retainer $Dr Roger Higgins Non-Executive Chairman90,000Mr George McKenzie Non-Executive Director45,000 Minotaur Exploration Annual Report 2019 | 15Anna Ogilvie, Geologist, pegging a proposed drillhole for EM testing at the Seer prospectShort termemployeebenefitsPost employmentShare-based paymentsTotalsPerformance based percentage of remunerationSalary & FeesBonusSuperannuationOptions$%Antonio Belperio20192018205,936205,93610,297-20,54219,564--236,775225,500--Roger Higgins2019201890,00090,000------90,00090,000--George McKenzie2019201845,00045,000-----52,02045,00097,020--Andrew Woskett20192018355,675355,67517,784-----373,459355,675--Total20192018696,611696,61128,081-20,54219,564-52,020745,234768,195--Table 1: Director remuneration for the year ended 30 June 2019 and 30 June 2018Short termemployeebenefitsPost employmentShare-based paymentsTotalsPerformance based percentage of remunerationSalary & FeesBonusSuperannuationOptions$%Varis Lidums20192018176,921178,0828,904-17,78516,91819,250-222,860195,000--Glen Little20192018183,228182,7188,767-18,24017,35813,090-223,325200,076--Total20192018360,149360,80017,671-36,02534,27632,340-446,185395,076--Table 2: Remuneration of other key management personnel for the year ended 30 June 2019 and 30 June 2018Bonuses to Dr Belperio and Mr Woskett were paid during the year at the discretion of the Board. No amounts were linked to performance and at risk. Bonuses to other key management personnel were paid during the year at the discretion of the Board. No amounts were linked to performance and at risk.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.Other transactions with key management personnelThroughout the year $55,933 (2018: $54,470) (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.BonusesDuring the 2019 financial year a number of Minotaur’s key management personnel received a cash bonus. Bonuses are paid at the discretion of the Board. All available bonuses to directors and other key management personnel were paid during the year.Share based remunerationOptions 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.No options were granted to directors as remuneration during the year.Details of options over ordinary shares in the Company that were granted during the year as remuneration to each of the other key management personnel are set out below: Options held by key management personnelThe number of options to acquire shares in the Company held during the 2019 reporting period by each of the key management personnel of the Group; including their related parties are set out below:Directors’ Report16 | Minotaur Exploration Annual Report 2019Balance at beginningof periodGranted as remunerationExercisedNet changeotherBalance at end of periodExpirydateFirst exercisedateDirectors - Unlisted optionsAntonio Belperio2,750,000---2,750,00017/11/1918/11/16RogerHiggins2,500,000---2,500,00017/11/1918/11/16GeorgeMcKenzie2,000,000---2,000,00030/11/2008/12/17AndrewWoskett5,000,000---5,000,00017/11/1918/11/16Number grantedGrant dateValue per option at grant date $Value of options at grant date$Number vestedExerciseprice $Last exercisedateOther key managementVaris Lidums1,250,00012/12/180.015419,2501,250,0000.052531/12/21Glen Little850,00012/12/180.015413,090850,0000.052531/12/21 Minotaur Exploration Annual Report 2019 | 17 Shares held by key management personnelThe number of fully paid ordinary shares in the Company held during the 2019 reporting period by each of the key management personnel of the Group; including their related parties are set out below.Use of remuneration consultantsDuring 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 2018 Annual General MeetingMinotaur Exploration Ltd received more than 85% of “yes” votes on its remuneration report for the 2018 financial year by proxy. The Company did not receive any feedback at the Annual General Meeting on its remuneration report.End of audited remuneration reportDirectors’ MeetingsThe 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:Balance at beginningof periodGranted as remunerationExercisedNet changeotherBalance at end of periodExpirydateFirst exercise dateOther key management - Unlisted optionsVaris Lidums450,000---450,00021/11/1920/11/14Varis Lidums400,000---400,00006/09/2107/09/16Varis Lidums-1,250,000--1,250,00031/12/2112/12/18Glen Little1,000,000---1,000,00021/11/1920/11/14Glen Little250,000---250,00006/09/2107/09/16Glen Little-850,000--850,00031/12/2112/12/18Balance at1 July 2018Participationin SPPOn marketacquisitionsBalance30 June 2019DirectorsAntonio Belperio1,762,750714,286-2,477,036Roger Higgins--1,000,0001,000,000George McKenzie59,100-1,000,0001,059,100Andrew Woskett205,000--205,000Other key managementVaris Lidums----Glen Little58,956--58,956Directors’ MeetingsAudit CommitteeDirectorEligibleAttendedEligibleAttendedAntonio Belperio66--Roger Higgins6622George McKenzie6622Andrew Woskett66-- 18 | Minotaur Exploration Annual Report 2019Proceedings on behalf of the groupNo 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.Non-audit servicesDuring 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: • 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 22 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 19 of this financial report and forms part of this Directors’ Report.Signed in accordance with a resolution of the directors:Roger HigginsChairman Dated this 22nd day of August 2019 Minotaur Exploration Annual Report 2019 | 19AUDITOR’S INDEPENDENCE DECLARATION 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. www.grantthornton.com.au Level 3, 170 Frome Street Adelaide SA 5000 Correspondence to: GPO Box 1270 Adelaide SA 5001 T +61 8 8372 6666 F +61 8 8372 6677 E info.sa@au.gt.com W www.grantthornton.com.au Auditor’s Independence Declaration To the Directors of 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 2019, 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 AUDIT PTY LTD Chartered Accountants I S Kemp Partner – Audit & Assurance Adelaide, 22 August 2019 FI NANCIAL REPORT
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30 June 2019
Revenue
Other income
Impairment of exploration and evaluation assets
Impairment of financial assets
Project generation costs
Employee benefits expense
Depreciation expense
Other expenses
Loss before income tax expense
Income tax benefit
Loss for the year
Consolidated Group
30 June 2019
30 June 2018
$
311,654
138,715
$
213,692
242,429
(2,960,520)
(1,342,979)
-
(194,897)
(610,228)
(126,364)
(914,119)
(40,003)
(684,780)
(690,645)
(150,890)
(906,416)
(4,355,759)
(3,359,592)
195,255
843,541
(4,160,504)
(2,516,051)
Note
4 (a)
4 (b)
4 (c)
4 (c)
4 (c)
4 (d)
4 (c)
4 (e)
5
20
Other comprehensive income (net of tax)
Items that will not be subsequently reclassified to profit or loss
Loss on equity instruments designated at fair value through other
comprehensive income
19 (b)
(295,683)
(144,543)
Total comprehensive income for the year attributable to the members
of the parent entity
(4,456,187)
(2,660,594)
Earnings per share
Basic earnings per share (cents)
Diluted earnings per share (cents)
6
6
(1.44)
(1.44)
(1.05)
(1.05)
The above statement should be read in conjunction with the accompanying notes.
20 | Minotaur Exploration Annual Report 2019
Consolidated Statement of Financial Position
as at 30 June 2019
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other current assets
Held-for-sale assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Financial assets
Property, plant and equipment
Exploration and evaluation assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Borrowings
Short-term provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
Long-term provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Consolidated Group
30 June 2019
30 June 2018
Note
$
$
7
8
9
10
11
12
13
15
16
17
16
17
18
19
20
3,985,806
2,020,041
31,689
388,833
127,726
452,840
4,406,328
2,600,607
635,222
-
5,041,550
2,600,607
332,672
500,554
7,589,649
8,422,875
518,355
623,185
8,660,998
9,802,538
13,464,425
12,403,145
2,925,298
1,228,934
26,713
438,028
25,986
568,237
3,390,039
1,823,157
985,597
23,506
1,009,103
4,399,142
366,014
33,714
399,728
2,222,885
9,065,283
10,180,260
48,166,080
962,210
44,940,370
1,142,393
(40,063,007)
(35,902,503)
9,065,283
10,180,260
The above statement should be read in conjunction with the accompanying notes.
