Annual Report
MRG Metals Ltd
ABN: 83 148 938 532
For the Year ended 30 June 2012
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
Contents
Review of Operations
Directors’ Report
Auditor’s Independence Declaration
Corporate Governance Statement
Statement of Financial Position
Statement of Comprehensive Income
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Consolidated Financial Statements
1. Nature of Operations
2. General Information and Statement of Compliance
3. Changes in Accounting Policies
4. Summary of Accounting Policies
5. Revenue
6. Segment Reporting
7. Other Receivables
8. Cash and Cash Equivalents
9. Equity
10. Employee Remuneration
11. Trade and Other Payables
12. Plant and Equipment
13. Exploration and Evaluation
14. Income Tax Expense
15. Auditor Remuneration
16. Earnings per Share and Dividends
17. Reconciliation of Cash Flows from Operating Activities
18. Related Party Transactions
19. Contingent Assets and Contingent Liabilities
20. Commitments
21. Financial Instrument Risk
22. Capital Risk Management
23. Post-Reporting Date Events
24. Parent Entity Information
25. Authorisation of Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
Corporate Directory
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For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
Review of Operations
Highlights:
3
• Acquisition of prospective Kalgoorlie East Gold project, WA
o Surface geophysics and soil sampling identifying high Gold and Nickel anomalies
o Subsequent RAB/RC drilling confirmed 3 target zones for Gold, Silver and Base Minerals
o Follow up work commenced on Silver targets
• Acquisition of prospective Collie South Coal project, WA
o Land owner and DMP approvals acquired. Drilling to start in Oct 2012
• Acquisition of Gold and Base metals project at Fraser Range, WA
• Completion of 1:2 non renounceable option rights entitlement, raising $426,042 net of costs
The year ended 30 June 2012 represented the first full year of MRG as a listed entity and is the period in which MRG
commenced its first drilling program at Kalgoorlie East, developed a program of works for Collie South and
acquired tenements in the prospective Fraser Range area (potential of the area highlighted by Sirius Resources
discovery). The year positions the Group for an exiciting 12 month exploration program focussed on further
targetting of the Silver anomoly identifed adjacent to the Nimbus Silver mine in Kalgoorlie, and Coal exploration
drilling on extensions of the known Coal fields. Add to this the recent Gold exploration finds by Northern Star
Resources next to our Xanadu tenement; the exciting Ni/Cu find by Sirius Resources near our Mt Fraser tenement,
which lies along the Tropicana extension; MRG offers some of the best exploration opportunities in the Junior
Exploration space.
Kalgoorlie East Project (Gold and Silver)
3 Targets identified.
The Kalgoorlie East Project is located approximately 7 kilometres due east of the Kalgoorlie Super Pit in the eastern
Goldfields of Western Australia and is considered prospective for both Gold and Nickel mineralisation, as the
project lies along strike and in the same sequence or rocks as the Golden Ridge Gold Mine and Blair Nickel Mine.
The project contains widespread evidence of mineralisation as shown by numerous historic workings.
After a review of previous exploration and structural analysis, the Company embarked upon widespread soil
sampling. This first pass sampling was followed be more detailed grid sampling, which highlighted some eleven
areas warranting further exploration. Also, in conjunction with the soil sampling, an Electro-Magnetic (EM)
geophysical survey was commissioned, over areas where elevated Nickel in soil was coincident with ultramafic rocks.
After completing further soil sampling analysis at its Kalgoorlie East Project during the March 2012 Quarter and the
results of the ground electromagnetic survey (EM), the Company completed its first pass RAB and RC drilling
program on the key targets at Kalgoorlie East.
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
4
• A total of 5,183 metres of RAB drilling was completed across a number of Gold and Silver targets. In addition
two RC holes were drilled in areas identified through the ground EM program targeting base metals. (Figure 1)
• Of the eight soil anomalies drill tested for Gold, two have returned elevated precious metal values. The first of
these is located within the tenement P26/3604 (Figure 1) and comprises a narrow auriferous shear structure
with a strike length in excess of 400 metres (across broadly spaced drill lines).
The southernmost anomaly has returned numerous elevated Silver (Ag) (Figure 1) values in 5 metre composite
samples. The elevated silver occurs in a pyritic felsic volcanics and black shale sequence, part of the Black Flag
Beds. The mineralisation appears analogous to that seen in the Nimbus deposit, which lies 2.5 kilometres to the
North East. Most significantly, many holes terminated in mineralisation as the Air Core drill was unable to
penetrate further into harder rock encountered at depth.
• The two RC holes, which drill tested strong EM anomalies, intersected strongly pyritised black shales.
Geochemical analysis of composite samples from these shales showed elevated levels of Copper and Zinc.
Subsequent testing and analysis has identified the potential for a significant source resource to be located in the
vicinity of the initial test areas. It is now planned to further test the area with an addition surface geophysics
(Surface EM) and deeper RC drilling. The preliminary drill results validate the earlier soil sampling analysis and
resultant target zones. Of particular interest is the potential for significant Silver mineralisation in the area
adjacent to the Nimbus mine, where recent exploration has identified substantial Silver intersects in previously
unexplored zones below the old mine operations. These discoveries and our preliminary exploration encourage
MRG to further explore the area for a significant Silver resource. Therefore, our near term focus on Kalgoorlie
East will be to further test the area for Silver mineralisation.
In summary the Aircore drilling discovered three distinct styles of mineralisation; shear hosted Gold mineralisation,
lateritic Nickel mineralisation, with up to 1% nickel and Silver mineralisation within meta - volcaniclastics. Several of
the holes intersected elevated Silver values, with hole KE047 terminating in a hard quartz vein returning values up to
88.7 g/t Silver.
The EM conductors tested by RC drilling were revealed to be black shales containing up to 1.5% Zinc and 0.2%
Copper. Of the mineralisation styles found in the first phase of drilling the Silver mineralisation was afforded the
highest priority for further work, as it is in a similar geological setting to the Nimbus Ag - Zn deposit, which lies 2.5
kilometres to the east.
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
5
Figure 1 Kalgoorlie East Gold Project
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
Collie South Project (Coal and Bauxite)
6
The Collie tenement covers 33kms of strike directly south of the main Collie Coal bearing basin & ground
surrounding the western sub-basin of the lesser Wilga Coal bearing basin. (Figures 2, 3)
An exhaustive compilation of has been made of all available data for the area of the Collie tenements & environs.
This has included data from previous drilling, gravity & airborne magnetic surveys and mapping. This compilation
has identified seven targets considered worthy of follow up.
In the June Quarter of 2012 the Company has sought the required approvals and negotiated with Private
Landholders for access in order to complete first pass drilling on four main targets, numbers 1, 3 & 6 on the
following plan. Drilling is planned to commence during October 2012.
Fig 2 Collie South identified target zones
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
7
Figure 3 Collie South Coal Project
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
Xanadu Project (Gold)
8
Work completed at the Xanadu Project during the year consisted of database compilation and verification. All
historical data relevant to the project dating back to the mid-1980’s was acquired in both digital and hard copy
format. Once finalised, the Xanadu database will be reviewed and priority targets identified for further exploration.
In addition an analysis of ALOS & LandSat imagery along with radiometric/DEM imaging has been completed to
identify the geological characteristics associated with the known mineral anomalies and to facilitate new target
identification.
A new target has been identified close to the known resource near the Amphitheatre area close to the eastern
boundary near to Northern Star Resources’ recent Sparta discovery.
The work of Northern Star Resources indicates that this region is developing into a significant Gold province. Our
project is 7km west of their Mt Olympus Gold Project where recently completed RC drilling has targeted the
sulphide resource beneath the Mt Olympus, Waugh and Peak open pits and adjacent to their new discovery at Sparta.
Figure 4 Xanadu Gold Project
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
Braemore Battery (Gold)
9
A soil program was completed at Braemore Battery to cover the northern portion of the project which overlay the
historical Au-As anomalies. Work completed to date has not identified any significant results. Braemore is to be
retained given that minimum expenditure is low and mostly met for the next year; pending review of drilling on
nearby tenements. We have written off the costs of Braemore at 30 June 2012. If further work is carried out that
changes our view, costs will be reinstated and capitalised.
Tenement Acquisitions/Sales
During the year the Board of MRG finalised its review of all the current Tenements. In light of recent developments
and acquisitions, MRG decided there was a need to reduce the number of Tenements in the portfolio. Key elements
to this decision being:
- Need to prioritise exploration expenditure across the most prospective projects.
- The preliminary exploration results across the retained Tenements warrant focus of management time and
Company resources.
Interest of 3rd parties created opportunities.
-
- Potential to look at other opportunities and acquisitions.
- Timing of Tenement anniversary dates and near term expenditure requirements.
MRG decided to sell its exploration licences at Bell Chambers, Diorite and Mulgul.
Terms of the sale included the retention of future interest via a royalty agreement which varies during the exploration
phase through to a full net smelter royalty once in the production phase.
