Exploration for nickel-copper sulphide
deposits, copper-gold and platinum
group element mineralisation in the
Musgrave region of South Australia
Exploration for nickel-copper sulphide deposits, copper-gold and platinum group element mineralisation in the
Musgrave region of South Australia.
the Company’s functional and presentation currency is Australian Dollars.
A description of the Company’s operations and principal activities is included in the Review of Operations and
the Directors’ Report.
ASX Code: MGV
Cash Balance: $17.8M
Issued Shares: 121M
ABN: 12 143 890 671
Top shareholders
Mithril Resources Ltd
Goldsearch Ltd
Barrick (Australia Pacific) Ltd
independence Group NL
JP Morgan Nominees Australia Ltd
integra Mining Ltd
Corporate information
Directors
Graham Ascough (Non-Executive Chairman)
Share Registry
Computershare investor Services Pty Ltd
Robert Waugh (Managing Director)
Kelly Ross (Non-Executive Director)
John Percival (Non-Executive Director)
Company Secretary
Donald Stephens
Registered Office
C/- HLB Mann Judd (SA) Pty Ltd
167-169 Fullarton Road
DuLWiCH SA 5065
Principal Place of Business
19 Richardson Street
WESt PERtH WA 6005
t: +61 (8) 9324 1061
F: +61 (8) 9324 1014
info@musgraveminerals.com.au
www.musgraveminerals.com.au
Level 5, 115 Grenfell Street
ADELAiDE SA 5000
Auditor
Grant thornton Audit Pty Ltd
Chartered Accountants
Level 1, 67 Greenhill Road
WAYViLLE SA 5034
Legal Advisors
O’Loughlins Lawyers
Level 2, 99 Frome Street
ADELAiDE SA 5000
Bankers
National Australia Bank
48 Greenhill Road
WAYViLLE SA 5034
this annual report covers Musgrave Minerals Ltd (ABN 12 143 890 671). the Company’s functional and presentation currency is Australian dollars.
A description of the Company’s operations and of its principal activities is included in the review of operations and activities in the Directors’
Report.
i
Corporate Information
Contents
2
3
Chairman’s Letter
Review of Operations
15
Summary of tenements
16
Directors’ Report
27
Auditor’s independence Declaration
28
Corporate Governance Statement
39
Statement of Comprehensive income
40
Statement of Financial Position
41
Statement of Changes in Equity
42
Statement of Cash Flows
43
Notes to the Financial Statements
71
Directors’ Declaration
72
independent Auditor’s Report
75
ASX Additional information
Contents
1
Chairman’s Letter
Dear Fellow Shareholder,
Musgrave Minerals Limited (‘Musgrave Minerals’) has been very active since listing on the Australian Securities
Exchange on 29 April 2011. the initial public offer of shares closed fully subscribed, with maximum over
subscriptions, to raise $20 million before costs, and the Company has already achieved encouraging results in
its exploration of South Australia’s Musgrave Province.
Musgrave Minerals has established a strong exploration team and commenced drilling at two prospects –
Moorilyanna, which is part of the Mimili Project, and Deering Hills. the Company has also identified priority
targets and commenced ground follow-up of targets generated from a large regional VtEM survey completed
in July 2011.
the Company’s work at Moorilyanna has already proved fruitful. Rotary air blast and aircore drilling has
identified three broad anomalous copper zones, including the Caprica East anomaly that extends over a
strike length of more than 900 metres with intercepts of up to 12 metres at 0.2% copper from surface.
Other results include drill holes showing copper mineralisation very close to surface. the regolith copper
mineralisation at Moorilyanna will be followed up with ground geophysics with the aim of identifying the
primary source of the copper in the underlying basement rocks.
At Deering Hills, Musgrave Minerals has commenced diamond drilling to test nickel-copper sulphide targets at
depths of between 60 and 160 metres. the Company looks forward to the results from this drilling and other
exploration work currently being undertaken, with the aim of unlocking the mineral potential of the Musgrave
region.
Looking ahead, while Musgrave Minerals has numerous exciting prospects within its current land holding,
the Company is also hopeful of adding to its exploration portfolio. the Company has a total of seven granted
exploration licences and 38 exploration licence applications in the South Australian portion of the Musgrave
Province. Four of these exploration licence applications have been prioritised for grant and we anticipate they
will be granted later this year.
i thank the management and staff of Musgrave Minerals for their efforts during the start-up phase of the
Company and look forward to building sustained success within the team as we move forward. With a very
strong cash position, experienced management and a unique land position in the under-explored Musgrave
Province, i am confident we have a bright future ahead.
Graham Ascough
Chairman
2
Chairman’s Letter
Review of Operations
Musgrave Minerals Ltd (‘Musgrave Minerals’ or the ‘Company’) is dedicated to discovering deposits of
economic mineralisation in the Musgrave Province of South Australia, using systematic and, well-resourced
exploration methods and programs. We have a leading exploration landholding in the Musgrave region, with
tenements covering an area in excess of 50,000km2 - which equates to approximately 5 per cent of South
Australia (Figure 1).
the Musgrave Province is one of the last under-explored frontiers for mineral exploration in Australia, and is
prospective for a number of commodities. the centrepiece is the recognition of, and access to, the under-
explored potential of the Giles Complex, a 1080Ma, aged, mafic-ultramafic, layered, intrusive complex that
hosts the massive Nebo/Babel deposit, a major nickel and copper sulphide deposit in the Western Australian
portion of the province.
in South Australia, the Musgrave Province lies almost entirely within Anangu Pitjantjatjara Yankunytjatjara
(“APY”) land (Aboriginal freehold land). Musgrave Minerals will endeavour to build on the strong relationship
with APY people that our cornerstone investor companies have already developed.
Historically, exploration activities in the region have been restricted but access has improved considerably in
recent times. Musgrave Minerals holds seven granted exploration licences with cleared exploration access to
areas totalling more than 3,200km2. We are in the process of advancing four additional tenements through
the granting process and expect to have exploration access to these tenements soon.
in 2010, prior to the initial Public Offering (‘iPO’), Musgrave Minerals completed an initial phase of exploration
on granted tenements that identified new nickel, copper and gold mineralisation, delineated 15 high
quality drill targets and advanced a number of conceptual targets to a drill test decision. A number of these
targets are defined by strong basement conductors coincident with interpreted Giles Complex intrusives
and geologically favourable structural locations. these are high priority, drill-ready targets. the exploration
completed to date clearly demonstrates our ability to be an effective explorer in the region and validates our
exploration strategy and targeting methodologies.
Review of Operations
3
Figure 1: Project Location Map
4
Review of Operations
Corporate
Musgrave Minerals Limited listed on the Australian Securities Exchange (“ASX”) on 29 April 2011. the
Company closed its initial public offering fully subscribed with a maximum oversubscription of $5 million,
raising $20 million before expenses.
During the period since listing to the end of the financial year, the Company spent $1.5 million on exploration
and administration activities, completed an initial drill program at the Moorilyanna Prospect and commenced
drilling on high priority targets at the Deering Hills Project. At the end of the financial year the Company was
well resourced, holding $17.8 million in cash.
Since listing, the Company has established a strong exploration team. it will continue to focus on the
exploration and potential development of mineral projects in the Musgrave region of South Australia.
Review of Operations
5
Exploration Activities
Musgrave Minerals is an Australian-based exploration company focused on
the Musgrave Geological Province of South Australia.
the Musgrave project tenements are prospective for massive and
disseminated nickel and copper sulphides within the mafic/ultramafic
Giles Complex intrusives, base metal mineralisation within the Birksgate
Complex metavolcanic and metasedimentary sequences, shear-hosted,
hydrothermal copper, silver and gold and pegmatite-hosted rare earth
element (“REE”) mineralisation.
the Company intersected near-surface copper mineralisation in its
maiden drilling program at Moorilyanna, part of the Mimili Project. it has
completed a ground electromagnetic (“EM”) survey at Moorilyanna and
a large regional airborne versatile time domain electromagnetic (“VtEM”)
survey. Drilling has also commenced on the high priority nickel-copper
targets at Deering Hills.
Exploration has continued at an aggressive pace since the end of financial
year with the completion of the initial drilling program at Deering Hills.
Regional geochemistry and gravity surveys are planned with ground EM
and induced Polarisation (“iP”) surveys to follow-up new airborne VtEM
anomalies.