Minotaur Exploration Annual Report 2019 | 21
FI NANCIAL REPORT
Consolidated Statement of Changes in Equity
for the year ended 30 June 2019
Note
Issued
capital
$
Consolidated Group
Share
option
reserve
$
Other
components
of equity
(Note 19)
$
Accumulated
losses
$
Total equity
$
Balance at 1 July 2018
44,940,370
1,032,205
110,188
(35,902,503)
10,180,260
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 as part consider-
ation for the acquisition of the
Highlands project
Issue of shares through Share
Placement and Share Purchase
Plan
Transaction costs on shares issued
Issue of options to employees
under the Company’s ESOP
-
-
17
17
275,000
3,161,234
(210,524)
-
3,225,710
-
-
-
-
-
115,500
115,500
(295,683)
(4,160,504)
(4,456,187)
(295,683)
(4,160,504)
(4,456,187)
-
-
-
-
-
-
-
-
-
-
275,000
3,161,234
(210,524)
115,500
3,341,210
Balance at 30 June 2019
48,166,080
1,147,705
(185,495)
(40,063,007)
9,065,283
The above statement should be read in conjunction with the accompanying notes.
22 | Minotaur Exploration Annual Report 2019
Consolidated Statement of Changes in Equity
for the year ended 30 June 2019 (continued)
Issued
apital
$
Note
Consolidated Group
Share
option
reserve
$
Other
components
of equity
(Note 19)
$
Accumulated
losses
$
Total equity
$
Balance at 1 July 2017
42,935,000
1,178,476
254,731
(33,584,743)
10,783,464
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 Share Purchase
Plan
Issue of shares through exercise
of options
Transaction costs on shares issued
Issue of unlisted options to
directors
17
17
Transfer from share option reserve
upon lapse of options
18(a)
-
-
2,043,422
76,489
(114,541)
-
-
2,005,370
-
-
-
-
-
52,020
(198,291)
(146,271)
(144,543)
(2,516,051)
(2,660,594)
(144,543)
(2,516,051)
(2,660,594)
-
-
-
-
-
-
-
-
-
-
2,043,422
76,489
(114,541)
52,020
198,291
198,291
-
2,057,390
Balance at 30 June 2018
44,940,370
1,032,205
110,188
(35,902,503)
10,180,260
The above statement should be read in conjunction with the accompanying notes.
Minotaur Exploration Annual Report 2019 | 23
FIN ANCIAL REPO RT
Consolidated Statement of Cash Flows
for the year ended 30 June 2019
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
R&D tax incentive received
Consolidated Group
Note
30 June 2019
$
30 June 2018
$
318,225
213,691
(1,762,801)
(1,609,720)
7,144
315,419
11,557
470,851
Net cash used in operating activities
7
(1,122,013)
(913,621)
Cash flows from investing activities
Payments for property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of equity instruments
Proceeds from sale of equity instruments
Proceeds from sale of tenements
Acquisition of Highlands project
Option, exclusivity, extension and signing fees received
Joint Venture receipts
Government grants received for exploration activities
Payment for exploration activities
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares through share purchase plan and share placement
Proceeds from exercise of listed options
Payment of transaction costs for issue of shares
Proceeds from JV loan arrangement
Repayment of borrowings
Net cash provided by financing activities
(3,733)
-
(110,000)
-
-
(125,000)
125,000
7,604,863
116,323
(20,628)
4,000
-
33,025
341,899
-
170,000
4,742,775
-
(8,090,695)
(6,674,046)
(483,242)
(1,402,975)
3,161,234
-
(210,524)
644,131
(23,821)
2,043,422
76,490
(114,542)
-
-
3,571,020
2,005,370
Net increase/(decrease) in cash and cash equivalents
Cash at the beginning of the year
Cash at the end of the year
1,965,765
2,020,041
3,985,806
(311,226)
2,331,267
2,020,041
7
The above statement should be read in conjunction with the accompanying notes.
24 | Minotaur Exploration Annual Report 2019
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
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/- O’Loughlins Lawyers, Level 2, 99 Frome Street, Adelaide SA 5000 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 2019 were approved and authorised for issue by the Board of Directors
on 22 August 2019.
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 24 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.
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.
Minotaur Exploration Annual Report 2019 | 25
FIN ANCIAL REPO RT
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 exists; and
b.
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 Limited.
Minotaur Exploration Limited 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. Minotaur Exploration Limited
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 43.5% refundable tax offset is available for companies with annual turnover of less than $20 million. The Group recognises refundable tax
offsets based on management’s best estimate 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
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.
26 | Minotaur Exploration Annual Report 2019
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
Leasehold improvements
Buildings
Plant and equipment
Motor vehicles
Useful life
3-7 years
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.
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
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another
entity.
i. Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive
income (OCI), and fair value through profit or loss.
Minotaur Exploration Annual Report 2019 | 27
FI NANCIAL REPORT
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the
Group’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component
or for which the Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case
of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing
component or for which the Group has applied the practical expedient are measured at the transaction price determined under AASB 15.
In order for a financial asset to be initially classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash
flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the
SPPI test and is performed at an instrument level.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The
business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the
market place (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
• Financial assets at amortised cost (debt instruments)
• Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments)
• Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity
instruments)
• Financial assets at fair value through profit or loss
Financial assets at amortised cost (debt instruments)
The Group measures financial assets at amortised cost if both of the following conditions are met:
• The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows;
and
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment.
Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
The Group’s financial assets at amortised cost includes trade receivables and a joint venture loan receivable.
Financial assets designated at fair value through OCI (equity instruments)
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments designated at fair value
through OCI when they meet the definition of equity under AASB 132 Financial Instruments: Presentation and are not held for trading. The
classification is determined on an instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other income in the statement of
profit or loss when the right of payment has been established, except when the Group benefits from such proceeds as a recovery of part
of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through OCI are
not subject to impairment assessment.
The Group elected to classify irrevocably its listed equity investments under this category.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e.,
removed from the Group’s consolidated statement of financial position) when:
• The rights to receive cash flows from the asset have expired; or
• The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in
full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially
all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the
asset, but has transferred control of the asset.
28 | Minotaur Exploration Annual Report 2019
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates
if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the
risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognise the transferred asset to the extent of
its continuing involvement. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability
are measured on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying
amount of the asset and the maximum amount of consideration that the Group could be required to repay.
Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss.
ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the
Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash
flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial
recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month
ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is
required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track
changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group
may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the
outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written
off when there is no reasonable expectation of recovering the contractual cash flows.
ii. Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings,
payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable
transaction costs.
The Group’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, and derivative financial
instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains
and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the
EIR. The EIR amortisation is included as finance costs in the statement of profit or loss.
This category generally applies to interest-bearing loans and borrowings.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial
liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The
difference in the respective carrying amounts is recognised in the statement of profit or loss.
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
Minotaur Exploration Annual Report 2019 | 29
FIN ANCIAL REPO RT
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
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 acquiree, 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) Non-current assets held for sale and discontinued operations
The Group classifies non-current assets and disposal groups as held for sale if their carrying amounts will be recovered principally through a
sale transaction rather than through continuing use. Non-current assets and disposal groups classified as held for sale are measured at the
lower of their carrying amount and fair value less costs to sell. Costs to sell are the incremental costs directly attributable to the disposal of
an asset (disposal group), excluding finance costs and income tax expense.
The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset or disposal group is
available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant
changes to the sale will be made or that the decision to sell will be withdrawn. Management must be committed to the plan to sell the asset
and the sale expected to be completed within one year from the date of the classification.
Property, plant and equipment and intangible assets are not depreciated or amortised once classified as held for sale.
Assets and liabilities classified as held for sale are presented separately as current items in the statement of financial position.
j) Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in which
that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional and
presentation currency.
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.
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.
30 | Minotaur Exploration Annual Report 2019
k) 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.
Other long-term employee benefits
The Group’s liabilities for 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.
l) 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.
m) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits available on demand with banks, other short-term highly liquid investments with
original maturities of 6 months or less, and bank overdrafts.