Acquisitions:
The Board of MRG is pleased to advise its successful application for prospective tenements along the Tropicana
geological feature extension, known as Fraser Range. Tropicana Gold has identified over 5 million oz resource.
o The project is consistent with MRG’s strategy to develop world class Gold assets.
o The tenements sit within MRG’s WA tenement focus.
o The project is in an area currently being evaluated by Thor Mining Ltd, Ausquest Ltd and AngloGold
Ashanti Ltd.
o The Company expects that these new tenements will be granted late in 2012.
o Recent Ni/Cu discovery by Sirius Resources in the Fraser Range tenement to the North further enhances
the potential of this relatively under explored region
Overview
The project lies in an area that has seen intense tectonic activity within the same province which hosts the Tropicana
Gold deposits. It has demonstrated Gold potential, with Gold anomalies already identified in the adjacent tenements
owned by Thor Mining Ltd and Ausquest Ltd ( Figure 5) and Nickel as indicated by the recent announcement of
Sirius Resources.
Location:
100km ESE of Norseman, WA
Tenements:
Exploration Licences:-
E63/1552 and E63/1553 for a total of 100 blocks.
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
10
Figure 5 – Fraser Range Project Location and Soil Geochemistry
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
Corporate Activities
11
Non-Renounceable Rights Options Issue
During the year, the Group offered Shareholders the opportunity to participate in a 1 for 2 non-renounceable
entitlements issue of Options. The last trading day for Shareholders to become eligible for the entitlement was
Tuesday 23 August 2011. All Shareholders registered as at 7.00pm AEST on 30 August 2011 were entitled to
participate in a pro-rata non-renounceable entitlements issue of Options on the basis of 1 Option for every 2 Shares
held. The Options were issued at 1 cent per Option and at an exercise price of 25 cents, valid for a period of 5 years.
Other key aspects of the Rights Issue were as follows:
• The maximum number of MRG options able to be issued were 44,058,000 and 44,057,993 were issued;
• The issue price for the Offer Securities was 1 cent each;
• Options exercisable at 25 cents for a period open until 21 September 2016;
• The amount of money raised by the Rights Issue was $440,580;
• The Board of MRG took up 100% of their own rights; and
• Money raised through the Rights Issue will be used to:
o provide working capital for the Company; and
o meet the costs of the Rights Issue, which were $14,538.
MRG is continuing to review a number of additional opportunities that avail themselves in the current market
conditions.
ACTIVITIES AND HIGHLIGHTS SINCE 30 JUNE 2012
MRG has submitted its program of works for Collie South and is awaiting approval from the Department of
Minerals &Petroleum WA and WA Water Authority before it commences the initial drill program. Drilling is
expected to start in October 2012.
Further drilling at Kalgoorlie East commenced in August 2012 and finished in early September 2012. Follow up RC
drilling of the Silver target did not return results with as high a tenor as the original air core drilling. However,
subsequent detailed geological mapping and soil sampling indicates that this mineralisation likely extends further to
the south.
Currently, a review of the exploration results generated to date is underway and the results of this review will be used
to focus future work on the Project. This work shows two areas to the south of the previous drilling, within the felsic
volcaniclastics. The stronger anomaly (anomaly 1) is within the Volcaniclastic unit but close to the boundary with
the Dolerite volcanics. The mapping suggests some local folding in the area and the mineralisation could be present
in the hinge zone of the fold. Additional drilling is planned to confirm this hypothesis and drilling will continue in
October.
Xanadu is currently undergoing further data consolidation and further field work is planned in the next quarter, to
develop a comprehensive exploration plan. A priority of the plan will be how to quickly monetise the known Gold
resource sitting within the old Leach pit, which was abandoned during previous operations under significantly
different gold valuations. It is anticipated (but requires validation) that in excess of 5,000 oz of contained Gold sits
within the old pit.
The Board of MRG has met to review the proposed exploration expenditure for the 2013 financial year and has
approved a range of exploration expenditure between $500,000 and $600,000 pending progressive outcomes.
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
12
Directors’ Report
The Directors of MRG Metals Ltd present their Report together with the financial statements of the consolidated
entity, being MRG Metals Ltd (‘MRG’ or ‘the Company’) and its controlled entity, MRG Metals (Australia) Pty Ltd
(‘the Group’) for the year ended 30 June 2012 and the Independent Audit Report thereon. The Company was
incorporated on 24 January 2011 and the comparatives in this Report are for the period from 24 January 2011 to 30
June 2011.
Director details
The following persons were directors of MRG Metals Ltd during or since the end of the financial year.
Mr Andrew Van Der Zwan
BA Chemical Engineering
Managing Director
Director since 14/02/2011
Andrew has 26 years engineering and commercial experience, both local and international. He was a Non Executive
Director of Gulfx Ltd for 11 years and was employed in various senior positions within the worldwide operations of
Exxon Mobil for 17 years.
Other current directorships:
None
Previous directorships (last 3 years):
None
Interests in shares:
2,160,000 shares
Interest in options:
1,080,000 options
Mr Albert Pietrzak
BA Mechanical Engineering
Independent Non-Executive Director
Independent Chairman
Director since incorporation 24/01/2011
Albert has 41 years engineering and commercial experience. He was Managing Director of an engineering company
for 33 years. He is a fully qualified IFR pilot, an engineering consultant and an investor.
Other current directorships:
None
Previous directorships (last 3 years):
None
Interests in shares:
2,130,000 shares
Interest in options:
1,065,000 options
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Consolidated Financial Statements
30 June 2012
Mr Shane Turner
CA, Bachelor of Business
Independent Non-Executive Director
Director since incorporation 24/01/2011
13
Shane is a Chartered Accountant and has 24 years financial and accounting experience. He has been employed with
KPMG, a large regional public accounting practice, operated his own public accounting practice and now is
employed with RSM Bird Cameron. He was a Non Executive Director and Company Secretary for Metminco Ltd
for 2 years.
Other current directorships:
None
Previous directorships (last 3 years):
Metminco Ltd
Interests in shares:
1,470,000 shares
Interest in options:
735,000 options
Company secretary
Shane Turner is a Chartered Accountant and the Group Chief Financial Officer. Shane has held senior positions
with a number of professional accounting firms and has a degree in Business. Shane has previously held the role of
company secretary for Metminco Ltd for 2 years. He has been the company secretary of MRG Metals Ltd since
incorporation on 24/01/2011.
Principal activities
During the period, the principal activities of entities within the Group were exploration and development of gold,
base metals and other commodities within Australia.
There have been no significant changes in the nature of these activities during the period.
Review of operations and financial results
The operating result of the Group for the year ended was a loss of $764,056 (part year 2011 loss $316,660). Refer
detailed Review of Operations that follows this report.
Earnings per share (0.87) cents (2011 (1.33) cents).
Since listing, monies raised have been used consistent with that described in the IPO Prospectus, including:
augment the Company’s exploration of mining tenements,
assist the Company to identify and assess new mining opportunities,
finance the acquisition of interests in mineral properties,
-
-
-
- meet the Company’s ongoing administration and corporate overhead expenses, and
- meet the one-off expenses of the offer.
Further information on the detailed operations of the Group during the year are included in the Review of
Operations Report.
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
Significant changes in the state of affairs
During the year, the following changes occurred within the Group:
• Options issue
On 25 November 2011, the Company completed a 1 for 2 non renounceable options issue, raising $440,580,
before costs of $14,538. These options are exercisable at $0.25 by September 2016.
• Tenement Acquisitions
On 4 July 2011, the Group completed the acquisition of tenements prospective for Gold at Kalgoorlie East,
WA. This resulted in 1,000,000 shares being issued and payment of $20,000.
On 26 July 2011, the Group completed an option for the 30% acquisition of tenements prospective for Coal
and Bauxite at Collie South, WA. This resulted in 1,000,000 shares being issued and payment of $50,000.
On 12 April 2012, the Company announced application for tenement acquisitions prospective for Gold along
the Tropicana extension at Fraser Range near Norseman, WA.
• Tenement Sales
On 5 March 2012, the Company announced sale of tenements known as Bell Chambers, Diorite and Mulgul
for a Royalty interest after a review of tenements.
Dividends
There were no dividends declared or paid during the financial period.
Events arising since the end of the reporting period
Since the end of the year the following significant events have occurred:
• There are no other events occurring since the end of the year that have, or may, significantly affect the
Group’s operations, results of those operations or the state of affairs of the Group.
Likely developments
Information on likely developments in the Group’s operations and the expected results have not been included in
this report because the directors believe it would likely result in unreasonable prejudice to the Group.
Directors’ meetings
The number of meetings of directors held during the period and the number of meetings attended by each director
were as follows:
Name
Board meetings
Mr A Van Der Zwan
Mr A Pietrzak
Mr S Turner
A
13
13
13
B
13
13
13
Where:
A is the number of meetings the Director was entitled to attend
B is the number of meetings the Director attended
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Consolidated Financial Statements
30 June 2012
15
Remuneration Report (audited)
The Directors of MRG Metals Ltd (‘the Group’) present the Remuneration Report prepared in accordance with the
Corporations Act 2001 and the Corporations Regulations 2001.
The remuneration report is set out under the following main headings:
a. Principles used to determine the nature and amount of remuneration
b. Details of remuneration
c. Service agreements
d. Share-based remuneration
(a) Principles used to determine the nature and amount of remuneration
The principles of the Group’s executive strategy and supporting incentive programs and frameworks are:
• To align rewards to business outcomes that deliver value to shareholders;
• To drive a high performance culture by setting challenging objectives and rewarding high performing
individuals; and
• To ensure remuneration is competitive in the relevant employment market place to support the attraction,
motivation and retention of executive talent.
MRG Metals Ltd has structured a remuneration framework that is market competitive and complementary to the
reward strategy of the Group.
