Annual Report
MRG Metals Ltd
ABN: 83 148 938 532
For the Year ended 30 June 2015
For personal use only 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. New Accounting Standards & Interpretations
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
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For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
Review of Operations
Highlights
3
The year ended 30 June 2015 saw MRG Metals Ltd (“MRG” or “Company”) complete further drilling at Xanadu
and test two deep targets at Loongana and East Yilgarn. Additional IOCG tenements were acquired in western
Queensland, consolidating our holdings in this prospective terrain.
The relationship with the Sasak technology was extended with a Technical Services Agreement and Project
Generation Agreement now in place until September 2017.
A Research and Development (“R & D”) grant of $613K for the 2014 year was received from the Federal
Government's R & D Tax Incentive Scheme in recognition of our technology driven exploration approach.
Approval has been received for another R & D claim of approximately $455K for the 2015 year.
The Company is continuing with the aim of drill testing high potential targets every quarter. An ongoing rigorous
review of our tenements is carried out to determine priorities for further testing or relinquishment. Additional
drilling at Xanadu, prelininary auger testing at Yardilla and geophysical surveys over the Queensland IOCG targets
are planned for the near term.
Projects
XANADU PROJECT
MRG's Xanadu project is located close to the northern margin of the Ashburton Basin, some 4 kms 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 Ltd 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.
A further drill program in May/June 2015 followed up an initial MRG drilling and soil sampling program
completed in 2014. The program focused on extensions to the Cleopatra mineralisation as well as the first holes into
Pertinax Prospect, discovered during the previous year (Figure 1).
Additional results returned from Cleopatra included:
4m @ 3.44 g/t Au from 33m
5m @ 1.70 g/t Au from 50m
Results from the first holes at Pertinax are highly encouraging. They reveal a similar order of multi-element
anomalies to the adjacent Mt Olympus mine, warranting acceleration of drilling and further holes are planned over
this prospect.
An extended soil sampling program commenced to the north east of the Pertinax prospect and easterly extension of
Cleopatra. Both of these areas have been largely ignored by previous explorers. Initial results have revealed
anomalism in both these areas and further infill soil sampling is planned in order to define drill targets.
MRG is confident that the technology driven exploration is the best method to target mineralisation on this
Project and has revitalised our exploration endeavours. MRG will continue to apply the results from
this modelling across the wider Project area to select and prioritise future drill targets.
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
4
Figure 1
LOONGANA PROJECT
MRG’s Loongana Project is located on the Nullarbor Plain, 500kms east of Kalgoorlie and 60kms north of the Trans
Australia railway line (Figure 4). MRG holds 2 granted licences 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 250m
to 350m 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 recently completed drilling its first hole, testing for an 11km long reef style Platinum Group Element ('PGE')
mineralised horizon within the Loongana Layered Complex, based on the PGE anomalous results identified in
historical drilling (Figure 2). These early results are consistent with the low grade “tail” of a Great Dyke (“Main
Sulphide Zone”) or Munni Munni (“Ferguson Reef”) style PGE reef, with the ore-grade part of the reef being
eroded away at the basement unconformity. MRG's drilling was targeted as a step-back on this horizon.
The hole LNDG003 intersected a package of cyclically layered gabbroic rocks, with thin pyroxenitic bases grading
through melanogabbro to mesogabbro. While no olivine cumulates are identified, the geochemical data suggest a Cr
bearing package is developed at the targeted horizon, and contains a 4.5m zone of anomalous PGE’s.
Further PGE exploration will target:
•
•
The PGE reef indicated in previous drilling; and
The top of a potential basal olivine rich package closer to the southern margin of the intrusion.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
5
Figure 2
QUEENSLAND IOCG PROJECTS
With the purchase of Sasak Resources Australia Pty Ltd in June 2013, MRG obtained 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. 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).
A further four IOCG licence applications were acquired during the year, consolidating MRG's holdings. The
applications cover targets identified by Sasak using their in-house predictive analytical targeting techniques. They
cover high potential targets on open ground within the prospective Mount Isa Block, further expanding the
Company’s presence in the area.
MRG's granted licences comprise:
SQUIRREL HILL - EPM19470
The Squirrel Hill Project is located approximately 125 kms SSE of Cloncurry and some 15 kms WNW of the
Cannington mine, operated by South 32.
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 10m to 40m 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.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
6
PULCHERA - EPM19471
Situated in the Simpson Desert near the Northern Territory border in western Queensland EPM19471 is located 135
kms 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 40m to 100m.
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 Project lies 120 kms 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. Future exploration will
comprise focussed drilling of geophysical (magnetic-gravity) anomalies. An exploration co funding grant of $75,000
has been granted by the Queensland government to assist with exploration.
NEW APPLICATIONS
The four new applications are known as Selwyn, Mt Angelay, Obam and Kamileroi.
MRG’s four new applications and its three granted licences are shown on Figure 3 below. These complement our
strategy to apply for ground largely on the margins of the Mount Isa block, where the prospective basement is under
cover and there are exploration opportunities for discoveries via the application of the Sasak technology.
Selwyn and Mt Angelay were granted in September 2015.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
7
Figure 3
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
YARDILLA PROJECT
8
In mid 2014, 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 220sq kms.
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 (Figure 4).
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’s 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.
A program of initial auger sampling is soon to commence as a precursor to RC drilling.