Bank overdrafts are reported within short-term borrowings in current liabilities in the statement of financial position.
n) 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 over time as 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).
o) 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.
p) 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.
q) 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).
Minotaur Exploration Annual Report 2019 | 31
FI NANCIAL REPORT
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
r) 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.
s) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current
financial year.
t) Critical Accounting Estimates and Judgements
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 $7,589,650
(2018: $8,660,998).
iii. Research and development incentive
The Group currently recognises Research and Development incentives on an accrual basis of costs incurred during the financial year.
Management complete a detailed estimate of the expected claim relating to the financial year based on current projects lodged with
AusIndustry.
u) 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 2018. Information
on the more significant standards is presented below.
AASB 9 Financial Instruments
AASB 9 Financial Instruments replaces AASB 139 Financial Instruments: Recognition and Measurement for annual periods beginning on
or after 1 January 2018, bringing together all three aspects of the accounting for financial instruments: classification and measurement;
impairment; and hedge accounting.
When adopting AASB 9, the Group has applied transitional relief and elected not to restate prior periods. Rather, differences arising from
the adoption of AASB 9 in relation to classification, measurement, and impairment are recognised in opening retained earnings as at 1 July
2018. The reclassifications and adjustments arising from the introduction of AASB 9 have not been reflected in the statement of financial
position as at 30 June 2018, but are recognised in the opening balance sheet from 1 July 2018. The following table shows the adjustments
recognised for each individual line item. Line items that were not affected by the change have not been included.
32 | Minotaur Exploration Annual Report 2019
Balance Sheet Extract
Non-Current Assets
Financial assets at fair value through other
comprehensive income (OCI)
Available-for-sale financial assets
30 June 2018 as
originally
presented
$
AASB 9
$
1 July 2018
$
-
518,335
(518,355)
518,355
(518,355)
-
On 1 July 2018 (the date of initial application of AASB 9), the group’s management assessed which business models apply to the financial
assets held by the group and has classified its financial instruments into the appropriate AASB 9 categories.
The impact of these changes on the Group’s equity is as follows:
Closing balance 30 June 2018 - AASB 139
Reclassify non trading equities from available-for-sale to FVOCI
Opening Balance 1 July 2018 – AASB 9
Equity investments previously classified as available-for-sale
Effect on AFS
reserve
$
Effect on FVOCI
reserve
$
110, 188
(110,188)
-
-
110,188
110,188
The group elected to present in OCI changes in the fair value of all its equity investments previously classified as available-for-sale, because
these investments are held as long-term strategic investments that are not expected to be sold in the short to medium term. As a result,
assets with a fair value of $518,355 were reclassified from available-for-sale financial assets to financial assets at FVOCI and fair value gains
of $110,188 were reclassified from the available-for-sale financial assets reserve to the FVOCI reserve on 1 July 2018.
Classification and Measurement
Except for certain trade receivables, under AASB 9, the Group initially measures a financial asset at its fair value plus, in the case of a financial
asset not at fair value through profit or loss, transaction costs. Under AASB 9, debt financial instruments are subsequently measured at fair
value through profit or loss (FVPL), amortised cost, or fair value through other comprehensive income (FVOCI).
The classification is based on two criteria:
•
the Group’s business model for managing the assets; and
• whether the instruments’ contractual cash flows represent ‘solely payments of principal and interest’ on the principal amount
outstanding (the ‘SPPI criterion’).
The new classification and measurement of the Group’s debt financial assets are, as follows:
• Debt instruments at amortised cost for financial assets that are held within a business model with the objective to hold the financial
assets in order to collect contractual cash flows that meet the SPPI criterion.
This category includes the Group’s Trade and other receivables.
Other financial assets are classified and subsequently measured, as follows:
• Equity instruments at FVOCI, with no recycling of gains or losses to profit or loss on derecognition.
This category only includes equity instruments, which the Group intends to hold for the foreseeable future and which the Group has
irrevocably elected to so classify upon initial recognition or transition.
The Group classified its quoted equity instruments as equity instruments at FVOCI. Equity instruments at FVOCI are not subject to an
impairment assessment under AASB 9. Under AASB 139, the Group’s quoted equity instruments were classified as AFS financial assets.
The accounting for the Group’s financial liabilities remains largely the same as it was under AASB 139. Similar to the requirements of AASB
139, AASB 9 requires contingent consideration liabilities to be treated as financial instruments measured at fair value, with the changes in
fair value recognised in the statement of profit or loss.
Minotaur Exploration Annual Report 2019 | 33
FI NANCIAL REPORT
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Impairment
The adoption of AASB 9 has fundamentally changed the Group’s accounting for impairment losses for financial assets by replacing AASB
139’s incurred loss approach with a forward-looking expected credit loss (ECL) approach.
AASB 9 requires the Group to record an allowance for ECLs for all loans and other debt financial assets not held at FVPL.
ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the
Group expects to receive. The shortfall is then discounted at an approximation to the asset’s original effective interest rate.
For Contract assets and Trade and other receivables, the Group has applied the standard’s simplified approach and has calculated ECLs
based on lifetime expected credit losses.
For other debt financial assets (i.e., loans and debt securities at FVOCI), the ECL is based on the 12-month ECL. The 12-month ECL is the
portion of lifetime ECLs that results from default events on a financial instrument that are possible within 12 months after the reporting
date. However, when there has been a significant increase in credit risk since origination, the allowance will be based on the lifetime ECL.
The Group considers a financial asset in default when its contractual payment is 90 days past due. However, in certain cases, the Group
may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the
outstanding contractual amounts in full before taking into account any credit enhancements held by the Group.
The adoption of the ECL requirements of AASB 9 have not materially impacted the expected recoverability of financial assets and accordingly
no adjustment or restatement was required to be recognised by the Group.
AASB 15 Revenue from Contracts with Customers – Accounting Policies applied from 1 July 2018
AASB 15 supersedes AASB 111 Construction Contracts, AASB 118 Revenue and related Interpretations and it applies to all revenue arising
from contracts with customers, unless those contracts are in the scope of other standards. The new standard establishes a five-step model
to account for revenue arising from contracts with customers.
Under AASB 15, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange
for transferring goods or services to a customer. The standard requires entities to exercise judgement, taking into consideration all of the
relevant facts and circumstances when applying each step of the model to contracts with their customers. The standard also specifies the
accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract.
The Group has applied AASB 15 using the modified approach and the relevant impacts of the implementation of AASB 15 are disclosed
below.
Rendering of services
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.
Prior to the adoption of AASB 15, the Group accounted for the management fees as a separate deliverable. Under AASB 15, the Group
assessed whether there were any additional performance obligations in relation to the management fees. From this review it was
determined that there were no additional performance obligations other than providing administrative and management support.
Under AASB 15, the Group concluded that management fees charged to joint operation partners for the management of exploration
activities will continue to be recognised over time, using an input method to measure progress towards complete satisfaction of the service
similar to the previous accounting policy, because the customer simultaneously receives and consumes the benefits provided by the Group.
Moreover, under AASB 15, any earned consideration that is conditional should be recognised as a contract asset rather than receivable.
From this review, no restatement to the statement of financial position as at 30 June 2018 or the statement of profit or loss for the year
ended 30 June 2019 was required as a result of the introduction of AASB 15.
AASB Interpretation 22 Foreign Currency Transactions and Advance Considerations
The Interpretation clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income
(or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the
transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance
consideration.
If there are multiple payments or receipts in advance, then the entity must determine the date of the transactions for each payment or
receipt of advance consideration.
34 | Minotaur Exploration Annual Report 2019
This Interpretation does not have any impact on the Group’s consolidated financial statements.
AASB 2016-5 Amendments to Australian Accounting Standards - Classification and Measurement of Share-based Payment Transactions
The AASB issued amendments to AASB 2 Share-based Payment that address three main areas: the effects of vesting conditions on
the measurement of a cash-settled share-based payment transaction; the classification of a share-based payment transaction with
net settlement features for withholding tax obligations; and accounting where a modification to the terms and conditions of a share-
based payment transaction changes its classification from cash-settled to equity-settled. On adoption, entities are required to apply the
amendments without restating prior periods, but retrospective application is permitted if elected for all three amendments and other
criteria are met. The Group’s accounting policy for cash-settled share based payments is consistent with the approach clarified in the
amendments.