The Board, in accordance with its charter as approved by the Board, is responsible for determining and reviewing
compensation arrangements for the directors and the executive team.
The remuneration structure that has been adopted by the Group consists of the following components:
• Fixed remuneration being annual salary; and
• Superannuation to meet statutory obligations.
The Board assesses the appropriateness of the nature and amount of remuneration on a periodic basis by reference
to recent employment market conditions with the overall objective of ensuring maximum stakeholder benefit from
the retention of a high quality Board and executive team.
The payment of bonuses, share options and other incentive payments are reviewed by the Board annually as part of
the review of executive. All bonuses, options and incentives must be linked to pre-determined performance criteria.
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Consolidated Financial Statements
30 June 2012
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(b) Details of remuneration
Details of the nature and amount of each element of the remuneration of each key management personnel (‘KMP’) of MRG Metals Ltd are shown in the table
below. The $5,000 paid to Mr A Pietrzak in 2011 was in recognition of outstanding contribution to the successful capital raising in connection with the IPO.
The $1,000 paid to Mr N Fammartino was in recognition of him serving as a Director for the period 24/1/11 to 14/2/11.
Director and other Key Management Personnel Remuneration
Short term employee benefits
Name
Executive director
Mr A Van Der Zwan
Non-executive directors
Mr A Pietrzak
Mr S Turner
Mr N Fammartino
Cash salary
and fees ($)
Cash bonus
($)
Non-
monetary
benefits ($)
56,250
-
20,833
35,833
-
5,000
-
-
2011 Total
112,916
5,000
Executive director
Mr A Van Der Zwan
150,000
-
Non-executive directors
Mr A Pietrzak
Mr S Turner
Mr N Fammartino
50,000
86,000
-
-
-
1,000
2012 Total
286,000
1,000
Post-
employment
benefits
Long-term
benefits
Termination
benefits
Share-based
payments
Superannuation
($)
Long-term
bonus ($)
Termination
payments ($)
Options ($)
Total ($)
% of
remuneration
that is
performance
based
-
-
-
-
-
-
-
-
-
-
5,063
1,875
3,225
10,163
13,500
4,500
7,740
25,740
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
61,313
27,708
39,058
-
128,079
163,500
54,500
93,740
1,000
312,740
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
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Consolidated Financial Statements
30 June 2012
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(c) Service agreements
Remuneration and other terms of employment for the Executive Directors and other Key Management Personnel
are formalised in a service agreement. The major provisions of the agreements relating to remuneration are set out
below:
Name
Mr A Van Der Zwan
Mr A Pietrzak
Mr S Turner - Director
Mr S Turner - Secretary
Base salary
150,000
50,000
50,000
36,000
Term of agreement
Three Years
Rotation per Corporations Act 2001 Nil
Rotation per Corporations Act 2001 Nil
Nil
No fixed term
Notice period
Six Months
(d) Share based remuneration
During the year, there was no share based remuneration paid or outstanding.
End of audited remuneration report.
Environmental legislation
The Group’s projects are subject to environmental regulation under laws of the Commonwealth and States and
Territories in Australia, specifically the Group is required to comply with terms of the grant of the tenement and all
directions given to it under those terms of the tenement which it holds. There have been no known breaches of the
tenement conditions, and no such breaches have been notified by any government agency during the period ended
30 June 2012.
Indemnities given and insurance premiums paid to auditors and officers
During the year, MRG Metals Ltd negotiated a premium to insure officers of the Group. The officers of the Group
covered by the insurance policy include all directors.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be
brought against the officers in their capacity as officers of the Group, 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 to cause detriment to the Group.
Details of the amount of the premium paid in respect of the insurance policies are not disclosed as such disclosure is
prohibited under the terms of the contract.
The Group has not otherwise, during or since the end of the financial year, except to the extent permitted by law,
indemnified or agreed to indemnity any current or former officer or auditor of the Group against a liability incurred
as such by an officer or auditor.
Non-audit services
During the previous period, Grant Thornton Audit Pty Ltd, the Group’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:
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Consolidated Financial Statements
30 June 2012
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• All non-audit services were subject to the corporate governance procedures adopted by the Group and have
been reviewed by the Board 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 Group, acting as an advocate
for the Group or jointly sharing risks and rewards.
Details of the amounts paid to the auditors of the Group, Grant Thornton Audit Pty Ltd, and its related practices
for audit and non-audit services provided during the year are set out in note 15 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.
Proceedings of behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings
on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of
taking responsibility on behalf of the Company for all or part of those proceedings.
Signed in accordance with a resolution of the directors.
Albert Pietrzak
Chairman
27 September 2012
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Consolidated Financial Statements
30 June 2012
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Grant Thornton Audit Pty Ltd
ACN 130 913 594
Level 2
215 Spring Street
Melbourne
Victoria 3000
GPO Box 4984
Melbourne
Victoria
3001
T +61 3 8663 6000
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E info.vic@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of MRG Metals Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of
MRG Metals Limited for the period ended 30 June 2012, I declare that, to the best of my knowledge and belief, there
have been:
a. no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
b. no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
B Taylor
Partner – Audit & Assurance
Melbourne, 27 September 2012
Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and
related entities, delivers its services independently in Australia.
Liability limited by a scheme approved under Professional Standards Legislation
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Corporate Governance Statement
20
This Corporate Governance Statement sets out the extent to which the Company's practices comply with the ASX
Corporate Governance Council's Principles of Good Corporate Governance and Recommendations
(Recommendations). The Recommendations are not mandatory.
ASX Corporate Governance
Council Recommendation
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1: Companies
should establish functions reserved
to the board and those delegated to
senior executives and disclose those
functions
MRG policy
Compliance
Complies
Group's
responsibilities of
The
Corporate
Governance framework includes a
Board Charter, which details the
specific
the
Board and identifies those areas of
authority delegated
senior
executives.
The Board will set performance
criteria to review the performance
of senior management.
to
the
The Board Charter is available on
the Group's website.
Recommendation 1.2: Companies
should disclose the process for
evaluating
the performance of
senior executives
Recommendation 1.3: Companies
should provide
information
indicated in the Guide to reporting
on Principle 1
Principle 2: Structure the board to add value
Recommendation 2.1: A majority
Two of
three
directors, being Albert Pietrzak
of the board should be independent
and
are
Shane
directors
independent directors.
Albert Pietrzak is the Chairman
and is an independent director.
Albert Pietrzak is the Chairman.
Andrew Van Der Zwan is the
Chief Executive Officer.
Recommendation 2.2: The chair
should be an independent director
Recommendation 2.3: The roles
of chair and chief executive officer
should not be exercise by the same
individual
Recommendation 2.4: The board
should
a nomination
committee
the Group's
establish
Turner,
Recommendation 2.5: Companies
should disclose the process for
evaluating the performance of the
board, its committees and individual
directors
into consideration
The Group does not currently
have a nomination committee.
appointments will be
Board
decided by the Board as a whole,
taking
the
needs of the Group at the relevant
time.
The Company Secretary plays an
integral role in monitoring the
conduct and activities of Board,
an
ensuring
appropriate mix of skills and
experience
reviewing
and
individual director's performance.
The Chief Executive Officer is
reviewing
responsible
the
for
performance of
the Company
Secretary.
the Board has
Complies
Complies
Complies
Complies
Complies
The Board does not
consider it necessary given
the size of the Group's
current operations.
Complies
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
21
the
MRG policy
ASX Corporate Governance
Council Recommendation
Recommendation 2.6: Companies
should provide
information
indicated in the Guide to reporting
on Principle 2
Principle 3: Promote ethical and responsible decision making
Recommendation 3.1: Companies
should establish a code of conduct
and disclose the code or a summary
of the code as to:
This information, where relevant,
has been disclosed
the
Directors’ Report.
in
Compliance
Complies
Complies
The Board has established a Code
of Conduct as to the practices
necessary to maintain confidence
in the Group's integrity; practices
necessary to take into account the
Group's legal obligations and the
reasonable
of
shareholders and the responsibility
and accountability of individuals
investigating
for reporting and
reports of unethical practices.
The Code of Conduct is available
on the Group's website.
expectations
-
-
-
-
the practices necessary to
maintain confidence in the
company's integrity
the practices necessary to take
into account their legal
obligations and the reasonable
expectations of their
stakeholders
the responsibility and
accountability of individuals
for reporting and investigating
reports of unethical practices
trading in securities of the
Company
Recommendation 3.2: Companies
should establish a policy concerning
diversity and disclose the policy or a
summary of that policy. The policy
should include requirements for the
establish measurable
board
to
objectives
for achieving gender
diversity for the board and to assess
annually both the objectives and
progress in achieving them
Recommendation 3.3: Companies
in each annual
should disclose
report the measurable objectives for
achieving gender diversity set by the
the
board
progress
and
diversity
towards achieving them
Recommendation 3.4: Companies
should disclose
in each annual
report the proportion of women
whole
employees
organisation, women
senior
executive positions and women on
the board
Recommendation 3.5: Companies
should provide
information
indicated in the Guide to reporting
in accordance with
policy
the
the
in
in
The Group does not currently
have a diversity policy.
Once the Group has established
its operations, it will develop a
policy that complements its needs.
The Group does not currently
have a diversity policy.
Once the Group has established
its operations, it will develop a
policy that complements its needs.
is committed to
prepare
Diversity
and
Board
review
appropriate
policy.
is committed to
prepare
Diversity
and
Board
review
appropriate
policy.
