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2023 ReportAnnual Report MRG Metals Ltd ABN: 83 148 938 532 For the Year ended 30 June 2014 For personal use only MRG Metals Ltd Consolidated Financial Statements 30 June 2014 Contents Review of Operations Directors’ Report Auditor’s Independence Declaration Corporate Governance Statement Statement of Financial Position Statement of Profit or Loss and Other 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 and Dividends 10. Trade and Other Payables 11. Plant and Equipment 12. Exploration and Evaluation 13. Option 14. Intangibles 15. Income Tax Expense 16. Auditor Remuneration 17. Earnings per Share 18. Reconciliation of Cash Flows from Operating Activities 19. Related Party Transactions 20. Contingent Assets and Contingent Liabilities 21. Commitments 22. Financial Instrument Risk 23. Capital Risk Management 24. Post-Reporting Date Events 25. Parent Entity Information 26. Authorisation of Financial Statements Directors’ Declaration Independent Auditor’s Report ASX Additional Information Corporate Directory 2 Page 3 11 18 19 24 25 26 27 28 28 28 29 34 34 34 34 35 36 36 36 37 37 37 38 38 39 39 41 41 41 43 43 43 43 44 45 48 51 For personal use only MRG Metals Ltd Consolidated Financial Statements 30 June 2014 Review of Operations 3 Highlights The year ended 30 June 2014 saw MRG refine and consolidate its tenement holdings in prospective areas. A technical review was completed on all tenements. This resulted in relinquishment of those that did not meet the Group’s criteria and acquisition of new tenements. The Group is continuing its goal of drill testing high potential targets every quarter. Projects XANADU PROJECT MRG's Xanadu project is located close to the northern margin of the Ashburton Basin, some 4 kilometres WSW of Northern Star Resources Ltd's Ashburton Project, (21.3 million tonnes @ 2.4g/t gold for 1.67 million ounces). The Xanadu mineralisation was discovered in the mid 1980's by BP Minerals and the Project area was subject to various phases of exploration in the ensuing period until MRG's acquisition in 2011. Three dimensional structural modelling and a detailed analysis of the exploration database compiled by MRG and analysed by our technical consultants Sasak Technical Services, provided an enhanced understanding of geological controls on mineralisation, to better target prospect scale drilling. MRG's initial drill program completed in May 2014 had multiple aims: • To drill-confirm the potential where suggested by previous explorers (Claudius & Cleopatra prospects) • Test extensions and repetitions of known mineralised areas based on a better understanding of litho-geochemical and structural controls (Cleopatra, Stynes & Amphitheatre) • Determine the location and timing of feeder structures responsible for the mineralising fluids (Cleopatra, Stynes & Caesar prospects). These aims were largely achieved. This drilling has validated the utility of the methodical approach used by MRG and Sasak Technical Services ('Sasak') to target mineralisation. MRG will continue to apply the results from this modelling across the wider Project area to select and prioritise future drill targets. Concurrent with the drilling, a soil sampling program tested two new areas that were outlined by our consultants. These areas were specifically targeted because of their geological similarities t o the nearby Mount Olympus style mineralisation. The new prospects known as Asterix, along strike from the Stynes prospect and Pertinax, north of Claudius show multi element anomalism and warrant further exploration. For personal use only MRG Metals Ltd Consolidated Financial Statements 30 June 2014 4 LOONGANA PROJECT MRG’s Loongana Project is located on the Nullarbor Plain, 500kms east of Kalgoorlie and 60km north of the Trans Australia railway line. MRG holds a granted licence and a new application that cover the majority of the Loongana Igneous Complex. This Complex is a large layered mafic and ultramafic intrusive body that lies at depths ranging from 250 metres to 350 metres below the surface. It includes one of the strongest gravity residuals in Australia, with accompanying multifarious magnetic features. The geophysical data covering the Complex, particularly the aeromagnetics, clearly delineate the intrusive body and related bounding faults. Positive aspects of the Complex derived from limited prior exploration include: • confirmation that part of the Complex represents a layered intrusion; • highly anomalous platinum group elements and gold values recorded in earlier drilling; • moderate thickness of cover rocks considering the potential value of any discovery; • traces of sulphides (chalcopyrite, pyrrhotite, pentlandite) were noted in an ultramafic cumulate; and • several features that indicate IOCG processes may potentially be operating in the granitic rocks, including hematite and chlorite alteration noted in drill core; thin section evidence for hydrothermal rather than metamorphic alteration; common trace chalcopyrite and blue quartz in the granites. MRG will test for platinum mineralisation, either as strataform or stratabound reefs within the Complex, or associated with disseminated to massive nickel - copper sulphides on the margins and Olympic Dam style iron-oxide copper-gold (IOCG) mineralisation. A review of geophysical data has identified a number of targets for drill testing. MRG believe that previous drilling was not sited in the optimum location for discovery. In particular, we have computed coincident magnetic/gravity targets using innovative data mining and 3D analysis techniques developed by Sasak. To support the planned drilling, MRG was successful in its recent funding application from the Department of Mines and Petroleum WA Co-funded Government - Industry Drilling Program of the Exploration Incentive Scheme (‘EIS’). Under the EIS, funds committed by MRG towards the approved drill programs will be matched by funds from the Western Australian Government, up to a maximum of $108,000. Drilling is planned to commence in Q4 2014. For personal use only MRG Metals Ltd Consolidated Financial Statements 30 June 2014 5 EAST YILGARN PROJECT MRG's East Yilgarn Project, along with Gold Road Resources Ltd's adjacent Yamarna Project, are located at the eastern margin of the Yilgarn Craton and are prospective for greenstone hosted gold in a frontier terrain. The potential of this region is demonstrated by Gold Road's exploration success on their Gruyere Prospect. The greenstone hosted gold deposits of the Yilgarn Craton account for a significant proportion of Australia's gold production. MRG are seeking analogues of this deposit style. This terrain is historically underexplored due its remoteness and is covered by younger rocks and sand of the Great Victoria Desert. Preparation for drilling is currently underway following predictive modelling by Sasak Technical Services Pty Ltd ('Sasak'). This analysis is focussed on a number of areas with practicable drilling depths. The depth to basement calculations are being refined and one targe t is approximately 150 metres below surface, with other basement targets likely to be in the range