In addition, the Group has no share-based payment transaction with net settlement features for withholding tax obligations and had not
made any modifications to the terms and conditions of its share-based payment transaction. Therefore, these amendments do not have any
impact on the Group’s consolidated financial statements.
(v) Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted early
by the group
Australian Accounting Standards and Interpretations that are issued, but are not yet effective, up to the date of issuance of the Group’s
financial statements are disclosed below. The Group intends to adopt these new standards and interpretations, if applicable, when they
become effective.
AASB 16 Leases
AASB 16 was issued in January 2016 and it replaces AASB 117 Leases, AASB Interpretation 4 Determining whether an Arrangement contains
a Lease, AASB Interpretation-115 Operating Leases-Incentives and AASB Interpretation 127 Evaluating the Substance of Transactions Involving
the Legal Form of a Lease.
AASB 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for
all leases under a single on-balance sheet model similar to the accounting for finance leases under AASB 117. The standard includes two
recognition exemptions for lessees – leases of ‘low-value’ assets (e.g. personal computers) and short-term leases (i.e. leases with a lease term
of 12 months or less).
At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e. the lease liability) and an asset
representing the right to use the underlying asset during the lease term (i.e. the right-of-use asset). Lessees will be required to separately
recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset.
Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.g. a change in the lease term, a change
in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognise
the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset.
Lessor accounting under AASB 16 is substantially unchanged from today’s accounting under AASB 117. Lessors will continue to classify all
leases using the same classification principle as in AASB 117 and distinguish between two types of leases: operating and finance leases.
AASB 16, which is effective for annual periods beginning on or after 1 January 2019, requires lessees and lessors to make more extensive
disclosures than under AASB 117.
The Group plans to adopt AASB 16 using the modified retrospective approach. The Group will elect to apply the standard to contracts
that were previously identified as leases applying AASB 117 and AASB Interpretation 4. The Group will therefore not apply the standard to
contracts that were not previously identified as containing a lease applying AASB 117 and AASB Interpretation 4.
The Group currently holds a lease of its office premises located in Norwood, this lease expires on 9 July 2019. The Group will elect to use
the exemptions proposed by the standard on lease contracts for which the lease terms ends within 12 months as of the date of initial
application, and lease contracts for which the underlying asset is of low value. Therefore the Group will not recognise a right of use asset
and lease liability for this lease.
AASB Interpretation 23 Uncertainty over Income Tax Treatment
The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of AASB
112 and does not apply to taxes or levies outside the scope of AASB 112, nor does it specifically include requirements relating to interest
and penalties associated with uncertain tax treatments.
The Interpretation specifically addresses the following:
• Whether an entity considers uncertain tax treatments separately;
•
•
•
The assumptions an entity makes about the examination of tax treatments by taxation authorities;
How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates; and
How an entity considers changes in facts and circumstances.
Minotaur Exploration Annual Report 2019 | 35
FI NANCIAL REPORT
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
An entity has to determine whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax
treatments. The approach that better predicts the resolution of the uncertainty should be followed.
The interpretation is effective for annual reporting periods beginning on or after 1 January 2019, but certain transition reliefs are available.
The Group will apply the interpretation from its effective date, however it is not expected to have a material impact on the Group.
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 the conflict between AASB 10 and AASB 128 in dealing with the loss of control of a subsidiary that is sold or
contributed to an associate or joint venture. The amendments clarify that the gain or loss resulting from the sale or contribution of assets
that constitute a business, as defined in AASB 3, between an investor and its associate or joint venture, is recognised in full. Any gain or loss
resulting from the sale or contribution of assets that do not constitute a business, however, is recognised only to the extent of unrelated
investors’ interests in the associate or joint venture.
The AASB have deferred the effective date of these amendments indefinitely, but an entity that early adopts the amendments must apply
them prospectively. The Group will apply these amendments when they become effective.
AASB 2018-1 Amendments to Australian Accounting Standards – Annual Improvements 2015–2017 Cycle
These improvements include:
AASB 3 Business Combinations
The amendments clarify that, when an entity obtains control of a business that is a joint operation, it applies the requirements for a business
combination achieved in stages, including remeasuring previously held interests in the assets and liabilities of the joint operation at fair
value. In doing so, the acquirer remeasures its entire previously held interest in the joint operation.
An entity applies those amendments to business combinations for which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after 1 January 2019, with early application permitted. These amendments will apply on future business
combinations of the Group.
AASB 11 Joint Arrangements
A party that participates in, but does not have joint control of, a joint operation might obtain joint control of the joint operation in which
the activity of the joint operation constitutes a business as defined in AASB 3. The amendments clarify that the previously held interests in
that joint operation are not remeasured.
An entity applies those amendments to transactions in which it obtains joint control on or after the beginning of the first annual reporting
period beginning on or after 1 January 2019, with early application permitted. These amendments are currently not applicable to the Group
but may apply to future transactions.
AASB 112 Income Taxes
The amendments clarify that the income tax consequences of dividends are linked more directly to past transactions or events that
generated distributable profits than to distributions to owners. Therefore, an entity recognises the income tax consequences of dividends
in profit or loss, other comprehensive income or equity according to where the entity originally recognised those past transactions or
events.
An entity applies those amendments for annual reporting periods beginning on or after 1 January 2019, with early application permitted.
When an entity first applies those amendments, it applies them to the income tax consequences of dividends recognised on or after the
beginning of the earliest comparative period. Since the Group’s current practice is in line with these amendments, the Group does not
expect any effect on its consolidated financial statements.
AASB 123 Borrowing Costs
The amendments clarify that an entity treats as part of general borrowings any borrowing originally made to develop a qualifying asset
when substantially all of the activities necessary to prepare that asset for its intended use or sale are complete.
An entity applies those amendments to borrowing costs incurred on or after the beginning of the annual reporting period in which the
entity first applies those amendments. An entity applies those amendments for annual reporting periods beginning on or after 1 January
2019, with early application permitted. Since the Group’s current practice is in line with these amendments, the Group does not expect any
effect on its consolidated financial statements.
36 | Minotaur Exploration Annual Report 2019
2 PARENT INFORMATION
Assets
Current assets
Non-current assets
Liabilities
Current liabilities
Non-current liabilities
Equity
Issued capital
Reserves – Share option
Accumulated losses
Financial performance
Loss for the year
Other comprehensive income
Guarantees
30 June
2019
$
4,108,163
7,676,811
30 June
2018
$
2,007,276
9,564,780
11,784,974
11,572,056
1,710,588
1,009,103
2,719,691
48,166,080
1,147,705
(40,248,502)
9,065,283
992,067
399,728
1,391,795
44,940,370
1,032,205
(35,792,314)
10,180,261
(4,456,187)
(2,660,594)
-
-
(4,456,187)
(2,660,594)
Minotaur Exploration Limited 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 23. 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 21. The contractual commit-
ments of the parent are consistent with that of the Group.