Figure 4
KALGOORLIE EAST PROJECT
The Kalgoorlie East Project is located approximately 8kms east of Kalgoorlie in the Eastern Goldfields of WA, and
consists of 15 prospecting licences covering an area of 17sq kms. This region is highly prospective and hosts a
number of large gold and silver deposits, including the Kalgoorlie Super Pit (>50 million oz Au) 7kms 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
(Figure 5).
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.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
9
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 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 MRG’s tenements. The spatial association between these NE faults and gold in soil
anomalies form a primary exploration target.
Limited exploration occurred on the project during the year. Recently acquired geophysical data was incorporated in
the Sasak predictive models, which has enhanced our understanding of controls on mineralisation. Our focus has
turned to the Balagundi satellite project, where further holes are planned to test the strike extension of mineralisation
found in our initial drilling.
Figure 5
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
FRASER RANGE PROJECT
10
The licence applications that comprise this Project are still awaiting grant, whilst the status of exploration in the
Dundas Nature Reserve is being resolved. Refer Figure 4.
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 was 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.
Drilling on MRG's East Yilgarn Project during October 2014 was challenging due to the remoteness of
the project and issues with water, either a lack thereof or strong inflows.
Archean Rocks were confirmed to be present, albeit at greater depths than anticipated. However, no
significant ore grade intercepts were returned from the drilling.
The Company carries out ongoing rigorous reviews of its tenements. Upon review, it was difficult to
justify any additional holes on this Project and it was determined to relinquish the tenements in August
2015 on their renewal anniversary.
ACTIVITIES AND HIGHLIGHTS SINCE 30 JUNE 2015
The remaining East Yilgarn tenements were relinquished in August 2015.
Two new QLD IOCG tenements have been granted in September 2015, Selwyn and Mt Angelay.
Successful completion of rights issue of Options in September 2015, raising $704,081.
Approval received for claiming a Research and Development Tax Refund for the 2015 year of approximately
$455,000.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
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 2015 and the Independent
Auditor’s 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 28 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
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
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:
1,652,900 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
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.
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
13
Review of operations and financial results
The operating result of the Group for the year ended was a loss of $4,453,036 (2014 loss $5,237,082). Refer detailed
Review of Operations that follows this report.
Earnings per share (3.28) cents (2014 (3.91) 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, 4 tenement applications were acquired over QLD IOCG targets.
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
A
10
10
10
10
B
10
10
10
10
Where:
A is the number of meetings the Director was entitled to attend
B is the number of meetings the Director attended
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
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Consolidated Financial Statements
30 June 2015
14
(a) Principles used to determine the nature and amount of remuneration
The principles of the Group’s executive strategy and supporting incentive programs and frameworks are:
To align rewards to business outcomes that deliver value to shareholders;
To drive a high performance culture by setting challenging objectives and rewarding high performing
individuals; and
To ensure remuneration is competitive in the relevant employment market place to support the attraction,
motivation and retention of executive talent.
MRG Metals Ltd has structured a remuneration framework that is market competitive and complementary to the
reward strategy of the Group.
The Board, in accordance with its charter as approved by the Board, is responsible for determining and reviewing
compensation arrangements for the directors and the executive team.
The remuneration structure that has been adopted by the Group consists of the following components:
Fixed remuneration being annual salary; and
Superannuation to meet statutory obligations.
The Board assesses the appropriateness of the nature and amount of remuneration on a periodic basis by reference
to recent employment market conditions with the overall objective of ensuring maximum stakeholder benefit from
the retention of a high quality Board and executive team.
The payment of bonuses, share options and other incentive payments are reviewed by the Board annually as part of
the review of executive. All bonuses, options and incentives must be linked to pre-determined performance criteria.
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Consolidated Financial Statements
30 June 2015
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
Non-executive directors
Mr C Gregory
Mr S Turner
Mr A Van Der Zwan
2015 Total
112,500
57,250
101,157
107,478
12,500
390,885
102,243
112,000
100,000
60,000
374,243
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,325
4,779
9,357
3,282
1,156
26,899
7,600
3,800
9,500
5,700
26,600
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
120,825
62,029
110,514
110,760
13,656
417,784
109,843
115,800
109,500
65,700
400,843
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
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
(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 2015.
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.
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
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 2015
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525 Collins St
Melbourne Victoria 3000
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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 Ltd
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead
auditor for the audit of MRG Metals Ltd for the year ended 30 June 2015, I declare that, to
the best of my knowledge and belief, there have been:
a
b
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 2015
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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 MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
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. However, the Company will be required to
provide a statement in its future annual reports disclosing the extent to which it has complied with the
Recommendations.
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.
The Company's Corporate Governance framework
includes a Board Charter, which details the specific
responsibilities of the Board and identifies those
areas of authority delegated to senior executives.
MRG policy
The Company's Board Charter provides
that
appropriate checks should be undertaken before the
appointment of a director.
If checks reveal any information that is relevant ,
then the Company will disclose that information to
Shareholders.
The Company's Board Charter sets provides that all
directors and senior executives, at the time of their
appointment, should execute a written agreement
that sets out the key terms of their appointment.
The Company's Board Charter sets out the role of
the Company Secretary and ensures that the
Company Secretary is accountable to the Board,
through the Chairman.