from 350 to 400 metres under cover. These targets will be tested during Q3 2014 by utilising the drilling co -funding received by MRG from the Western Australian Government Exploration Incentive Scheme. For personal use only MRG Metals Ltd Consolidated Financial Statements 30 June 2014 6 QUEENSLAND IOCG PROJECTS With the purchase of Sasak Resources Australia Pty Ltd in June 2013, MRG acquired three tenements in the Mt. Isa Block, a large geological province in western Queensland. These three projects have the potential to host Iron Oxide, Copper Gold ('IOCG') and base metal deposits, as they have similar geophysical characteristics to known deposits such as Glencore PLC's Ernest Henry Mine (166 Mt @ 1.1% Cu & 0.54 g/t Au - pre mining resource) and BHP's Cannington Mine (44 Mt @ 383 g/t Ag, 8.9% Pb, 4.2% Zn - 2007 resource). As indicated at the time of the acquisition of Sasak, one of the benefits was a diversification into copper by gaining exposure to prospective ground within the Mount Isa block. Prior analysis utilising the technology of Sasak revealed the potential of these three areas to host mineralisation. SQUIRREL HILL - EPM19470 The Squirrel Hill Project is located approximately 125 km SSE of Cloncurry and some 15 kilometres WNW of the Cannington mine, operated by BHP Billiton. Despite the proximity of Squirrel Hill to Cannington, the Sasak technology suggests a geological setting favourable for IOCG deposits in addition to silver - lead - zinc mineralisation. Prior exploration has shown that the Project lies below a thin 10 to 40 m of cover in the south eastern corner of the Mt Isa Inlier, to the east of the Cloncurry Overthrust, within the Eastern Fold Belt. The host rocks comprise strongly metamorphosed sandstones (psammite), which have been extensively intruded by granitites. MRG has already commenced a review of past exploration to select initial targets. PULCHERA - EPM19471 Situated in the Simpson Desert near the Northern Territory border in western Queensland EPM19471 is located 135 kilometres north west of Bedourie. The Pulchera project is near the major Toomba Fault which lies on the south western edge of the Mt. Isa Block, a Proterozoic geological terrain that hosts a diverse range of world class orebodies. Previous broad spaced drilling by BHP revealed that the depth of cover ranges from a manageable 40 to 100 m. Recent exploration on an adjacent licence returned strongly anomalous results of up to 27m @ 0.4% copper from 9m (including 3m @ 2.4% copper). The aim is to discover an Olympic Dam style IOCG (Iron Oxide Copper Gold) deposit in a granitic breccia host, associated with continental faulting and high fluid flow on terrane boundaries. DAVENPORT DOWNS - EPM19306 The Davenport Downs licence was granted in April 2013 and lies 120 kilometres south east of Boulia. Like the Pulchera Project it is close to the interpreted southern margin of the Mount Isa Block. The Project straddles portion of a prominent gravity ridge with accompanying favourable magnetic signatures. Exploration work undertaken on the tenement to date comprise historical data compilation, geophysical data review and prospectivity assessment. The Davenport Downs EPM is considered prospective due to its positive magnetic - gravity response which are characteristic of IOCG-Type deposits in the Mount Isa Block. The depth of cover is understood to be around 400m, so future exploration will comprise focussed drilling of geophysical (magnetic-gravity) anomalies. These newly granted licences will form the focus of MRG exploration efforts in the coming year. Our strategy has been to apply for ground largely on the margins of the mineralised Proterozoic Mount Isa block, where basement is under cover and there are exploration opportunities for discoveries utilising the Sasak technology. For personal use only MRG Metals Ltd Consolidated Financial Statements 30 June 2014 7 KALGOORLIE EAST PROJECT The Kalgoorlie East Project is located approximately 8km east of Kalgoorlie in the Eastern Goldfields of WA, and consists of 15 prospecting licences covering an area of 17km². This region is highly prospective and hosts a number of large gold and silver deposits, including the Kalgoorlie Super Pit (>50 million oz Au) 7km to the west, Kanowna Belle (>5 million oz Au) 12kms to the north and Nimbus (>23 million oz Ag-eq.) 2kms to the south east. The geology of the project area consists of a structurally complex assemblage of Archean ultramafic, mafic and felsic volcanic rocks with associated sediments and cherts, intruded by a series of younger dolerite dykes and felsic porphyries, together known as the Golden Ridge Belt. Indications of a number of styles of mineralisation have been identified on the project, including Kambalda style nickel sulphide, shear hosted gold, Nimbus style silver mineralisation and disseminated base metal mineralisation. In addition, the Boorara type mineralisation, may also be present. At Boorara, <1km east, mineralisation is controlled by the intersection of a north east trending fault with the major regional NNW trending faults. This NE fault and others of a similar orientation, extend into the MRG tenements. The spatial association between these NE faults and gold in soil anomalies form a primary exploration target. During the year a number of nickel targets were assessed in detail. The main target being an area where previous Aircore drilling returned 5m @ 1% nickel, 0.2% cobalt & 0.33% chromium from 5m down hole. While this intercept is within weathered rocks, subsequent re - analysis indicated that it derived from primary nickel sulphides, rather than For personal use only MRG Metals Ltd Consolidated Financial Statements 30 June 2014 8 being a lateritic accumulation. Another anomaly to the south showed coherent high nickel soil anomalism up to 3,966 ppm Ni. A Reverse Circulation drilling program was completed during November 2013 seeking narrow high grade Kambalda Style nickel sulphide mineralisation. Whilst no high grade nickel zones were found a number of strongly anomalous pathfinder and trace elements results were returned. Further drilling directed towards directed towards two new gold targets in the main Kalgoorlie East and satellite Balagundi prospect was undertaken in February 2014. The holes at Balagundi were drilled into a virgin area with no prior drilling. Of the four shallow holes completed , anomalous gold and strongly anomalous arsenic were found in two of the holes. We are greatly encouraged by these promising early results and further drilling over this area is justified. Within the Project many thick bands of the Metalliferous Black Shales were encountered during drilling. Their geochemistry shows that they are very sulphidic, with highly anomalous concentrations of Au, As and elevated base metals. There are many types of mineral deposits that are enveloped by disseminated pyrite ‘shells’ with anomalous geochemistry. Accordingly, further work is planned on the black shale geochemistry to determine vectors to mineralisation. For personal use only MRG Metals Ltd Consolidated Financial Statements 30 June 2014 9 YARDILLA PROJECT In mid 2014, the Board of MRG