MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
1
Annual Report
MRG Metals Ltd
ABN: 83 148 938 532
For the Year ended 30 June 2018
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
2
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. Income Tax Expense
14. Auditor Remuneration
15. Earnings per Share
16. Reconciliation of Cash Flows from Operating Activities
17. Related Party Transactions
18. Contingent Assets and Contingent Liabilities
19. Commitments
20. Financial Instrument Risk
21. Capital Risk Management
22. Post-Reporting Date Events
23. Parent Entity Information
24. Authorisation of Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
Corporate Directory
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MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
Review of Operations
Highlights
The year ended 30 June 2018 saw MRG Metals Ltd (“MRG” or “Company”) explore its Swedish joint venture
(“JV”) Norrliden project; enter into an Agreement for a Chinese Resource Company to carry out due diligence on
our Australian projects with potential to then enter into a joint venture and entered into an Agreement to acquire
Mozambique Heavy Mineral Sands projects, subject to conditions precedent which were incomplete at year end.
A Research and Development (“R & D”) grant of $670K for the 2017 year was received from the Federal
Government's Research and Development Tax Incentive Scheme in recognition of our technology driven
exploration approach.
The Company raised $2M via Placements and a Rights Issue.
The Company is now pursuing a sale, together with its Swedish JV Partner, of its equity in its Swedish Norrliden
project. Various of the Company’s projects are subject to due diligence for opportunities of Joint Ventures. The
Company has ceased negotiations to acquire a Mozambique Heavy Mineral Sands project. The Company is reviewing
new project opportunities.
Projects
SWEDEN
Norrliden
On 29 May 2017 MRG Metals entered into a Farm-in Agreement with Mandalay Resources Corporation (Mandalay)
over a Volcanogenic Massive Sulphide project in north east Sweden known as Norrliden. MRG has progressively
advanced this Project since commencement of the Agreement.
It is located in a key position within the central part of the Paleoproterozoic (c. 1890-1870 Ma) Skellefte Belt in
Northern Sweden, 5km to the southeast of Boliden Group’s Maurliden mines, along the main structural corridor and
mineralised trend between Boliden and Malå. There are numerous sulphide deposits, resources and mines within
10km of the Norrliden Project and the district offers huge potential for further new discoveries.
Much of the Skellefte Belt and the majority of the Norrliden Project area is covered by a veneer of recent glacial till
(up to 50m thick). Within the Norrliden JV concessions are three main areas of historical exploration that are the
focus of exploration by MRG; Norrliden Södra, Norrliden Norra & Bjufors. Exploration during the year comprised
several programs of diamond drilling, down hole and surface geophysical testing and most recently, Bottom of Till
(BOT) geochemical sampling via shallow drilling.
Exploration Completed
Diamond drilling during 2018 drilling at Norrliden Södra tested the depth extent of the outcropping mineralisation
and both holes intercepted zones of disseminated and banded sulphide mineralization.
Significant intercepts included:
•
Inc.
NOR17001: 20m @ 1.0g/t Au, 55.3g/t Ag, 0.74% Zn and 0.22% Pb (from 45m)
o
o
8m @ 2.3g/t Au, 130 g/t Ag, 0.46% Zn and 0.21% Pb (from 45m)
8m @ 1.2% Zn, 0.24% Pb, 0.14 g/t Au and 4.6 g/t Ag (from 57m)
NOR17006: 9m @ 0.31g/t Au, 1.88g/t Ag, 0.23 % Zn and 0.06% Pb (from 58m)
•
Inc.
o
3m @ 0.88g/t Au, 4.40g/t Ag, 0.23% Zn and 0.14% Pb (from 58m)
Unfortunately, the drill holes testing the deeper mineralised zones within the Norrliden Norra deposit were
terminated before the target depth was reached, due to failure of the hydraulic system on the drill rig causing them to
be abandoned.
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Consolidated Financial Statements
30 June 2018
4
Figure 1 Project location map showing drill holes and intercepts from Norrliden drilling.
Norrliden Geophysics
Downhole electromagnetic (DHEM) surveying completed subsequent to drilling of NOR17001 identified a late-time
off-hole conductor (500 Siemens) at approximately 65m depth; centered below the hole in a down-dip position.
Modelling suggests the conductor has a depth extent of at least 150m. Further drill testing of the off-hole EM
conductor is planned during the coming year.
In addition, two separate Fixed Loop (FLEM) surveys at the project have been completed. The first survey was
designed to test a zone of structural interest located to the west of the existing mineralisation at both Norra and
Södra. The zone (Norrliden Västra) is where the main east-west shear zone intersects a cross-cutting structure that is
orientated NNE/SSW. No significant results were identified from this survey.
The second survey was designed to test a coincident deep-IP and airborne GeoTEM anomaly located to the
northeast of Norra at the Jungfrutjärnen prospect (refer Figure 1). The deep-IP profile was completed by local
university (LTU) researchers in 2009 and the airborne GeoTEM was completed by previous explorer North Atlantic
Resources (NAN) in 1997 have not previously been followed-up. The FLEM survey at Jungfrutjärnen identified
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Consolidated Financial Statements
30 June 2018
5
multiple conductors, two of which are located at shallow depths and a third deeper at an approximate depth of 200m
below surface. Three drill holes are planned to test these conductors when drilling recommences.
Bottom of Till Geochemistry
Exploration in April 2018 and May 2018 comprised a 58-hole bottom-till geochemical drilling programme (refer
Figure 2). The drilling was designed to test the previously untested corridor between Norra and Södra westwards
towards the adjacent tenement held by S2 Resources Ltd, who previously identified a ~800m long gold geochemical
anomaly within the same corridor.
The BOT drilling successfully identified the Södra mineralised trend across at least four drill traverses for a total strike
length of ~650m; this mineralised trend is anomalous in Au, Ag, As, Pb, Zn and S. In addition to the Södra mineralised
trend anomaly, the BOT drilling also identified three single-point, multi-element anomalies; one anomaly lies
immediately due west of the Norra deposit, one lies on the northern end of the western-most traverse and the third is
located at the southern end of the orientation line. All three single-point anomalies showed elevated levels of Au, Ag,
As, Pb, Zn and S and have been recommended for follow-up drilling in due course.
A single drill traverse served as an orientation line that passed directly over the known mineralisation at Södra and at
Norra. On the orientation line, the upper-till, bottom-till and bedrock samples were assayed using a combination of
assaying methods. The mineralisation at Norra was easily identified in all fractions and in all assay methods, albeit in a
single drillhole. The peak assays for this single drillhole were:
o
o
o
S.
o
Four-acid Bedrock: 0.95% Cu, 0.05g/t Au, 4.23g/t Ag, 119.5ppm As, 23.9ppm Pb, 374ppm Zn and 8.6% S.
Aqua Regia Bedrock: 0.93% Cu, 0.05g/t Au, 4.21g/t Ag, 133ppm As, 22.8ppm Pb, 365ppm Zn and 9% S.
Aqua Regia Upper-Till: 0.92% Cu, 0.16g/t Au, 5.63g/t Ag, 138.5ppm As, 27.2ppm Pb, 152ppm Zn and 5.01%
Ionic Leach Upper-Till: 98400ppb Cu, 27.3ppb Au, 4.2ppb Ag, 32.2ppb As, 9.1ppb Pb, and 40ppb Zn.
Refer to ASX Announcement on 14 September 2018.
Figure 2: Location map showing the recently completed bottom-till geochemical drilling at the Norrliden Project, Sweden.
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Consolidated Financial Statements
30 June 2018
6
Norrliden - Revised Mineral Resource Estimate
Concurrently with exploration at Norrliden, historic drilling data was validated and reviewed leading to a revised
mineral resource estimate for the project. This was released to the market on 13 July 2018, subsequent to the
reporting period. Details of this revised estimate are given below in ‘ACTIVITIES AND HIGHLIGHTS SINCE 30
JUNE 2018’.
MOZAMBIQUE
MRG announced to the Market on 11 April 2018) that it had entered into a binding Heads of Agreement to acquire
Sofala Resources Pty Ltd and Trophosys Pty Ltd, after the completion of due diligence. The due diligence was
successfully completed and subject to formal sale agreements and subsequent MRG shareholder approval, the
acquisitions would have seen MRG holding a 100% interest in the Corridor, Linhuane and Marao/Marucca heavy
mineral sands projects in the extensively endowed Xai Xai and Inhambane Heavy Mineral Sand Provinces of south-
east Mozambique.
Following shareholder and regulatory approval and at settlement of the transaction MRG would:
Reimburse Sofala loans (not to exceed US$100,000).