None at present.
None at present due to
the size of Group.
The Code of Conduct and the
diversity policy (once established)
will be available on the Group's
Board
review
appropriate
is committed to
prepare
Diversity
and
For personal use only
22
Compliance
policy.
The Board does not
consider it necessary given
the size of the Group's
current operations.
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
MRG policy
ASX Corporate Governance
Council Recommendation
on Principle 3
Principle 4: Safeguard integrity in financial reporting
Recommendation 4.1: The board
should establish an audit committee
website.
The Group does not currently
have an audit committee. The
functions of this committee will
be carried out by the whole Board.
The Company Secretary has
significant experience in financial
and accounting matters and will be
for
primarily
the
monitoring and preparing
financial
External
reports.
resources will be commissioned
where necessary.
responsible
Refer to comments in 4.1 above.
Refer to comments in 4.1
above.
Recommendation 4.2: The audit
committee should be structured so
that it:
-
-
-
consists only of non-executive
directors
consists of a majority of
independent directors
is chaired by an independent
chair, who is not chair of the
board
- has at least 3 members
Refer to comments in 4.1 above.
Refer to comments in 4.1 above.
The Group has established a
Continuous Disclosure Policy
which applies to all directors and
senior management.
the
Recommendation 4.3: The audit
committee should have a formal
charter
Recommendation 4.4: Companies
should provide
information
indicated in the Guide to reporting
on Principle 4
Principle 5: Make timely and balanced disclosure
Recommendation 5.1: Companies
should establish written policies
designed to ensure compliance with
disclosure
ASX Listing Rule
requirements
ensure
and
accountability at a senior executive
level
that compliance and
disclose those policies or a summary
of those policies
Recommendation 5.2: Companies
information
should provide
indicated in the Guide to reporting
on Principle 5
Principle 6: Respect the rights of shareholders
Recommendation 6.1: Companies
should design a communications
for promoting effective
policy
the
for
to
Group's
The
Continuous
Disclosure Policy will be available
on the Group's website.
The Group is committed to all
shareholders
stakeholders
and
having equal and timely access to
Refer to comments in 4.1
above.
Refer to comments in 4.1
above.
Complies
Complies
Complies
For personal use only
23
MRG policy
Compliance
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
ASX Corporate Governance
Council Recommendation
communication with shareholders
and encouraging their participation
at general meetings and disclose
their policy or a summary of that
policy
Recommendation 6.2: Companies
should provide
information
indicated in the Guide to reporting
on Principle 6
the
Principle 7: Recognise and manage risk
Recommendation 7.1: Companies
should establish policies for the
oversight
and management of
material business risks and disclose
a summary of those policies
to
require management
implement
Recommendation 7.2: The board
to
should
design and
the risk
management and internal control
system to manage the company's
material business risks and report to
it on whether those risks are being
managed effectively. The board
should disclose that management
has reported
the
to
it as
the company's
effectiveness of
management of its material business
risks
Recommendation 7.3: The board
it has
should disclose whether
received assurance from the CEO
and CFO
the declaration
provided in accordance with section
295A of the Corporations Act is
founded on a sound system of risk
management and internal control
and that the system is operating
effectively in all material respects in
relation to financial reporting risks
Recommendation 7.4: Companies
information
should provide
that
the
material information regarding the
operations and results of
the
Group.
Where required, this information
will be provided via the ASX.
Otherwise,
information will be
made available on the Group's
website.
The Group will provide an
explanation of any departures (if
the best practice
any)
recommendations in Principle 6 in
its future annual reports.
from
considers
Given the size of the Group's
current operations, the Board has
formed the view that a separate
risk committee is not necessary.
The Board itself monitors all areas
of operational and financial risk
strategies
and
for
appropriate
risk management
arrangements on an ongoing basis.
If considered necessary, external
input will be sought to assess and
counteract identified risks.
The Board will
that
require
Andrew Van Der Zwan, as
Managing Director and Chief
Executive Officer, design and
implement an appropriate risk
management and internal control
system and provide a report to the
Board at the relevant time.
Complies
Complies
Complies
The Board will seek this assurance
from Andrew Van Der Zwan as
Chief Executive Officer.
Complies
The Group will provide an
explanation of any departures (if
Complies
For personal use only
24
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
ASX Corporate Governance
Council Recommendation
indicated in the Guide to reporting
on Principle 7
MRG policy
Compliance
from
any)
the best practice
recommendations in Principle 7 in
its future annual reports.
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1: The board
should establish a remuneration
committee
The Group does not currently
have a remuneration committee. .
is responsible for
The Board
recommendations
making
regarding
and
director
remuneration
management
packages.
The Board does not
consider it necessary given
the size of the Group's
current operations
Recommendation
The
remuneration committee should be
structured so that it:
8.2:
-
-
consists of a majority of
independent directors
is chaired by an independent
chair
- has at least three members
clearly distinguish
Recommendation 8.3: Companies
the
should
structure of non-executive directors'
remuneration from that of executive
directors and senior executives
Recommendation 8.4: Companies
should provide
information
indicated in the Guide to reporting
on Principle 8
the
Refer to comments in 8.1 above.
Refer to comments in 8.1
above.
and
reflects
the scope of
The Board is aware of the need to
remains
remuneration
ensure
competitive and consistent with
competitor companies and that
remuneration
the
performance of the Group over
time.
The directors performing
an
executive role are remunerated
their
based on
the
responsibilities
performance of the Group.
Non-executive directors are paid
fees
by
shareholders.
the
The Group will provide
requisite
regarding
disclosure
executive remuneration policies in
its annual report.
The Group will provide an
explanation of any departures (if
any)
the best practice
recommendations in Principle 8 in
its future annual reports.
determined
from
as
Complies
Complies
The Board actively monitors the Group's governance framework, related practices and overall culture.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
25
Statement of Financial Position
As of 30 June 2012
Notes
Consolidated Consolidated
2011
$
2012
$
Assets
Current
Cash and cash equivalents
Other receivables
Total current assets
Non-current
Plant & Equipment
Exploration & Evaluation
Total non-current assets
Total assets
Liabilities
Current
Employee benefits
Trade and other payables
Total current liabilities
Total liabilities
Net assets
Equity
Share capital
Retained earnings
Total equity
8
7
12
13
10
11
9
4,362,737
44,436
4,407,173
5,145,091
92,370
5,237,461
736
2,089,540
2,090,276
6,497,449
-
1,146,623
1,146,623
6,384,084
10,062
183,567
193,629
193,629
6,303,820
4,716
150,034
154,750
154,750
6,229,334
7,384,536
(1,080,716)
6,303,820
6,545,994
(316,660)
6,229,334
This statement should be read in conjunction with the notes to the financial statements.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
26
Statement of Comprehensive Income
for the year ended 30 June 2012
Revenue
Employee benefits expense
Administrative expenses
Exploration expenses
Loss before tax
Tax expense
Loss after tax
Other comprehensive income, net of
tax
Total comprehensive losses
Earnings per share
Basic earnings per share
Earnings from continuing operations
Diluted earnings per share
Earnings from continuing operations
Notes
Consolidated
2012
$
Consolidated
24/1/11 - 30/6/11
$
5
10
14
16
298,117
(317,086)
(376,708)
(368,379)
(764,056)
-
(764,056)
-
(764,056)
28,840
(127,795)
(217,705)
-
(316,660)
-
(316,660)
-
(316,660)
Cents
Cents
(0.87)
(0.87)
(1.33)
(1.33)
This statement should be read in conjunction with the notes to the financial statements.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
27
Statement of Changes in Equity
for the year ended 30 June 2012
Balance at 24 January 2011
Other Comprehensive Income
Loss after income tax expense for the period
Transactions with owners
Issue of share capital
Less capital raising costs
Total transactions with owners
Share
Capital
$
Retained
earnings
$
Total
equity
$
-
-
-
-
(316,660)
(316,660)
6,967,200
(421,206)
6,545,994
-
-
-
6,967,200
(421,206)
6,545,994
Balance at 30 June 2011
6,545,994
(316,660)
6,229,334
Balance at 30 June 2011
6,545,994
(316,660)
6,229,334
Other Comprehensive Income
Loss after income tax expense for the period
-
(764,056)
(764,056)
Transactions with owners
Issue of share capital
Less capital raising costs
Total transactions with owners
853,080
(14,538)
838,542
-
-
-
853,080
(14,538)
838,542
Balance at 30 June 2012
7,384,536
(1,080,716)
6,303,820
This statement should be read in conjunction with the notes to the financial statements.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
Statement of Cash Flows
for the year ended 30 June 2012
28
Notes
17
Operating activities
Interest received
Payments to suppliers and employees
Net cash from continuing operations
Net cash used in operating activities
Investing activities
Payment for plant & equipment
Payment for exploration & evaluation
Net cash used in investing activities
Financing activities
Proceeds from issue of share capital
Capital raising costs
Net cash from (used in) financing activities
Net change in cash and cash equivalents
Consolidated Consolidated
24/1/11 to
30/6/11
$
2012
$
298,117
(643,069)
(344,952)
(344,952)
(1,104)
(874,840)
(875,944)
28,840
(329,944)
(301,104)
(301,104)
-
(72,924)
(72,924)
453,080
(14,538)
438,542
5,695,800
(176,681)
5,519,119
(782,354)
5,145,091
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
8
5,145,091
4,362,737
-
5,145,091
This statement should be read in conjunction with the notes to the financial statements.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
29
Notes to the consolidated financial statements
Nature of operations
1
The activities of MRG Metals Ltd and its subsidiary, MRG Metals (Australia) Pty Ltd are exploration
and development of gold, base metals and other commodities within Australia.