Mimili Project
EL3954 & EL3955 (100% Musgrave Minerals Ltd)
• Significant near-surface copper mineralisation intersected in RAB-aircore
drilling at Moorilyanna
• Three broad anomalous copper zones identified
• Caprica East anomaly extends over a strike length of more than 900
metres with intercepts up to 12m @ 0.2% copper from surface
Best results include:
Hole #
Down Hole Intercept
From Depth (Down Hole)
MOORB 057
10m @ 0.23% Cu
MOORB 067
12m @ 0.20% Cu
MOORB 110
2m @ 0.17% Cu
MOORB 058
16m @ 0.14% Cu
4m
0m
11m
2m
6
Review of Operations
• Ground EM has identified two late time conductors
within the Mimili project area
• An airborne VTEM survey has been completed and
identified priority targets for follow-up.
Musgrave Minerals owns 100% of the Mimili Project
which consists of two exploration licences, EL3954 and
EL3955. the project is situated 40km west of the Stuart
Highway and approximately 70km north-west of Marla
in South Australia. Exploration was undertaken on both
a regional scale to define new targets and on a local
scale at the Moorilyanna Prospect.
A regional airborne VtEM survey was completed over a high priority section of EL3955 late in June
2011 (Figure 2). the survey is targeting near-surface and buried conductors that may represent massive
nickel, copper or other base metal sulphide mineralisation. A total of 671 line km of VtEM was flown on
200m spaced lines. Final data is not expected until late September 2011 although preliminary results are
encouraging, with a number of new targets identified for follow-up.
A ground EM survey was
completed to verify 10
anomalies identified in the
2010 VtEM survey over the
broader Moorilyanna area.
A total of 10.4 line km of
ground EM was completed on
11 individual traverses. two
late time conductors were
identified on separate lines
(Figure 2). Both conductors
appear to be sub-vertical
and located in areas of
extensive sand cover and no
outcrop. Both conductors
are interpreted by the model
to be shallow, less than 90m
to top in an area of extensive
sand cover.
Reverse circulation (“RC”)
drilling is planned to test
the conductive responses in
December 2011.
Figure 2: Location of Ground EM Anomalies and VtEM Survey
Areas Within EL3955 on a grey scale aeromagnetic image
(ground EM anomalies shown as red stars)
Review of Operations
7
Moorilyanna Prospect
EL3955 (100% Musgrave Minerals Ltd)
the Moorilyanna Prospect, within the Mimili Project area, is situated on a wholly-owned tenement located
approximately 40km west of the Stuart Highway and Adelaide to Darwin railway line in South Australia, on
the eastern edge of the Musgrave Geological Province.
A combination rotary air blast (“RAB”) and aircore drilling program was completed at Moorilyanna, consisting
of 142 holes for 1,486 metres. the drilling has successfully defined near-surface copper mineralisation in
weathered bedrock over three broad areas.
the drilling was undertaken on 10 broad spaced traverses in three main zones (Figure 3). Significant results
are shown in table 1.
Hole #
Down Hole Intercept
From Depth (Down Hole)
MOORB 057
MOORB 067
MOORB 110
MOORB 058
MOORB 059
MOORB 019
MOORB 030
MOORB 031
MOORB 047
MOORB 111
10m @ 0.23% Cu
12m @ 0.20% Cu
2m @ 0.17% Cu
16m @ 0.14% Cu
4m @ 0.12% Cu
4m @ 0.10% Cu
2m @ 0.11% Cu
2m @ 0.11% Cu
2m @ 0.11% Cu
2m @ 0.11% Cu
4m
0m
11m
2m
8m
4m
2m
2m
0m
3m
table 1: Summary of Significant Drill Results from initial Moorilyanna Regolith Drilling
All three main target areas were anomalous in copper, with best results from the Caprica East zone (Figure
4). the Caprica East zone extends for more than 900 metres with a mineralised width of up to 80 metres.
the mineralisation is open along strike to the north-west and is associated with elevated silver and gold. the
mineralisation is interpreted to be hydrothermal in nature and structurally controlled.
the significant copper results are located in an area of sparse subcrop and shallow sand cover. the broad
nature of these initial results is extremely encouraging.
An induced polarisation (‘iP’) geophysical survey is planned to identify the potential source of the primary
copper mineralisation for deeper drill testing.
Furthermore an RC Drilling program is planned to be undertaken in December 2011 to test these targets for
high-grade copper mineralisation in ‘fresh’ bedrock beneath the weathered zone.
8
Review of Operations
Figure 3: Location of Moorilyanna Drill Results on Geochemical Copper Grid and Aster image
Figure 4: Location of Caprica East Drill Results on Geochemical Copper Grid
Review of Operations
9
Deering Hills Project
EL3941 & EL3942 (100% Musgrave Minerals Ltd)
• Diamond drilling for massive nickel-copper sulphides has commenced to test nine basement EM
conductors within EL3942
• The drilling is planned to test the targets at a depth of between 60 and 160 metres
• A detailed airborne VTEM survey has been completed and has identified high priority targets for follow-up.
the Deering Hills Project consists of two wholly owned tenements, EL3941 Hanging Knoll and EL3942 Mount
Hardy, located in the central region of the Musgrave Province, in far northern South Australia covering
approximately 992km2. EL3942 is one of the most prospective tenements in the portfolio and diamond drilling
has commenced to test nine high quality nickel-copper-PGE targets outlined by recent exploration.
the diamond drilling program is testing nine strong nickel-copper sulphide targets identified from airborne
and ground EM surveys. Musgrave Minerals identified the targets during surveys conducted in late 2010 and
early 2011. Final data is not expected until late in September, although preliminary results received to date are
encouraging with a number of promising targets.
10
Review of Operations
the targets are strong late time EM conductors (Figure 5) located in geologically and structurally favourable
domains under thin sand cover. the EM responses are consistent with those expected from significant
accumulations of nickel-copper sulphide mineralisation.
Both chalcopyrite (primary copper-sulphide mineral) and pentlandite (primary nickel-sulphide mineral) have
been identified in nearby surface exposures of the mafic Giles Complex adjacent to one of the targets,
suggesting the system is fertile. the Giles Complex mafic intrusives are host to the massive nickel-copper
sulphide mineralisation on the Western Australian side of the Musgrave Province at Nebo-Babel.
One diamond drill-hole was completed prior to the end of the financial year to a depth of 211 metres. No
significant mineralisation was visible in the core, although analytical results had not yet been received.
the drilling program is expected to take three months to complete.
Figure 5: Drill targets and VtEM Survey Area Within EL3941 and EL3942 on a grey scale aeromagnetic image.
A regional airborne VtEM survey was completed
over the highest priority portions of EL3941 and
EL3942 late in June 2011. the survey aims to
identify near-surface and buried conductors that
may represent massive nickel, copper or other base
metal sulphide mineralisation. A total of 2,880
line km of VtEM was flown on 200m spaced lines.
Final data is not expected until late in September
although preliminary results received are
encouraging, with a number of promising targets
identified for follow-up.
Review of Operations
11
Mt Woodroffe Project
EL3940 (100% Musgrave Minerals Ltd)
• A detailed airborne VTEM survey has been completed at Mt Woodroffe and identified priority targets for
follow-up.
the Mt Woodroffe Project is situated on EL3940 within a large, geologically complex area, straddling the
Mann Fault Complex and Woodroffe thrust Zone in the central Musgrave Province, and covers an area of
approximately 424km2.
A regional airborne VtEM survey was completed over a portion of EL3940 late in June 2011 (Figure 6). the
aim of the survey is to identify near-surface and buried conductors that may represent massive nickel and
copper sulphide mineralisation. A total of 484 line km of VtEM was flown on 200m spaced lines. Final data is
not expected until late September, although preliminary results are encouraging with a number of new targets
identified for follow-up.
Figure 6: VtEM Survey Area Within EL3940 on aeromagnetic image
12
Review of Operations
Mt Woodward Project
EL3939 (100% Musgrave Minerals Ltd)
EL3939 covers an area of 22km2 and is located approximately 85km east-south-east of uluru. the Woodroffe
thrust underlies Giles Complex intrusives which are prospective for nickel-copper sulphide mineralisation.
A tenement wide airborne VtEM survey is proposed with the aim of identifying conductors for ground follow-
up.
Bryson Hill Project
EL4047 (Musgrave Minerals Ltd earning 75% from Pitjantjatjara Mining Company Pty Limited and Zeil
No. 1 Pty Limited)
the Bryson Hill Project covers an area of approximately 1,535km2 and is located in the far easterly portion of
the Musgrave Province. the tenement is covered by spinifex sand plains and dunes with only very minimal
subcrop. Little previous exploration has been undertaken within the tenement area. A regional airborne VtEM
survey is planned over a portion of EL4047 along with geological mapping and ground follow-up.