Issue 175,000,000 MRQ fully paid ordinary shares and 175,000,000 MRQOB options to the
Sofala and Trophosys shareholders.
Milestone payments and timeframes:
1. Within 24 months of settlement and the achievement of a 350Mt JORC-compliant MRE
(minimum THM of 5%), MRG shall issue 240,000,000 MRQ fully paid ordinary shares to
Sofala and Trophosys shareholders.
2. Following completion of a positive economic scoping study across the projects combined
with a MRG board decision to commence a PFS at any time after settlement or within 30
months, MRG shall issue 480,000,000 fully paid ordinary shares to Sofala and Trophosys.
Further, the Sofala and Trophosys shareholders will voluntarily escrow 240,000,000 of these
shares until such time that MRG achieves a market capitalisation greater than AUD$100M
for greater than 30 days or for a period of 24 months from issue, whichever occurs first. If
the projects are sold at a valuation greater than AUD$100M cash or based on consideration
that is valued by an Independent Expert’s Report prior to the completion of milestone 2
then all shares under milestones 1 and 2 will be issued.
Despite the best efforts of the Company, negotiations have ceased.
WESTERN AUSTRALIAN PROJECTS:
YARDILLA
The Yardilla project is located 95km east-northeast of Norseman, WA and is prospective for gold mineralisation on
the boundary between the Archean Yilgarn Craton and the Proterozoic Albany-Fraser Orogen. MRG holds 3
licences over the core of the project and was granted a further 8 licences in October 2017. This has increased land
holdings to over 450sqkm, covering prospective lithology identified from structural and geochemical analysis.
During the year MRG entered into a binding Heads of Agreement with Chinese based resource company, Au
Resource Company Ltd (‘AU Resource’), to Farm – in to MRG’s Yardilla & Xanadu Gold Projects. Representatives
of Au Resource undertook a ground EM geophysical survey proximal to the prospects previously drilled by MRG on
the Project during December 2017. Four anomalies were identified during the survey, mostly located close to the
previous holes at the Ommaney Prospect, but offset from the zones that were previously drill tested.
MRG is assessing the significance of these geophysical responses as part of a review of the exploration strategy at
Yardilla and is considering next steps, including farm-in opportunities with other parties.
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30 June 2018
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XANADU
The Xanadu Project is located close to the northern-central margin of the Ashburton Basin, flanking both the Pilbara
Craton and Hamersley Basin and lies 4km west southwest of Northern Star’s Ashburton project (1.67Moz at 2.4g/t).
It covers a 12km strike length of prospective stratigraphy that includes several known occurrences of gold
mineralisation and a number of prospects including the Amphitheatre Mine. Gold mineralisation has been detected
by shallow drilling along the entire strike length of the tenements.
An orientation EM survey planned over Xanadu by MRG’s Farm in partner Au Resource was delayed due to the
cyclone season and subsequent adverse weather. It is now due to take place early in 2019, accompanied by an on
ground geological review. This will be followed by a combined drilling and detailed geophysical program following
completion of the survey.
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. MRG holds 2 granted licences that cover the majority of the Loongana Igneous Complex, a
large layered mafic and ultramafic intrusive body that lies at depths ranging from 250m to 350m below the surface.
MRG has applied for extension of the main Loongana Licence, E69/3104 to enable completion of a revised
exploration program. MRG has re-focused exploration using a combined drilling and EM-geophysics approach with
the aim to generate new targets that will be tested for intrusion-related Ni-Cu-PGE and intrusion-related Cu-Au
targets beneath the thick limestone and shale cover of the Nullarbor Plain. A Program of Works has been approved
for drilling of these new targets and MRG is considering a program during the coming year.
KALGOORLIE EAST
MRG holds two Prospecting Licences; P26/4015 & P26/4016 within the Golden Ridge Belt, 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. The project is located approximately 8km east of Kalgoorlie
and 12km the north of Macpherson’s Resources Ltd’s Boorara Gold Project.
Au Resource Company, undertook a ground EM geophysical survey during early 2018 and discovered two anomalies
within the Kalgoorlie East tenements. However, the anomalies are located close to the boundary of MRG’s
tenements and likely extend into competitors ground. Consequently, no further geophysical test work was
conducted to further explore the potential. The significance of these anomalies is presently being assessed to
ascertain whether any more intensive exploration is warranted.
QUEENSLAND PROJECTS:
MRG holds a number of Projects in Western Queensland with potential to host Iron Oxide, Copper Gold ('IOCG')
and base metal mineralisation. They have similar geophysical characteristics to other known deposits within the
Mount Isa Block.
Our tenement holdings in Queensland were rationalised during the year with the expiry of both the Davenport
Downs and Squirrel Hills Projects. MRG retains five projects in Queensland comprising:
Iron Oxide Copper Gold Type Targets:
Gunpowder Formation meta-sediments are exposed at surface.
EPM 25887 Selwyn: 11km North of BHP Cannington in the Staveley Formation.
EPM 25884 Mt Angelay: 30km NE of Selwyn-Starra Deposit, also in the Staveley Formation.
EPM25885 Kamilaroi: 150km NNW of Cloncurry. 40m @ 0.14% Cu in previous drilling by Paradigm Metals.
EPM25883 Oban: 35km SW of Mt Isa at a splay in regional-scale structures where Alpha Centauri and
Sediment Hosted Copper-Lead-Zinc Targets:
EPM19471 Pulchera: A string of prospects situated in the Simpson Desert near the Northern Territory border in
western Queensland. Along strike from Krucible Metals Toomba discovery of up to 27m @ 0.4% copper from 9m
(including 3m @ 2.4% copper).
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30 June 2018
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Alkaline Intrusion (Carbonatite) Hosted Cobalt-Scandium-Nickel -Rare Earth Element targets
EPM19471 Pulchera: The project also sits astride an anomalously magnetic, post-orogenic late-Devonian alkaline
intrusion, one of several running in a NW-SE orientation for several hundred kilometres from central NSW to the Gulf of
Carpentaria. These underexplored intrusions have similarities to economically significant intrusions of the Kola Peninsula
(Finland-Russia) which are prospective for Co-Sc-Ni and Rare Earth Elements as well as gold and platinum group
elements.
All of the Queensland projects are currently subject to due diligence with two parties to determine if they wish to proceed
to a farm-in on any of those projects. Refer below in ‘ACTIVITIES AND HIGHLIGHTS SINCE 30 JUNE 2018’.
ACTIVITIES AND HIGHLIGHTS SINCE 30 JUNE 2018
MOZAMBIQUE
Progression of formal Mozambique Sale Agreements has ceased.
NORRLIDEN MINERAL RESOURCE ESTIMATE & PRELIMINARY MINE OPTIMISATION
Subsequent to the end of the year, MRG announced (refer ASX Announcement dated 13 July 2018) an updated
JORC Mineral Resource Estimate (“MRE”) and preliminary mine optimisation for its Norra and Bjurfors
polymetallic sulphide deposits following a review and validation of historic diamond drilling data from across the
project area.
Highlights from the MRE include:
•
•
•
Norra: 3.1Mt @ 2.3% Zn, 0.7% Cu, 0.2% Pb, 0.47g/t Au 39g/t Ag (1% ZnEq cut-off, 3.33t/m³ density)
Bjurfors: 2.1Mt @ 1.9% Zn, 0.1% Cu, 0.1% Pb, 0.15g/t Au, 15g/t Ag (1% ZnEq cut-off, 3.33t/m³ density)
Global: 5.2Mt @ 2.1% Zn, 0.4% Cu, 0.2% Pb, 0.3g/t Au, 29g/t Ag (1% ZnEq cut-off, 3.33t/m³ density)
The addition of 2.1Mt of resource material extensional to the previously mined open-pit at Bjurfors deposits
•
(Mellersta & Västra) has increased the global MRE for Norrliden, albeit diluting the global grade. A previous MRE
for the Norra deposit reported in 2012 was 1.497Mt @ 4.4% Zn, 0.8% Cu, 0.4% Pb, 0.8 g/t Au, 59.9 g/t Ag
(Wheeler, 2012).
Optimisation analysis has demonstrated that the Norra deposit is not significantly sensitive to price changes.
There is also a new resource addition at Burfors deposit, where a minable pit is also possible at lower prices
Highlights from the mine optimisation include:
Norra: 1.8Mt @ 4.13% ZnEq
•
Bjurfors: 118Kt @ 5.29% ZnEq
•
•
Optimisation analysis has demonstrated that the Norra ore body is economically robust if mined by open pit
methods. Main attributes include its shallow depth, good metal grades over consistent thicknesses, sufficient mass
and metallurgy which is amenable to reasonable recoveries and successful production of copper and zinc
concentrates.
