Annual 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