The Company's Diversity Policy requires the Board
to set out measurable objectives for achieving
gender diversity. The Diversity Policy requires the
Board to annually assess its diversity objectives and
report on the Company's progress in achieving
those objectives. At the end of each reporting
period, the Diversity Policy requires the Company
to report on its progress and set out the respective
proportion of men and women across the whole of
the Company (including their representation in key
management positions)
Recommendation 1.2: Companies should:
-
-
undertake appropriate checks before appointing
a person, or putting forward to security holders
a candidate for election as a director; and
provide security holders with all material
information it its possession relevant to a
decision on whether or not to elect or re-elect a
director.
Recommendation 1.3: Companies should have a
written agreement with each director and senior
executive setting out the terms of their appointment.
Recommendation 1.4: Company Secretaries should
be accountable directly to the Board, through the
Chair, on all matters to do with the proper functioning
of the Board.
Recommendation 1.5: Companies should:
-
-
-
have a diversity policy which includes
requirements for the Board or a relevant
committee of the Board to set measurable
objectives for achieving gender diversity and to
access annually both the objectives and the
progress in achieving them;
disclose the diversity policy or a summary of the
policy;
disclose, at the end of each reporting period, the
measurable objectives for achieving gender
diversity set by the Board or a relevant
committee of the Board, in accordance with the
diversity policy, and its progress towards
achieving them, and either:
-
the respective proportions of men and
women on the Board, in senior executive
positions and across the whole organisation
(including how the company has defined
"senior executive" for these purposes); or
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
ASX Corporate Governance Council
Recommendation
-
if the Company is a "relevant employer"
under the Workplace Gender Equality Act,
the Company's most recent "Gender
Equality Indicators" as defined in and
published under that Act.
Recommendation 1.6: Companies should:
-
-
have and disclose a process for periodically
evaluating the performance of the Board, its
committees and individual directors;
disclose, in relation to each reporting period,
whether a performance evaluation was
undertaken in the reporting period in accordance
with that process.
Recommendation 1.7: Companies should:
-
-
have and disclose a process for periodically
evaluating the performance of its senior
executives; and
disclose, in relation to each reporting period,
whether a performance evaluation was
undertaken in the reporting period in accordance
with that process
Principle 2: Structure the board to add value
Recommendation 2.1: Companies should:
-
have a nominations committee which:
-
has at least three members, a majority of
whom are independent directors; and
is chaired by an independent director.
-
The Company should disclosed:
-
-
-
The charter of the nomination committee;
The members of the nomination committee; and
as at the end of each reporting period, the
number of times the nomination committee met
through the period and the individual
attendances of the members at those meetings;
or
the Company does not have a nomination
if
committee disclose, that fact, and the process it
employs to address Board successions issues and to
ensure that the Board has appropriate balance of skills
knowledge, experience, independence and diversity to
enable it to discharge its duties and responsibilities
effectively
Recommendation 2.2: Companies should have and
disclose a Board skills matrix setting out the mix of
skills and diversity that the Board currently has or is
looking to achieve in its membership.
Recommendation 2.3: Companies should disclose:
20
MRG policy
The Company Secretary plays an integral role in
monitoring the conduct and activities of Board,
ensuring the Board has an appropriate mix of skills
and experience and reviewing individual director's
performance.
The Chief Executive Officer is responsible for
reviewing
the Company
Secretary.
the performance of
The Chief Executive Officer is responsible for
reviewing the individual performance of senior
executives.
The Company does not currently have a nomination
committee. The Board does not consider it
necessary given the size of the Company's current
operations. Board appointments will be decided by
the Board as a whole, taking into consideration the
needs of the Company at the relevant time. Where
the Company considers there is a need to review the
skills and competencies of the existing Directors
and to supplement that experience, the Company
would consider engaging appropriately qualified
third parties to assist with the review. The
Company's Board Charter requires the Board to
develop
future
plans
succession
management of the Company.
the
for
The Company's Board Charter sets out
the
directors' obligations to prepare and disclose a
Board skills matrix.
The Company's Board Charter sets out
the
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
ASX Corporate Governance Council
Recommendation
MRG policy
21
-
-
-
the names of directors considered by the Board
to be independent directors;
If a director has an interest, position, association
or relationship of a type set out in Box 2.3 of the
Third Edition of the Recommendations, but the
Board is of the opinion that it does not
compromise the independence of the director,
the nature of the interest, position, association
or relationship in question and an explanation of
why the Board is of that opinion; and
the length of service of each director.
Recommendation 2.4: The majority of the Board of
a Company should be independent directors.
Recommendation 2.5: The Chairman of the Board
should be an independent director and, in particular,
should not be the same person as the CEO of the
Company.
Recommendation 2.6: Companies should have a
program for inducting new directors and provide
appropriate professional development opportunities
for directors to develop and maintain the skills and
knowledge needed to perform their role as directors
effectively.
directors' obligations in relation to conflicts of
interests and the disclosure requirements of the
Board.
Three of the Company's four directors, being Chris
Gregory, Andrew Van Der Zwan and Shane
Turner, are independent directors.
Andrew Van Der Zwan, an independent director, is
the Chairman of the Board and Keith Weston is the
CEO of the Company.
The Company's Board Charter requires the Board
to implement an induction procedure to assist newly
appointed directors to gain an understanding of the
Company's polices and procedures. In addition, the
Board Charter requires the Board to develop
continuing education opportunities in order to
provide the directors with the ability to enhance
their skills.