General information and statement of compliance
2
The consolidated general purpose financial statements of the Group have been prepared in accordance
with the requirements of the Corporations Act 2001, Australian Accounting Standards and other
authoritative pronouncements of the Australian Accounting Standards Board. Compliance with
Australian Accounting Standards results in full compliance with the International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
MRG Metals Ltd is the Group's ultimate parent company. MRG Metals Ltd is a public company
incorporated and domiciled in Australia.
The consolidated financial statements for the year ended 30 June 2012 were approved and authorised for
issue by the board of directors on 26 September 2012 (see note 25).
3
Changes in accounting policies
Overall considerations
3.1
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board (“AASB”) that are mandatory for the current
reporting period.
The adoption of these Accounting Standards and Interpretations did not have any impact on the
financial performance or position of the Group.
3.2
New Accounting Standards and Interpretations not yet mandatory or early
adopted
At the date of authorisation of the financial statements, the Standards and Interpretations listed
below were in issue but not yet effective.
Standard/Interpretation
Effective for annual Expected to be initially
reporting periods
applied in the financial
beginning on or after year ending
AASB 9 ‘Financial Instruments’, AASB 200911
‘Amendments to Australian Accounting
Standards arising from AASB 9’ and
AASB 2010-7 ‘Amendments to Australian
Accounting Standards arising from AASB 9
(December 2010)’
1 January 2013
30 June 2014
AASB 10 ‘Consolidated Financial Statements’
1 January 2013
30 June 2014
AASB 11 ‘Joint Arrangements’
1 January 2013
30 June 2014
AASB 12 ‘Disclosure of Interests in Other
1 January 2013
30 June 2014
For personal use only
30
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
Entities’
AASB 127 ‘Separate Financial Statements’
(2011)
1 January 2013
30 June 2014
AASB 128 ‘Investments in Associates and Joint
Ventures’ (2011)
1 January 2013
30 June 2014
AASB 13 ‘Fair Value Measurement’ and AASB
2011-8 ‘Amendments to Australian Accounting
Standards arising from AASB 13’
AASB 119 ‘Employee Benefits’ (2011) and
AASB 2011-10 ‘Amendments to Australian
Accounting Standards arising from AASB 119
(2011)’
AASB 2010-8 ‘Amendments to Australian
Accounting Standards – Deferred Tax: Recovery
of Underlying Assets’
AASB 2011-4 ‘Amendments to Australian
Accounting Standards to Remove Individual Key
Management Personnel Disclosure
Requirements’
AASB 2011-7 ‘Amendments to Australian
Accounting Standards arising from the
Consolidation and Joint Arrangements
standards’
AASB 2011-9 ‘Amendments to Australian
Accounting Standards – Presentation of Items of
Other Comprehensive Income’
Interpretation 20 ‘Stripping Costs in the
Production Phase of a Surface Mine’ and AASB
2011-12 ‘Amendments to Australian Accounting
Standards arising from Interpretation 20’
1 January 2013
30 June 2014
1 January 2013
30 June 2014
1 January 2012
30 June 2013
1 July 2013
30 June 2014
1 January 2013
30 June 2014
1 July 2012
30 June 2013
1 January 2013
30 June 2014
At the date of authorisation of the financial statements, the following IASB Standards and IFRIC
Interpretations were also in issue but not yet effective, although Australian equivalent Standards
and Interpretations have not yet been issued.
Standard/Interpretation
Mandatory Effective Date of IFRS 9 and
Transition Disclosures (Amendments to IFRS 9
and IFRS 7)
Effective for annual Expected to be initially
reporting periods
applied in the financial
beginning on or after year ending
30 June 2016
1 January 2015
For personal use only
31
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
4
Summary of accounting policies
Overall considerations
4.1
The significant accounting policies that have been used in the preparation of these consolidated financial
statements are summarised below.
The consolidated financial statements have been prepared using the measurement bases specified by
Australian Accounting Standards for each type of asset, liability, income and expense. The measurement
bases are more fully described in the accounting policies below.
Presentation of financial statements
4.2
AASB 101 requires two comparative periods to be presented for the statement of financial position in
certain circumstances. The comparatives are for the reporting period since incorporation on 24 January
2011 to 30 June 2011.
Basis of consolidation
4.3
The Group financial statements consolidate those of the parent company and its subsidiary undertakings
drawn up to 30 June 2012. Subsidiaries are all entities over which the Group has the power to control
the financial and operating policies. The Group obtains and exercises control through more than half of
the voting rights. All subsidiaries have a reporting date of 30 June.
All transactions and balances between Group companies are eliminated on consolidation, including
unrealised gains and losses on transactions between Group companies. Amounts reported in the
financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the
accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year
are recognised from the effective date of acquisition, or up to the effective date of disposal, as
applicable.
Segment reporting
4.4
Operating segments are presented using the ‘management approach’, where information is presented on
the same basis as the internal reports provided to chief operating decision makers, being the Board of
Directors. The Board of Directors are responsible for the allocation of resource to operating segments
and assessing their performance.
Revenue
4.5
Interest income is recognised when received.
Operating expenses
4.6
Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their
origin.
Exploration and evaluation
4.7
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of
interest. These costs are only carried forward to the extent that they are expected to be recouped
through the successful development of the area or where activities in the area have not yet reached a
stage that permits reasonable assessment of the existence of economically recoverable reserves.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
32
Accumulated costs in relation to an abandoned area are written off in full against profit or loss in the
year in which the decision to abandon the area is made.
A regular review for impairment is undertaken of each area of interest to determine the appropriateness
of continuing to carry forward costs in relation to that area of interest.
Income taxes
4.8
Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not
recognised in other comprehensive income or directly in equity.
Current income tax assets and/or liabilities comprise those obligations to, or claims from, the Australian
Taxation Office (ATO) and other fiscal authorities relating to the current or prior reporting periods, that
are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or
loss in the financial statements. Calculation of current tax is based on tax rates and tax laws that have
been enacted or substantively enacted by the end of the reporting period.
Deferred income taxes are calculated using the liability method on temporary differences between the
carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on
the initial recognition of goodwill, or on the initial recognition of an asset or liability unless the related
transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary
differences associated with investments in subsidiaries and joint ventures is not provided if reversal of
these temporary differences can be controlled by the Group and it is probable that reversal will not
occur in the foreseeable future.
Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to
apply to their respective period of realisation, provided they are enacted or substantively enacted by the
end of the reporting period. Deferred tax liabilities are always provided for in full.
Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised
against future taxable income.
Deferred tax assets and liabilities are offset only when the Group has a right and intention to set off
current tax assets and liabilities from the same taxation authority.
Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in
profit or loss, except where they relate to items that are recognised in other comprehensive income (such
as the revaluation of land) or directly in equity, in which case the related deferred tax is also recognised
in other comprehensive income or equity, respectively.
Cash and cash equivalents
4.9
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term,
highly liquid investments that are readily convertible into known amounts of cash and which are subject
to an insignificant risk of changes in value.
For personal use only
33
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
Other Receivables
4.10
Other receivables are recognised at amortised cost, less any impairment.
Trade Payables
4.11
These amounts represent liabilities for goods and services provided the Group prior to the end of the
financial period and which are unpaid. Due to their short term nature they are measured at amortised
cost and not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
Earnings per share
4.12
Basic earnings per share is calculated by dividing the profit attributable to the owners of MRG Metals
Ltd, excluding any costs of servicing equity other than ordinary shares, by the weighted average number
of ordinary shares outstanding during the financial period, adjusted for bonus elements in ordinary
shares issued during the financial period.
Diluted earnings per share adjust the figures used in the determination of basic earnings per share to take
into account the after income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares and the weighted average number of shares assumed to have been issued for
no consideration in relation to dilutive potential ordinary shares.
Equity
4.13
Share capital represents the nominal value of shares that have been issued. Any transaction costs
associated with the issuing of shares are deducted from share capital, net of any related income tax
benefits.
Retained earnings include all current and prior period retained profits.
4.14
Post employment benefits and short-term employee benefits
The Group provides post employment benefits through various defined contribution plans.
A defined contribution plan is a superannuation plan under which the Group pays fixed contributions
into an independent entity. The Group has no legal or constructive obligations to pay further
contributions after its payment of the fixed contribution. The Group contributes to several plans and
insurances for individual employees that are considered defined contribution plans. Contributions to the
plans are recognised as an expense in the period that relevant employee services are received.
Short-term employee benefits, including annual leave entitlement, are current liabilities included in
‘employee benefits’, measured at the undiscounted amount that the Group expects to pay as a result of
the unused entitlement.
Provisions, contingent liabilities and contingent assets
4.15
Provisions are recognised when present obligations as a result of a past event will probably lead to an
outflow of economic resources from the Group and amounts can be estimated reliably. Timing or
amount of the outflow may still be uncertain. Provisions are not recognised for future operating losses.
Provisions are measured at the estimated expenditure required to settle the present obligation, based on
the most reliable evidence available at the reporting date, including the risks and uncertainties associated
with the present obligation. Where there are a number of similar obligations, the likelihood that an
outflow will be required in settlement is determined by considering the class of obligations as a whole.