•
•
with the appropriate strip ratios and as long as capital investment could be kept to a minimum by running the
Bjurfors deposits as satellite pits to the main processing facilities at Norra or through contract mining.
•
profit margin of US$111M for Norra and US$2.4M for Bjurfors.
•
demonstrated that a purely open-cut operation remains the more profitable option until such time as the
mineralisation at Norra can be shown to be open at depth; further deep diamond drilling is required to determine if
the mineralisation at Norra is open at depth.
This early stage study, with numerous go-forward risks needing to be taken into account, returned a total
An underground stope development analysis was also completed for both deposits although results
Resource
Category
Measured
Indicated
Inferred
TOTAL
Tonnes
(Mt)
1.3
1.8
2.1
5.2
Zn Grade
(%)
2.6
2.4
1.6
2.1
Cu Grade
(%)
0.7
0.3
0.4
0.4
Pb Grade
(%)
0.2
0.2
0.1
0.2
Au Grade
(%)
0.6
0.3
0.2
0.3
Ag Grade
(%)
40
30
22
29
Table 1: Global MRE for the Norrliden Project. Calculated via Ordinary Kriging using a 1% ZnEq cut-off and a density of 3.33 t/m
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Consolidated Financial Statements
30 June 2018
9
Further, the Company announced on 20 September 2018 that Phase 1 earn-in to 10% equity had been completed
and together with their Joint Venture Partner, Mandalay, opportunities for a sale of the project were being explored.
If a sale was to be made, it would factor in the Company’s right to 50% ownership under the joint venture
agreement.
QUEENSLAND PROJECTS
PULCHERA
Subsequent to the end of the year, MRG announced (refer ASX Announcement dated 26 July 2018) that it had
entered into a Memorandum of Understanding with Singapore Commodities and Mining house Magnaver Group via
its subsidiary Apollo Exploration & Mining Ltd (“Apollo”) to Partner with MRG at Pulchera.
MRG and Apollo have agreed to the following terms:
-
Diligence to reach a Binding Heads of Agreement
-
-
-
standard inclusions.
Apollo to pay MRG AUD$100,000 upon signing for transfer of Intellectual Property
Exploration will be sole-funded by Apollo - AUD$4.0M to earn 80% in 2 stages
Upon reaching the 80% milestone Apollo, the Companies will form a Joint Venture with usual industry
Apollo has 60 days (extended to 23 October 2018 – refer ASX Announcement 19 September 2018) Due
OBAN, SELWYN, KAMILEROI AND MT ANGELAY
Subsequent to the end of the year, MRG announced (refer ASX Announcement dated 19 September 2018) that it
had entered into a Binding Heads of Agreement with AU Resource Company (“AU”) to commence due diligence on
these projects and if positive, progress to a Farm-In on the following terms:
Farm-In Terms:
o
o
o
AU 15% earn-in after $250,000 sole expenditure within 12 months;
AU to 40% earn-in after cumulative $1,000,000 sole expenditure OR the total amount of measured, indicated
and inferred gold resource calculated according to the JORC standards to 100,000 ounces in the Project Area
within 24 months;
AU to 60% earn-in after cumulative $2,000,000 sole expenditure OR the total amount of measured, indicated
and inferred gold resource calculated according to the JORC standards to 200,000 ounces in the Project Area
within 36 months.
JV formation at 60:40 (Standard industry terms for Joint Operating Committee, JV equity structure and associated
dilution clauses to facilitate sole funding after JV is formed).
AU shall maintain the right but not the obligation to sole fund from 60% to 90%, via equity earn in at the rate of
sole expenditure of $1.5 million per 5% equity.
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Consolidated Financial Statements
30 June 2018
TENEMENTS:
The Tenements held by the Company at reporting date are as follows:
10
Note
Granted Oct 2017
Granted Oct 2017
Granted Oct 2017
Granted Oct 2017
Granted Oct 2017
Granted Oct 2017
Granted Oct 2017
Granted Oct 2017
Project
Yardilla
Yardilla
Yardilla
Yardilla
Yardilla
Yardilla
Yardilla
Yardilla
Yardilla
Yardilla
Yardilla
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Kalgoorlie East
Kalgoorlie East
Loongana
Loongana
Pulchera
Mt Angelay I
Mt Angelay II
Oban
Kamileroi
Selwyn
Tenement
E28/2368
E63/1626
E28/2338
E28/2669
E28/2670
E28/2671
E28/2672
E28/2673
E28/2674
E28/2678
E63/1837
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
E52/3065
P26/4015
P26/4016
E69/3104
E69/3288
EPM19471
EPM25884
EPM26167
EPM25883
EPM25885
EPM25887
% Owned
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
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Consolidated Financial Statements
30 June 2018
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 2018 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 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 over 30 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
Previous directorships (last 3 years):
TTE Petroleum Ltd (ASX: TTE) April 2014 to April 2016
Interests in shares:
14,835,250 shares
Interest in options:
3,590,000 August 2020 options
7,611,750 December 2020 options
Mr Shane Turner
CA, Bachelor of Business
Independent Non-Executive Director
Director since incorporation 24/01/2011
Shane is a Chartered Accountant and has over 30 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 Australia. He has been Company Secretary and CFO of White Rock Minerals (ASX: WRM)
since August 2015. He was a Non Executive Director and Company Secretary for Metminco (ASX: MNC) for 2
years.
Other current directorships:
None
Previous directorships (last 3 years):
None
Interests in shares:
9,958,700 shares
Interest in options:
1,520,000 August 2020 options
4,652,900 December 2020 options
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Consolidated Financial Statements
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Mr Christopher Gregory
BSc Geology, MAusIMM, MAIG, FSEG, MAICD
Independent Non-Executive Director since 12/08/2013
Director since 12/08/2013
12
Chris has extensive global minerals industry experience over 37 years, at both technical and executive levels. Career
foundation of 22 years in the Asia-Pacific region with Rio Tinto. Currently Vice President – Operational Geology at
Mandalay Resources (TSX: MND) and MD at Sasak Minerals.
Other current directorships:
None
Previous directorships (last 3 years):
None
Interests in shares:
37,349,700 shares
Interest in options:
8,300,000 August 2020 options
12,449,900 December 2020 options
Company secretary
Shane Turner is a Chartered Accountant and the Group Chief Financial Officer. Shane has held senior positions
with a number of professional accounting firms and has a degree in Business. Shane has held the role of Company
Secretary at White Rock Minerals (ASX: WRM) since August 2015. Shane has previously held the role of Company
Secretary for Metminco (ASX: MNC) 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 and Overseas. There have been no significant changes in the
nature of these activities during the period.
Review of operations and financial results
The operating result of the Group for the year ended was a loss of $894,394 (2017 loss $590,197). Refer detailed
Review of Operations that follows this report.
Earnings per share (0.19) cents (2017 (0.21) cents).
Further information on the detailed operations of the Group during the year is included in the Review of Operations
Report.
Significant changes in the state of affairs
During the year, some tenement applications for the Kalgoorlie East project, the Squirrel Hill project and Davenport
Downs project were relinquished.
During the year, new tenement applications that were made in 2017 for the Yardilla project were granted.
During the year, a Binding Heads of Agreement was entered into on a Mozambique Heavy Minerals Sands project,
for which negotiations have ceased since year end.
Dividends
There were no dividends declared or paid during the financial period.
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
13
Events arising since the end of the reporting period
Negotiations for the acquisition of Mozambique Heavy Mineral Sands projects have ceased.
Opportunities for the sale of the Swedish Volcanogenic Massive Sulphide project are being explored.
Due diligence is underway for another party to Farm-In to the Pulchera project.
Due diligence is underway for another party to Farm-In to the Oban, Selwyn, Kamileroi and Mt Angelay projects.
The Company is reviewing new project opportunities.
Since the end of the year no further significant events have occurred other than those noted in the Review of
Operations Report.
Likely developments
Consider new project opportunities.
Pursue a sale of Norrliden.
Pursue opportunities for others to Farm-In to Australian projects.
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 S Turner
Mr C Gregory
A
10
10
10
B
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
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
14
Remuneration Report (audited)
The Directors of MRG Metals Ltd (‘the Group’) present the Remuneration Report prepared in accordance with the
Corporations Act 2001 and the Corporations Regulations 2001.
The remuneration report is set out under the following main headings:
a. Principles used to determine the nature and amount of remuneration
b. Details of remuneration
c.
Service agreements
d. Share-based remuneration
e. Bonuses included in remuneration
f. Other information
(a) Principles used to determine the nature and amount of remuneration
The principles of the Group’s executive strategy and supporting incentive programs and frameworks are:
To align rewards to business outcomes that deliver value to shareholders;
To drive a high performance culture by setting challenging objectives and rewarding high performing
individuals; and
To ensure remuneration is competitive in the relevant employment market place to support the attraction,
motivation and retention of executive talent.