Principle 3: Promote ethical and responsible decision making
Recommendation 3.1: Companies should:
-
-
have a code of conduct for its directors, senior
executives and employees; and
disclose that code or a summary of it.
The Board has established a Code of Conduct as to
the practices necessary to maintain confidence in
the Company's integrity, practices necessary to take
into account the Company's legal obligations and
the reasonable expectations of shareholders and the
responsibility and accountability of individuals for
reporting and investigating reports of unethical
practices.
The Code of Conduct will be available on the
Company's website.
The Company does not currently have an audit
committee. The Board does not consider it
necessary given the size of the Company's current
operations. 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 primarily responsible
for monitoring and preparing the financial reports.
External resources will be commissioned where
necessary.
The Company's process and practices comply with
the Recommendation. In particular, the CEO of the
Company provides a declaration in relation to the
Principle 4: Safeguard integrity in financial reporting
Recommendation 4.1: The Board should establish an
audit committee. If the Company does not have an
audit committee, disclose that fact, and the process it
employs to independently verify and safeguard the
integrity of its corporate reporting, including the
process for the appointment and removal of the
external auditor and the rotation of the audit
engagement partner.
Recommendation 4.2: The Board should, before it
approves the company’s financial statements for a
financial period, receive from its CEO and CFO a
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
22
the
ASX Corporate Governance Council
Recommendation
declaration that, in their opinion, the financial records
of the company have been properly maintained and
that
the
appropriate accounting standards and give a true and
fair view of the financial position and performance of
the company and that the opinion has been formed on
the basis of a sound system of risk management and
internal control which is operating effectively.
financial statements comply with
Recommendation 4.3: Companies that have AGMs
should ensure that their external auditors attend their
AGMs and are available to answer questions from
security holders relevant to the audit
Principle 5: Make timely and balanced disclosure
Recommendation 5.1: Companies should:
-
-
have a written policy for compliance with its
continuous disclosure obligations under the
ASX Listing Rules; and
disclose that policy or a summary of it.
Principle 6: Respect the rights of shareholders
Recommendation 6.1: Companies should provide
information about
to
itself and
investors via its website.
Recommendation 6.2 Companies should design and
implement an investor relations program to facilitate
effective two-way communication with investors.
its governance
Recommendation 6.3: Companies should disclose
the policies and processes it has in place to facilitate
and encourage participation at meetings of security
holders
Recommendation 6.4: Companies should give
security holders the option to receive communications
from, and send communications to, the Company and
its security registry electronically.
Principle 7: Recognise and manage risk
Recommendation 7.1: Companies should have a
committee to oversee risk. If a Company does not
have a risk committee, it must disclose that fact, and
the processes it employs for overseeing the Company's
risk management framework.
Recommendation 7.2: Companies should:
-
review their risk management framework at least
annual to satisfy that the continue to be sound;
and
MRG policy
Company's financial statements that, in his opinion,
the financial records of the Company have been
maintained and that the financial statements comply
with appropriate accounting standards and give a
true and fair view of the financial position and
performance of the Company and that the opinion
has been formed on the basis of a sound system of
risk management and internal control which is
operating effectively.
As a matter of practice, the Company invites the
external auditors of the Company to attend the
AGM of the Company. The security holders are
provided with an opportunity to ask questions of
the external auditors at the AGM.
The Company has established a Continuous
Disclosure Policy which applies to all directors and
senior management.
A copy of the Continuous Disclosure Policy has
been made available on the Company's website.
the Board
The Company's Continuous Disclosure Policy
requires the Company to include all of its corporate
governance policies on its websites.
The Company's Board Charter sets out the manner
in which
to
communicate with its shareholders and the manner
in which shareholders can make enquiries to the
Company.
The Company's Board Charter sets out
the
Company's goal to encourage participation at
general meetings.
endeavor
should
The Company's Board Charter addresses the means
to effectively communicate with shareholders.
Given the size of the Company'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
and considers strategies
risk
management arrangements on an ongoing basis. If
considered necessary, external input will be sought
to assess and counteract identified risks.
for appropriate
The Board will require that Keith Weston, as
Managing Director and Chief Executive Officer
the Company's risk
undertakes a review of
management framework annually to ensure that the
framework continues to be sound, and disclose, in
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
ASX Corporate Governance Council
Recommendation
-
disclose in relation to each reporting period,
whether such a review has taken place.
Recommendation 7.3: Companies should:
-
-
if they have an internal audit function, how the
function is structured and what role it performs;
or
if they do not have an internal audit function,
that fact and the process they employ for
evaluating and continually improving
effectiveness of their risk management and
internal control process.
Recommendation 7.4: Companies should disclose
whether they have any material exposure to economic,
environmental and social sustainability risks and, if it
does, how it manages or intends to manage those risk.
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1: The Board should establish a
remuneration committee.
If the Company does not have a remuneration
committee, disclose that fact and the process it
employs for setting the level and composition of
remuneration for directors and senior executives and
ensure that such remuneration is appropriate and not
excessive.
Recommendation 8.2: Companies should separately
its policies and practices regarding the
disclose
remuneration of non-executive directors and the
remuneration of executive directors and other senior
executives.
23
MRG policy
relation to each reporting period, whether such a
review has taken place.
that
formed
the view
Given the size of the Company's current operations,
the Board has
the
appointment of an internal auditor is not necessary.