Provisions are discounted to their present values, where the time value of money is material.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
34
All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.
Possible inflows of economic benefits to the Group that do not yet meet the recognition criteria of an
asset are considered contingent assets.
Goods and Services Tax (GST)
4.16
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of
GST incurred is not recoverable from the Tax Office. In these circumstances the GST is recognised as
part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables
in the statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST
components of investing and financing activities, which are disclosed as operating cash flows.
Significant management judgement in applying accounting policies
4.17
The following are significant management judgements in applying the accounting policies of the Group
that have the most significant effect on the financial statements.
Deferred tax assets
The assessment of the probability of future taxable income in which deferred tax assets can be utilised is
based on the Group's latest approved budget forecast, which is adjusted for significant non-taxable
income and expenses and specific limits to the use of any unused tax loss or credit. The tax rules in the
numerous jurisdictions in which the Group operates are also carefully taken into consideration. If a
positive forecast of taxable income indicates the probable use of a deferred tax asset, especially when it
can be utilised without a time limit, that deferred tax asset is usually recognised in full. The recognition
of deferred tax assets that are subject to certain legal or economic limits or uncertainties is assessed
individually by management based on the specific facts and circumstances. Estimation uncertainty
When preparing the financial statements management undertakes a number of judgements, estimates
and assumptions about recognition and measurement of assets, liabilities, income and expenses.
The actual results may differ from the judgements, estimates and assumptions made by management,
and will seldom equal the estimated results.
Information about significant judgements, estimates and assumptions that have the most significant
effect on recognition and measurement of assets, liabilities, income and expenses is provided below.
Exploration and evaluation assets
At each reporting date, the directors review the carrying amount of each area of interest, with reference
to the indicators of impairment outlined in AASB 6 Exploration for and Evaluation of Mineral
Resources. No indicators of impairment were noted in the current period.
Tax Losses
The Group has not recognised a deferred tax asset with regard to unused tax losses and other temporary
differences, as it has not been determined whether the Company will generate sufficient taxable income
against which the unused tax losses and other temporary differences can be utilised in the foreseeable
future.
Share based payments
The Group measures the cost of share based payments at fair value at the issue date.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
5
Revenue
Interest received
6
Segment reporting
35
Consolidated
2012
$
298,117
298,117
Consolidated
24/1/11 -
30/6/11
$
28,840
28,840
The Group is organised into one operating segment, which is the exploration and development of Gold,
base metals and other commodities within Australia. This operating segment is based on the internal
reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating
Decision Makers) in assessing performance and in determining the allocation of resources.
7
Other receivables
GST receivables
Prepayments
Other receivables
The receivables noted above are not impaired nor past due.
8
Cash and cash equivalents
Cash and cash equivalents include the following components:
Cash at bank and in hand:
AUD
Short term deposits (AUD)
Cash and cash equivalents
Consolidated
2012
$
44,436
-
44,436
Consolidated
2011
$
49,704
42,666
92,370
Consolidated
2012
$
Consolidated
2011
$
3,552,737
810,000
4,362,737
1,085,091
4,060,000
5,145,091
The effective interest rate on short-term bank deposits is 5.55%; these deposits have an average maturity
of 90 days but can be redeemed prior to maturity without penalty on interest earned.
For personal use only
36
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
9
9.1
Equity
Share capital
The share capital of MRG Metals Ltd consists of fully paid ordinary shares and options, the shares do
not have a par value. All shares are equally eligible to receive dividends and the repayment of capital and
represent one vote at the shareholders' meeting of MRG Metals Ltd.
Date Issued
Details
24 Jan 2011
24 Jan 2011
8 March 2011
11 March 2011
8 June 2011
8 June 2011
Shares issued and fully paid:
Issued to Directors at $0.005
Issued to Consultants at $0.005
Issued to Seed Capitalists at $0.0625
Issued to Promoters at $0.06251
Issued to Tenement Vendors at $0.20
Issued to Public on IPO at $0.20
Total issued shares at 30 June 2011
Less costs of capital raising for above items2
Total share capital at 30 June 2011
Quantity
2,800,000
12,000,000
50,000,000
3,600,000
5,250,000
12,466,000
86,116,000
Consolidated
24/1/11 - 30/6/11
$
14,000
60,000
3,125,000
225,000
1,050,000
2,493,200
6,967,200
(421,206)
6,545,994
1These shares were awarded to promoters, whom assisted with the seed capital raising, at an issue price
of $0.001 per share (totalling $3,600). These shares have been recognised at the fair value of the shares
as denoted by the issue price of the seed capital raising.
2 Included in the costs of capital raising is $221,400 of share based payments to promoters.
Date Issued
Details
4 July 2011
26 July 2011
9 November 2011
SHARES
Total at 30 June 2011
Shares issued and fully paid:
Issued to Tenement Vendors at $0.20
Issued to Tenement Vendors at $0.20
Issued from options conversion at $0.25
Total issued shares at 30 June 2012
OPTIONS
Total at 30 June 2011
Options issued:
28 September 2011 Issued to public at $0.01
9 November 2011 Options conversion
Total issued options at 30 June 2012
Less costs of capital raising for above items
Total issued options at 30 June 2012
SHARE CAPITAL
Total share capital at 30 June 2012
Consolidated
2012
$
Quantity
86,116,000
6,545,994
1,000,000
1,000,000
50,000
88,166,000
200,000
200,000
12,500
6,958,494
-
-
44,057,993
(50,000)
44,007,993
44,007,993
440,580
-
440,580
(14,538)
426,042
7,384,536
For personal use only
37
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
9.2
Dividends
No dividends were declared or paid during the year. There are no franking credits outstanding at period
end.
10
10.1
Employee remuneration
Employee benefits expense
Expenses recognised for employee benefits are analysed below:
Salaries and fees
Defined Contribution Superannuation
Employee benefits expense
10.2
Employee benefits
Consolidated
2012
$
291,346
25,740
317,086
Consolidated
24/1/11 -
30/6/11
$
117,632
10,163
127,795
The liabilities recognised for employee benefits in the statement of financial position consist of the
following amounts:
Current:
- Other short term employee obligations
Consolidated
2012
$
Consolidated
2011
$
10,062
10,062
4,716
4,716
The current portion of these liabilities represents the Group’s obligations to its current employees that
are expected to be settled during 2012. Other short-term employee obligations arise from accrued annual
leave entitlement at the reporting date.
11
Trade and other payables
Trade and other payables recognised in the statement of financial position can be analysed
as follows:
Current
- Trade payables
- Other payables and accrued expenses
Consolidated
2012
$
Consolidated
2011
$
139,941
43,626
183,567
96,782
53,252
150,034
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
12
Plant and equipment
Plant & Equipment
Accumulated Depreciation
13
Exploration and evaluation assets
Cost as at 24 Jan 2011
Additions:
Xanadu - tenement acquisition costs
Mulgul - tenement acquisition costs
Braemore Battery - tenement acquisition costs
Diorite/Bellchambers - tenement acquisition costs
Other acquisition and exploration costs
Cost as at 30 June 2011
Cost as at 30 June 2011
Additions:
Kalgoorlie East - tenement acquisition costs
Collie South - tenement acquisition costs
Fraser Range - tenement acquisition costs
Other acquisition and exploration costs
Disposals:
Mulgul
Diorite/Bellchambers
Braemore Battery
Cost as at 30 June 2012
38
Consolidated
2012
$
1,104
(368)
736
Consolidated
2011
$
-
-
-
Consolidated
2011
$
825,100
12,254
220,000
55,000
34,269
1,146,623
Consolidated
2012
$
1,146,623
220,000
250,000
13,700
791,140
(22,435)
(65,513)
(243,975)
2,089,540
The shares issued as consideration for tenement purchases are equivalent to the fair value of those
tenements at the issue price of the Initial Public Offering.
The recoverability of the carrying amount of the exploration and evaluation assets is dependent on
successful development and commercial exploitation, or alternatively, sale of the respective areas of
interest.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
14
Income tax expense
The relationship between the expected tax expense based on the tax rate of MRG Metals Ltd and the
reported tax expense in profit or loss can be reconciled as follows, also showing major components of
tax expenses:
39
Profit/(loss) before tax
Expected tax expense/(benefit) @ 30%
Adjustment for non-deductible expenses:
- Movement in accruals
- Movement in provisions
-
Incorporation expenses
- Exploration and evaluation expenses
Current period tax loss not recognised
Current tax expense
Deferred tax expense:
- Temporary differences
- Unused tax losses
Deferred tax assets not recognised
Consolidated
2012
$
(764,056)
(229,217)
Consolidated
24/1/11 - 30/6/11
$
(316,660)
(94,998)
-
1,603
(338)
(210,473)
(438,425)
438,425
-
(209,208)
438,425
229,217
10,800
1,415
457
(7,497)
(89,823)
89,823
-
5,175
89,823
94,998
The above potential tax benefit has not be recognised as the recovery is uncertain.
The taxation benefit of tax losses and temporary differences not brought to account will only be
obtained if:
-
the Group derives future assessable income of a nature and an amount sufficient to enable the
benefit from the deductions for the losses to be realised;
the Group continues to comply with the conditions for deductibility imposed by law; and
no change in tax legislation adversely affects the Group in realising the benefits from deducting
the tax losses.