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
a) Revenue
Administration fees
Rent received
Timing of revenue recognition
Goods transferred at a point in time
Services transferred over time
Total revenue
Consolidated Group
30 June
2019
$
292,086
19,568
311,654
-
311,654
311,654
30 June
2018
$
190,559
23,133
213,692
-
213,692
213,692
Minotaur Exploration Annual Report 2019 | 37
FI NANCIAL REPORT
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
4 REVENUE AND EXPENSES
b) Other income
Net gain on disposal of equity instruments
Option, exclusivity, signing and extension fees received
Net gain on disposal of exploration assets
Bank interest received or receivable
Other income
c) Expenses
Impairment of non-current assets
Impairment of exploration and evaluation assets
Impairment of equity instruments
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
Consolidated Group
30 June
2019
$
-
125,000
-
7,144
6,571
138,715
30 June
2018
$
8,799
170,000
52,760
10,870
-
242,429
2,960,520
-
2,960,520
1,342,979
40,003
1,382,982
194,897
194,897
684,780
684,780
7,937
90,138
24,670
3,619
7,937
92,173
20,018
30,762
Total depreciation of non-current assets
126,364
150,890
d) Employee benefits expense
Wages, salaries, directors’ fees and other remuneration expenses
2,418,210
2,267,088
Superannuation expense
Transfer from annual leave provision
Transfer (from)/to long service leave provision
Share options expense
Transfer to exploration assets
171,227
(67,194)
(73,223)
115,500
(1,954,292)
610,228
165,283
(20,410)
50,518
52,020
(1,823,854)
690,645
38 | Minotaur Exploration Annual Report 2019
e) Other expenses
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
5 INCOME TAX BENEFIT
The major components of income tax benefit are:
Statement of comprehensive income
Current income tax
Current income tax charge
Research and development tax incentive
Income tax benefit reported in the income statement
Consolidated Group
30 June
2019
$
227,982
104,556
265,221
48,232
40,235
22,340
7,328
47,951
46,295
103,979
914,119
30 June
2018
$
220,689
83,379
228,708
53,161
37,988
31,654
9,013
32,208
48,757
160,859
906,416
-
(195,255)
(195,255)
-
(843,541)
(843,541)
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% (2018: 27.5%)
Expenditure not allowable for income tax purposes
Research and development tax incentive
Tax losses not recognised due to not meeting recognition criteria
Consolidated Group
30 June
2019
$
30 June
2018
$
(4,355,759)
(3,359,592)
(1,197,834)
32,053
(195,255)
1,165,781
(195,255)
(923,888)
14,825
(843,541)
909,063
(843,541)
The Group has tax losses arising in Australia of $87,865,423 (2018: $84,461,055) that are available indefinitely for offset against future
taxable profits generated by the Group. In addition the Group has $7,925,923 (2018: $8,055,232) 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 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.
Minotaur Exploration Annual Report 2019 | 39
FI NANCIAL REPORT
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
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
Weighted average number of ordinary shares adjusted
for the effect of dilution
Consolidated Group
30 June
2019
$
($4,160,504)
288,306,568
30 June
2018
$
($2,516,051)
240,592,566
-
-
288,306,568
240,592,566
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 2019.
As no dilutive effect has been taken into account for 2019, 31,685,000 potential ordinary shares have not been included in the
calculation.
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the
date of completion of these financial statements.
7 CASH AND CASH EQUIVALENTS
Cash and cash equivalents
Cash at bank and on hand
Short-term deposits
Consolidated Group
30 June
2019
$
3,747,706
238,100
3,985,806
30 June
2018
$
1,841,941
178,100
2,020,041
Reconciliation to Statement of Cash Flows
For the purpose of the Statement of Cash Flows, cash and cash equivalents comprise the following at 30 June:
Cash at bank and on hand
Short-term deposits
40 | Minotaur Exploration Annual Report 2019
Consolidated Group
30 June
2019
$
3,747,706
238,100
3,985,806
30 June
2018
$
1,841,941
178,100
2,020,041
Reconciliation of net loss after tax to net cash flows from operations
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, shares in listed companies and
tenements
Share options expensed
Changes in assets and liabilities:
(Increase)/decrease in trade and other receivables
Decrease/(increase) in accrued R&D tax incentive
Decrease in prepayments
Decrease in trade and other payables
(Decrease)/increase in employee provisions
Net cash used in operating activities
Consolidated Group
30 June
2019
$
30 June
2018
$
(4,160,504)
(2,516,051)
126,364
3,155,417
150,890
2,067,762
-
(231,559)
115,500
52,020
(199,154)
120,164
1,382
(140,765)
(140,417)
686
(372,690)
4,519
(99,307)
30,109
(1,122,013)
(913,621)
Included in short-term deposits is $238,100 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.
8 TRADE AND OTHER RECEIVABLES
Trade receivables
Trade receivables are non-interest bearing and are generally on 30-90 day terms.
Information regarding the credit risk of current receivables is set out in Note 26.
9 OTHER CURRENT ASSETS
Prepayments
Accrued R&D tax incentive
Net GST and PAYG receivable
Other
Consolidated Group
30 June
2019
$
31,689
31,689
30 June
2018
$
127,726
127,726
47,154
252,526
66,334
22,819
388,833
48,536
372,690
16,614
15,000
452,840
Minotaur Exploration Annual Report 2019 | 41
FI NANCIAL REPORT
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
10 HELD-FOR-SALE ASSETS
Opening balance
Transfers from exploration and evaluation assets
Consolidated Group
30 June
2019
$
-
635,222
635,222
30 June
2018
$
-
-
-
On 28 May 2019 the Group publicly announced it had entered into a binding conditional Term Sheet to sell its Scotia and Leinster
Nickel assets in Western Australia to ASX listed Auroch Minerals Limited (ASX: AOU). The sale transfers Minotaur Exploration Ltd’s
ownership of Minotaur Gold Solutions Pty Ltd and Altia Resources Pty Ltd, both wholly-owned subsidiaries, which collectively own
the tenements E36/899, E36/936, M29/245 and M29/246. The sale is expected to be completed within a year from the reporting
date. As at 30 June 2019, Minotaur Gold Solutions Pty Ltd and Altia Resources Pty Ltd were classified as a disposal group held for
sale.
On 20 September 2018, the Group entered into a Tenement Sale Agreement for the sale of E37/909. The sale is expected to be
completed within a year from the reporting date. Accordingly the carrying value of this tenement has been disclosed as assets held
for sale as at 30 June 2019.
Proceeds from the sale of tenements listed above are in excess of the carrying value. No impairment expense was recognised upon
reclassification of the assets to held-for-sale.
11 FINANCIAL ASSETS
Equity instruments at fair value through OCI – shares in listed companies
Opening balance
Revaluations
Disposals
Acquisitions
Impairments
Consolidated Group
30 June
2019
$
518,355
(295,683)
-
110,000
-
332,672
30 June
2018
$
718,494
(127,111)
(33,025)
-
(40,003)
518,355
42 | Minotaur Exploration Annual Report 2019
12 PROPERTY, PLANT AND EQUIPMENT
30 June 2019
Cost
Opening balance
Additions
Disposals
Accumulated depreciation
Opening balance
Depreciation for the year
Disposals
Land and
buildings
Leasehold
improvements
Plant and
equipment
Kaolin
Pilot Plant
Motor
Vehicles
Total
508,723
611,218
-
-
-
-
373,285
3,733
-
283,765
187,253
1,964,244
-
-
-
-
3,733
-
508,723
611,218
377,018
283,765
187,253
1,967,977
31,748
7,937
-
521,080
90,138
-
331,690
24,670
-
283,765
172,776
1,341,059
-
-
3,619
-
126,364
-
39,685
611,218
356,360
283,765
176,395
1,467,423
Net book value
469,038
-
20,658
-
10,858
500,554
Property is measured at historical cost less accumulated depreciation. Land and buildings with a net book value of $469,038 (2018:
$476,975) is offered as security against a mortgage of $368,179.