successfully negotiated an option and purchase agreement over two granted exploration licences that adjoin an existing MRG 100% owned Yardilla licence application. Together, they cover a contiguous area of approximately 220 square kilometres. The combined project area straddles part of the Cundeelee Fault, which separates the Archean Yilgarn Craton from the Proterozoic Albany-Fraser Orogen. The three adjoining exploration licences are considered to be prospective for gold, nickel and base metals that may be present in both geological terrains. The area has been held by several companies, but only Sipa Resources (2006 – 2013 JV with Newmont) and AngloGold Ashanti (2008 – 2013) have completed widespread systematic exploration. Past exploration targeted gold, with little evidence of nickel and base metal exploration in ultramafics of the Yilgarn Craton or metamorphosed units of the Albany-Fraser Orogen. MRG primary target is gold and nickel mineralisation associated with structural dislocations in the Archean greenstones and analogues of Tropicana style gold mineralisation in the Albany Fraser Orogen. FRASER RANGE PROJECT MRG's Fraser Range project has a total area of approximately 500km2 and is located 100km south east of Norseman, WA. The project consists of six pending exploration licences, of which two were applied for in March 2012 and an additional four in March 2013. The primary target is Tropicana style gold mineralisation. The geology of the Albany Fraser Orogenic Province, of which the MRG’s Fraser Range project is part, is poorly known, since younger sediments cover approximately 90 percent of the area. Based on limited outcrop and geophysical interpretation, the project lies within a complex of strongly deformed Proterozoic high-grade gneissic rocks. The focus for MRG has been an ancient collision zone located between the Yilgarn Craton and the Albany-Fraser Orogen which hosts AngloGold Ashanti’s +5M oz Tropicana Gold Mine, located 400km to the northeast and Sirius Resources Ltd's Nova Bollinger Ni-Cu-Co deposit, located some 80km the northeast. Prior to these discoveries the area was not thought to be overly prospective. However, MRG's exploration licence applications are yet to be granted. We currently hold priority to the mineral exploration rights but grant has been delayed due to environmental matters. We have received advice that high level inter Departmental negotiations between the Departments of Mines & Petroleum (DMP') and Environment & Conservation ('DEC') are still ongoing regarding the environmental conditions that should apply to licences within the Dundas Nature Reserve. Although some companies are actively exploring within the Reserve no new licences For personal use only MRG Metals Ltd Consolidated Financial Statements 30 June 2014 10 have been granted access to the Reserve since February 2012. MRG's first application was made on 27 March 2012 and initially referred to DEC on 13 June 2012. MRG is monitoring the ongoing negotiations between DMP & DEC and is seeking a meeting with the Departments on a timely resolution of the issue so that grant of the licences may proceed. All open file and geophysical data is currently being scrutinized for favourable structural positions and alteration zones, with selected areas to be subjected to a targeted geochemical sampling program upon final licence approval. ACTIVITIES AND HIGHLIGHTS SINCE 30 JUNE 2014 MRG’s two remaining QLD IOCG tenements have been granted. Drilling commenced on the East Yilgarn project late September. Continuation of data refinement to identify high priority drill targets. For personal use only MRG Metals Ltd Consolidated Financial Statements 30 June 2014 11 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 entities, MRG Metals (Australia) Pty Ltd and MRG Metals (Exploration) Pty Ltd (‘the Group’) for the year ended 30 June 2014 and the Independent Audit Report thereon. Director details The following persons were directors of MRG Metals Ltd during or since the end of the financial year. Mr Keith Weston BSc Geology (hons), MAusIMM Managing Director & Chief Executive Officer since 07/01/2013 Director since 07/01/2013 Keith is a Geologist with over 27 years experience in the Minerals Industry throughout Australia and Latin America. In recent times, Mr Weston was the inaugural Managing Director and Chief Executive Officer of Metminco Ltd (ASX Code: MNC)(“Metminco”). He held the position prior to ASX Listing on 1 October 2007 until 31 October 2009. During this time he was instrumental in the successful takeover of Hampton Mining Ltd and subsequent exploration by the merged entity in South America. Principally, from November 2009 to December 2011, he was Chief Geologist for Peru of Metminco, where he was involved in advancing the world class Los Calatos copper deposit. Since January 2012, Keith was engaged as a consulting Geologist for MRG. Other current directorships: None Previous directorships (last 3 years): None Interests in shares: 100,000 shares Interest in options: None Mr Andrew Van Der Zwan BE Chemical Engineering (hons) Independent Non Executive Director since 07/01/2013 Chairman since 08/10/2013 Director since 14/02/2011 Andrew has 28 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: Argo Exploration Ltd (ASX: AXT) since 19/03/2013 Titan Energy Ltd (ASX: TTE) since 02/04/2014 Previous directorships (last 3 years): None Interests in shares: 2,375,000 shares Interest in options: 1,080,000 options For personal use only MRG Metals Ltd Consolidated Financial Statements 30 June 2014 Mr Shane Turner CA, Bachelor of Business Independent Non-Executive Director Director since incorporation 24/01/2011 12 Shane is a Chartered Accountant and has 26 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 for 2 years. Other current directorships: None Previous directorships (last 3 years): None Interests in shares: 1,594,100 shares Interest in options: 735,000 options Mr Christopher Gregory BSc Geology, MAusIMM, MAIG, FSEG, MAICD Independent Non-Executive Director since 12/08/2013 Director since 12/08/2013 Chris has extensive global minerals industry experience over 31 years, at both technical and executive levels. Career foundation of 22 years in the Asia-Pacific region with Rio Tinto. Currently consultant GM Australasia, Corporate Development & Exploration, Mandalay Resources (TSX:MND). Other current directorships: None Previous directorships (last 3 years): None Interests in shares: 12,499,900 shares Interest in options: None Mr Albert Pietrzak BE Mechanical Engineering Independent Non-Executive Director Independent Chairman Director since incorporation 24/01/2011. Resigned 8/10/13. Albert has 42 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. For personal use only MRG Metals Ltd Consolidated Financial Statements 30 June 2014 13 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 for 2 years. He has been the company secretary of MRG 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 $5,237,082 (2013 loss $1,070,853). Refer detailed Review of Operations that follows this report. Earnings per share (3.91) cents (2013 (1.21) cents). Further information on the detailed operations of the Group during the year is included in the Review of Operations Report. Significant changes in the state of affairs During the year, tenement applications were made at Yardilla, Xanadu and Loongana and an Option was acquired over tenements at Yardilla. Some tenements at East Yilgarn were relinquished. 