Review of Operations
13
Other Projects
Musgrave Minerals has a total of seven granted exploration licences and 38 exploration licence applications in
the South Australian portion of the Musgrave Province. Planning and interpretation commenced on a number
of the remaining projects, although no field work was undertaken on these projects during the period.
Four exploration licence applications have been prioritised for grant. the granting of these initial four new
exploration licences (ELA380/97, ELA364/97, ELA54/97 and ELA41/97) is expected later this year (Figure 7).
Figure 7: Prioritised tenements for Grant
Competent Persons Statement
The information in this report that relates to Exploration Results is based on information compiled by Mr Robert Waugh. Mr Waugh is a
member of the Australasian Institute of Mining and Metallurgy (AusIMM) and a member of the Australian Institute of Geoscientists (AIG).
Mr Waugh is Managing Director of Musgrave Minerals Limited. Mr Waugh has sufficient industry experience to qualify as a Competent
Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.
Mr Waugh consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.
14
Review of Operations
Summary of tenements
Tenement
EL1996/260
EL1996/262
EL1996/336
EL1996/337
EL1996/338
EL1996/339
EL1996/340
EL1996/341
EL1996/342
EL1996/534
EL1997/040
EL1997/041
Project
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
EL1997/053
Musgrave PMC JV
EL1997/054
Musgrave PMC JV
EL1997/055
Musgrave PMC JV
EL1997/056
Musgrave PMC JV
EL1997/057
Musgrave PMC JV
EL1997/058
Musgrave PMC JV
EL1997/059
Musgrave PMC JV
EL1997/060
Musgrave PMC JV
EL1997/061
Musgrave PMC JV
EL1997/062
Musgrave PMC JV
EL1997/063
Musgrave PMC JV
EL1997/143
EL1997/144
EL1997/186
EL1997/297
EL1997/321
EL1997/364
EL1997/380
EL1997/468
EL1997/605
EL1999/035
EL2001/031
EL2008/154
EL2008/155
EL2008/156
EL2008/239
EL3939
EL3940
EL3941
EL3942
EL3954
EL3955
EL4047
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave PMC JV
Locality
Status
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Area
519 Km2
463 Km2
653 Km2
1854 Km2
620 Km2
1301 Km2
2198 Km2
1230 Km2
2136 Km2
1783 Km2
1507 Km2
2385 Km2
1013 Km2
2360 Km2
595 Km2
1241 Km2
1656 Km2
1721 Km2
2308 Km2
666 Km2
2108 Km2
1926 Km2
1957 Km2
1040 Km2
835 Km2
1815 Km2
2015 Km2
624 Km2
1342 Km2
1256 Km2
215 Km2
152 Km2
692 Km2
338 Km2
37 Km2
34 Km2
12 Km2
46 Km2
22 Km2
424 Km2
427 Km2
565 Km2
714 Km2
1906 Km2
1535 Km2
MGV Interest
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0% (may earn up to 75%)
0% (may earn up to 75%)
0% (may earn up to 75%)
0% (may earn up to 75%)
0% (may earn up to 75%)
0% (may earn up to 75%)
0% (may earn up to 75%)
0% (may earn up to 75%)
0% (may earn up to 75%)
0% (may earn up to 75%)
0% (may earn up to 75%)
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0% (may earn up to 75%)
Summary of Tenements
15
Directors Report
Your Directors submit their report for the year ended 30 June 2011.
Directors
the names and details of the Company’s Directors in office during the financial year and until the date of this
report are as follows.
Mr Graham Ascough
Non-Executive Chairman
Appointed 26/05/2010
Mr Robert Waugh
Managing Director
Appointed 06/03/2011
Mr John Percival
Non-Executive Director
Appointed 26/05/2010
Mrs Kelly Ross
Non-Executive Director
Appointed 26/05/2010
Mr Donald Stephens
Company Secretary
Appointed 16/06/2010
Names, qualifications, experience and special responsibilities
Graham Ascough
BSc, PGeo (Chairman, Non-Executive Director)
Graham Ascough has more than 22 years of industry exploration experience evaluating mineral projects and
resources in Australia and overseas. Mr Ascough has been Managing Director of ASX listed Mithril Resources
Limited since October 2006. He is a geophysicist by training and prior to joining Mithril Resources Limited, Mr
Ascough was the Australian Manager of Nickel and PGM Exploration at the major Canadian resources house,
Falconbridge Limited (acquired by Xstrata Plc in 2006). He has had broad industry involvement ranging from
playing a leading role in setting the strategic direction for significant country-wide exploration programmes to
working directly with junior explorers. He is also the non-executive Chairman of ASX listed Aguia Resources
Limited. Mr Ascough is also a Councillor of the South Australian Chamber of Mines and Energy and is Chair
of its Exploration Committee. He is a member of the Australasian institute of Mining and Metallurgy and is a
Professional Geoscientist of Ontario, Canada.
Robert Waugh
MSc, BSc, MAusIMM, MAIG (Managing Director)
Robert Waugh has over 24 years’ experience in the resources sector including more than eight years in the
Musgrave region. Mr Waugh was a critical member of the WMC Resources Limited exploration team that
discovered the massive Nebo and Babel nickel/copper/PGM deposits at West Musgrave in 2000. He was
subsequently Project Manager of the team that defined the initial resource at Nebo-Babel. Mr Waugh has
16
Directors Report
held senior exploration management roles at WMC Resources (WMC), BHP Billiton Exploration Limited (BHP),
Fusion Resources Limited, Cameco Australia Limited and most recently was Exploration Manager for Raisama
Limited. Mr Waugh spent over 19 years with WMC and subsequently BHP, following the takeover of WMC
in 2005. He has extensive exploration and mining experience in a range of commodities including nickel,
copper, gold, uranium and PGMs. Mr Waugh holds a Bachelor of Science degree majoring in geology from
the university of Western Australia and a Masters of Science in Mineral Economics from Curtin university
and the Western Australian School of Mines. Mr Waugh is a member of the Australasian institute of Mining
and Metallurgy and a Member of the Australian institute of Geoscientists. Mr Waugh is a member of the
Company’s audit committee.
John Percival
(Non Executive Director)
John Percival has been involved in investment and merchant banking for over 25 years including 15 years
as investment Manager of Barclays Bank New Zealand Limited. in addition he has extensive experience in
stockbroking, corporate finance and investment management. Mr Percival is currently Executive Director –
Operations of Goldsearch Limited (ASX).
Kelly Ross
BBus, CPA GradDipCSP (Non-Executive Director)
Kelly Ross is a qualified accountant holding a Bachelor of Business (Accounting) and has the designation CPA
from the Australian Society of Certified Practicing Accountants. Mrs Ross is a Chartered Secretary with over 25
years’ experience in accounting and administration in the mining industry and was the Company Secretary of
independence Group NL for 10 years. Mrs Ross is currently a Non-Executive Director of independence Group
NL (ASX). Mrs Ross is a member of the Company’s audit committee.
Company Secretary
Donald Stephens
BA(Acc), FCA
Donald Stephens is a Chartered Accountant and corporate advisor with over 25 years’ experience in the
accounting industry, including 14 years as a partner of HLB Mann Judd, a firm of Chartered Accountants. He
is a Director of Papyrus Australia Ltd, Mithril Resources Ltd, CRW Holdings Ltd and is Company Secretary to
Minotoaur Exploration Ltd, Mithril Resources Ltd, toro Energy Ltd and Petratherm Ltd. He holds other public
company secretarial positions and directorships with private companies and provides corporate advisory
services to a wide range of organisations.
Directors Report
Directors Report
17
interests in the Shares and Options of the Company and
Related Bodies Corporate
As at the date of this report, the interests of the Directors in the shares and options of Musgrave Minerals Ltd
were:
Mr Graham Ascough
Mr Robert Waugh
Mr John Percival
Mrs Kelly Ross
Dividends
Number of Ordinary Shares
Number of Options over Ordinary Shares
200,000
80,000
100,000
50,000
750,000
5,000,000
500,000
500,000
No dividends were paid or declared since the start of the financial year (2010: nil). No recommendation for
payment of dividends has been made.
Principal Activities
the principal activities of the Company during the financial year were:
• to establish the activities of the newly established entity;
• to carry out exploration of mineral tenements by agreement with founding shareholders, both on a joint
venture basis and by the Company in its own right;
• to continue to seek extensions of areas held and to seek out new areas with mineral potential; and
• to evaluate results achieved through surface sampling, geophysical surveys and drilling activities carried out
during the year.
Operating Results
the loss of the Company for the financial year after providing for income tax amounted to $2,251,700 (2010:
$6,746).