30 June 2018
Cost
Opening balance
Additions
Disposals
Accumulated depreciation
Opening balance
Depreciation for the year
Disposals
Land and
buildings
Leasehold
improvements
Plant and
equipment
Kaolin
Pilot Plant
Motor
Vehicles
Total
508,723
611,218
-
-
-
-
352,658
20,627
-
283,765
187,253
1,943,617
-
-
-
-
20,627
-
508,723
611,218
373,285
283,765
187,253
1,964,244
23,811
7,937
-
428,907
92,173
-
311,672
20,018
-
283,765
-
-
142,014
30,762
-
1,190,169
150,890
-
31,748
521,080
331,690
283,765
172,776
1,341,059
Net book value
476,975
90,138
41,595
-
14,477
623,185
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
30 June
2019
$
30 June
2018
$
7,256,212
333,437
7,589,649
7,483,688
1,177,310
8,660,998
Minotaur Exploration Annual Report 2019 | 43
FI NANCIAL REPORT
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
13 EXPLORATION AND EVALUATION ASSETS
Capitalised tenement expenditure movement reconciliation – Consolidated Group:
30 June 2019
Balance at beginning of year
Additions through expenditure capitalised
Additions through acquisition of Highlands project
Reductions through joint operation contributions
Reductions through government grants received
Exploration joint
operations
$
7,483,688
8,488,116
-
(7,320,831)
(116,323)
Exploration
other
$
1,177,310
1,073,431
400,000
-
-
Total
$
8,660,998
9,561,547
400,000
(7,320,831)
(116,323)
Write-off of tenements relinquished
(1,487,045)
(1,473,475)
(2,960,520)
Transfers to Held-for-sale assets
Transfers between categories
Balance at end of year
30 June 2018
Balance at beginning of year
Additions through expenditure capitalised
Reductions through joint operation contributions
Write-off of tenements relinquished
Transfers between categories
Balance at end of year
-
208,607
7,256,212
5,597,913
4,706,663
(4,689,827)
(16,837)
1,885,776
7,483,688
(635,222)
(208,607)
333,437
3,371,113
1,018,115
-
(1,326,142)
(1,885,776)
1,177,310
(635,222)
-
7,589,649
8,969,026
5,724,778
(4,689,827)
(1,342,979)
-
8,660,998
The impairment expense of $2,960,520 (2018: $1,342,979) 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
44 | Minotaur Exploration Annual Report 2019
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
Forfeited during the year
Expired during the year
2019
number
7,635,000
7,500,000
-
-
2019
WAEP
$0.17
$0.03
-
-
Outstanding at the end of the year
15,135,000
$0.11
2018
number
9,765,000
-
(1,575,000)
(555,000)
7,635,000
2018
WAEP
$0.18
-
$0.25
$0.09
$0.17
Exercisable at the end of the year
15,135,000
$0.11
7,635,000
$0.17
The outstanding balance as at 30 June 2019 is represented by:
• A total of 5,105,000 options exercisable at any time until 21 November 2019 with an exercise price of $0.19.
• A total of 2,530,000 options exercisable at any time until 6 September 2021 with an exercise price of $0.115.
• A total of 7,500,000 options exercisable at any time until 31 December 2021 with an exercise price of $0.0525.
The weighted average remaining contractual life for the share options outstanding as at 30 June 2019 is 1.74 years (2018: 1.99 years).
The range of exercise prices for options outstanding at the end of the year was $0.0525 - $0.19 (2018: $0.115 - $0.19).
Share options issued to directors
No share options were issued to directors during the year.
15 TRADE AND OTHER PAYABLES
Trade payables (i)
Joint operation income received in advance
Accrued expenses
Other payables (ii)
i. Trade payables are non-interest bearing and are normally settled on 30-day terms.
ii. Other payables are non-interest bearing and are normally settled within 30-90 days.
Information regarding the credit risk of current payables is set out in Note 26.
Consolidated Group
30 June
2019
$
1,346,538
1,036,087
479,657
63,016
30 June
2018
$
757,823
178,641
266,487
25,983
2,925,298
1,228,934
Minotaur Exploration Annual Report 2019 | 45
FI NANCIAL REPORT
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
16 BORROWINGS
Current
Bank borrowings (i)
Non-current
Bank borrowings (i)
JV loan arrangement (ii)
Consolidated Group
30 June
2019
$
26,713
26,713
341,466
644,131
985,597
30 June
2018
$
25,986
25,986
366,014
-
366,014
i. Bank borrowings reflect a secured interest and principal loan that is fully offset by unrestricted cash. There are no annual
renewal or review terms.
ii. In the Company’s ASX Release dated 14 May 2019, the Company announced it had entered into a ‘loan carry’ arrangement
with OZ Minerals Ltd through to commercial production from the Jericho copper deposit. In return, OZ Minerals’ beneficial
ownership of the Jericho JV increased from 70% to 80% (Minotaur 20%), effective 1 April 2019. From that date, loan amounts
advanced by OZ Minerals to the Company will be non-recourse and repayable only if positive cash flow emanates from
production at Jericho.
Consolidated Group
30 June
2019
$
95,777
342,251
438,028
23,506
23,506
30 June
2018
$
162,971
405,266
568,237
33,714
33,714
17 PROVISIONS
Current
Annual leave provision
Long service leave provision
Non-current
Long service leave provision
46 | Minotaur Exploration Annual Report 2019
18 ISSUED CAPITAL
Consolidated Group
30 June
2019
$
30 June
2018
$
334,396,917 fully paid ordinary shares (2018: 252,488,374)
48,166,080
44,940,370
2019
2018
Number
$
Number
$
Balance at beginning of financial year
252,488,374
44,940,370
212,386,616
42,935,000
Issue of shares as part consideration for the acquisi-
tion of the Highlands project
Issue of shares through Share Placement and Share
Purchase Plan
Issue of shares through exercise of options
Transaction costs on shares issued
Balance at end of financial year
5,152,883
275,000
-
-
76,755,660
3,161,234
39,296,603
2,043,422
-
N/A
-
(210,524)
805,155
N/A
76,489
(114,541)
334,396,917
48,166,080
252,488,374
44,940,370
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
Reserves
Share option reserve (a)
FVOCI reserve (b)
(a) Share option reserve
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
Consolidated Group
30 June
2019
$
1,147,705
(185,495)
962,210
1,032,205
115,500
-
-
1,147,705
30 June
2018
$
1,032,205
110,188
1,142,393
1,178,476
-
52,020
(198,291)
1,032,205
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.
During the period unlisted share options were issued to employees under the Company’s Employee Share Option Plan. The unlisted
share options were issued under the following terms and conditions:
Unlisted options issued to employees of the Company
7,500,000
$0.0525
Number of
options issued
Exercise price
Expiry date
31/12/2021
All options listed above issued during the period are exercisable at the date the options are issued.
Share-based payments to employees issued under the Company’s Employee Share Option Plan are measured at the fair value of the
instruments issued and amortised over the vesting periods or expensed immediately if these vest on grant date.
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.
Minotaur Exploration Annual Report 2019 | 47
FI NANCIAL REPORT
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
19 RESERVES
The corresponding amount is recorded to the share option reserve. The fair value of options is determined using the Black-Scholes
pricing model. The valuation inputs used in determining the fair value at grant date were as follows:
Options issued to employees of the Company
Share price at grant date:
Expected volatility:
Risk free rate:
Fair value at grant date:
(b) FVOCI reserve (previously Available-for-sale revaluation reserve)
Balance at beginning of financial year
Reclassification of financial instruments under AASB 9
Transfer upon disposal of listed shares
Net revaluation (decrement)/increment
Balance at end of financial year
$0.039
77.00%
2.00%
$0.015
Consolidated Group
30 June
2019
$
-
110,188
-
(295,683)
(185,495)
30 June
2018
$
254,731
-
(488)
(144,055)
110,188
The FVOCI reserve comprises the cumulative net change in the fair value of shares held in listed companies.
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
Balance at end of financial year
21 COMMITMENTS FOR EXPENDITURE
Operating leases
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Consolidated Group
30 June
2019
$
30 June
2018
$
(35,902,503)
(33,584,743)
(4,160,504)
-
(2,516,051)
198,291
(40,063,007)
(35,902,503)
8,802
-
8,802
361,483
8,802
370,285
Terms of lease arrangements
The Group has renewed its operating lease for its principal place of business subsequent to 30 June 2019. The lease entered into
expires on 9 July 2024 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.
48 | Minotaur Exploration Annual Report 2019
Exploration licences
In order to maintain current rights of tenure to exploration tenements the Group will be required to outlay in the year ending
30 June 2019 amounts of approximately $3 million in respect of exploration licence rentals and to meet minimum expenditure
requirements. It is expected that of this minimum expenditure requirement, $2.13 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.