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 no further significant events have occurred other than those noted in the Review of Operations Report. 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 K Weston Mr S Turner Mr C Gregory Mr A Pietrzak A 9 9 9 7 2 B 9 9 9 7 2 Where: A is the number of meetings the Director was entitled to attend B is the number of meetings the Director attended For personal use only MRG Metals Ltd Consolidated Financial Statements 30 June 2014 14 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. For personal use only MRG Metals Ltd Consolidated Financial Statements 30 June 2014 15 (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. Mr C Gregory was appointed as Non-executive director on 12 August 2013. Mr. A Pietrzak resigned on 8 October 2013. Mr. A Van Der Zwan replaced Mr. A Pietrzak as Chairman on 8 October 2013. Director and other Key Management Personnel Remuneration Short term employee benefits Cash salary and fees ($) Cash bonus ($) Non- monetary benefits ($) 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 Name Executive director Mr K Weston Non-executive directors Mr A Van Der Zwan Mr S Turner Mr C Gregory Mr A Pietrzak 2014 Total Executive directors Mr K Weston Mr A Van Der Zwan Non-executive directors Mr A Pietrzak Mr S Turner Mr A Van Der Zwan 2013 Total 112,500 57,250 101,157 107,478 12,500 390,885 58,077 88,847 50,000 96,891 19,359 313,174 - - - - - - - - - - - - - - - - - - - - - - - - 8,325 4,779 9,357 3,282 1,156 26,899 5,227 6,510 4,500 8,640 2,242 27,119 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 120,825 62,029 110,514 110,760 13,656 417,784 63,304 95,357 54,500 105,531 21,601 340,293 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil For personal use only MRG Metals Ltd Consolidated Financial Statements 30 June 2014 16 (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 K Weston Mr K Weston – Consultant (1) Mr A Van Der Zwan Mr C Gregory Mr C Gregory - Consultant Mr S Turner - Director Mr S Turner - Secretary Base salary 80,000 50,000 60,000 40,000 72,000 50,000 50,000 Notice period Term of agreement One Month One Year No fixed term Nil Rotation per Corporations Act 2001 Nil Rotation per Corporations Act 2001 Nil No fixed term Nil Rotation per Corporations Act 2001 Nil Nil No fixed term Note (1) – Mr K Weston changed from a base salary of $120,000 to $80,000 plus $750 per day capped at $50,000 for in field geological work effective 1 October 2013. (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 2014. 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. For personal use only MRG Metals Ltd Consolidated Financial Statements 30 June 2014 17 Non-audit services During the previous period, Grant Thornton Audit Pty Ltd, the Group’s auditors, performed no other services in addition to their statutory audit duties. 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 16 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 18 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. Andrew Van Der Zwan Chairman 30 September 2014 Error! No document variable supplied. ABN 41 127 556 389 Error! No document variable supplied.Error! No document variable supplied. 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 2014 18 Grant Thornton Audit Pty Ltd ACN 130 913 594 The Rialto, Level 30 525 Collins St Melbourne Victoria 3000 GPO Box 4736 Melbourne Victoria 3001 T +61 3 8320 2222 F +61 3 8320 2200 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 year ended 30 June 2014, I declare that, to the best of my knowledge and belief, there have been: no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and no contraventions of any applicable code of professional conduct in relation to the audit. GRANT THORNTON AUDIT PTY LTD Chartered Accountants Brad Taylor Partner - Audit & Assurance Melbourne, 30 September 2014 Error! No document variable supplied. ABN 41 127 556 389 Error! No document variable supplied.Error! No document variable supplied. 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 2014 Corporate Governance Statement 19 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 responsibilities of MRG policy Compliance Complies Group's Recommendation 1.2: Companies should disclose the process for the performance of evaluating 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 of the board should be independent directors the 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 a nomination should committee establish Recommendation 2.5: Companies should disclose the process for evaluating the performance of the board, its committees and individual directors The Corporate Governance framework includes a Board Charter, which details the specific the Board and identifies those areas of senior authority delegated executives. The Board will set performance criteria to review the performance of senior management. to The Board Charter is available on the Group's website. is the Chief the Group's Three of four directors, being Andrew Van Der Zwan, Christopher Gregory and Shane Turner, are independent directors. Andrew Van Der Zwan is the Chairman and is an independent director. Andrew Van Der Zwan is the Chairman. Keith Weston Executive Officer. The Group does not currently have a nomination committee. Board appointments will be 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, ensuring an appropriate mix of skills and experience reviewing and individual director's performance. The Chief Executive Officer is the responsible into consideration the Board has reviewing for 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 2014 ASX Corporate Governance Council Recommendation MRG policy Compliance 20 the Company performance of Secretary. This information, where relevant, has been disclosed the Directors’ Report. in the 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: 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 is committed to prepare Diversity and Board review appropriate policy. 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. 