The Board will oversee the risk management and
internal control process. If considered necessary,
external input will be sought to assess and review
risk
the
management and internal control process.
the Company's
effectiveness
of
The Board will be responsible for disclosing
whether the Company has any material exposure to
economic, environmental and social responsibility
risks and, if it does, how it intends to manage those
risks.
in
relation
the size of
recommendations
it necessary given
The Company does not currently have a
remuneration committee. The Board does not
consider
the
Company's current operations. The Board is
responsible for making recommendations regarding
director and management remuneration packages.
The Company's Board Charter sets out
the
principles that should be considered by the Board in
making
to
management remuneration packages.
The Board
is aware of the need to ensure
remuneration remains competitive and consistent
with competitor companies and that remuneration
reflects the performance of the Company over time.
The directors performing an executive role are
their
remunerated based on
responsibilities and
the
Company.
Non-executive directors are paid fees as determined
by shareholders.
The Company will provide the requisite disclosure
regarding executive remuneration policies in its
annual report.
the performance of
scope of
the
Recommendation 8.3: Companies which have equity
based remuneration schemes should:
-
-
have a policy on whether participants are
permitted to enter into transactions (whether
through the use of derivatives or otherwise)
which limit the economic risk of participating in
the scheme; and
disclose the policy or a summary of it.
The Share Trading Policy of the Company prohibits
employees of the Company from entering into any
transaction which would have the effect of hedging
or otherwise transferring to any person the risk of
any fluctuation in the value of any unvested
entitlement in the Company.
The Board actively monitors the Company's governance framework, related practices and overall culture.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
Statement of Financial Position
As of 30 June 2015
24
Notes
Consolidated Consolidated
2014
$
2015
$
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
410,139
625,637
1,035,776
1,238,917
70,618
1,309,535
-
3,960,509
75,000
-
4,035,509
5,071,285
-
6,634,422
75,000
1,021,750
7,731,172
9,047,707
548,436
548,436
548,436
4,522,849
64,822
64,822
64,822
8,975,885
9
16,364,536
(11,841,687)
16,364,536
(7,388,651)
4,522,849
8,975,885
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 2015
25
Statement of Profit or Loss and other
Comprehensive Income
for the year ended 30 June 2015
Revenue
Research & Development Incentive
Government Drilling Grants
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
5
15
17
Consolidated
2015
$
Consolidated
2014
$
24,039
1,068,730
198,900
(400,843)
(599,520)
(1,021,750)
(3,722,592)
(4,453,036)
-
(4,453,036)
-
127,545
-
-
(417,784)
(733,874)
(1,022,118)
(3,190,851)
(5,237,082)
-
(5,237,082)
-
(4,453,036)
(5,237,082)
Cents
Cents
(3.28)
(3.28)
(3.91)
(3.91)
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 2015
Statement of Changes in Equity
for the year ended 30 June 2015
26
Share
Capital
$
Retained
earnings
$
Total
equity
$
Balance at 30 June 2014
16,364,536
(7,388,651)
8,975,885
Other Comprehensive Income
Loss after income tax expense for the period
-
(4,453,036)
(4,453,036)
Balance at 30 June 2015
16,364,536
(11,841,687)
4,522,849
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
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
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
Statement of Cash Flows
for the year ended 30 June 2015
Operating activities
Interest received
Sale of Data
Research & Development Incentive
Government Drilling Grants
Payments to suppliers and employees
Net cash from continuing operations
Net cash used in operating activities
Investing activities
Payment for exploration & evaluation
Net cash used in investing activities
Financing activities
27
Notes
Consolidated Consolidated
2014
$
2015
$
24,433
-
613,373
112,500
(1,079,338)
(329,032)
(329,032)
137,945
55,000
-
-
(1,167,344)
(974,399)
(974,399)
18
(499,746)
(499,746)
(897,259)
(897,259)
-
-
Net change in cash and cash equivalents
(828,778)
(1,871,658)
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
8
1,238,917
410,139
3,110,575
1,238,917
This statement should be read in conjunction with the notes to the financial statements.
For personal use only
28
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
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 2015 were approved and authorised for
issue by the board of directors on 30 September 2015 (see note 26).
3
New Accounting Standards and Interpretations not yet mandatory or early
adopted
A number of new standards, amendments to standards and interpretations are effective for annual
periods beginning after 1 July 2015. Those which may be relevant to the group are set out below. The
group does not plan to adopt these standards early.
AASB 9 Financial Instruments and Amendments to Australian Accounting Standards arising from AASB 9
(AASB 2009-11, AASB 2010-7, AASB 2014-7, AASB 2014-8). The new standard and amendments
which become mandatory for the Group’s 2019 financial statements could change the classification
and measurement of financial assets and financial liabilities. The new standards are not expected to
have significant impact on the financial statements.
AASB 2015-1 Amendments to Australian Accounting Standards – Annual Improvements to Australian
Accounting Standards 2012-2014 Cycle. The amendments relate to IFRS 5, IFRS 7, IAS 19 and IAS 34.
The amendments are mandatory for application from 1 January 2016 and are not expected to have
a significant impact on the Group’s financial statements.
AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB
101. The amendments are intended to ensure entities are able to use judgement when applying a
standard in determining what information to disclose in their financial statements. The
amendments apply for periods beginning on or after 1 January 2016. The amendments are not
expected to have a significant impact on the Group’s financial statements.