22 AUDITOR’S REMUNERATION
Audit or review of the financial report
Taxation compliance
Total auditor’s remuneration
23 CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Consolidated Group
30 June
2019
$
46,295
17,650
63,945
30 June
2018
$
48,757
17,700
66,457
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, totaling $218,500 at 30 June 2019 (2018: $165,000). These guarantees are designed to act as collateral
over the tenements which Minotaur explores on and can be used by the relevant Government authorities in the event that Minotaur
does not sufficiently rehabilitate the land it explores on. It is noted that the bank guarantees have, as at the date of signing this
report, never been utilised by any State Government.
24 CONTROLLED ENTITIES
Name of entity
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)
Natural Nanotech Pty Ltd (ii)
Ownership interest
Country of
incorporation
2019
%
2018
%
Australia
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
100
100
-
i. Minotaur Exploration Limited is the head entity within the tax consolidated group.
ii. These companies are members of the tax consolidated group.
Minotaur Exploration Annual Report 2019 | 49
FI NANCIAL REPORT
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
25 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 2019
Financial assets
Cash and cash equivalents
Trade and other receivables
Equity instruments
Note
7
8
11, 27
Equity
instruments at
FV through OCI
$
(Carried at fair
value)
-
-
332,672
332,672
Cash
$
Loans and
Receivables
$
(Carried at amortised cost)
3,985,806
-
-
-
31,689
-
Total
$
3,985,806
31,689
332,672
3,985,806
31,689
4,350,167
Financial liabilities
Note
Trade and other payables
Current borrowings
Non-current borrowings
15
16, 25(a)
16, 25(a)
30 June 2018
Financial assets
Note
Cash and cash equivalents
Trade and other receivables
Equity instruments
7
8
11, 27
Payables
$
Borrowings
$
Total
$
(Carried at amortised cost)
2,940,298
-
2,940,298
-
-
26,713
985,597
26,713
985,597
2,940,298
1,012,310
3,952,608
Equity
instruments at
FV through OCI
$
(Carried at fair
value)
-
-
518,355
518,355
Cash
$
Loans and
Receivables
$
Total
$
(Carried at amortised cost)
2,020,041
-
2,020,041
-
-
127,726
-
127,726
518,355
2,020,041
127,726
2,666,122
Financial liabilities
Note
Trade and other payables
Current borrowings
Non-current borrowings
15
16, 25(a)
16, 25(a)
Payables
$
Borrowings
$
Total
$
(Carried at amortised cost)
1,228,934
-
1,228,934
-
-
1,228,934
25,986
366,014
392,000
25,986
366,014
1,620,934
A description of the Group’s financial instrument risks, including risk management objectives and policies is given in Note 26.
The methods used to measure financial assets and liabilities reported at fair value are described in Note 27.
50 | Minotaur Exploration Annual Report 2019
25(a) BORROWINGS
Borrowings include the financial liabilities:
Financial liabilities
Carried at amortised cost
Borrowings
All borrowings are denominated in AUD.
Borrowings at amortised cost
Current
Non-Current
2019
2018
2019
2018
26,713
26,713
25,986
25,986
985,597
985,597
366,014
366,014
Bank borrowings are secured by land and buildings owned by the Group (see Note 12). Current interest rates are variable and
average 4.58% (2018: 4.78%). The carrying amount of bank borrowings is considered to be a reasonable approximation of the fair
value.
Other financial instruments
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
26 FINANCIAL RISK MANAGEMENT
Capital 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 Group’s exploration activities and fund operating costs.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss
from activities.
The Group does not have any significant credit risk exposure to any single counterparty or any Group of counterparties having
similar characteristics. The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings
assigned by international credit-rating agencies. The carrying amount of financial assets recorded in the financial statements, net of
any allowances for losses, represents the Group’s maximum exposure to credit risk.
Interest rate risk
The tables listed below detail the Group’s interest bearing assets, consisting solely of cash on hand and on short term deposit (with
all maturities less than one year in duration).
Consolidated
2019
Variable interest rate
2018
Variable interest rate
Weighted average
effective interest rate
%
Less than 1 year
$
0.24
0.50
3,985,806
2,020,041
At the 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 $15,015 which is mainly attributable to the Group’s exposure to interest rates on its
variable bank deposits.
Minotaur Exploration Annual Report 2019 | 51
FI NANCIAL REPORT
Notes to the Consolidated Financial Statements
for the year ended 30 June 2019
26 FINANCIAL RISK MANAGEMENT
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
2019
Interest bearing
Non-interest bearing
2018
Interest bearing
Non-interest bearing
Weighted average
effective interest rate
%
Less than 1 year
$
Longer than 1 year and
not longer than 5 years
$
4.58
-
4.78
-
26,713
2,940,298
25,986
1,228,934
341,466
-
366,014
-
Equity instrument risk management
Ultimate responsibility for the Group’s investments in equity 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.
27 FAIR VALUE MANAGEMENT
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 2019 and 30 June 2018:
30 June 2019
Financial assets at fair value
Equity instruments designated at FVOCI
Equity instruments
30 June 2018
Financial assets at fair value
Equity instruments designated at FVOCI
Equity instruments
52 | Minotaur Exploration Annual Report 2019
Level 1
$
Level 2
$
Level 3
$
Total
$
332,672
332,672
518,355
518,355
-
-
-
-
-
-
-
-
332,672
332,672
518,355
518,355
There were no transfers between Level 1 and Level 2 in 2019 or 2018.
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.
28 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
Dr Antonio Belperio, Executive Director
Dr Roger Higgins, Non-Executive Chairman
Mr George McKenzie, Non-Executive Director
Mr Andrew Woskett, Managing Director
Other key management personnel
Mr Varis Lidums, Commercial Manager and Company Secretary
Mr Glen Little, Exploration and Business Development Manager
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
30 June
2019
$
1,102,512
1,102,512
56,567
56,567
32,340
32,340
30 June
2018
$
1,057,411
1,057,411
53,840
53,840
52,020
52,020
1,191,419
1,163,271
Throughout the year no transactions took place between Minotaur Exploration Limited and any associates (2018: $Nil). In addition,
no amounts were owed by any associates at the end of the year (2018: $Nil).
Director and key management personnel related entities
Throughout the year $55,933 (2018: $54,470) (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 24.
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.
29 POST-REPORTING DATE EVENTS
No matter or circumstance has arisen since 30 June 2019 that has significantly affected the Group’s operations, results or state of
affairs, or may do so in the future.