-
-
15
Auditor remuneration
Audit services
Auditors of MRG Metals Ltd – Grant Thornton
- Audit of the financial report
Audit services remuneration
Other services
Auditors of MRG Metals Ltd – Grant Thornton
- Preparation of an Investigating Accountants Report
Total other service remuneration
Total Auditor’s remuneration
Consolidated
2012
$
Consolidated
24/1/11 - 30/6/11
$
34,000
34,000
-
-
34,000
20,000
20,000
9,800
9,800
29,800
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
Earnings per share
16
The weighted average number of shares for the purposes of diluted earnings per share can be
reconciled to the weighted average number of ordinary shares used in the calculation of basic
earnings per share as follows:
40
Loss after income tax
Weighted average number of shares used in basic earnings per share
Weighted average number of shares used in diluted earnings per share
Earnings Per Share
Diluted Earnings Per Share
Consolidated
2012
$
(764,056)
88,071,601
88,071,601
Consolidated
2011
$
(316,660)
23,807,858
23,807,858
(0.87) cents
(0.87) cents
(1.33) cents
(1.33) cents
The rights to options held by option holders have not been included in the weighted average number of
ordinary shares for the purposes of calculating diluted EPS as they do not meet the requirements for the
inclusion in AASB 133 “Earnings per Share”. The rights to options are non-dilutive as the Group is loss
generating.
17
Reconciliation of cash flows from operating activities
Cash flows from operating activities
Loss after income tax expense for the year
Cash flows excluded from loss attributable to operating activities
Non cash flows in loss:
Depreciation
Write off deferred exploration and evaluation expenditure
Change in other employee obligations
Change in other assets and liabilities:
(Increase)/decrease in trade and other receivables
(Increase)/decrease in other assets and prepayments
(Increase)/decrease trade and other payables
Net cash from operating activities
Non cash investing and financing activities
Consolidated
2012
$
Consolidated
24/1/11 -
30/6/11
$
(764,056)
(316,660)
368
331,923
5,345
5,268
42,666
33,534
(344,952)
-
-
4,716
(49,704)
(42,666)
103,210
(301,104)
The Group purchased tenements via share based payments (refer to Note 13) and also awarded shares
to promoters of seed capital (refer to Note 9.1).
For personal use only
41
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
18
Related party transactions
The Parent entity is MRG Metals Ltd.
MRG Metals Ltd owns 100% of the shares of MRG Metals (Australia) Pty Ltd.
MRG Metals (Australia) Pty Ltd owns the mining tenements and has no other Assets or Liabilities.
The Group's related parties include its key management and others as described below.
Unless otherwise stated, none of the transactions incorporate special terms and conditions and no
guarantees were given or received.
18.1
Transactions with related parties
The following transactions occurred with related parties:
Payment for goods and services:
The Company has entered into an agreement with Calatos Pty Ltd in relation to consulting fees for
services relating to marketing, dealing with shareholders and capital raising. The fees payable are
$120,000 per annum. At the time of entering into the agreement, Mr Bruce McFarlane, a shareholder of
Calatos Pty Ltd, held a controlling interest in MRG Metals Ltd.
The Group used the accounting services of RSM Bird Cameron, an entity associated with Mr. Turner.
The amounts billed were based on normal market rates and amounted to $31,500 (2011 $68,000).
Receivable from and payable to related parties
There were no trade receivable from or trade payables to related parties.
Loans to/from related parties
There were no loans to or from related parties at the reporting date.
Terms and conditions
All transactions are made on normal commercial terms and conditions and at market rates.
18.2 Transactions with key management personnel
Key management of the Group are the Board of Directors. Key management personnel remuneration is
set out in the Remuneration Report in the Director’s Report.
18.3
Equity instruments held by KMP
The number of shares in the Company by each of the key management personnel of the Group,
including their related parties are set out below:
For personal use only
42
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
Year ended 30 June 2011
Van Der Zwan
Pietrzak
Turner
Fammartino
Year ended 30 June 2012
Van Der Zwan
Pietrzak
Turner
Balance at
start of
year
-
-
-
-
-
Balance at
start of
year
2,160,000
2,130,000
1,470,000
5,760,000
Received
on
exercise
Other
changes
Held at
the end of
the
reporting
period
-
-
-
-
-
-
-
-
(1,860,000)
2,160,000
2,130,000
1,470,000
-
(1,860,000)
5,760,000
Additions
2,160,000
2,130,000
1,470,000
1,860,000
7,620,000
Received
on
exercise
Other
changes
Additions
Held at
the end of
the
reporting
period
-
-
-
-
-
-
-
-
-
-
-
-
2,160,000
2,130,000
1,470,000
5,760,000
These shares were acquired in initial capital raising of Company, via issue to Seed Capitalists and via
Initial Public Offering. Mr. Fammartino resigned on 14 February 2011.
The number of options in the Company by each of the key management personnel of the Group,
including their related parties are set out below:
Year ended 30 June 2012
Van Der Zwan
Pietrzak
Turner
Balance at
start of
year
-
-
-
-
Deleted
on
exercise
Other
changes
Held at
the end of
the
reporting
period
-
-
-
-
-
-
-
-
1,080,000
1,065,000
735,000
2,880,000
Additions
1,080,000
1,065,000
735,000
2,880,000
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
19
Contingent assets and contingent liabilities
The Group has no contingent assets as 30 June 2012.
The Group has no contingent liabilities at 30 June 2012.
20
Commitments for expenditure
Exploration and evaluation:
Within 12 months
43
2012
$
344,000
344,000
2011
$
310,760
310,760
Exploration and evaluation:
In order to maintain current rights of tenure to exploration tenements, the Group is required to outlay
rentals and to meet the minimum expenditure requirements of the State Mine Departments. Minimum
expenditure commitments may be subject to renegotiation and with approval may otherwise be avoided
by sale, farm out or relinquishment. These obligations are not provided in the accounts and are payable.
21
Financial instrument risk
Risk management objectives and policies
The Group is exposed to various risks in relation to financial instruments. The main types of risks are
market risk (including interest rate risk), credit risk and liquidity risk.
The Group's risk management is carried out by the board of directors, and focuses on actively securing
the Group's short to medium-term cash flows by minimising the exposure to financial markets.
The Group does not engage in the trading of financial assets for speculative purposes nor does it write
options. The most significant financial risks to which the Group is exposed are described below.
21.1
Foreign currency sensitivity
To date, all of the Group's transactions have been carried out in Australian Dollars.
21.2
Interest rate sensitivity
The Group's only exposure to interest rate risk is in relation to deposits held. Deposits are held with
reputable banking financial institutions.
At 30 June 2012, there was $750,000 on deposit at 5.55% and $60,000 on deposit at 5.80% (Note 8).
On 2 July 2012, $3,000,000.00 was invested for six months at 5.50%.
An increase/decrease by 30% or 1.65 basis points would have a favourable/adverse effect on profit for
the year of $62,865. The percentage change is based on the expected volatility of interest rates using
market data and analysts’ forecasts.
For personal use only
44
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
21.3
Credit risk analysis
Credit risk is the risk that a counterparty fails to discharge an obligation to the Group. The Group is
exposed to minimal credit risk as its only exposure is to interest receivable and GST refunds.
21.4
Liquidity risk analysis
Liquidity risk is that the Group might be unable to meet its obligations. The Group manages its liquidity
needs by monitoring actual and forecast cash inflows and outflows due in day-to-day business.
The Group's working capital, being current assets less current liabilities, at 30 June 2012 was $4,213,544.
Based on this, the directors are satisfied the Group will have sufficient funds to pay its debts as and
when they fall due.
As at 30 June, the Group's non-derivative financial liabilities have contractual maturities (including
interest payments where applicable) as summarised below:
30 June 2011
Trade and other payables
Total
30 June 2012
Trade and other payables
Total
Current
Non current
Within 6
months
$
150,034
150,034
6 to 12
months
$
-
-
1 to 5 years
$
-
-
Later than 5
years
$
-
-
Current
Non current
Within 6
months
$
183,567
183,567
6 to 12
months
$
-
-
1 to 5 years
$
-
-
Later than 5
years
$
-
-
The above amounts reflect the contractual undiscounted cash flows, which may differ to the carrying
values of the liabilities at the reporting date. Unless otherwise stated, the carrying amounts of financial
instruments reflect their fair values due to their short term nature.
22
Capital risk management
The Group’s objectives when managing capital is to ensure the Group's ability to continue as a going
concern so that it can provide an adequate return to shareholders.
The Group would look to raise capital when an opportunity to invest in a business, company or tenement is
seen as value adding.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
45
23
Post-reporting date events
Since the end of the year the following significant events have occurred:
• There are no other events occurring since the end of the year that have, or may, significantly affect
the Group’s operations, results of those operations or the state of affairs of the Group.
24
Parent entity information
Information relating to MRG Metals Ltd (‘the parent entity’)
Statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Retained earnings
Statement of comprehensive income
Profit/(loss) for the period
Total comprehensive income
2012
$
2011
$
4,407,173
6,497,449
193,629
193,629
7,384,536
(1,080,716)
6,303,820
5,237,461
6,384,084
154,750
154,750
6,545,994
(316,660)
6,229,334
(764,056)
(764,056)
(316,660)
(316,660)
25
Authorisation of financial statements
The consolidated financial statements for the year ended 30 June 2012 were approved by the board of
directors on 27 September 2012.