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 for achieving gender objectives diversity for the board and to assess annually both the objectives and progress in achieving them Recommendation 3.3: Companies should disclose in each annual report the measurable objectives for achieving gender diversity set by the the board diversity progress and towards achieving them Recommendation 3.4: Companies in each annual should disclose report the proportion of women whole employees organisation, women senior executive positions and women on the board Recommendation 3.5: Companies The Code of Conduct and the Board 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. in accordance with None at present. policy the in in is committed to prepare Diversity and Board review appropriate policy. None at present due to the size of Group. is committed to For personal use only 21 Compliance and review appropriate policy. prepare Diversity The Board does not consider it necessary given the size of the Group's current operations. MRG Metals Ltd Consolidated Financial Statements 30 June 2014 the MRG policy ASX Corporate Governance Council Recommendation should provide information indicated in the Guide to reporting on Principle 3 Principle 4: Safeguard integrity in financial reporting Recommendation 4.1: The board should establish an audit committee diversity policy (once established) will be available on the Group's 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 monitoring and preparing the External reports. financial 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 Refer to comments in 4.1 above. Refer to comments in 4.1 above. Recommendation 4.3: The audit committee should have a formal charter Recommendation 4.4: Companies information should provide 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 ensure and requirements accountability at a senior executive level that compliance and disclose those policies or a summary of those policies Recommendation 5.2: Companies should provide information indicated in the Guide to reporting on Principle 5 Principle 6: Respect the rights of shareholders Recommendation 6.1: Companies The Group is committed to all Complies The Group has established a Continuous Disclosure Policy which applies to all directors and senior management. The Continuous Disclosure Policy will be available on the Group's website. Complies Complies Group's the for to For personal use only 22 MRG policy Compliance MRG Metals Ltd Consolidated Financial Statements 30 June 2014 ASX Corporate Governance Council Recommendation should design a communications for promoting effective policy 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 the to has reported it as effectiveness of the company's management of its material business risks Recommendation 7.3: The board should disclose whether it has 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 that shareholders stakeholders and having equal and timely access to 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 any) the best practice 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 require that Keith Weston, 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 Keith Weston as Chief Executive Officer. Complies For personal use only 23 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 ASX Corporate Governance Council Recommendation Recommendation 7.4: Companies information should provide indicated in the Guide to reporting on Principle 7 the MRG policy The Group will provide an explanation of any departures (if any) the best practice recommendations in Principle 7 in its future annual reports. from Compliance Complies 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 management remuneration 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 responsibilities the performance of the Group. Non-executive directors are paid by fees 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 the best practice any) 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 2014 24 Statement of Financial Position As of 30 June 2014 Notes Consolidated Consolidated 2013 $ 2014 $ Assets Current Cash and cash equivalents Other receivables Total current assets Non-current Plant & Equipment Exploration & Evaluation Option Intangibles Total non-current assets Total assets Liabilities Current Trade and other payables Total current liabilities Total liabilities Net assets Equity Share capital Retained earnings Total equity 8 7 11 12 13 14 10 1,238,917 70,618 1,309,535 3,110,575 116,295 3,226,870 - 6,634,422 75,000 1,021,750 7,731,172 9,040,707 368 8,665,546 - 2,043,500 10,709,414 13,936,284 64,822 64,822 64,822 8,975,885 153,317 153,317 153,317 13,782,967 9 16,364,536 (7,388,651) 15,934,536 (2,151,569) 8,975,885 13,782,967 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 2014 25 Statement of Profit or Loss and other Comprehensive Income for the year ended 30 June 2014 Revenue Employee benefits expense Administrative expenses Amortisation/Depreciation expenses Exploration/Tenements W/off 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 2014 $ Consolidated 2013 $ 5 15 17 127,545 (417,784) (733,874) (1,022,118) (3,190,851) (5,237,082) - (5,237,082) - 182,654 (330,231) (475,854) - (447,422) (1,070,853) - (1,070,853) - (5,237,082) (1,070,853) Cents Cents (3.91) (3.91) (1.21) (1.21) 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 2014 Statement of Changes in Equity for the year ended 30 June 2014 26 Share Capital $ Retained earnings $ Total equity $ Balance at 30 June 2012 7,384,536 (1,080,716) 6,303,820 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 - (1,070,853) (1,070,853) 8,550,000 - 8,550,000 - - - 8,550,000 - 8,550,000 Balance at 30 June 2013 15,934,536 (2,151,569) 13,782,967 Balance at 30 June 2013 15,934,536 (2,151,569) 13,782,967 Other Comprehensive Income Loss after income tax expense for the period - (5,237,082) (5,237,082) Transactions with owners Issue of share capital Less capital raising costs Total transactions with owners 430,000 - 430,000 - - - 430,000 - 430,000 Balance at 30 June 2014 16,364,536 (7,388,651) 8,975,885 This statement should be read in conjunction with the notes to the financial statements. For personal use only 27 27 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 Statement of Cash Flows for the year ended 30 June 2014 Operating activities Interest received Sale of Data 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 financing activities Notes Consolidated Consolidated 2013 $ 2014 $ 18 137,945 55,000 (1,167,344) (974,399) (974,399) - (897,259) (897,259) - - - 114,279 - (871,652) (757,373) (757,373) - (494,789) (494,789) - - - Net change in cash and cash equivalents (1,871,658) (1,252,162) Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year 8 3,110,575 1,238,917 4,362,737 3,110,575 This statement should be read in conjunction with the notes to the financial statements. For personal use only 28 28 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 Notes to the consolidated financial statements Nature of operations 1 The activities of MRG Metals Ltd and its subsidiaries, MRG Metals (Australia) Pty Ltd and MRG Metals (Exploration) 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 2014 were approved and authorised for issue by the board of directors on 30 September 2014 (see note 26). Changes in accounting policies Overall considerations 3 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 Standard /Interpretation Effective for annual reporting periods beginning on or after AASB 9 Financial Instruments AASB 2012-3 Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities 1 January 2018 1 January 2014 Expected to be initially applied in the financial year ending 30 June 2019 30 June 2015 Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2014 reporting periods. The Group has assessed that they do not expect a material impact on the financial statements when the above standards are implemented. For personal use only 29 29 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 Summary of accounting policies Overall considerations 4 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. Basis of consolidation 4.3 The Group financial statements consolidate those of the parent company and its subsidiary undertakings drawn up to 30 June 2014. The parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. 