18
Directors Report
Operations Overview
A full review of operations carried out by the Company is provided in the ‘review of operations’ preceding this
Directors’ Report.
Risk Management
the Company takes a proactive approach to risk management. the Board is responsible for ensuring that
risks, and also opportunities, are identified on a timely basis and that the Company’s objectives and activities
are aligned with the risks and opportunities identified by the Board.
the Company believes that it is crucial for all board members to be a part of this process, and as such the
Board has not established a separate risk management committee.
the Board has a number of mechanisms in place to ensure that management’s objectives and activities are
aligned with the risks identified by the Board. these include the following:
• Board approval of a strategic plan, which encompasses the Company’s vision, mission and strategy
statements, designed to meet stakeholder’s needs and manage business risk.
•
Implementation of Board approved operating plans and budgets and board monitoring of progress against
these budgets, including the establishment and monitoring of performance indicators of both a financial
and non financial nature.
Significant Changes in the State of Affairs
On 29 April 2011 the Company successfully listed on the Australian Securities Exchange, after completing a
successful initial public offering raising $20 Million before expenses.
Significant Events After the Balance Date
there were no significant events that occurred after balance date.
Directors Report
19
Likely Developments and Expected Results
information as to the likely developments in the operations of the Company and the expected results of those
operations has been included in the review of operations.
Environmental Regulation and Performance
the Company is aware of its responsibility to impact as little as possible on the environment, and where
there is any disturbance, to rehabilitate sites. During the year under review the majority of work carried out
was in South Australia and the Company followed procedures and pursued objectives in line with guidelines
published by the South Australian Government. these guidelines are quite detailed and encompass the
impact on owners and land users, heritage, health and safety and proper restoration practices. the Company
supports this approach and is confident that it properly monitors and adheres to these objectives, and any
local conditions applicable, both in South Australia and elsewhere.
the Company is committed to minimising environmental impacts during all phases of exploration,
development and production through a best practice environmental approach. the Company shares
responsibility for protecting the environment for the present and the future. it believes that carefully managed
exploration programs should have little or no long-lasting impact on the environment and the Company
has formed a best practice policy for the management of its exploration programs. the Company properly
monitors and adheres to this approach and there were no environmental incidents to report for the year under
review. Furthermore, the Company is in compliance with the state and/or commonwealth environmental laws
for the jurisdictions in which it operates.
Occupational Health, Safety and Welfare
in running its business, Musgrave Minerals aims to protect the health, safety and welfare of employees,
contractors and guests. in the reporting year the Company experienced no medical aid incidents and no lost
time injuries. the Company reviews its Occupational Health, Safety and Welfare (OHS&W) policy at regular
intervals to ensure a high standard of OHS&W.
indemnification and insurance of Directors and Officers
to the extent permitted by law, the Company has indemnified (fully insured) each Director and the Company
Secretary of the Company for a premium of $13,200 (2010: $12,060). the liabilities insured include costs
20
Directors Report
and expenses that may be incurred in defending civil or criminal proceedings (that may be brought) against the
officers in their capacity as officers of the Company or a related body, 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 willful 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 or to cause detriment to the Company.
Share Options
Unissued Shares
At the date of this report, the following options to acquire ordinary shares in the Company were on issue:
Issue Date
Expiry Date
Exercise Price
Balance at 1
July 2010
Net Issued/
(Exercised)
during Year
Lapsed/
Cancelled/
Expired
Balance at 30
June 2011
21/08/2010
20/08/2015
17/02/2011
17/02/2016
17/02/2011
17/02/2016
09/05/2011
8/05/2016
$0.25
$0.36
$0.50
$0.36
-
-
-
-
-
7,750,000
4,750,000
2,500,000
500,000
15,500,000
-
-
-
-
-
7,750,000
4,750,000
2,500,000
500,000
15,500,000
New Options issued
the following unlisted options were issued during the year to:
• The tenement vendors pursuant to Tenement Sale Agreements (outlined in the prospectus lodged with the
ASX on 27 April 2011):
• 7,750,000 options with an exercise price of $0.25 and exercisable any time between 21 August 2010
to 20 August 2015.
• The Directors and Company Secretary:
• 2,250,000 options with an exercise price of $0.36 and exercisable any time between 28 April 2013 to
17 February 2016.
• The Managing Director pursuant to his employment agreement:
• 2,500,000 options with an exercise price of $0.36 which are exercisable at any time between 28 April
2013 until 17 February 2016.
• 2,500,000 options with an exercise price of $0.50 which are exercisable at any time between 28 April
2013 until 17 February 2016.
• An employee under the Company’s Employee Share Option Plan (ESOP):
• 500,000 options with an exercise price of $0.36 and exercisable anytime between 9 May 2011 to 8
May 2016.
Directors Report
21
Remuneration Report (Audited)
this report outlines the remuneration arrangements in place for Directors and other key management
personnel of Musgrave Minerals Ltd.
Remuneration philosophy
the Board is responsible for determining remuneration policies applicable to Directors and senior executives
of the Company. the broad policy is to ensure that remuneration properly reflects the individuals’ duties
and responsibilities and that remuneration is competitive in attracting, retaining and motivating people with
appropriate skills and experience. At the time of determining remuneration consideration is given by the Board
to the Company’s financial performance.
Employment contracts
the employment conditions of the Managing Director, Mr Robert Waugh, are formalised in an employment
contract. under this contract, the Company agrees to employ Mr Waugh as Managing Director of the
Company for a period of three years commencing on 7 March 2011 with his current gross annual salary,
inclusive of 9% superannuation guarantee, being $290,000. the Company may terminate the employment
contract without cause by providing six (6) months written notice or making payment in lieu of notice, based
on the annual salary component. termination payments are generally not payable on resignation or dismissal
for serious misconduct. in the instance of serious misconduct the Company can terminate employment at any
time.
the employment conditions of the Exploration Manager, Dr Justin Gum, are formalised in a contract of
employment. Dr Gum commenced employment on 1 October 2010 and his current gross annual salary,
inclusive of superannuation guarantee, is $163,500. Either party may terminate the employment contract
without cause by providing one (1) month’s written notice or making payment in lieu of notice (in the
case of the Company) or forfeiture of one month’s salary (in the case of Dr Gum), based on the annual
salary component. termination payments are generally not payable on resignation or dismissal for serious
misconduct. in the instance of serious misconduct the Company can terminate employment at any time.
Key management personnel remuneration and equity holdings
the Board currently determines the nature and amount of remuneration for Board members and senior
executives of the Company. the policy is to align Director and executive objectives with shareholder and
business objectives by providing a fixed remuneration component and offering specific long term incentives.
22
Directors Report
the non executive Directors and other executives receive a superannuation guarantee contribution required
by the Federal Government, which is currently 9%, and do not receive any other retirement benefits.
Some individuals, however, may choose to sacrifice part of their salary to increase payments towards
superannuation. All remuneration paid to Directors and executives is expensed as incurred. Executives are
also entitled to participate in the Company share option scheme. Options are valued using the Black Scholes
methodology.
the Board policy is to remunerate non executive Directors at market rates based on comparable companies
for time, commitment and responsibilities. the Board determines payments to non executive Directors and
reviews their remuneration annually, based on market practice, duties and accountability. independent
external advice is sought when required.
table 1: Directors remuneration for the year ended 30 June 2011 and 30 June 2010
Short Term
Benefits
Post Employment
Share-based
payments
Total
Salary and Fees
Superannuation
Value of options
10,900
-
84,829
-
7,500
-
7,500
-
110,729
-
-
-
7,635
-
675
-
675
-
8,985
-
139,500
-
902,500
-
93,000
-
93,000
-
150,400
-
994,964
-
101,175
-
101,175
-
1,228,000
-
1,347,714
-
Mr Graham Ascough**
2011
2010
Mr Robert Waugh
2011
2010
Mr John Percival**
2011
2010
Mrs Kelly Ross**
Total
2011
2010
2011
2010
table 2: Remuneration of other key management personnel for the year ended 30 June
2011 and 30 June 2010
Short Term
Benefits
Post Employment
Share-based
payments
Total
Salary and Fees
Superannuation
Value of options
99,533
-
-
-
99,533
-
8,958
-
-
-
8,958
-
98,500
-
93,000
-
191,500
-
206,991
-
93,000
-
299,991
-
Dr Justin Gum
2011
2010
Donald Stephens * & **
Total
2011
2010
2011
2010
Directors Report
23
(*) HLB Mann Judd (SA) Pty Ltd have received professional fees for accounting, taxation and secretarial services provided during the year
of $68,300 (2010: Nil). Donald Stephens, the Company Secretary, is a consultant with HLB Mann Judd (SA) Pty Ltd.