AASB 2015-3 Amendments to Australian Accounting Standards arising from the withdrawal of AASB 1031
Materiality. The amendments affect the withdrawal of AASB 1031 and are applicable for the period
beginning on or after 1 July 2015. The amendments are not expected to have a significant impact
on the Group’s financial statements.
AASB 2014-3 Amendments to Australian Accounting Standards – Accounting for Acquisitions of Interests in
Joint Operations Amendments. The amendments require business combination accounting to be
applied to acquisitions of interests in a joint operation that meet the definition of a business. The
amendments will become mandatory for the Group’s 2017 financial statements and are not
expected to have significant impact on the financial statements.
AASB 15 Revenue from Contracts with Customers and AASB 2014-5 Amendments to Australian Accounting
Standards arising from AASB 15. AASB 15 applies to contracts with customers and presents two
For personal use only 29
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
approaches to revenue recognition as well as enhanced disclosure requirements. Application of
AASB 15 will be mandatory for years beginning on or after 1 July 2017. The new standard is not
expected to have significant impact on the financial statements unless the Group commences
operations which may result in customer contracts.
AASB 2014-4 Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of
Depreciation and Amortisation clarifies that a revenue basis for depreciating property plant and
equipment cannot be used and introduces a rebuttable presumption that use of revenue based
amortisation methods for intangible assets is inappropriate. Amendments have an effective date of
1 January 2016 and are not expected to have a significant impact on the Group’s financial
statements.
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 2015. 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.
4.5
Interest income is recognised on an accrual basis using the effective interest method.
Revenue
Operating expenses
4.6
Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their
origin.
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
30
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.
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.
4.10
Other Receivables
For personal use only
31
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
Other receivables are recognised at amortised cost, less any impairment.
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.
4.14
The Group provides post employment benefits through various accumulation funds.
Post employment benefits
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.
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.
For personal use only
32
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
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/Tax losses
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.
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.
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.
Share based payments
The Group measures the cost of share based payments at fair value at the issue date.
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 and this expired
in June 2015.
For personal use only
33
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
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.
4.20 Government incentives and grants
Government incentives and grants comprise assistance by the Government in the form of transfers of
resources to the Group in return for past or future compliance with certain conditions relating to the
activities of the Group. Government incentives and grants are recognised when there is reasonable
assurance that the Group will comply with the conditions attaching to them and the grants will be
received.
Government incentives and grants are recognised in profit or loss on a systematic basis over the periods
in which expenses are recognised for the related costs for which grants are intended to compensate.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
5
Revenue
Interest
Sale of Data
6
Segment reporting
34
Consolidated
2015
$
24,039
-
24,039
Consolidated
2014
$
72,545
55,000
127,545
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
Government Drilling Grant receivable
Research & Development Incentive receivable
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
2015
$
57,598
2,581
7,739
95,040
455,357
7,322
625,637
Consolidated
2014
$
50,317
2,975
9,880
-
-
7,446
70,618
Consolidated
2015
$
Consolidated
2014
$
325,722
84,417
410,139
657,568
581,349
1,238,917
The effective interest rate on short-term bank deposits is 3.60%; these deposits have an average maturity
of 365 days.
For personal use only
35
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
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
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
Total issued options at 30 June 2014
SHARE CAPITAL
Date Issued
Details
SHARES
Total at 30 June 2014
Total share capital at 30 June 2015
OPTIONS
Total at 30 June 2014
Total issued options at 30 June 2015
SHARE CAPITAL
Quantity
Consolidated
2014
$
133,166,000
15,508,494
2,000,000
446,115
135,612,115
44,007,993
44,007,993
Quantity
135,612,115
135,612,115
44,007,993
44,007,993
380,000
50,000
15,938,494
426,042
426,042
16,364,536
Consolidated
2015
$
15,938,494
15,938,494
426,042
426,042
16,364,536
Dividends
9.2
No dividends were declared or paid during the year. There are no franking credits outstanding at period
end.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
Trade and other payables
10
Trade and other payables recognised in the Statement of Financial Position can be analysed
as follows:
36
Current
-
- Other payables and accrued expenses
Trade payables
11
Plant and equipment
Plant & Equipment
Accumulated Depreciation
12
Exploration and evaluation assets
Cost as at 30 June 2013
Additions
Other exploration costs
Relinquishments
Cost as at 30 June 2014
Cost as at 30 June 2014
Additions
Other exploration costs
Relinquishments
Cost as at 30 June 2015
Consolidated
2015
$
448,084
100,352
548,436
Consolidated
2014
$
23,580
41,242
64,822
Consolidated
2015
$
1,104
(1,104)
-
Consolidated
2014
$
1,104
(1,104)
-
Consolidated
2014
$
8,665,546
43,895
1,099,034
(3,174,053)
6,634,422
Consolidated
2015
$
6,634,422
10,422
577,819
(3,262,154)
3,960,509
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.
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. As of 30 June 2015 this Option has not yet
been exercised.
For personal use only 37
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
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, which expired
in June 2015.
Intangibles
Accumulated Amortisation
Consolidated
2015
$
2,043,500
(2,043,500)
-
Consolidated
2014
$
2,043,500
(1,021,750)
1,021,750
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
- 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
2015
$
(4,453,036)
(1,335,911)
Consolidated
2014
$
(5,237,082)
(1,571,125)
17,733
(173,346)
(1,387)
(1,492,911)
(1,492,911)
(157,000)
1,492,911
1,335,911
(3,683)
(329,710)
13,703
(1,890,815)
(1,890,815)
(319,690)
1,890,815
1,571,125
The above potential tax benefit has not be recognised as the recovery is uncertain.