MRG Metals Ltd has structured a remuneration framework that is market competitive and complementary to the
reward strategy of the Group.
The Board, in accordance with its charter as approved by the Board, is responsible for determining and reviewing
compensation arrangements for the directors and the executive team.
The remuneration structure that has been adopted by the Group consists of the following components:
Fixed remuneration being annual salary; and
Superannuation to meet statutory obligations.
The Board assesses the appropriateness of the nature and amount of remuneration on a periodic basis by reference
to recent employment market conditions with the overall objective of ensuring maximum stakeholder benefit from
the retention of a high quality Board and executive team.
The payment of bonuses, share options and other incentive payments are reviewed by the Board annually as part of
the review of executive. All bonuses, options and incentives must be linked to pre-determined performance criteria.
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
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.
Director and other Key Management Personnel Remuneration
Short term employee benefits
Post-
employment
benefits
Long-term
benefits
Termination
benefits
Share-based
payments
Cash salary
and fees ($)
Cash bonus
($)
Superannuation
($)
Long-term
bonus ($)
Termination
payments ($)
Performance
Rights ($) (1)
Total ($)
% of
remuneration
that is
performance
based
Name
Executive director
Mr K Weston (2)
Non-executive directors
Mr A Van Der Zwan
Mr S Turner
Mr C Gregory
2017 Total
Non-executive directors
Mr C Gregory
Mr S Turner
Mr A Van Der Zwan
2018 Total
6,666
95,837
100,000
112,000
314,503
110,000
100,000
100,000
310,000
-
-
-
-
-
-
-
-
-
633
4,750
9,500
4,750
19,633
4,750
9,500
4,750
19,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,299
7,363
7,363
7,363
107,950
116,863
124,113
Nil
Nil
Nil
Nil
22,089
356,225
Nil
12,160
12,160
12,160
126,910
121,660
116,910
36,480
365,480
Nil
Nil
Nil
Nil
(1) Non-monetary benefits are Performance Rights that will lapse if they have not vested within 5 years of grant date (22 November 2016) and vest upon Company achieving a 5 day VWAP of
$0.05 per share. The amount for each Non-executive director was $60,800 based on the Monte-Carlo valuation model. The amount allocated each year is the proportion that is expensed to
the year.
(2) Mr K Weston ceased 5 August 2016.
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
16
(c) Service agreements
Remuneration and other terms of employment for Executive Directors and other Key Management Personnel are
formalised in a service agreement. The major provisions of the agreements relating to remuneration are set out
below:
Name
Mr A Van Der Zwan
Mr A Van Der Zwan - Consultant
Mr C Gregory
Mr C Gregory - Consultant
Mr S Turner - Director
Mr S Turner - Secretary
Base salary
50,000
50,000
50,000
50,000
50,000
50,000
Notice period
Term of agreement
Rotation per Corporations Act 2001 Nil
No fixed term
Rotation per Corporations Act 2001 Nil
No fixed term, rate changed 1/5/18 Nil
Rotation per Corporations Act 2001 Nil
Nil
No fixed term
(d) Share based remuneration
During the year, there was no share based remuneration.
(e) Bonuses included in remuneration
No short-term incentive cash bonuses were awarded as remuneration during the financial year.
(f) Other information
Loans to key management personnel (KMP) – there were no loans from the Company to KMP’s during the financial
year (2017: nil).
Other transactions with KMP’s – none (2017: nil).
Shares held by key management personnel
The number of ordinary shares in the Company held by each of the Group’s key management personnel, including
their related parties, is set out below:
2017
Key
Management
Person
Van Der Zwan
Turner
Gregory
Weston
Balance at
start of year
2,375,000
1,652,900
12,449,900
100,000
16,577,800
Received
on
exercise
-
-
-
-
-
Other
changes
-
-
-
(100,000)
(100,000)
Additions
4,812,500
3,652,900
12,449,900
-
20,915,300
Held at the
end of the
reporting
period
7,187,500
5,305,800
24,899,800
-
37,393,100
Mr Weston held 100,000 shares at date of cessation, 5 August 2016.
2018
Key
Management
Person
Van Der Zwan
Turner
Gregory
Additions
7,647,750
4,652,900
12,449,900
24,750,550
The additions were via participation in the Rights Issue and additional shares acquired as approved by Shareholders
at a General Meeting of the Company.
Balance at
start of year
7,187,500
5,305,800
24,899,800
37,393,100
Other
changes
-
-
-
-
Received
on
exercise
-
-
-
-
Held at the
end of the
reporting
period
14,835,250
9,958,700
37,349,700
62,143,650
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
17
Options held by key management personnel
The number of options to acquire shares in the Company held by each of the key management personnel of the
Group; including their related parties are set out below.
2017
Key
Management
Person
Van Der Zwan
Turner
Gregory
Weston
Balance at start
of year
4,670,000
2,255,000
8,300,000
88,688
15,313,688
Additions
-
-
-
-
-
Mr Weston held 88,688 options at date of cessation, 5 August 2016.
2018
Key
Management
Person
Van Der Zwan
Turner
Gregory
Balance at start
of year
3,590,000
1,520,000
8,300,000
13,410,000
Additions
7,647,750
4,652,900
12,449,900
24,750,550
The additions were attached to shares acquired during the year.
End of audited remuneration report.
Deleted
on
exercise
-
-
-
-
-
Deleted
on
exercise
-
-
-
-
Ceased/Lapsed
(1,080,000)
(735,000)
-
(88,688)
(1,903,688)
Ceased/Lapsed
-
-
-
-
Held at
the end of
the
reporting
period
3,590,000
1,520,000
8,300,000
-
13,410,000
Held at
the end of
the
reporting
period
11,237,750
6,172,900
20,749,900
38,160,550
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 2018.
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.
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
18
The Group has not otherwise, during or since the end of the financial year, except to the extent permitted by law,
indemnified or agreed to indemnity any current or former officer or auditor of the Group against a liability incurred
as such by an officer or auditor.
Non-audit services
During the previous period, Grant Thornton Audit Pty Ltd, the Group’s auditors, performed 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 14 to the Financial Statements.
A copy of the auditor’s independence declaration as required under s307C of the Corporations Act 2001 is included
on page 19 of this financial report and forms part of this Directors’ Report.
Proceedings of behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings
on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of
taking responsibility on behalf of the Company for all or part of those proceedings.
Signed in accordance with a resolution of the directors.
Andrew Van Der Zwan
Chairman
28 September 2018
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727 Collins Street
Melbourne VIC 3008
Correspondence to:
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of MRG Metals Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of MRG Metals
Limited for the year ended 30June 2018, 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 Accountant
T S Jackman
Partner - Audit & Assurance
Melbourne, 28 September 2018
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘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
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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.
19For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
20
Corporate Governance Statement
MRG Metals Ltd has adopted comprehensive systems of controls and accountability as the basis for the administration
of corporate governance. To the extent that they are applicable, MRG has adopted the Corporate Governance
Principles and Recommendations as published by ASX Corporate Governance Council on 27 March 2014 and became
effective for financial years beginning on or after 1 July 2014. The Corporate Governance Statement is current at 30
June 2018 and has been approved by the Board of Directors.
ASX Corporate Governance Council
Recommendation
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1: Companies should establish
functions reserved to the board and those delegated to
senior executives and disclose those functions.
MRG policy
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.
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
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)
in achieving
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 2018
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
if the Company does not have a nomination 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.
21
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 Chairman is responsible for reviewing the
performance of the Company Secretary.
The Chairman 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
succession plans for the future management of the
Company.
The Company's Board Charter sets out the directors'
obligations to prepare and disclose a Board skills
matrix.
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
ASX Corporate Governance Council
Recommendation
Recommendation 2.3: Companies should disclose:
-
-
-
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.
22
MRG policy
The Company's Board Charter sets out the directors'
obligations in relation to conflicts of interests and the
disclosure requirements of the Board.
All of the Company's current 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.
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 policies 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 CFO of 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
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
ASX Corporate Governance Council
Recommendation
financial period, receive from its CEO and CFO a
declaration that, in their opinion, the financial records
of the company have been properly maintained and that
the financial statements comply with 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.
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 itself and its governance to investors
via its website.
Recommendation 6.2 Companies should design and
implement an investor relations program to facilitate
effective two-way communication with investors.
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
23
MRG policy
Company provides a declaration in relation to the
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
the financial position and
and fair view of
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 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 the Board should endeavor 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.