(**) Graham Ascough is the Managing Director and Donald Stephens is a non-executive Director and Company Secretary of Mithril
Resources Ltd which is the beneficial holder of 7.67% of the issued capital of Musgrave Minerals Ltd. John Percival is an executive
Director of Goldsearch Ltd which is the beneficial holder of 7.17% of the issued capital of Musgrave Minerals Ltd. Kelly Ross is a non-
executive Director of independence Group NL which is the beneficial holder of 7.46% of the issued capital of Musgrave Minerals Ltd.
table 3: Options granted as part of remuneration
Grant
Date
Grant
Number
Vesting
Date
Value per
option at
grant date
Exercise
Price
Total Fair
Value
% of
Remuneration
Mr Graham Ascough
17/02/11
750,000
17/02/11
$0.186
$0.36
$139,500
92.75%
Mr Robert Waugh
17/02/11
2,500,000
17/02/11
$0.186
$0.36
$465,000
46.74%
Mr Robert Waugh
17/02/11
2,500,000
17/02/11
$0.175
$0.50
$437,500
43.97%
Mr John Percival
17/02/11
500,000
17/02/11
$0.186
$0.36
$93,000
91.92%
Mrs Kelly Ross
17/02/11
500,000
17/02/11
$0.186
$0.36
$93,000
91.92%
Dr Justin Gum
09/05/11
500,000
09/05/11
$0.197
$0.36
$98,500
47.59%
Mr Donald Stephens
17/02/11
500,000
17/02/11
$0.186
$0.36
$93,000
100.00%
Note: None of the above options granted to key management personnel have attached performance conditions in accordance with the
current remuneration policy of the Company.
All of the options issued during the year vested upon issue.
table 4: Option holdings of Key Management Personnel
30 June 2011
Mr Graham Ascough
Mr Robert Waugh
Mr Robert Waugh
Mr John Percival
Mrs Kelly Ross
Dr Justin Gum
Mr Donald Stephens
Balance at
Beginning
of Year
Granted as
Remuneration
Balance at
End of Year
Exercise
Price
First Exercise
Date
Last Exercise
Date
-
-
-
-
-
-
-
750,000
750,000
$0.36
28/04/2013
17/02/2016
2,500,000
2,500,000
$0.36
28/04/2013
17/02/2016
2,500,000
2,500,000
$0.50
28/04/2013
17/02/2016
500,000
500,000
$0.36
28/04/2013
17/02/2016
500,000
500,000
$0.36
28/04/2013
17/02/2016
500,000
500,000
$0.36
9/05/2011
8/05/2016
500,000
500,000
$0.36
28/04/2013
17/02/2016
Note: None of the above Key Management Personnel held options in the prior period.
24
Directors Report
table 5: Shareholdings of Key Management Personnel
30 June 2011
Balance at
Beginning of Year
Shares Issued During Year
Balance at End of Year
Mr Graham Ascough
Mr Robert Waugh
Mr John Percival
Mrs Kelly Ross
Dr Justin Gum
Mr Donald Stephens
-
-
-
-
-
-
200,000
80,000
100,000
50,000
40,000
-
Note: None of the above Key Management Personnel held shares in the prior period.
200,000
80,000
100,000
50,000
40,000
-
Directors’ Meetings
the number of meetings of Directors (including meetings of committees of Directors) held during the year and
the number of meetings attended by each Director was as follows:
Number of Meetings Held
6
-
-
-
Directors’ Meetings
Audit Committee
Number of Meetings
Attended:
Mr Graham Ascough
Mr Robert Waugh
Mr John Percival
Mrs Kelly Ross
Eligible
Attended
Eligible
Attended
6
2
6
6
6
2
6
6
-
-
-
-
-
-
-
-
the members of the audit committee are Mrs Kelly Ross, Mr Graham Ascough and Mr Robert Waugh.
Proceedings on Behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or 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 any part of those proceedings.
the Company was not a party to any such proceedings during the year.
Directors Report
25
Auditor independence and Non-Audit Services
Grant thornton Audit Pty Ltd, in its capacity as auditor for Musgrave Minerals Limited, provided services as the
Company’s investigating Accountant to the prospectus during the reporting year.
the auditor’s independence declaration for the year ended 2011 as required under section 307C of the
Corporations Act 2001 has been received and can be found on the following page.
Signed in accordance with a resolution of the Board of Directors.
Mr Graham Ascough
Chairman
Dated this 28th day of September 2011
26
Directors Report
Auditor’s independence Declaration
Auditor’s Independence Declaration
27
Corporate Governance Statement
the Board of Directors has adopted a corporate framework for the Company which is underpinned by the
ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations with 2010
Amendments (2nd Edition) (Recommendations) applicable to ASX-listed entities.
this Section addresses each of the Corporate Governance Principles and, where the Company has not
followed a Recommendation, this is identified with the reasons for not following the Recommendation. those
charters and policies that form the basis of the corporate governance practices of the Company are located on
the Company’s website.
Principle 1 - Lay solid foundations for management and
oversight
(a) Recommendation 1.1 – Functions reserved to the Board and delegated to
senior executives
the Board will be accountable to Shareholders for the performance of the Company and will have
overall responsibility for its operations. Day to day management of the Company’s affairs, and the
implementation of the corporate strategy and policy initiatives, will be formerly delegated by the Board
to the Managing Director.
the Company has established functions reserved to the Board and functions delegated to senior
executives.
the functions reserved to the Board include:
• Approving the strategic direction and related objectives of the Company and monitoring
management performance in the achievement of these objectives.
• Adopting budgets and monitoring the financial performance of the Company.
• Reviewing annually the performance of the Managing Director and senior executives, including the
Company Secretary, against the objectives and performance indicators established by the Board.
• Overseeing the establishment and maintenance of adequate internal controls and effective
monitoring systems.
• Overseeing the implementation and management of effective safety and environmental
performance systems.
28
Corporate Governance Statement
• Ensuring all major business risks are identified and effectively managed.
• Ensuring that the Company meets its legal and statutory obligations.
• Overseeing of the Company, including its control and accountability systems.
the functions delegated to senior executives include:
•
Implementing the Company’s vision, values and business plan.
• Managing the business to agreed capital and operating expenditure budgets.
•
Identifying and exploring opportunities to build and sustain the business.
• Allocating resources to achieve the desired business outcomes.
• Sharing knowledge and experience to enhance success.
• Facilitating and monitoring the potential and career development of the Company’s people
resources.
•
Identifying and mitigating areas of risk within the business.
• Managing effectively the internal and external stakeholder relationships and engagement strategies.
• Determining the senior executives’ position on strategic and operational issues.
For the purposes of the proper performance of their duties, the Directors are entitled to seek
independent professional advice at the Company’s expense, unless the Board determines otherwise.
the Board schedules meetings on a regular basis and other meetings as and when required.
the Company has not formally established the functions reserved to the Board and those delegated to
senior executives in accordance with recommendations 1.1 and 1.3 of the ASX Corporate Governance
Council. Given the size of the Company, the Board has not considered it necessary to formulate a Board
charter.
(b) Recommendation 1.2 – Performance evaluation of senior executives
the Managing Director and senior management participate in annual performance reviews. the
performance of staff is measured against the objectives and performance indicators established by
the Board. A performance evaluation for senior executives will take place in the upcoming reporting
period in accordance with the Company’s documented process. the performance of senior executives
is reviewed by comparing performance against agreed measures, examining the effectiveness and
results of their contribution and identifying areas for potential improvement. in accordance with
recommendations 1.2 and 1.3 of the ASX Corporate Governance Council the Company has not
disclosed a description of the performance evaluation process in addition to the disclosure above.
Corporate Governance Statement
29
Principle 2 - Structure the Board to add value
At the date of this report the Board consists of the following Directors:
• Mr Graham Ascough - Non-Executive Chairman
• Mr Robert Waugh - Managing Director
• Mrs Kelly Ross - Non-Executive Director
• Mr John Percival - Non-Executive Director
the Board considers this to be an appropriate composition given the size and development of the Company at
the present time. A profile of each Director including their skills, qualifications and experience, is set out in the
Directors’ Report.