The carry forward tax losses at 30 June 2015 were $8,703,799.
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.
-
-
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
16
Auditor remuneration
Audit services
Auditors of MRG Metals Ltd – Grant Thornton
- Audit of the financial report
Audit services remuneration
Other services
Total Auditor’s remuneration
38
Consolidated
2015
$
Consolidated
2014
$
42,913
42,913
-
42,913
42,400
42,400
-
42,400
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
2015
$
(4,453,036)
135,612,115
135,612,115
Consolidated
2014
$
(5,237,082)
133,860,709
133,860,709
(3.28) cents
(3.28) cents
(3.91) cents
(3.91) 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
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
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 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
19
The Parent entity is MRG Metals Ltd.
Related party transactions
39
Consolidated
2015
$
Consolidated
2014
$
(4,453,036)
(5,237,082)
1,021,750
3,173,659
(557,160)
2,141
483,614
(329,032)
1,022,118
3,156,393
42,832
2,845
38,495
(974,399)
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) Pty Ltd own the mining tenements and have
no other Assets or Liabilities.
The Group's related parties include its key management and others as described in Note 19.2.
Unless otherwise stated, none of the transactions incorporate special terms and conditions and no
guarantees were given or received.
19.1
The following transactions occurred with related parties:
Transactions with related parties
Payment for goods and services:
The Group used the accounting and taxation services of RSM Bird Cameron, an entity associated with
Mr. Turner. The amounts billed were based on normal market rates and amounted to $58,000 (2014
$39,000).
Receivable from and payable to related parties
There were no trade receivable from or trade payables to related parties.
Loans to/from related parties
There were no loans to or from related parties at the reporting date.
Terms and conditions
All transactions are made on normal commercial terms and conditions and at market rates.
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.
For personal use only
40
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
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 2014
Key
Management
Person
Weston
Van Der Zwan
Turner
Gregory
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
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
Year ended 30 June 2015
Key
Management
Person
Weston
Van Der Zwan
Turner
Gregory
Balance at
start of
year
100,000
2,375,000
1,594,100
12,449,900
Received
on
exercise
-
-
-
-
Other
changes
-
-
-
-
Additions
-
-
58,800
-
Held at
the end of
the
reporting
period
100,000
2,375,000
1,652,900
12,449,900
16,519,000
58,800
-
-
16,577,800
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 2014
Key
Management
Person
Weston
Van Der Zwan
Turner
Gregory
Balance
at start of
year
-
1,080,000
735,000
-
1,815,000
Deleted
on
exercise
-
-
-
-
Other
changes
-
-
-
-
Additions
-
-
-
-
Held at
the end of
the
reporting
period
-
1,080,000
735,000
-
-
-
-
1,815,000
For personal use only
41
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
Year ended 30 June 2015
Key
Management
Person
Weston
Van Der Zwan
Turner
Gregory
Balance
at start of
year
-
1,080,000
735,000
-
1,815,000
Deleted
on
exercise
-
-
-
-
Other
changes
-
-
-
-
Additions
-
-
-
-
Held at
the end of
the
reporting
period
-
1,080,000
735,000
-
-
-
-
1,815,000
Contingent assets and contingent liabilities
20
The Company has identified potential stamp duty implications associated with the acquisition of MRG
Metals (Exploration) Pty Ltd (formerly Sasak Resources Pty Ltd). The Company has made a submission
to the Western Australian Office of State Revenue to determine whether any stamp duty is payable on
the acquisition of the tenements of MRG Metals (Exploration) Pty Ltd. The Directors estimate that if
the stamp duty is assessable, the Company's liability will be approximately $300,000.
21
Commitments for expenditure
Exploration and evaluation:
Within 12 months
2015
$
417,540
417,540
2014
$
571,800
571,800
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
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
22.1
To date, all of the Group's transactions have been carried out in Australian Dollars.
Foreign currency sensitivity
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 2015, there was $84,417 on deposit at 3.60% (Note 8).
An increase/decrease by 30% or 1.08 basis points would have a favourable/adverse effect on profit for
the year of $912. 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 2015 was $487,340.
In addition, $704,081 was raised in September 2015. 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 2014
Trade and other payables
Total
30 June 2015
Trade and other payables
Total
Current
Non current
Within 6
months
$
64,822
64,822
6 to 12
months
$
-
-
1 to 5 years
$
-
-
Later than 5
years
$
-
-
Current
Non current
Within 6
months
$
548,436
548,436
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
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
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.
24
Since the end of the year the following significant events have occurred:
Post-reporting date events
The remaining East Yilgarn tenements were relinquished in August 2015.
Two new QLD IOCG tenements have been granted in September 2015, Selwyn and Mt Angelay.
Successful completion of rights issue of Options in September 2015, raising $704,081.
Approval received for claiming a Research and Development Tax Refund for the 2015 year of
approximately $455,000.
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.
25
Information relating to MRG Metals Ltd (‘the parent entity’)
Parent entity information
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
2015
$
2014
$
1,035,776
5,071,285
548,436
548,436
1,309,535
9,040,707
64,822
64,822
16,364,536
(11,841,687)
4,522,849
16,364,536
(7,388,651)
8,975,885
(4,453,036)
(4,453,036)
(5,237,082)
(5,237,082)
Authorisation of financial statements
26
The consolidated financial statements for the year ended 30 June 2015 were approved by the board of
directors on 30 September 2015.