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 requires that Andrew Van Der Zwan, as
Chairman undertakes a review of the Company's risk
management framework annually to ensure that the
framework continues to be sound, and disclose, in
relation to each reporting period, whether such a
review has taken place.
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
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
disclose
its policies and practices regarding the
remuneration of non-executive directors and the
remuneration of executive directors and other senior
executives.
24
MRG policy
Given the size of the Company's current operations,
the Board has formed the view that 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 the effectiveness of
the Company's risk management and internal control
process.
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.
relation
remuneration packages.
The Company does not currently have a
remuneration committee. The Board does not
consider it necessary given the size of the Company's
current operations. The Board is responsible for
making recommendations regarding director and
management
The
Company's Board Charter sets out the principles that
should be considered by the Board in making
to management
in
recommendations
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
the
responsibilities and
Company.
Non-executive directors are paid fees within the total
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 2018
Statement of Financial Position
As of 30 June 2018
Assets
Current
Cash and cash equivalents
Other receivables
Total current assets
Non-current
Plant & Equipment
Exploration & Evaluation
Total non-current assets
Total assets
Liabilities
Current
Trade and other payables
Total current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserve
Retained earnings
Total equity
25
Notes
Consolidated
2018
$
Consolidated
2017
$
8
7
11
12
10
9
9
1,724,570
35,887
1,760,457
2,063
3,628,518
3,630,581
5,391,038
579,964
728,503
1,308,467
1,809
3,056,142
3,057,951
4,366,418
84,227
84,227
84,227
5,306,811
132,843
132,843
132,843
4,233,575
20,029,818
745,734
(15,468,741)
18,104,748
703,174
(14,574,347)
5,306,811
4,233,575
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 2018
26
Statement of Profit or Loss and other
Comprehensive Income
for the year ended 30 June 2018
Revenue
Research & Development Incentive
Other income
Employee benefits expense
Consultants
Promotions expense
Administration expenses
Amortisation/Depreciation expenses
Exploration/Tenements write off expenses
(Loss) before tax
Tax expense
(Loss) after tax
Other comprehensive income, net of tax
Total comprehensive (losses)
Earnings per share
Basic earnings per share
Earnings from continuing operations
Diluted earnings per share
Earnings from continuing operations
Notes
Consolidated
2018
$
Consolidated
2017
$
5
12
13
15
11,543
-
-
(255,483)
(289,858)
-
(155,441)
(1,106)
(204,049)
(894,394)
-
(894,394)
-
(894,394)
9,799
174,452
26,181
(248,390)
(295,307)
(65,754)
(190,203)
(975)
-
(590,197)
-
(590,197)
-
(590,197)
Cents
Cents
(0.19)
(0.19)
(0.21)
(0.21)
This statement should be read in conjunction with the notes to the financial statements.
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
27
Statement of Changes in Equity
for the year ended 30 June 2018
Share
Capital
$
Share
based
payments
reserve
$
Retained
earnings
$
Total
equity
$
Balance at 1 July 2016
16,364,536
677,402
(14,410,192)
2,631,746
Issue of share capital
Transaction costs
Share based payments
Lapsed options
Loss after income tax expense for the period
2,264,121
(97,867)
-
(426,042)
-
-
-
25,772
-
-
-
-
-
426,042
(590,197)
2,264,121
(97,867)
25,772
-
(590,197)
Balance at 30 June 2017
18,104,748
703,174
(14,574,347)
4,233,575
Balance at 1 July 2017
18,104,748
703,174
(14,574,347)
4,233,575
Issue of share capital
Transaction costs
Share based payments
Loss after income tax expense for the period
2,064,199
(139,129)
-
-
-
-
42,560
-
-
-
-
(894,394)
2,064,199
(139,129)
42,560
(894,394)
Balance at 30 June 2018
20,029,818
745,734
(15,468,741)
5,306,811
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 2018
Statement of Cash Flows
for the year ended 30 June 2018
Operating activities
Interest received
Sale of Data
Research & Development Incentive
Payments to suppliers and employees
Net cash used in operating activities
Investing activities
Payment for exploration & evaluation
Payment for plant & equipment
Net cash used in investing activities
Financing activities
Proceeds from issue of capital
Payment of transaction costs
Net cash from financing activities
Net change in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
28
Notes
Consolidated
2018
$
Consolidated
2017
$
11,090
-
669,271
(686,536)
(6,175)
(772,930)
(1,360)
(774,290)
2,064,199
(139,128)
1,925,071
1,144,606
579,964
1,724,570
16
8
9,799
25,000
551,680
(1,453,324)
(866,845)
(691,942)
(1,172)
(693,114)
2,128,121
(60,404)
2,067,717
507,758
72,206
579,964
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 2018
29
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 2018 were approved and authorised for
issue by the board of directors on 28 September 2018 (see note 24).
3
New Accounting Standards and Interpretations not yet mandatory or early
adopted
The Group has adopted all mandatory new standards and amendments to standards, including any
consequential amendments to other standards, with a date of initial application of 1 July 2017. The new,
revised or amended standards or interpretations did not have a significant impact on the amounts or
disclosures in the financial report.
Australian Accounting Standards and Interpretations that have recently been issued or amended but are
not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting
period ended 30 June 2018. The consolidated entity's assessment of the impact of these new or amended
Accounting Standards and Interpretations, most relevant to the consolidated entity, are set out below.
AASB 9 Financial Instruments
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The
standard replaces all previous versions of AASB 9 and completes the project to replace AASB 139
'Financial Instruments: Recognition and Measurement'. AASB 9 introduces new classification and
measurement models for financial assets. A financial asset shall be measured at amortised cost, if it is
held within a business model whose objective is to hold assets in order to collect contractual cash flows,
which arise on specified dates and solely principal and interest. All other financial instrument assets are
to be classified and measured at fair value through profit or loss unless the entity makes an irrevocable
election on initial recognition to present gains and losses on equity instruments (that are not held-for-
trading) in other comprehensive income ('OCI'). For financial liabilities, the standard requires the
portion of the change in fair value that relates to the entity's own credit risk to be presented in OCI
(unless it would create an accounting mismatch). New simpler hedge accounting requirements are
intended to more closely align the accounting treatment with the risk management activities of the entity.
New impairment requirements will use an 'expected credit loss' ('ECL') model to recognise an allowance.
Impairment will be measured under a 12-month ECL method unless the credit risk on a financial
instrument has increased significantly since initial recognition in which case the lifetime ECL method is
adopted. The standard introduces additional new disclosures. There will be no impact on the carrying
values or accounting treatment of investments held as a result of this accounting standard being
implemented.
AASB 15 Revenue from Contracts with Customers
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
30
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The
standard provides a single standard for revenue recognition. The core principle of the standard is that an
entity will recognise revenue to depict the transfer of promised goods or services to customers in an
amount that reflects the consideration to which the entity expects to be entitled in exchange for those
goods or services. The standard will require: contracts (either written, verbal or implied) to be identified,
together with the separate performance obligations within the contract; determine the transaction
price, adjusted for the time value of money excluding credit risk; allocation of the transaction price to
the separate performance obligations on a basis of relative stand-alone selling price of each distinct good
or service, or estimation approach if no distinct observable prices exist; and recognition of revenue when
each performance obligation is satisfied. Credit risk will be presented separately as an expense rather
than adjusted to revenue. For goods, the performance obligation would be satisfied when the customer
obtains control of the goods. For services, the performance obligation is satisfied when the service has
been provided, typically for promises to transfer services to customers. For performance obligations
satisfied over time, an entity would select an appropriate measure of progress to determine how much
revenue should be recognised as the performance obligation is satisfied. Contracts with customers will
be presented in an entity's statement of financial position as a contract liability, a contract asset, or a
receivable, depending on the relationship between the entity's performance and the customer's payment.
Sufficient quantitative and qualitative disclosure is required to enable users to understand the contracts
with customers; the significant judgements made in applying the guidance to those contracts; and any
assets recognised from the costs to obtain or fulfil a contract with a customer. The consolidated entity
has adopted this standard from 1 July 2018, with no material impact from adoption as there are no
contracts with customers.