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 on an accrual basis using the effective interest method. 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 30 30 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 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. Other Receivables 4.10 Other receivables are recognised at amortised cost, less any impairment. For personal use only 31 31 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 Trade Payables 4.11 These amounts represent liabilities for goods and services provided to 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. Post employment benefits 4.14 The Group provides post employment benefits through various accumulation funds. An accumulation fund is a superannuation fund 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. Contributions to the funds are recognised as an expense in the period that relevant employee services are received. 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. 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. For personal use only 32 32 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 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. 4.17 Significant management judgement in applying accounting policies 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. During the year 2,000,000 shares were issued to a consultant of the Company, Calatos P/L, as approved at the 2013 annual general meeting. For personal use only 33 33 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 4.18 Other intangible assets Recognition of other intangible assets Acquired intangible assets The acquisition of Sasak Resources required the issue of 45,000,000 ordinary shares. The market value of the shares at 26 June 2013, being date transaction was approved at a General Meeting, was $0.19. Hence, total consideration was $8,550,000. The value per the Independent Geologist Report for the tenements acquired was $6,506,500. The balance of consideration of $2,043,500 was attributed to the access to the data mining software of Sasak Technical. The initial access is for two years. Subsequent measurement All intangible assets, including the acquired Technical Services Agreement, are accounted for using the cost model whereby capitalised costs are amortised on a straight-line basis over their estimated useful lives, as these assets are considered finite. Residual values and useful lives are reviewed at each reporting date. In addition, they are subject to impairment testing as described in Note 4.19. The following useful lives are applied: Technical Services Agreement – 2 years Amortisation has been included within depreciation, amortisation and impairment of non-financial assets. When an intangible asset is disposed of, the gain or loss on disposal is determined as the difference between the proceeds and the carrying amount of the asset, and is recognised in profit or loss within other income or other expenses. 4.19 Impairment testing of goodwill, other intangible assets and property, plant and equipment For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. Goodwill is allocated to those cash- generating units that are expected to benefit from synergies of the related business combination and represent the lowest level within the Group at which management monitors goodwill. All individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s or cash-generating unit's carrying amount exceeds its recoverable amount, which is the higher of fair value less costs to sell and value-in- use. To determine the value-in-use, management estimates expected future cash flows from each cash- generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. The data used for impairment testing procedures are directly linked to the Group's latest approved budget, adjusted as necessary to exclude the effects of future reorganisations and asset enhancements. Discount factors are determined individually for each cash-generating unit and reflect management’s assessment of respective risk profiles, such as market and asset-specific risks factors. Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that cash-generating unit. Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit. With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist. An impairment charge is reversed if the cash-generating unit’s recoverable amount exceeds its carrying amount. For personal use only 34 34 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 5 Revenue Interest Sale of Data 6 Segment reporting Consolidated 2014 $ 72,545 55,000 127,545 Consolidated 2013 $ 182,654 - 182,654 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 Interest Prepayments Other 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 2014 $ 50,317 2,975 9,880 7,446 70,618 Consolidated 2013 $ 35,195 68,375 12,725 - 116,295 Consolidated 2014 $ Consolidated 2013 $ 657,568 581,349 1,238,917 44,603 3,065,972 3,110,575 The effective interest rate on short-term bank deposits is 3.62%; these deposits have an average maturity of 120 days. For personal use only 35 35 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 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 28 June 2013 SHARES Total at 30 June 2012 Shares issued and fully paid: Issued to Sasak Resources Vendors Total share capital at 30 June 2013 OPTIONS Total at 30 June 2012 Options issued: Total issued options at 30 June 2013 SHARE CAPITAL Date Issued Details 26 February 2014 20 June 2014 SHARES Total at 30 June 2013 Shares issued and fully paid: Issued to Consultant for services rendered Issued to Tenement Option Vendor Total share capital at 30 June 2014 OPTIONS Total at 30 June 2013 Options issued: Total issued options at 30 June 2014 SHARE CAPITAL Consolidated 2013 $ Quantity 88,166,000 6,958,494 45,000,000 133,166,000 8,550,000 15,508,494 44,007,993 - 44,007,993 426,042 - 426,042 15,934,536 Consolidated 2014 $ Quantity 133,166,000 15,508,494 2,000,000 446,115 135,612,115 44,007,993 - 44,007,993 380,000 50,000 15,938,494 426,042 - 426,042 16,364,536 For personal use only 36 36 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 Dividends 9.2 No dividends were declared or paid during the year. There are no franking credits outstanding at period end. Trade and other payables 10 Trade and other payables recognised in the statement of financial position can be analysed as follows: Current - Trade payables - Tenement acquisition payable - Other payables and accrued expenses 11 Plant and equipment Plant & Equipment Accumulated Depreciation 12 Exploration and evaluation assets Cost as at 30 June 2012 Additions Other exploration costs Relinquishments Cost as at 30 June 2013 Cost as at 30 June 2013 Additions Other exploration costs Relinquishments Cost as at 30 June 2014 Consolidated 2014 $ 23,580 - 41,242 64,822 Consolidated 2013 $ 49,797 50,000 53,520 153,317 Consolidated 2014 $ 