Andrew Van Der Zwan
Chairman
Shane Turner
Director/Secretary
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
Directors’ declaration
44
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 2015 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
2015.
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 2015
_______________________Andrew Van Der Zwan
Director
For personal use only Independent Auditor’s Report
To the Members of MRG Metals Ltd
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
Correspondence to:
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
Report on the financial report
We have audited the accompanying financial report of MRG Metals Ltd (the “Company”),
which comprises the statement of financial position as at 30 June 2015, 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 .
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.
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 In making those risk assessments, the auditor considers internal control relevant to the
Company’s preparation of the financial report that gives a true and fair view in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company’s internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the Directors, as well as evaluating the
overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the
Corporations Act 2001.
Auditor’s opinion
In our opinion:
a
b
the financial report of MRG Metals Ltd is in accordance with the Corporations Act
2001, including:
i
ii
giving a true and fair view of the Company’s financial position as at
30 June 2015 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations
Regulations 2001; and
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 13 to 16 of the directors’ report
for the year ended 30 June 2015. The Directors of the Company are responsible for the
preparation and presentation of the remuneration report in accordance with section 300A of
the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration
report, based on our audit conducted in accordance with Australian Auditing Standards.
Auditor’s opinion on the remuneration report
In our opinion, the remuneration report of MRG Metals Ltd for the year ended
30 June 2015, complies with section 300A of the Corporations Act 2001.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
Brad Taylor
Partner - Audit & Assurance
Melbourne, 30 September 2015
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
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 25 September 2015.
47
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
Number of Shares
18,935,398
12,249,900
12,249,900
12,449,900
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
9
28
105
177
125
444
There were 9 holders of less than a marketable parcel of ordinary shares.
Twenty largest quoted shareholders
Ottawa Resources P/L
Jolanza P/L
Lograr Investments P/L
El Gaia Holdings P/L
Julian Bavin HoldingsP/L
J Powell
Bond Street Custodians Ltd
A Van Der Zwan
Hedt Super P/L
L, H & T Knight
Minico P/L
M Bolton
HSBC Custody Nominees (Australia) Ltd
N Fammartino
S Turner
Australian Executors Trustees Ltd
Tigerland Investments P/L
Rylet P/L
Ordinary Shares
Number Held %of quoted shares
13.96
9.18
9.03
9.03
4.06
2.29
2.03
1.75
1.73
1.53
1.47
1.47
1.39
1.30
1.22
1.17
1.09
1.02
18,935,398
12,449,900
12,249,900
12,249,900
5,500,200
3,100,000
2,749,350
2,375,000
2,340,000
2,070,000
2,000,000
2,000,000
1,889,500
1,760,000
1,652,900
1,580,000
1,480,000
1,380,000
For personal use only 48
1,305,751
1,290,000
90,357,799
0.96
0.95
66.63
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
TRR Investments P/L
A & J Turner P/L
Restricted equity securities
The following securities are subject to escrow:
-
15,000,000
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
RL Staggard & DL Berry
J Powell
Hedt Super P/L
Gulf Country Investments P/L
HSBC Custody Nominees (Australia) Ltd
Life-Style Connections P/L
L, H & T Knight
Minico P/L
W Damm
A Van Der Zwan
Rylet P/L
N Fammartino
Bigson P/L
Tigerland Investments P/L
Sage Administration P/L
TRR Investments P/L
A & J Turner P/L
Notemarl P/L
S Popovic
Securities exchange
3,442,000
1,500,000
1,404,500
1,280,000
1,200,000
1,122,250
1,050,000
1,035,000
1,000,000
1,000,000
965,000
940,000
880,000
880,000
700,000
695,000
690,000
645,000
640,000
640,000
21,708,750
%of quoted
options
7.82
3.41
3.19
2.91
2.73
2.55
2.39
2.35
2.27
2.27
2.19
2.14
2.00
2.00
1.59
1.58
1.57
1.47
1.45
1.45
49.33
The Company is listed on the Australian Securities Exchange and options are quoted under the code
MRQO.
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
Tenements
The Tenements held by the Company at reporting date are as follows:
49
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
Kalgoorlie East
Kalgoorlie East
East Yilgarn
East Yilgarn
East Yilgarn
Loongana
Loongana
Yardilla
Pulchera
Squirrel Hill
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
P26/4015
P26/4016
E38/2547
E38/2550
E38/2553
E69/3104
E69/3288
E28/2368
EPM19471
EPM19470
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
100
100
100
100
For personal use only 50
MRG Metals Ltd
Consolidated Financial Statements
30 June 2015
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
12 Anderson Street West, 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
12 Anderson Street West, Ballarat VIC 3350
PO Box 685, Ballarat VIC 3353
Telephone: +61 3 5330 5800 Fax: +61 3 5333 1667
www.rsmi.com.au
Solicitors
Gadens
Level 25, 600 Bourke Street, Melbourne VIC 3000
Telephone: +61 3 9252 2555 Fax: +61 3 9252 2500
www.gadens.com
Share Registry
Link Market Services Limited
Central Park, Level 4, 152 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
Website: www.grantthornton.com.au
Stock Exchange Listing
ASX Codes: MRQ , MRQO
For personal use only