(a) Recommendation 2.1 - A majority of the Board should be independent
Directors
the Board is conscious of the need for independence and ensures that where a conflict of interest
may arise, the relevant Director(s) leave the meeting to ensure a full and frank discussion of the
matter(s) under consideration by the rest of the Board. those Directors who have interests in specific
transactions or potential transactions do not receive Board papers related to those transactions or
potential transactions, do not participate in any part of a Directors’ meeting which considers those
transactions or potential transactions, are not involved in the decision making process in respect of
those transactions or potential transactions, and are asked not to discuss those transactions or potential
transactions with other Directors. Each Director is required by the Company to declare on an annual
basis the details of any financial or other relevant interests that they may have in the Company.
the Board has determined that its three non-executive Directors are not independent as defined under
Recommendation 2.1. the Company is therefore at variance with Recommendation 2.1 in that a
majority of Directors are not independent.
the Board considers its current structure to be an appropriate composition of the required skills and
experience, given the experience of the individual Directors and the size and development of the
Company at the present time.
Each individual member of the Board is satisfied that whilst the Company may not comply with
Recommendation 2.1, all Directors bring an independent judgment to bear on Board decisions.
(b) Recommendation 2.2 – The chair should be an independent Director
the Company’s Chairman, Mr Graham Ascough, is not an independent Director as defined under
Recommendation 2.1.
30
Corporate Governance Statement
(c) Recommendation 2.3 – The roles of chair and Managing Director should be
separated
the roles of the Chairman and the Managing Director will not be exercised by the same individual.
(d) Recommendation 2.4 – Nomination Committee
the Board has not established a Nomination and Remuneration Committee in accordance with
recommendation 2.4 of the Corporate Governance Council. the Board takes ultimate responsibility for
these matters and continues to monitor the composition of the Board and the roles and responsibilities
of its members. Accordingly, the Company does not have a Nomination and Remuneration Committee
Charter in accordance with recommendations 2.4 and 2.6 of the ASX Corporate Governance Council.
(e) Recommendation 2.5 – Process for evaluating the performance of the Board
the Board continues to review performance against appropriate measures and identify ways to
improve performance. the Board has not formally disclosed the review process in accordance with
recommendations 2.5 and 2.6 of the ASX Corporate Governance Council. the Board takes ultimate
responsibility for these matters and does not consider the disclosure of the performance evaluation
necessary at this stage.
(f) Recommendation 2.6 – Additional information concerning the Board and
Directors
the Company will include the disclosures required by Recommendation 2.6 in its future annual reports.
there are procedures in place, agreed by the Board, to enable Directors, in furtherance of their duties,
to seek independent professional advice at the Company’s expense.
Principle 3 – Promote ethical and responsible decision
making
(a) Securities Trading Policy
the Company has established a policy concerning trading in the Company’s shares by the Company’s
officers, employees and contractors and consultants to the Company while engaged in work for the
Company (Representatives).
Corporate Governance Statement
31
this policy provides that it is the responsibility of each Representative to ensure they do not breach the
insider trading prohibition in the Corporations Act. Breaches of the insider trading prohibition will result
in disciplinary action being taken by the Company.
Representatives must also obtain written consent from the Chairman (or, in the case of the Chairman,
from the Board) prior to trading in the Company’s securities.
Subject to these restrictions, the policy provides that Directors, the Company Secretary and employees
of, or contractors to, the Company that have access to the Company’s financial information or drilling
results are permitted to trade in the Company’s securities throughout the year except during the
following periods:
(a) the period between the end of the March, June, September and December quarters and the release
of the Company’s quarterly report to ASX for so long as the Company is required by the Listing
Rules to lodge quarterly reports; and
(b) 24 hours after the following events:
(i) Any major announcements;
(ii) The release of the Company’s quarterly, half yearly and annual financial results to the ASX;
and
(iii) the Annual General Meeting and all other General Meetings.
in exceptional circumstances the Board may waive the requirements of the Share trading Policy to allow
Representatives to trade in the shares of the Company, provided to do so would not be illegal.
Directors must advise the Company Secretary of changes to their shareholdings in the Company within
two (2) business days of the change.
(b) Recommendation 3.1 – Code of Conduct
the Board recognises the need for Directors and employees to observe the highest standards of
behaviour and business ethics when engaging in corporate activity. the Company intends to maintain a
reputation for integrity and is highly committed to demonstrating appropriate corporate practices and
decision making. the Company’s officers and employees are required to act in accordance with the law
and with the highest ethical standards. the Board has adopted and disclosed a formal code of conduct
applying to the Board and all employees in accordance with recommendations 3.1 and 3.5 of the
Corporate Governance Council.
(c) Recommendation 3.2 and Recommendation 3.3 – Diversity Policy
the ASX Corporate Governance Council has released amendments dated 30 June 2010 to the 2nd
edition Corporate Governance Principles and Recommendations in relation to diversity.
32
Corporate Governance Statement
For the purpose of the amendments diversity includes, but is not limited to, gender, age, ethnicity and
cultural background.
the Company continues to strive towards achieving objectives established towards increasing gender
diversity.
the Company will assess all staff and Board appointments on their merits with consideration to diversity
a driver in decision making. the Company has not yet developed or disclosed a formal diversity policy
and therefore has not complied with the recommendations 3.2 and 3.3 of the Corporate Governance
Council effective from 1 January 2011.
the Board is ultimately responsible for reviewing the achievement of this policy.
the Company will include the disclosures required by Recommendation 3.3 in its future annual reports.
(d) Recommendation 3.4 - Reporting in Annual Report
the Company’s future annual reports will include a report containing the proportion of women
employees in the whole organisation, women in senior executive positions and women on the Board.
Principle 4 - Safeguard integrity in financial reporting
the Company has structured financial management to independently verify and safeguard the integrity of its
financial reporting. the structure established by the Company includes:
• Review and consideration of the financial statements by the Audit Committee.
• A process to ensure the independence and competence of the Company’s external auditors.
(a) Recommendation 4.1 – Audit Committee
the Company has established an Audit Committee.
(b) Recommendation 4.2 – Structure of the Audit Committee
the Company’s Audit Committee does not comply with all of the requirements of Recommendation
4.2. Details are as follows:
• the Audit Committee does not consist only of non-executive Directors; there are two non-executive
Directors and one executive Director;
• the Audit Committee does not consist of a majority of independent Directors; and
Corporate Governance Statement
33
• the Audit Committee is chaired by Mrs Kelly Ross, who is not an independent Director.
Although none of the members of the Audit Committee are independent, the Board has
nevertheless determined that the composition of the Audit Committee represents the only practical
mix of Directors that have an appropriate range of qualifications and expertise and that can
understand and competently deal with current and emerging relevant business issues.
(c) Recommendation 4.3 – Audit Committee Charter
the Audit Committee’s primary responsibilities are to:
• oversee the existence and maintenance of internal controls and accounting systems;
• oversee the management of risk within the Company;
• oversee the financial reporting process;
• review the annual and half-year financial reports and recommend them for approval by the Board;
• nominate external auditors;
• review the performance of the external auditors and existing audit arrangements; and
• ensure compliance with laws, regulations and other statutory or professional requirements, and the
Company’s governance policies.
the Company has adopted an Audit Committee Charter which sets out its role, responsibilities and
membership requirements and reflects the matters set out in the commentary and guidance for
Recommendation 4.3.
(d) Recommendation 4.4 – Additional Information concerning the Audit
Committee
the Company will include the disclosures required by Recommendation 4.4 in its future annual reports.
in accordance with the guide to reporting on Principle 4, the Company’s Audit Committee Charter is
available on the Company’s website.
Principle 5 - Make timely and balanced disclosure
the Company has a policy that all shareholders and investors have equal access to the Company’s information.
the Board ensures that all price sensitive information is disclosed to ASX in accordance with the continuous
disclosure requirements of the Corporations Act and Listing Rules. the Company Secretary has primary
responsibility for all communications with ASX and is accountable to the Board through the Chair.
34
Corporate Governance Statement
(a) Recommendation 5.1 – ASX Listing Rule Disclosure Requirements
the Company has established a Continuous Disclosure Policy which sets out the key obligations of
Directors and employees in relation to continuous disclosure as well as the Company’s obligations under
the Listing Rules and Corporations Act. the policy also provides procedures for internal notification and
external disclosures, as well as procedures for promoting understanding of compliance with disclosure
requirements.
the policy reflects the matters set out in the commentary and guidance for Recommendation 5.1.
(b) Recommendation 5.2 – Continuous Disclosure Policy
the Company will include the disclosures required by Recommendation 5.2 in its future annual reports.
A copy of the Company’s Continuous Disclosure Policy is available on the Company’s website.
Principle 6 - Respect the rights of shareholders
the Board strives to ensure that Shareholders are provided with sufficient information to assess the
performance of the Company and its Directors and to make well-informed investment decisions.