1,104 (1,104) - Consolidated 2013 $ 1,104 (736) 368 Consolidated 2013 $ 2,089,540 6,645,853 405,436 (475,283) 8,665,546 Consolidated 2014 $ 8,665,546 43,895 1,099,034 (3,174,053) 6,634,422 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 37 37 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 Option 13 The company entered into an Option Agreement on 23 June 2014 for the right to acquire tenements adjacent to its Yardilla tenement in the South Fraser Range area of Western Australia. The cost of the Option was $75,000 ($25,000 cash and $50,000 shares). The Option gives the company the right to acquire the tenements within 2 years for $100,000 of shares in the Company. Upon decision to mine, another $500,000 of shares in the Company are payable. Intangibles 14 The acquisition of Sasak Resources required the issue of 45,000,000 ordinary shares. The market value of the shares at 26 June 2013, being date transaction was approved at a General Meeting, was $0.19. Hence, total consideration was $8,550,000. The value per the Independent Geologist Report for the tenements acquired was $6,506,500. The balance of consideration of $2,043,500 was attributed to the access to the data mining software of Sasak Technical. The initial access is for two years. Intangibles Accumulated Amortisation Consolidated 2014 $ 2,043,500 (1,021,750) 1,021,750 Consolidated 2013 $ 2,043,500 - 2,043,500 Income tax expense 15 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: Profit/(loss) before tax Expected tax expense/(benefit) @ 30% Adjustment for non-deductible expenses: - Movement in accruals - Movement in provisions - Exploration and evaluation expenses Adjustment for non-assessable income: - Movement in other receivables Current period tax loss not recognised Deferred tax expense: - Temporary differences - Unused tax losses Deferred tax assets not recognised Consolidated 2014 $ (5,237,082) (1,571,125) Consolidated 2013 $ (1,070,853) (321,256) (3,683) - (329,710) 13,703 (1,890,815) 1,890,815 (319,690) 1,890,815 1,571,125 5,256 (3,019) (102,811) (20,512) (442,342) 442,342 (121,086) 442,342 321,256 The above potential tax benefit has not be recognised as the recovery is uncertain. For personal use only MRG Metals Ltd Consolidated Financial Statements 30 June 2014 The carry forward tax loss at 30 June 2014 was $5,126,115. 38 38 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. - - 16 Auditor remuneration Audit services Auditors of MRG Metals Ltd – Grant Thornton - Audit of the financial report Audit services remuneration Other services Total other service remuneration Total Auditor’s remuneration Consolidated 2014 $ Consolidated 2013 $ 42,400 42,400 - 42,400 39,500 39,500 - 39,500 Earnings per share 17 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: 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 2014 $ (5,237,082) 133,860,709 133,860,709 Consolidated 2013 $ (1,070,853) 88,535,863 88,535,863 (3.91) cents (3.91) cents (1.21) cents (1.21) 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. For personal use only 39 39 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 18 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: Amortisation/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 Related party transactions 19 The Parent entity is MRG Metals Ltd. Consolidated 2014 $ Consolidated 2013 $ (5,237,082) (1,070,853) 1,022,118 3,156,404 - 42,832 2,845 38,495 (974,399) 368 304,889 (10,062) (59,134) (12,725) 90,144 (757,373) MRG Metals Ltd owns 100% of the shares of MRG Metals (Australia) Pty Ltd. MRG Metals Ltd owns 100% of the shares of MRG Metals (Exploration) Pty Ltd. MRG Metals (Australia) Pty Ltd and MRG (Exploration) own the mining tenements and have 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. Transactions with related parties 19.1 The following transactions occurred with related parties: Payment for goods and services: 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 $39,000 (2013 $40,800). 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. For personal use only 40 40 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 19.2 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. Equity instruments held by KMP 19.3 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: Year ended 30 June 2013 Balance at start of year - 2,160,000 2,130,000 1,470,000 Received on exercise - - - - Other changes - - - - Additions 100,000 120,000 50,000 61,600 Weston Van Der Zwan Pietrzak Turner Held at the end of the reporting period 100,000 2,280,000 2,180,000 1,531,600 5,760,000 331,600 - - 6,091,600 Year ended 30 June 2014 Balance at start of year 100,000 2,280,000 1,531,600 12,249,900 Received on exercise - - - - Other changes - - - - Additions - 95,000 62,500 200,000 Weston Van Der Zwan Turner Gregory Held at the end of the reporting period 100,000 2,375,000 1,594,100 12,449,900 16,161,500 357,500 - - 16,519,000 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 2013 Balance at start of year - 1,080,000 1,065,000 735,000 Deleted on exercise - - - - Other changes - - - - Additions - - - - Weston Van Der Zwan Pietrzak Turner Held at the end of the reporting period - 1,080,000 1,065,000 735,000 2,880,000 - - - 2,880,000 For personal use only 41 41 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 Year ended 30 June 2014 Balance at start of year - 1,080,000 735,000 - Deleted on exercise - - - - Other changes - - - - Additions - - - - Weston Van Der Zwan Turner Gregory Held at the end of the reporting period - 1,080,000 735,000 - 1,815,000 - - - 1,815,000 Contingent assets and contingent liabilities 20 The Group has no contingent assets or liabilities as at 30 June 2014. 21 Commitments for expenditure Exploration and evaluation: Within 12 months 2014 $ 2013 $ 571,800 1,046,880 571,800 1,046,880 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. 22 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. For personal use only 42 42 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 Foreign currency sensitivity 22.1 To date, all of the Group's transactions have been carried out in Australian Dollars. Interest rate sensitivity 22.2 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 2014, there was $581,349 on deposit at 3.62% (Note 8). An increase/decrease by 30% or 1.09 basis points would have a favourable/adverse effect on profit for the year of $6,313. The percentage change is based on the expected volatility of interest rates using market data and analysts’ forecasts. Credit risk analysis 22.3 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. Liquidity risk analysis 22.4 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 2014 was $1,244,713. 