Albert Pietrzak
Chairman
Shane Turner
Director/Secretary)
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
Directors’ declaration
46
1. In the opinion of the directors of MRG Metals Ltd:
a
the consolidated financial statements and notes of MRG Metals Ltd are in accordance with the
Corporations Act 2001, including
i.
giving a true and fair view of its financial position as at 30 June 2012 and of its performance for
the financial period ended on that date; and
ii.
complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001; and
b there are reasonable grounds to believe that MRG Metals Ltd will be able to pay its debts as
and when they become due and payable.
2. The directors have been given the declarations required by Section 295A of the Corporations Act
2001 from the chief executive officer and chief financial officer for the financial period ended 30 June
2012.
3. The consolidated financial statements comply with International Financial
Reporting Standards.
Signed in accordance with a resolution of the directors:
Dated at Melbourne, the 27th day of September 2012
_______________________Albert Pietrzak
Director
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
47
Grant Thornton Audit Pty Ltd
ACN 130 913 594
Level 2
215 Spring Street
Melbourne Victoria 3000
GPO Box 4984
Melbourne Victoria 3001
T +61 3 8663 6000
F +61 3 8663 6333
E info.vic@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of MRG Metals Ltd
Report on the financial report
We have audited the accompanying financial report of MRG Metals Ltd (the “Company”), which
comprises the statement of financial position as at 30 June 2012, the statement of comprehensive
income, statement of changes in equity and statement of cash flows for the year then ended, notes
comprising a summary of significant accounting policies and other explanatory information and the
directors’ declaration of the company .
Directors responsibility for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the Directors determines is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error. The Directors also state, in the notes to the financial report, in accordance with
Accounting Standard AASB 101 Presentation of Financial Statements, the financial statements comply
with International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require us to comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together
with its subsidiaries and related entities, delivers its services independently in Australia.
Liability limited by a scheme approved under Professional Standards Legislation
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
48
In making those risk assessments, the auditor considers internal control relevant to the Company’s
preparation of the financial report that gives a true and fair view in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the Directors, as well
as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Electronic presentation of audited financial report
This auditor’s report relates to the financial report of MRG Metals Ltd and controlled entities for the
year ended 30 June 2012 included on MRG Metals Ltd’s web site. The Company’s Directors are
responsible for the integrity of MRG Metals Ltd’s web site. We have not been engaged to report on the
integrity of MRG Metals Ltd’s web site. The auditor’s report refers only to the statements named above.
It does not provide an opinion on any other information which may have been hyperlinked to/from
these statements. If users of this report are concerned with the inherent risks arising from electronic data
communications they are advised to refer to the hard copy of the audited financial report to confirm the
information included in the audited financial report presented on this web site.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act
2001.
Auditor’s opinion
In our opinion:
a
the financial report of MRG Metals Ltd is in accordance with the Corporations Act 2001,
including:
i
ii
giving a true and fair view of the Company’s financial position as at 30 June 2012 and of its
performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
b
the financial report also complies with International Financial Reporting Standards as disclosed in
the notes to the financial statements.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
49
Report on the remuneration report
We have audited the remuneration report included in pages 15 to 17 of the directors’ report for the year
ended 30 June 2012. The Directors of the Company are responsible for the preparation and presentation
of the remuneration report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the remuneration report, based on our audit conducted in
accordance with Australian Auditing Standards.
Auditor’s opinion on the remuneration report
In our opinion, the remuneration report of MRG Metals Ltd for the year ended 30 June 2012, complies
with section 300A of the Corporations Act 2001.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
B.L. Taylor
Partner - Audit & Assurance
Melbourne, 27 September 2012
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
50
ASX Additional Information
Additional information required by the ASX Limited Listing Rules and not disclosed elsewhere in this
report is set out below. The information is effective as at 19 September 2012.
Substantial Shareholders
The number of substantial shareholders and their associates are set out below:
Shareholder
Ottawa Resources P/L
Voting Rights
Ordinary shares
Number of Shares
11,524,000
On show of hands, every member present at a
meeting in person or by proxy shall have one
vote and upon a poll each share shall have one vote
Options
Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
1,000,000 and over
No voting rights
Shareholders
4
29
122
166
112
433
There were no holders of less than a marketable parcel of ordinary shares.
Twenty largest quoted shareholders
G & C Hedt P/L
Bigson P/L
J Powell
Gulf Country Investments P/L
L Knight
Tigerland Investments P/L
TRR Investments P/L
Aznanob P/L
RL Staggard & DL Berry
A & J Turner P/L
33rd Infinity P/L
S Popovic
Notemarl P/L
UBS Wealth Management Australia Nominees P/L
Malanti P/L
Bruce McFarlane & J Charlwood
Marloss Fifteen P/L
PW Askins & HM Ansell
Stage Constructions P/L
Brian McFarlane
Ordinary Shares
Number Held %of quoted shares
4.02
4.02
4.02
3.77
3.01
2.20
2.17
2.17
2.01
2.01
2.01
2.01
2.01
1.96
1.57
1.38
1.38
1.27
1.26
1.21
45.46
2,560,000
2,560,000
2,560,000
2,400,000
1,920,000
1,400,000
1,380,000
1,380,000
1,280,000
1,280,000
1,280,000
1,280,000
1,280,000
1,250,892
1,000,000
882,500
880,000
810,000
800,000
768,000
28,951,392
For personal use only
51
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
Restricted equity securities
The following securities are subject to escrow:
-
24,439,000
Escrowed until 8 June 2013
Securities exchange
The Company is listed on the Australian Securities Exchange and shares are quoted under the code
MRQ.
Options
Twenty largest quoted optionholders
Number Held
Ottawa Resources P/L
G & C Hedt P/L
J Powell
Gulf Country Investments P/L
HSBC Custody Nominees (Australia) Ltd
Life-Style Connections P/L
Minico P/L
Kathryn Van Der Zwan
L Knight
Rylet P/L
N Fammartino
Bigson P/L
Tigerland Investments P/L
Sage Administration P/L
TRR Investments P/L
RL Staggard & DL Berry
A & J Turner P/L
33rd Infinity P/L
S Popovic
Notemarl P/L
Securities exchange
5,942,000
1,280,000
1,280,000
1,200,000
1,154,750
1,050,000
1,000,000
965,000
960,000
890,000
880,000
880,000
700,000
695,000
690,000
687,500
640,000
640,000
640,000
640,000
22,814,250
%of quoted
options
13.50
2.91
2.91
2.73
2.62
2.39
2.27
2.19
2.18
2.02
2.00
2.00
1.59
1.58
1.57
1.56
1.45
1.45
1.45
1.45
51.82
The Company is listed on the Australian Securities Exchange and options are quoted under the code
MRQO.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
Tenements
The Tenements held by the Company at reporting date are as follows:
Project
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Kalgoorlie East
Collie South
Braemore Battery
Braemore Battery
Braemore Battery
Braemore Battery
Braemore Battery
Braemore Battery
Braemore Battery
Braemore Battery
Braemore Battery
Fraser Range
Fraser Range
Tenement
P52/1366
P52/1367
P52/1368
P52/1369
P52/1372
P52/1373
P52/1374
P52/1375
P52/1376
P52/1377
P52/1378
P52/1379
P52/1380
P52/1381
P26/3693
P26/3694
P26/3596
P26/3597
P26/3598
P26/3599
P26/3600
P26/3601
P26/3602
P26/3603
P26/3604
P26/3605
P26/3606
P25/1984
P25/1985
E70/3331
P37/7008
P37/7009
P37/7765
P37/7766
P37/7767
P37/7768
P37/7769
P37/7070
P37/7771
EL63/1552
EL63/1553
52
% Owned
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
30
100
100
100
100
100
100
100
100
100
100
100
For personal use only
53
MRG Metals Ltd
Consolidated Financial Statements
30 June 2012
Corporate Directory
Directors & Secretary
Albert Pietrzak
Non Executive Chairman
Andrew Van Der Zwan
Managing Director and Chief Executive Officer
Shane Turner
Non Executive Director and Company Secretary
Principal place of business
Level 8, 350 Collins Street, Melbourne VIC 3000
Telephone: +61 3 9642 8575
Email: info@mrgmetals.com.au
www.mrgmetals.com.au
Fax: +61 3 96425662
Registered office
Level 1, 1-3 Bath Lane, Ballarat Victoria 3350
PO Box 237, Ballarat VIC 3353
Telephone: +61 3 5330 5800 Fax: +61 3 5333 1667
Corporate accountant and Registered ASIC Agent
RSM Bird Cameron
Level 1, 1-3 Bath Lane, Ballarat VIC 3350
PO Box 685, Ballarat VIC 3353
Telephone: +61 3 5330 5800 Fax: +61 3 5333 1667
www.rsmi.com.au
Solicitors
Middletons
Level 25, 525 Collins Street, Melbourne VIC 3000
Telephone: +61 3 9205 2000 Fax: +61 3 9205 2055
www.middletons.com
Share Registry
Link Market Services Limited
Ground Floor, 178 St Georges Terrace, Perth WA 6000
Telephone: 1300 554 474
Auditor
Grant Thornton Audit Pty Ltd
Level 2, 215 Spring Street, Melbourne Vic 3000
Telephone (office): +61 3 8663 6000 Fax: +61 3 8663 6333
Email: brad.taylor@au.gt.com
Website: www.grantthornton.com.au
Stock Exchange Listing
ASX Codes: MRQ , MRQO
For personal use only