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The
standard replaces AASB 117 'Leases' and for lessees will eliminate the classifications of operating leases
and finance leases. Subject to exceptions, a 'right-of-use' asset will be capitalised in the statement of
financial position, measured at the present value of the unavoidable future lease payments to be made
over the lease term. The exceptions relate to short-term leases of 12 months or less and leases of low-
value assets (such as personal computers and small office furniture) where an accounting policy choice
exists whereby either a 'right-of-use' asset is recognised or lease payments are expensed to profit
or loss as incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for
lease prepayments, lease incentives received, initial direct costs incurred and an estimate of any future
restoration, removal or dismantling costs. Straight-line operating lease expense recognition will be
replaced with a depreciation charge for the leased asset (included in operating costs) and an interest
expense on the recognised lease liability (included in finance costs). In the earlier periods of the lease, the
expenses associated with the lease under AASB 16 will be higher when compared to lease expenses
under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation)
results will be improved as the operating expense is replaced by interest expense and depreciation in
profit or loss under AASB 16. For classification within the statement of cash flows, the lease payments
will be separated into both a principal (financing activities) and interest (either operating or financing
activities) component. For lessor accounting, the standard does not substantially change how a lessor
accounts for leases. The consolidated entity will adopt this standard from 1 July 2019, with no impact
from adoption as the Company has no leases.
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.
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
31
Presentation of financial statements
4.2
AASB 101 requires two comparative periods to be presented for the statement of financial position in
certain circumstances.
4.3 Basis of measurement
Going Concern
The Group recorded a loss after tax of $894,394 and net cash outflows from operating and investing
activities were $780,465 for the year ended 30 June 2018. The Group’s financial position as at 30 June
2018 was as follows:
The Group had available cash reserves of $1,724,570;
The Group’s current assets of $1,760,457 exceed current liabilities of $84,227 by $1,676,230;
The Group’s main activity is exploration and as such it does not presently have a source of operating
income, rather it is reliant on equity raisings or funds from other external sources to fund its activities.
Current forecasts indicate that cash on hand as at 30 June 2018 will be sufficient to fully fund the planned
exploration and operational activities during the next twelve months. However, if the Group acquires a
new project or exploration activities change, then the Group may need to secure additional funding.
The Group’s position as at 31 August 2018 was as follows:
The Group had available cash reserves of $1,535,567;
The Group continued to have a positive working capital position; and
There have been no material changes to the Group’s liabilities or non-cancellable commitments since
30 June 2018.
The Directors are confident that, if required, the Group will be able to secure sufficient funds or reduce
or defer expenditure to ensure that the Group can meet essential operational and expenditure
commitments for at least the next twelve months.
Accordingly, the financial statements for the year ended 30 June 2018 have been prepared on a going
concern basis as, in the opinion of the Directors, the Group will be in a position to continue to meet its
essential operating costs and pay its debts as and when they fall due for at least twelve months from the
date of this report.
However, the Directors recognise that if further funding is required and is not subsequently secured, the
outcome of which is uncertain until such funding is secured, there is a material uncertainty as to whether
the going concern basis of accounting is appropriate. As a result, the Group may be required to relinquish
title to certain tenements, significantly curtail further expenditures and may have to realise its assets and
extinguish its liabilities other than in the ordinary course of business and at amounts different from those
stated in the financial report.
Basis of consolidation
4.4
The Group financial statements consolidate those of the parent company and its subsidiary undertakings
drawn up to 30 June 2018. 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.
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
32
Segment reporting
4.5
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.
4.6
Interest income is recognised on an accrual basis using the effective interest method.
Revenue
Operating expenses
4.7
Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their
origin.
Exploration and evaluation
4.8
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
4.9
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.
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
33
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
4.10
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.
4.11
Other receivables are recognised at amortised cost, less any impairment.
Other Receivables
Trade Payables
4.12
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
4.13
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
4.14
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.
4.15
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
4.16
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.
For personal use only 34
MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
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)
4.17
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of
GST incurred is not recoverable from the Tax Office. In these circumstances the GST is recognised as
part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables
in the statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST
components of investing and financing activities, which are disclosed as operating cash flows.
4.18
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.
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
35
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.
One or more of the following facts and circumstances indicate that an entity should test exploration and
evaluation assets for impairment (the list is not exhaustive):
(a)
(b)
(c)
(d)
the period for which the entity has a right to explore in the specific arear has expired during
the period or will expire in the near future and is not expected to be renewed.
substantive expenditure on further exploration for and evaluation of mineral resources in the
specific area is neither budgeted nor planned.
exploration for and evaluation of mineral resources in the specific area have not led to the
discovery of commercially viable quantities of mineral resources and the entity has decided
to discontinue such activities in the specific area.
sufficient data exist to indicate that, although a development in the specific area is likely to
proceed, the carrying amount of the exploration and evaluation asset is unlikely to be
recovered in full from successful development or by sale.
The Company wrote off the Davenport Downs project and two tenements in the Kalgoorlie East
project during the current period as they had lapsed.
4.19 Other intangible assets
Recognition of other intangible 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.
4.20 Impairment testing of goodwill, other intangible assets and property, plant and
equipment
For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely
independent cash inflows (cash-generating units). As a result, some assets are tested individually for
impairment and some are tested at cash-generating unit level. Goodwill is allocated to those cash-
generating units that are expected to benefit from synergies of the related business combination and
represent the lowest level within the Group at which management monitors goodwill.
All individual assets or cash-generating units are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s or cash-generating unit's carrying
amount exceeds its recoverable amount, which is the higher of fair value less costs to sell and value-in-
use. To determine the value-in-use, management estimates expected future cash flows from each cash-
generating unit and determines a suitable interest rate in order to calculate the present value of those
cash flows. The data used for impairment testing procedures are directly linked to the Group's latest
approved budget, adjusted as necessary to exclude the effects of future reorganisations and asset
enhancements. Discount factors are determined individually for each cash-generating unit and reflect
management’s assessment of respective risk profiles, such as market and asset-specific risks factors.
Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to
that cash-generating unit. Any remaining impairment loss is charged pro rata to the other assets in the
cash-generating unit. With the exception of goodwill, all assets are subsequently reassessed for
indications that an impairment loss previously recognised may no longer exist. An impairment charge is
reversed if the cash-generating unit’s recoverable amount exceeds its carrying amount.
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
36
4.21 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.
5
Revenue
Interest
Consolidated
2018
$
11,543
11,543
Consolidated
2017
$
9,799
9,799
Segment reporting
6
The Group is organised into one operating segment, which is the exploration and development of Gold,
base metals and other commodities within Australia and Sweden. 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.
All items of Revenue and Expense are allocated to the Australian segment.
All items of Assets and Liabilities are allocated to the Australian segment, except for capitalised
exploration assets of $591,133 and accrued expenses of $20,613, which are allocated to Sweden.
7
Other receivables
GST receivables
Research & Development Incentive receivable
Other
Other receivables
The receivables noted above are not impaired nor past due.
8
Cash and cash equivalents include the following components:
Cash and cash equivalents
Consolidated
2018
$
30,434
-
5,453
35,887
Consolidated
2017
$
45,203
669,271
14,029
728,503
Cash at bank and in hand:
AUD
Short term deposits (AUD) (a)
Cash and cash equivalents
The effective interest rate on short-term bank deposits is 2.55%; these deposits have an average maturity
of 365 days.
(a) The $21,313 is restricted cash as it is security for Company credit cards.
Consolidated
2018
$
1,703,257
21,313
1,724,570
Consolidated
2017
$
559,855
20,109
579,964
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
37
Equity
Share capital & reserves
9
9.1
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.
Details
SHARES
Total at 1 July 2016
Additions during the year
Costs of raising
Total share capital at 30 June 2017
OPTIONS RESERVE
Total at 1 July 2016
Lapsed during the year
Total issued options at 30 June 2017
SHARE BASED PAYMENTS
RESERVE
Total at 1 July 2016
Created during the year
Total reserve at 30 June 2017
SHARE CAPITAL & RESERVES
Details
SHARES
Total at 1 July 2017
Additions during the year
Costs of raising
Total share capital at 30 June 2018
OPTIONS RESERVE
Total at 1 July 2017
Additions during the year
Total issued options at 30 June 2018
SHARE BASED PAYMENTS
RESERVE
Total at 1 July 2017
Created during the year
Total reserve at 30 June 2018
SHARE CAPITAL & RESERVES
Consolidated
2017
$
15,938,494
2,264,121
(97,867)
18,104,748
Quantity
135,612,115
185,167,644
-
320,779,759
116,986,397
(44,007,993)
72,978,404
1,103,444
(426,042)
677,402
-
25,772
25,772
18,807,922
Consolidated
2018
Quantity
$
320,779,759
346,389,880
-
667,169,639
72,978,404
321,389,880
394,368,284
18,104,748
2,064,199
(139,129)
20,029,818
677,402
-
677,402
25,772
42,560
68,332
20,775,552
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
38
Dividends
9.2
No dividends were declared or paid during the year. There are no franking credits outstanding at period
end.