Minotaur Exploration Annual Report 2019 | 53
DIRECTORS’ DECLARATION54 | Minotaur Exploration Annual Report 2019The directors of the company declare that:1. the consolidated financial statements and notes, as set out on pages 20 to 53, 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 2019 and of the performance for the year ended on that date of the company and consolidated group; 2. the Managing Director and Company Secretary have each declared that: a. the financial records of the company for the financial year have been properly maintained in accordance with s 286 of the Corporations Act 2001; b. the financial statements and notes for the financial year comply with Accounting Standards; and c. the financial statements and notes for the financial year give a true and fair view; and 3. in the directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the Board of Directors.Roger HigginsChairmanDated this 22nd day of August 2019 Minotaur Exploration Annual Report 2019 | 55INDEPENDENT AUDITOR’S REPORT Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 ‘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. www.grantthornton.com.au 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 2019, 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 giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its performance for the year ended on that date; and b complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. INDEPENDENT AUDITOR’S REPORT56 | Minotaur Exploration Annual Report 2019 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 Exploration and evaluation assets – Note 1, 4 & 13 At 30 June 2019, the carrying value of exploration and evaluation assets was $7,589,649. In accordance with AASB 6 Exploration for and Evaluation of Mineral Resources, the Group 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: (cid:120) obtaining management’s reconciliation of capitalised exploration and evaluation expenditure and agreeing to the general ledger; (cid:120) reviewing management’s area of interest considerations against AASB 6; (cid:120) conducting a detailed review of management’s assessment of trigger events prepared in accordance with AASB 6 including; (cid:16) tracing projects to statutory registers, exploration licenses and third party confirmations to determine whether a right of tenure existed; (cid:16) 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; (cid:16) 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; (cid:120) assessing the accuracy of impairment recorded for the year as it pertained to exploration interests; (cid:120) evaluating the competence, capabilities and objectivity of management’s experts in the evaluation of potential impairment triggers; and (cid:120) assessing the appropriateness of the related financial statement disclosures. 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 2019, but does not include the financial report and our auditor’s report thereon. 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. 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 2019. In our opinion, the Remuneration Report of Minotaur Exploration Limited, for the year ended 30 June 2019 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, 22 August 2019 Minotaur Exploration Annual Report 2019 | 57 ASX A DDITIONAL INF ORMATION
Interests in Mining Tenements as at 30 September 2019
Minotaur Equity
or Equity Earned
%
JV Partner
47
40
100
100
100
100
0
100
100
100
100
100
20
20
20
20
30
30
30
30
30
0
30
30
30
0
30
Sumitomo Metal Mining Oceania Pty Ltd
Sandfire Resources
OZ Minerals 80% in portion of the tenement
OZ Minerals 80% in portion of the tenement
OZ Minerals 80% in portion of the tenement
OZ Minerals 80% in portion of the tenement
OZ Minerals 70% in portion of the tenement,
Sandfire Resources 60% in portion of the
tenement
OZ Minerals
OZ Minerals
OZ Minerals 70% in portion of the tenement,
Sandfire Resources 60% in portion of the
tenement
OZ Minerals
OZ Minerals
OZ Minerals
OZ Minerals
OZ Minerals
OZ Minerals
OZ Minerals
Lease ID
Lease Name
State
Holding Company
Border Joint Venture
EL5963
Mutooroo
SA
Minotaur Operations
Cloncurry Regional
MDL432
Altia
Highlands Project
QLD
Levuka Resources
EPM16197
Blockade
QLD Minotaur Operations
EPM17914
Blockade East
QLD Minotaur Operations
EPM17947
Blockade East
Extension
QLD Minotaur Operations
EPM18671
Bulonga
QLD Minotaur Operations
EPMA27339 Miranda
QLD Minotaur Operations
EPM19733
EPM18492
EPM25824
Mt Remarkable
Consolidated
Mt Remarkable
Extension
Mt Remarkable
Inclusion
QLD Minotaur Operations
QLD Minotaur Operations
QLD Minotaur Operations
EPM17638
Phillips Hill
QLD Minotaur Operations
EPM14281
Yamamilla
QLD Minotaur Operations
Jericho Joint Venture
EPM25389
Fullarton
QLD Minotaur Operations
EPM26233
Route 66
QLD Minotaur Operations
MDL431
Eloise
EPM17838
Levuka
Eloise Joint Venture
QLD
QLD
Levuka Resources
Levuka Resources
MDL431
Eloise
QLD
Levuka Resources
EPM25389
Fullarton
QLD Minotaur Operations
EPM26703
Holy Joe
QLD Minotaur Operations
EPM17838
Levuka
QLD
Levuka Resources
EPM25801
Masai
QLD
Levuka Resources
EPMA27052 Matilda
QLD Minotaur Operations
EPM18624
Oorindi Park
QLD Minotaur Operations
EPM26684
Pink Hut
QLD Minotaur Operations
EPM25238
Saxby
QLD Minotaur Operations
EPMA27279
Swagman
QLD
Levuka Resources
EPM26521
Sybellah
QLD Minotaur Operations
58 | Minotaur Exploration Annual Report 2019
Interests in Mining Tenements as at 30 September 2019
Lease ID
Lease Name
State
Holding Company
Industrial Minerals Project
EL6128
Camel Lake
SA
Minotaur Operations
ELA5502
Casterton South
VIC
EL5869
Coober Pedy
ELA2019/73 Dromedary
EL6144
EL5911
Garford
Giddina Creek
ELA2019/83 Mount Cooper
EL6202
EL6285
EL5814
EL6096
EL5787
Mount Hall
Sceales
Tootla
Whichelby
Yanerbie
Peake & Denison Project
EL6221
EL6270
EL6222
EL6223
Big Perry
Davenport
Teemurrina
Wood Duck
Other Projects
ELA2019/112 Satellite
ELA
Comet
EL5542
Blinman
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
Minotaur Industrial
Minerals
BMV Properties
Minotaur Operations
Minotaur Operations
BMV Properties
Minotaur Operations
Minotaur Operations
Minotaur Operations
Great Southern Kaolin
Minotaur Operations
Minotaur Operations
Minotaur Operations
Minotaur Operations
Minotaur Operations
Minotaur Operations
Minotaur Operations
Minotaur Operations
Perilya
EL5117
Ediacara
SA
Perilya
ML4386
Third Plain
SA
Perilya
EL5723
Wilkawillina
SA
Perilya
EL5984
Moonta
SA
Peninsula Resources
Minotaur Equity
or Equity Earned
%
JV Partner
100
0
100
0
100
100
0
100
100
100
100
100
100
100
100
100
0
0
10
10
10
10
10
Andomeda Metals Ltd
Andromeda Metals Ltd
Andromeda Metals Ltd
Andromeda Metals Ltd
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
Peninsula Resources (interest in portion of
the tenement)
EPM26422
Mt Osprey
QLD
Birla Mt Gordon
M15 395
West Kambalda
M15 703
West Kambalda
L15 128
L15 255
West Kambalda
West Kambalda
WA
WA
WA
WA
Tychean Resources
Tychean Resources
Tychean Resources
Tychean Resources
#22.9
1.5% NSR
1.5% NSR
1.5% NSR
1.5% NSR
# Diluting interest over former EPM17061 area
1.5% NSR = 1.5% NSR all minerals other than Nickel
Minotaur Exploration Annual Report 2019 | 59
ASX ADDITIONAL INF ORMATION
Shareholdings as at 30 September 2019
Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this report is as follows.
The information is current as at 30 September 2019.
DISTRIBUTION OF EQUITY SECURITIES
Ordinary share capital
334,396,917 fully paid ordinary shares are held by 2,272 shareholders.
All issued ordinary shares carry one (1) vote per share and carry the rights to dividend.
Options
22,185,000 unlisted options are held by 28 option holders.
The number of shareholders, by size of holding, in each class are:
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,000 and over
Holding less than a marketable parcel
SUBSTANTIAL SHAREHOLDERS
Ordinary shareholders
Citicorp Nominees Pty Limited
Yarraandoo Pty Ltd
Twenty largest holders of quoted equity securities
Citicorp Nominees Pty Limited
Yarraandoo Pty Ltd
OZ Minerals Limited
Miningnut Pty Ltd
HSBC Custody Nominees (Australia) Limited
Chetan Enterprises Pty Ltd
RJ & KE Super Fund Pty Ltd
FMR Investments Pty Ltd
Netwealth Investments Limited
Sandfire Resources NL
Mr Robert Gemelli
BNP Paribas Nominees Pty Ltd
Mr Peter George Burke
Mr Anthony Mark van der Steeg
P & W Adams Pty Ltd
Dorica Nominees Pty Ltd
Mr Peter Francis Hasenkam
Jetosea Pty Ltd
Mr Nicholas James Carter & Mrs Susan Mary Carter
Mr Peter Francis Hasenkam
60 | Minotaur Exploration Annual Report 2019
Fully paid ordinary shares
Unlisted options
172
136
261
1,199
504
2,272
408
0
0
0
4
24
28
0
Fully paid
Number
40,131,405
23,441,569
Percentage
12.00%
7.01%
Fully paid ordinary shares
Number
40,131,405
23,441,569
8,041,670
4,500,000
3,695,409
2,985,797
2,977,934
2,960,765
2,830,246
2,608,695
2,523,427
2,232,381
2,211,289
2,138,967
2,100,000
2,026,558
1,955,605
1,898,176
1,832,627
1,754,896
Percentage
12.00%
7.01%
2.40%
1.35%
1.11%
0.89%
0.89%
0.89%
0.85%
0.78%
0.75%
0.67%
0.66%
0.64%
0.63%
0.61%
0.58%
0.57%
0.55%
0.52%
114,847,416
34.34%
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