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 2013 Trade and other payables Total 30 June 2014 Trade and other payables Total Current Non current Within 6 months $ 103,317 103,317 6 to 12 months $ - - 1 to 5 years $ - - Later than 5 years $ - - Current Non current Within 6 months $ 64,822 64,822 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. For personal use only 43 43 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 Capital risk management 23 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. Post-reporting date events 24 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. Parent entity information 25 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 2014 $ 2013 $ 1,309,535 9,040,707 64,822 64,822 3,226,870 13,936,284 153,317 153,317 16,364,536 (7,388,651) 8,975,885 15,934,536 (2,151,569) 13,782,967 (5,237,082) (5,237,082) (1,070,853) (1,070,853) 26 Authorisation of financial statements The consolidated financial statements for the year ended 30 June 2014 were approved by the board of directors on 30 September 2014. Andrew Van Der Zwan Chairman Shane Turner Director/Secretary For personal use only 44 44 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 Directors’ declaration 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 2014 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 2014. 3. The consolidated financial statements comply with International Financial Reporting Standards. Signed in accordance with a resolution of the directors: Dated at Melbourne, the 30th day of September 2014 _______________________Andrew Van Der Zwan Director For personal use only MRG Metals Ltd Consolidated Financial Statements 30 June 2014 45 45 Grant Thornton Audit Pty Ltd ACN 130 913 594 The Rialto, Level 30 525 Collins St Melbourne Victoria 3000 GPO Box 4736 Melbourne Victoria 3001 T +61 3 8320 2222 F +61 3 8320 2200 E info.vic@au.gt.com W www.grantthornton.com.au Independent Auditor’s Report To the Members of MRG Metals Limited Report on the financial report We have audited the accompanying financial report of MRG Metals Limited (the “Company”), which comprises the statement of financial position as at 30 June 2014, the statement of profit or loss and other 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 the consolidated entity comprising the Company and the entities it controlled at the year’s end or from time to time during the financial year. Directors’ responsibility for the financial report The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001. The Directors’ responsibility also includes such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. The Directors also state, in the notes to the financial report, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, the financial statements comply with International Financial Reporting Standards. Auditor’s responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require us to comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report. For personal use only 46 46 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 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 Limited is in accordance with the Corporations Act 2001, including: i ii giving a true and fair view of the Company’s and consolidated entity’s financial position as at 30 June 2014 and of their 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. Report on the remuneration report We have audited the remuneration report included in pages 14 to 16 of the directors’ report for the year ended 30 June 2014. 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. For personal use only 47 47 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 Auditor’s opinion on the remuneration report In our opinion, the remuneration report of MRG Metals Limited for the year ended 30 June 2014, complies with section 300A of the Corporations Act 2001. GRANT THORNTON AUDIT PTY LTD Chartered Accountants Brad Taylor Partner - Audit & Assurance Melbourne, 30 September 2014 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies. For personal use only 48 48 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 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 2014. Substantial Shareholders The number of substantial shareholders and their associates are set out below: Shareholder Ottawa Resources P/L Lograr Investments P/L El Gaia Holdings P/L Jolanza P/L Julian Bavin Holdings P/L Number of Shares 17,783,000 12,284,900 12,249,900 12,449,900 8,347,700 Voting Rights Ordinary shares Options Holding 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,000 and over 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 No voting rights Shareholders 6 35 101 190 118 450 There were 16 holders of less than a marketable parcel of ordinary shares. Twenty largest quoted shareholders Ottawa Resources P/L Lograr Investments P/L El Gaia Holdings P/L Jolanza P/L J Powell Julian Bavin HoldingsP/L Australian Executors Trustees Ltd Calatos P/L Hedt Super P/L K Van Der Zwan L, H & T Knight Minico P/L M Bolton B McFarlane & J Charlwood N Fammartino HSBC Custody Nominees (Australia) Ltd UBS Wealth Management Australia Nominees P/L Ordinary Shares Number Held %of quoted shares 10.24 3.88 3.88 3.80 2.95 2.62 2.43 2.33 2.23 2.00 1.97 1.90 1.90 1.70 1.67 1.51 1.46 10,764,000 4,083,300 4,083,300 4,000,050 3,100,000 2,750,100 2,560,000 2,450,000 2,340,000 2,105,000 2,070,000 2,000,000 2,000,000 1,783,000 1,760,000 1,589,500 1,534,000 For personal use only 49 49 1,480,000 1,410,000 1,380,000 55,242,250 1.41 1.34 1.31 52.53 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 Tigerland Investments P/L TRR Investments P/L Rylet P/L Restricted equity securities The following securities are subject to escrow: - - - 446,115 15,000,000 15,000,000 Escrowed until 20 December 2014 Escrowed until 28 June 2015 Escrowed until 28 June 2016 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 J Powell Hedt Super P/L Gulf Country Investments P/L HSBC Custody Nominees (Australia) Ltd RL Staggard & DL Berry Life-Style Connections P/L L, H & T Knight Minico P/L K Van Der Zwan Rylet P/L N Fammartino Bigson P/L Tigerland Investments P/L W Damm Sage Administration P/L TRR Investments P/L A & J Turner P/L 33rd Infinity P/L S Popovic Securities exchange 5,162,000 1,404,500 1,280,000 1,200,000 1,154,750 1,101,000 1,050,000 1,035,000 1,000,000 965,000 940,000 880,000 880,000 700,000 700,000 695,000 690,000 640,000 640,000 640,000 22,757,250 %of quoted options 11.73 3.19 2.91 2.73 2.62 2.50 2.39 2.35 2.27 2.19 2.14 2.00 2.00 1.59 1.59 1.58 1.57 1.45 1.45 1.45 51.71 The Company is listed on the Australian Securities Exchange and options are quoted under the code MRQO. For personal use only 50 50 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 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 East Yilgarn East Yilgarn East Yilgarn East Yilgarn East Yilgarn Loongana Davenport Downs Tenement % Owned 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 E38/2547 E38/2550 E38/2553 E38/2557 E38/2773 E69/3104 EPM19306 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 For personal use only 51 51 MRG Metals Ltd Consolidated Financial Statements 30 June 2014 Corporate Directory Directors & Secretary Andrew Van Der Zwan Non Executive Chairman Keith Weston Managing Director and Chief Executive Officer Christopher Gregory Non Executive Director 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 K & L Gates Level 25, 525 Collins Street, Melbourne VIC 3000 Telephone: +61 3 9205 2000 Fax: +61 3 9205 2055 www.klgates.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 30, 525 Collins 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
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