(a) Recommendation 6.1 – Shareholder Communications Policy
information is communicated to Shareholders through:
• annual, half-yearly and quarterly financial and activity reports;
• annual and other general meetings convened for Shareholder review and approval of Board
proposals;
• continuous disclosure of material changes to ASX; and
• the Company’s website where all ASX announcements, notices and financial reports are published
as soon as possible after release to ASX.
the auditor is invited to attend the annual general meeting of Shareholders. the Chairman will permit
Shareholders to ask questions about the conduct of the audit and the preparation and content of the
audit report.
the Company has adopted a Shareholder Communications Policy for:
• promoting effective communication with shareholders; and
• encouraging shareholder participation at annual and other general meetings.
Corporate Governance Statement
35
(b) Recommendation 6.2 – Availability of Shareholder Communications Policy
the Company will include the disclosures required by Recommendation 6.2 in its future annual reports.
A copy of the Company’s Shareholder Communications Policy is available on the Company’s website.
Principle 7 - Recognise and manage risk
the Board has identified the significant areas of potential business and legal risk of the Company. in addition
the Board has developed the culture, processes and structures of the Company to encourage a framework of
risk management which identifies, monitors and manages the material risks facing the organisation.
(a) Recommendation 7.1 – Risk Management Policies
the identification, monitoring and, where appropriate, the reduction of significant risk to the Company
is the responsibility of the Managing Director and the Board. the Board has also established the Audit
Committee which addresses the risks of the Company.
the Board reviews and monitors the parameters under which such risks will be managed. Management
accounts are prepared and reviewed with the Managing Director at subsequent Board meetings.
Budgets are prepared and compared against actual results.
Management and the Board monitor the Company’s material business risks and reports are considered
at regular meetings.
the Company has not publicly disclosed a policy for the oversight and management of material
business risks in accordance with recommendations 7.1 and 7.4 of the Corporate Governance Council.
the Board takes ultimate responsibility for these matters and does not consider disclosure of a risk
management policy to be appropriate at this stage.
(b) Recommendation 7.2 – Risk Management and Internal Control System
the Company is in the process of developing a risk management framework which will be supported
by the Board of Directors and management.
the Board will require management to design and implement a risk management and internal control
system to manage the Company’s business risks.
the Board will require management to report to it on whether those risks are being managed
effectively.
36
Corporate Governance Statement
(c) Recommendation 7.3 – Statement from the Managing Director and Company
Secretary
the Managing Director and the Company Secretary will be required to state in writing to the Board that
the Company’s financial reports present a true and fair view, in all material respects, of the Company’s
financial condition and operational results are in accordance with relevant accounting standards.
included in this statement will be confirmation that the Company’s risk management and internal
controls are operating efficiently and effectively.
(d) Recommendation 7.4 – Additional Information concerning Risk Management
the Company will include the disclosures required by Recommendation 7.4 in its future annual reports.
the Company has not publicly disclosed a policy for the oversight and management of material
business risks in accordance with recommendation 7.1 and 7.4 of the Corporate Governance Council.
the Board takes ultimate responsibility for these matters and does not consider disclosure of a risk
management policy to be appropriate at this stage.
Principle 8 - Remunerate fairly and responsibly
(a) Recommendation 8.1 – Remuneration Committee
the Board has not established a Remuneration Committee or disclosed a Committee Charter on
the Company’s website and therefore has not complied with recommendations 8.1 and 8.3 of the
Corporate Governance Council. the Board takes ultimate responsibility for these matters and does not
consider a Remuneration Committee to be appropriate at this stage.
(b) Recommendation 8.2 - Structure of Remuneration Committee
the Board has not established a Remuneration Committee or disclosed a Committee Charter on
the Company’s website and therefore has not complied with recommendations 8.2 and 8.3 of the
Corporate Governance Council. the Board takes ultimate responsibility for these matters and does not
consider a Remuneration Committee to be appropriate at this stage.
(c) Recommendation 8.3 – Remuneration of Executive Directors, Executives and
Non-Executive Directors
the Chairman and the non-executive Directors are entitled to draw Director’s fees and receive
Corporate Governance Statement
37
reimbursement of reasonable expenses for attendance at meetings. the Company is required to
disclose in its annual report details of remuneration to Directors. the maximum aggregate annual
remuneration which may be paid to non-executive Directors is $250,000 per annum. this amount
cannot be increased without the approval of the Company’s Shareholders.
(d) Recommendation 8.4 – Additional Information concerning Remuneration
the Company will include the disclosures required by Recommendation 8.3 in its future annual reports.
38
Corporate Governance Statement
Statement of Comprehensive income
For the Year Ended 30 June 2011
Other Income
Employee Benefits Expense
Depreciation Expense
Finance Costs
Other Expenses
2011
$
2010
$
227,039
(1,843,093)
(1,848)
Note
4 (a)
4 (b)
(13,023)
(903)
4 (c)
(311,495)
(68)
-
(3,844)
(5760)
Loss Before Income Tax
(1,941,475)
income tax
5
(310,225)
(986)
Loss From Continuing Operations
(2,251,700)
(6,746)
Other Comprehensive income
-
-
Total Comprehensive Loss for the Year
(2,251,700)
(6,746)
Earnings Per Share from Continuing Operations:
Basic Earnings Per Share
Diluted Earnings Per Share
6
6
Cents
(7.56)
(7.56)
Cents
-
-
the accompanying notes form part of these financial statements.
Statement of Comprehensive Income
39
Statement of Financial Position
As at 30 June 2011
Note
2011
$
2010
$
Current Assets
Cash and Cash Equivalents
trade and Other Receivables
Other Current Assets
Total Current Assets
Non-Current Assets
Plant and Equipment
Exploration and Evaluation Assets
Total Non-Current Assets
Total Assets
Current Liabilities
trade and other payables
Borrowings
Provisions
Total Current Liabilities
Non-Current Liabilities
Borrowings
Provisions
Total Non-Current Liablities
Total Liabilities
Net Assets
Equity
issued Capital
Reserves
Retained Losses
Total Equity
7
8
9
10
11
13
14
15
14
15
17
18
19
17,781,987
200,000
194,824
178,275
4,347
-
18,155,086
204,347
212,767
9,597,272
9,810,039
4,544
32,023
36,567
27,965,125
240,914
465,496
7,925
22,830
496,251
89,155
1,196
90,351
49,961
-
-
49,961
-
-
-
586,602
49,961
27,378,523
190,953
26,729,469
197,699
2,907,500
(2,258,446)
27,378,523
-
(6,746)
190,953
the accompanying notes form part of these financial statements.
40
Statement of Financial Position
Statement of Changes in Equity
For the Year Ended 30 June 2011
Issued
Capital
Ordinary
$
Retained
Losses
$
Reserves
$
Total
$
-
-
-
Balance at incorporation
total comprehensive (Loss)
Share issues
transaction costs (net of tax)
-
-
200,000
(2,301)
(6,746)
-
-
Balance at 30 June 2010
197,699
(6,746)
Balance at 1 July 2010
197,699
(6,746)
(2,251,700)
total comprehensive (Loss)
Fair value of options issued
Fair value of options issued for consideration for
tenements acquired
Share issue on 18 November 2010
Share issue on 7 December 2010
-
-
-
1,017,800
282,200
Share issued pursuant to the Prospectus
20,000,000
Share issue as consideration for tenements
acquired
transaction costs (net of tax)
6,000,000
(768,230)
-
-
-
-
-
-
(6,746)
200,000
(2,301)
190,953
190,953
(2,251,700)
-
-
-
-
-
-
-
1,419,500
1,419,500
1,488,000
1,488,000
-
-
-
-
-
1,017,800
282,200
20,000,000
6,000,000
(768,230)
Balance at 30 June 2011
26,729,469
(2,258,446)
2,907,500
27,378,523
the accompanying notes form part of these financial statements.
Statement of Changes in Equity
41
Statement of Cash Flows
For the Year Ended 30 June 2011
Note
2011
$
2010
$
Cash Flows from Operating Activities
Payments to suppliers and employees
interest received
Net Cash (Used in) Operating Activities
7 (b)
Cash Flows from Investing Activities
Purchase of plant and equipment
Payments for exploration activities
Net Cash (Used in) Investing Activities
Cash Flows from Financing Activities
(847,300)
227,039
(620,261)
(221,246)
(1,895,131)
(2,116,377)
-
-
-
-
-
-
Proceeds from issue of shares
21,300,000
200,000
transaction costs on issue of shares
Repayment of borrowings
Net Cash Provided by Financing Activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
(1,078,455)
97,080
20,318,625
17,581,987
200,000
-
-
200,000
200,000
-
Cash and Cash Equivalents at the End of the Year
7 (a)
17,781,987
200,000
the accompanying notes form part of these financial statements.