Trade and other payables
10
Trade and other payables recognised in the Statement of Financial Position can be analysed
as follows:
Current
-
- Other payables and accrued expenses
Trade payables
11
Plant and equipment
Plant & Equipment
Accumulated Depreciation
12
Exploration and evaluation assets
Cost as at 1 July 2016
Additions
Other exploration costs
Offset R&D Tax Incentive
Cost as at 30 June 2017
Cost as at 1 July 2017
Other exploration costs
Relinquishments
Cost as at 30 June 2018
Consolidated
2018
$
24,114
60,113
84,227
Consolidated
2017
$
22,673
110,170
132,843
Consolidated
2018
$
5,780
(3,717)
2,063
Consolidated
2017
$
4,420
(2,611)
1,809
Consolidated
2017
$
2,191,582
210,055
1,149,324
(494,819)
3,056,142
Consolidated
2018
$
3,056,142
776,425
(204,049)
3,628,518
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. The relinquishments represent the capitalised amounts written off during the period when
ownership of the tenements is abandoned.
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
39
Income tax expense
13
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) @ 27.5%
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
2018
$
(894,394)
(245,958)
Consolidated
2017
$
(590,197)
(162,304)
13,766
-
186,408
(45,784)
(45,784)
200,174
45,784
245,958
6,876
-
(40,641)
(196,069)
(196,069)
(33,765)
196,069
162,304
The above potential tax benefit has not been recognised as the recovery is uncertain.
The carry forward tax losses at 30 June 2018 were $11,139,690.
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.
14
Auditor remuneration
Audit services
Auditors of MRG Metals Ltd – Grant Thornton
- Audit and review of the financial reports
Audit services remuneration
Other services
Total Auditor’s remuneration
Consolidated
2018
$
Consolidated
2017
$
41,000
41,000
-
41,000
38,500
38,500
-
38,500
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
40
Earnings per share
15
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
2018
$
(894,394)
465,534,830
465,534,830
Consolidated
2017
$
(590,197)
283,619,488
283,619,488
(0.19) cents
(0.19) cents
(0.21) cents
(0.21) cents
The rights to options held by option holders have not been included in the weighted average number of
ordinary shares for the purposes of calculating diluted EPS as they do not meet the requirements for the
inclusion in AASB 133 “Earnings per Share”. The rights to options are non-dilutive as the Group is loss
generating.
16
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
Share based payments transactions
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 used in operating activities
17
The Parent entity is MRG Metals Ltd.
Related party transactions
Consolidated
2018
$
Consolidated
2017
$
(894,394)
(590,197)
1,106
36,480
204,049
692,616
-
(46,032)
(6,175)
975
22,089
-
(178,135)
8,262
(129,839)
(866,845)
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 17.2.
Unless otherwise stated, none of the transactions incorporate special terms and conditions and no
guarantees were given or received.
For personal use only
MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
41
Transactions with related parties
17.1
The following transactions occurred with related parties:
Payment for goods and services:
The Group used the accounting and taxation services of RSM Australia, an entity associated with Mr.
Turner and Mr. Turner. The amounts billed were based on normal market rates and amounted to
$41,000 (2017 $41,000).
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.
Transactions with key management personnel
17.2
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.
Short term benefits
Post employment benefits
Share based payments
Total KMP remuneration
Consolidated
2018
$
310,000
19,000
36,480
365,480
Consolidated
2017
$
314,503
19,633
22,089
356,225
Equity instruments held by KMP
17.3
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 2017
Key
Management
Person
Van Der Zwan
Turner
Gregory
Weston
Year ended 30 June 2018
Key
Management
Person
Van Der Zwan
Turner
Gregory
Balance at
start of
year
2,375,000
1,652,900
12,449,900
100,000
16,577,800
Balance at
start of
year
7,187,500
5,305,800
24,899,800
37,393,100
Received
on
exercise
-
-
-
-
-
Other
changes
-
-
-
(100,000)
(100,000)
Additions
4,812,500
3,652,900
12,449,900
-
20,915,300
Received
on
exercise
-
-
-
-
Other
changes
-
-
-
-
Additions
7,647,750
4,652,900
12,449,900
24,750,550
Held at
the end of
the
reporting
period
7,187,500
5,305,800
24,899,800
-
37,393,100
Held at
the end of
the
reporting
period
14,835,250
9,958,700
37,349,700
62,143,650
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
42
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 2017
Key
Management
Person
Van Der Zwan
Turner
Gregory
Weston
Balance
at start of
year
4,670,000
2,255,000
8,300,000
88,688
15,313,688
Deleted
on
Additions
-
-
-
-
-
exercise Ceased/Lapsed
(1,080,000)
(735,000)
-
(88,688)
(1,903,688)
-
-
-
-
-
Year ended 30 June 2018
Key
Management
Person
Van Der Zwan
Turner
Gregory
Balance
at start of
year
3,590,000
1,520,000
8,300,000
13,410,000
Deleted
on
exercise
-
-
-
-
Other
changes
-
-
-
-
Additions
7,647,750
4,652,900
12,449,900
24,750,550
18
There were no contingent assets or liabilities.
Contingent assets and contingent liabilities
19
Commitments for expenditure
Held at
the end of
the
reporting
period
3,590,000
1,520,000
8,300,000
-
13,410,000
Held at
the end of
the
reporting
period
11,237,750
6,172,900
20,749,900
38,160,550
Exploration and evaluation:
Within 12 months
After 12 months but not later than 5 years
2018
$
2017
$
941,040
2,813,300
915,043
1,467,740
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.
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
43
20
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.
Foreign currency sensitivity
20.1
The Group's transactions during the year have been carried out in Australian Dollars, Swedish Kroner
(SKR) and Euro.
There is a risk that changes in foreign exchange rates will affect the Group’s income or amounts to be
paid or received arising from its financial obligations. The Group’s objective of foreign currency risk
management is to manage and control foreign currency risk exposures within acceptable parameters, while
optimising the return.
The Group’s exposure to foreign currency risk relates primarily to foreign exchange rates applicable to the
Group’s foreign currency denominated obligations recognised in the balance sheet.
Foreign currency risk refers to the risk that the value of a financial commitment, recognised asset or liability
will fluctuate due to changes in foreign currency rates. The primary foreign currency exposure is to the
SKR.
Management monitors the exposure to foreign exchange risk on an ongoing basis by regularly reviewing
forward foreign exchange rates applicable to its foreign currency denominated obligations.
The Group’s exposure to assets and liabilities to SKR at 30 June 2018 (there were none at 30 June 2017)
is set out below (Australian dollar equivalents):
Reported exchange rate
Trade and other payables
Total exposure
30 June 2018
0.15
(20,613)
(20,613)
The table below shows the effect on profit after income tax expense and total equity from SKR currency
exposures, had the rates been 10% higher or lower than the year end rate. Whilst directors cannot predict
movements in foreign currency rates, a sensitivity of 10% is considered reasonable taking in to account
the current level of exchange rates and the volatility observed on a historical basis.
Foreign exchange rates - 10%
Foreign exchange rates + 10%
30 June 2018
Increase/(Decrease)
in profit after
income tax
(2,061)
2,061
Increase/(Decrease)
in Equity
(2,061)
2,061
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
44
Interest rate sensitivity
20.2
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 2018, there was $21,313 on deposit at 2.55% (Note 8).
An increase/decrease by 30% or 0.08 basis points would have a favourable/adverse effect on profit for
the year of $163. The percentage change is based on the expected volatility of interest rates using
market data and analysts’ forecasts.
Credit risk analysis
20.3
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
20.4
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 2018 was $1,676,230.
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 2018
Trade and other payables
Total
30 June 2017
Trade and other payables
Total
Current
Non current
Within 6
months
$
84,227
84,227
6 to 12
months
$
-
-
1 to 5 years
$
-
-
Later than 5
years
$
-
-
Current
Non current
Within 6
months
$
132,843
132,843
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.
Capital risk management
21
The Group’s objectives when managing capital is to ensure the Group's ability to continue as a going
concern so that it can provide an adequate return to shareholders.
The Group would look to raise capital when an opportunity to invest in a business, company or tenement is
seen as value adding.
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
45
22
Since the end of the year the following significant events have occurred:
Post-reporting date events
Negotiations for the acquisition of Mozambique Heavy Mineral Sands projects have ceased.
Opportunities for the sale of the Swedish Volcanogenic Massive Sulphide project are being explored.
Due diligence is underway for another party to Farm-In to the Pulchera project.
Due diligence is underway for a another party to Farm-In to the Oban, Selwyn, Kamileroi and Mt
Angelay projects.
The Company is reviewing new project opportunities.
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.
23
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 & reserves
Retained earnings
Statement of comprehensive income
Profit/(loss) for the period
Total comprehensive income
2018
$
1,760,457
5,391,038
84,227
84,227
2017
$
1,308,467
4,366,418
132,843
132,843
20,775,552
(15,468,741)
5,306,811
18,807,922
(14,574,347)
4,233,575
(894,394)
(894,394)
(590,197)
(590,197)
Authorisation of financial statements
24
The consolidated financial statements for the year ended 30 June 2018 were approved by the board of
directors on 28 September 2018.
Andrew Van Der Zwan
Chairman
Shane Turner
Director/Secretary
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
46
Directors’ declaration
1. In the opinion of the directors of MRG Metals Ltd:
a
the consolidated financial statements and notes of MRG Metals Ltd are in accordance with the
Corporations Act 2001, including
i.
giving a true and fair view of its financial position as at 30 June 2018 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
2018.
3. The consolidated financial statements comply with International Financial Reporting Standards.
Signed in accordance with a resolution of the directors:
Dated at Melbourne, the 28th day of September 2018.
_______________________Andrew Van Der Zwan
Director
For personal use only Collins Square, Tower 1
727 Collins Street
Melbourne VIC 3008
Correspondence to:
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of MRG Metals Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of MRG Metals Limited (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 30 June 2018, the consolidated statement of profit or loss
and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows
for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting
policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its performance for the year
ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘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.
47For personal use only
Material uncertainty related to going concern
We draw attention to Note 4.3 in the financial statements, which indicates that the Group incurred a net loss of $894,394
during the year ended 30 June 2018, with the net cash outflows from operating and investing activities totalling $780,465.
These events or conditions, along with other matters as set forth in Note 4.3, indicate that a material uncertainty exists that
may cast doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material uncertainty related to going concern section, we have determined the
matters described below to be the key audit matters to be communicated in our report.
Key audit matter
How our audit addressed the key audit matter
Exploration and evaluation assets – Note 12
At 30 June 2018 the carrying value of exploration and
evaluation assets was $3,628,518.
In accordance with AASB 6 Exploration for and Evaluation
of Mineral Resources, the Group is required to assess at
each reporting date if there are any triggers for impairment
which may suggest the carrying value is in excess of the
recoverable value.
The process undertaken by management to assess whether
there are any impairment triggers in each area of interest
involves an element of management judgement.
This area is a key audit matter due to the significant
judgement involved in determining the existence of
impairment triggers.
Our procedures included, amongst others:
obtaining the management reconciliation of capitalised
exploration and evaluation expenditure and agreeing to the
general ledger;
reviewing management’s area of interest considerations against
AASB 6;
conducting a detailed review of management’s assessment of
trigger events prepared in accordance with AASB 6 including;
tracing projects to statutory registers, exploration licenses
and third party confirmations to determine whether a right
of tenure existed;
enquiry of management regarding their intentions to carry
out exploration and evaluation activity in the relevant
exploration area, including review of management’s
budgeted expenditure;
understanding whether any data exists to suggest that the
carrying value of these exploration and evaluation assets
are unlikely to be recovered through development or sale;
assessing the accuracy of impairment recorded for the year
as it pertained to exploration interests; and
assessing the appropriateness of the related financial
statement disclosures.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2018, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
48For personal use only
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors’ for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This description forms part of our
auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in the Directors’ report for the year ended 30 June 2018.
In our opinion, the Remuneration Report of MRG Metals Limited, for the year ended 30 June 2018 complies with section
300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
Grant Thornton Audit Pty Ltd
Chartered Accountants
T S Jackman
Partner – Audit & Assurance
Melbourne, 28 September 2018
49For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
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 21 September 2018.
50
Substantial Shareholders
There were no substantial shareholders.
Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,000 and over
Shareholders
32
15
56
244
512
859
There were 310 holders of less than a marketable parcel of ordinary shares.
Ordinary Shares
Twenty largest quoted shareholders
Number Held
P Cozzi
T Sorensen
CJ & M Gregory S/F A/C
Rocco Tassone S/F A/C
Jolanza P/L
EJ Heymann
M Bazdaric
A Manger
First Investment Partners P/L
Freedom Trader P/L
KV Van Der Zwan Family A/C
A & J Turner P/L
Futurity Private P/L
TC Wallace
Mazarine Investments P/L
D Bodin
Giojaz S/F No.1 A/C
S & E Turner S/F A/C
Y Cai
C Coglan
Restricted equity securities
Nil
31,700,000
19,964,806
19,349,250
19,000,000
18,000,450
15,135,000
12,000,000
11,798,520
11,595,668
11,412,500
10,025,250
9,485,000
9,200,000
7,500,000
6,530,000
6,000,000
6,000,000
5,708,700
5,600,000
5,250,000
241,255,144
%of quoted
shares
4.75
2.99
2.90
2.85
2.70
2.27
1.80
1.77
1.74
1.71
1.50
1.42
1.38
1.12
0.98
0.90
0.90
0.86
0.84
0.79
36.16
Securities exchange
The Company is listed on the Australian Securities Exchange and shares are quoted under the code
MRQ.
For personal use only MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
51
Options
Twenty largest quoted optionholders
Number Held
K Baker
P Proksa
S Gultom
Ohio Holdings P/L
R Carroll
D Fagan
P Cozzi
CJ & M Gregory S/F A/C
Andrew Fleischer S/F A/C
Jolanza P/L
A & J Turner P/L
Lehav P/L
E Heymann
M Zollo
Durbanator S/F A/C
S Siu
Freedom Trader P/L
E Coakley
Byass Family A/C
A & K Van Der Zwan S/F A/C
39,135,089
20,000,000
15,000,000
10,000,000
10,000,000
9,255,555
8,500,000
6,449,750
6,250,000
6,000,150
5,495,000
5,401,502
5,045,000
5,000,000
5,000,000
4,921,599
4,825,000
4,585,000
4,500,000
4,140,000
179,503,645
%of quoted
options
12.18
6.22
4.67
3.11
3.11
2.88
2.64
2.01
1.94
1.87
1.71
1.68
1.57
1.56
1.56
1.53
1.50
1.43
1.40
1.29
55.87
Securities exchange
The Company is listed on the Australian Securities Exchange and options are quoted under the codes
MRQOA and MRQOB.
For personal use only 52
Note
Granted Oct 2017
Granted Oct 2017
Granted Oct 2017
Granted Oct 2017
Granted Oct 2017
Granted Oct 2017
Granted Oct 2017
Granted Oct 2017
MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
Tenements
The Tenements held by the Company at reporting date are as follows:
Project
Yardilla
Yardilla
Yardilla
Yardilla
Yardilla
Yardilla
Yardilla
Yardilla
Yardilla
Yardilla
Yardilla
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Xanadu
Kalgoorlie East
Kalgoorlie East
Loongana
Loongana
Pulchera
Mt Angelay I
Mt Angelay II
Oban
Kamileroi
Selwyn
Tenement
E28/2368
E63/1626
E28/2338
E28/2669
E28/2670
E28/2671
E28/2672
E28/2673
E28/2674
E28/2678
E63/1837
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
E52/3065
P26/4015
P26/4016
E69/3104
E69/3288
EPM19471
EPM25884
EPM26167
EPM25883
EPM25885
EPM25887
% Owned
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
For personal use only 53
MRG Metals Ltd
Consolidated Financial Statements
30 June 2018
Corporate Directory
Directors & Secretary
Andrew Van Der Zwan
Non Executive Chairman
Christopher Gregory
Non Executive Director
Shane Turner
Non Executive Director and Company Secretary
Principal place of business
12 Anderson Street West, Ballarat VIC 3350
Telephone: +61 3 5330 5800 Fax: +61 3 5330 5890
Email: info@mrgmetals.com.au, www.mrgmetals.com.au
Registered office
12 Anderson Street West, Ballarat Victoria 3350
PO Box 237, Ballarat VIC 3353
Telephone: +61 3 5330 5800 Fax: +61 3 5330 5890
Corporate accountant and Registered ASIC Agent
RSM Australia
12 Anderson Street West, Ballarat VIC 3350
PO Box 685, Ballarat VIC 3353
Telephone: +61 3 5330 5800 Fax: +61 3 5330 5890
www.rsm.com.au
Solicitors
Moray & Agnew
Level 6, 505 Little Collins Street, Melbourne VIC 3000
Telephone: +61 3 9600 0877 Fax: +61 3 9600 0894
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
Collins Square, Tower 1
727 Collins Street, Melbourne Vic 3008
Telephone (office): +61 3 8320 2222 Fax: +61 3 8663 6333
Website: www.grantthornton.com.au
Stock Exchange Listing
ASX Codes: MRQ, MRQOA, MRQOB
For personal use only