42
Statement of Cash Flows
Notes to the Financial Statements
For the Year Ended 30 June 2011
1. Corporate information
the financial report of Musgrave Minerals Ltd (the Company) for the year ended 30 June 2011 was authorised
for issue in accordance with a resolution of the directors on 28th September 2011. Musgrave Minerals Ltd is a
company limited by shares incorporated and domiciled in Australia. the Company was incorporated on 26th
May 2010 and the comparative financial statements reflect the transactions to 30th June 2010.
2. Summary of Significant Accounting Policies
this financial report includes the financial statements and notes of Musgrave Minerals Ltd (‘Company’).
Basis of preparation
the financial report is a general-purpose financial report, which has been prepared in accordance with
Australian Accounting Standards, Australian Accounting interpretations, other authoritative pronouncements
of the Australian Accounting Standards Board and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in
a financial report containing relevant and reliable information about transactions, events and conditions to
which they apply. Compliance with Australian Accounting Standards ensures that the financial statements
and notes also comply with international Financial Reporting Standards. Material accounting policies adopted
in the preparation of this financial report are presented below. they have been consistently applied unless
otherwise stated.
the financial report has been prepared on an accrual basis and is based on historical costs, modified, where
applicable by the measurement at fair value of selected non-current assets, financial assets and financial
liabilities.
New and Revised Accounting Standards
the Company has adopted the following revisions and amendments to AASB’s issued by the Australian
Accounting Standards Board and iFRS issued by the international Accounting Standards Board, which are
relevant to and effective for the Company’s financial statements for the annual period beginning 1 July 2010:
Notes to the Financial Statements
43
• Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project-
AASB 2009-5
•
Improvements to IFRSs- AASB 2010-03.
the adoption of new and revised Accounting Standards effective for the financial statements for the annual
period beginning 1 July 2010 did not have a material impact on the Company’s financial statements.
a.
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the
Company and the revenue can be reliably measured. the following specific recognition criteria must
also be met before revenue is recognised:
interest income
interest revenue is accrued on a time basis, by reference to the principal outstanding and at the
effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts
through the expected life of the financial asset to that asset’s net carrying amount.
b.
Finance costs
Finance costs directly attributable to the acquisition, construction or production of assets that
necessarily take a substantial period of time to prepare for their intended use or sale, are added to the
cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
c.
Cash and cash equivalents
Cash and short-term deposits in the statement of financial position comprise cash at bank, cash in hand
and short term deposits with an original maturity of three months or less.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash
equivalents as defined above.
d.
Trade and other receivables
trade receivables, which generally have 30-90 day terms, are recognised and carried at original invoice
amount less an allowance for any uncollectable amounts.
An allowance for doubtful debts is made when there is objective evidence that the Company will not
be able to collect the debts. Bad debts are written off when identified.
44
Notes to the Financial Statements
e.
Income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected
to be recovered from or paid to the taxation authorities. the tax rates and tax laws used to compute
the amount are those that are enacted or substantively enacted by the balance date.
Deferred income tax is provided on all temporary differences at the balance date between the tax bases
of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
• when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss; or
• when the taxable temporary difference is associated with investments in subsidiaries, associates
or interests in joint ventures, and the timing of the reversal of the temporary difference can be
controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of
unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences and the carry-forward of unused tax
credits and unused tax losses can be utilised, except:
• when the deferred income tax asset relating to the deductible temporary difference arises from the
initial recognition of an asset or liability in a transaction that is not a business combination and, at
the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
• when the deductible temporary difference is associated with investments in subsidiaries, associates
or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that
it is probable that the temporary difference will reverse in the foreseeable future and taxable profit
will be available against which the temporary difference can be utilised.
the carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of
the deferred income tax asset to be utilised.
unrecognised deferred income tax assets are reassessed at each balance date and are recognised to
the extent that it has become probable that future taxable profit will allow the deferred tax asset to be
recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the
year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the balance date.
income taxes relating to items recognised directly in equity are recognised in equity and not in profit or
loss.
Notes to the Financial Statements
45
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set
off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the
same taxable entity and the same taxation authority.
f. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GSt except:
• when the GST incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GSt is recognised as part of the cost of acquisition of the asset or as
part of the expense item as applicable; and
• receivables and payables, which are stated with the amount of GST included.
the net amount of GSt recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the statement of financial position.
Cash flows are included in the Statement of Cash Flows on a gross basis and the GSt component of
cash flows arising from investing and financing activities, which is recoverable from, or payable to, the
taxation authority are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GSt recoverable from, or payable
to, the taxation authority.
g.
Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment
losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of
replacing the parts is incurred.
Depreciation is calculated on a straight-line and diminishing value basis on all plant and equipment as
follows:
Plant and equipment – 20 – 100%
Motor vehicles – 18.75%
impairment
the carrying values of plant and equipment are reviewed for impairment at each reporting date,
with recoverable amount being estimated when events or changes in circumstances indicate that the
carrying value may be impaired.
the recoverable amount of plant and equipment is the higher of fair value less costs to sell and value
in use. in assessing value in use, the estimated future cash flows are discounted to their present value
46
Notes to the Financial Statements
using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, recoverable amount is
determined for the cash-generating unit to which the asset belongs, unless the asset’s value in use can
be estimated to be close to its fair value.
An impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated
recoverable amount. the asset or cash-generating unit is then written down to its recoverable amount.
For plant and equipment, impairment losses are recognised in the Statement of Comprehensive
income.
h.
Impairment of non-financial assets
At each reporting date, the Company reviews the carrying values of its tangible and intangible assets to
determine whether there is any indication that those assets have been impaired. if such an indication
exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell
and value in use, is compared to the asset’s carrying value. in assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted.
Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of
comprehensive income.
impairment testing is performed annually for goodwill, intangible assets with indefinite lives and
intangible assets not yet available for use. Where it is not possible to estimate the recoverable amount
of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to
which the asset belongs.
i.
Exploration expenditure
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 in the year in
which the decision to abandon the area is made.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing
to carry forward costs in relation to that area of interest.
Costs of site restoration are provided over the life of the facility from when exploration commences
Notes to the Financial Statements
47
and are included in the costs of that stage. Site restoration costs include the dismantling and removal
of mining plant, equipment and building structures, waste removal, and rehabilitation of the site in
accordance with clauses of the mining permits. Such costs have been determined using estimates of
future costs, current legal requirements and technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted for on a prospective basis. in determining the
costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to
the fact that the restoration will be completed within one year of abandoning the site.
j.
Trade and other payables
trade payables and other payables are carried at amortised cost and represent liabilities for goods and
services provided to the Company prior to the end of the financial year that are unpaid and arise when
the Company becomes obliged to make future payments in respect of the purchase of these goods and
services.
k.
Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
When the Company expects some or all of a provision to be reimbursed, for example under
an insurance contract, the reimbursement is recognised as a separate asset but only when the
reimbursement is virtually certain. the expense relating to any provision is presented in the income
statement net of any reimbursement.
if the effect of the time value of money is material, provisions are discounted using a current pre-tax
rate that reflects the risks specific to the liability.
l.
Share-based payment transactions
the Company provides benefits to employees of the Company in the form of share-based payments,
whereby employees receive options incentives (equity-settled transactions).
there is currently one plan in place to provide these benefits, the Employee Share Option Plan (ESOP)
which provides benefits to Directors and employees.
the cost of these equity-settled transactions with employees is measured by reference to the fair value
at the date at which they are granted. Share-based payments to non-employees are measured at the
fair value of the equity instruments issued. the fair value is determined using the Black-Scholes option
pricing model.
48
Notes to the Financial Statements
the cost of equity-settled transactions is recognised as an expense in the statement of comprehensive
income, together with a corresponding increase in the share option reserve, when the options are
issued. However, where options have vesting terms attached, the cost of the transaction is amortised
over the vesting period.
upon the exercise of options, the balance of share based payments reserve relating to those options is
transferred to share capital.
m.
Issued Capital
Ordinary shares are classified as equity. incremental costs directly attributable to the issue of new shares
or options are shown in equity as a deduction, net of tax, from the proceeds.
n.
Joint Ventures
A joint venture is a contractual arrangement whereby two or more parties undertake an economic
activity that is subject to joint control. A jointly controlled operation involves use of assets and other
resources of the venturers rather than establishment of a separate entity. the Company recognises its
interest in the jointly controlled operations by recognising the assets that it controls and the liabilities
that it incurs. the Company also recognises the expenses that it incurs and its share of the income that
it earns from the sale of goods or services by the jointly controlled operation.
o. Critical Accounting Estimates and Judgments
the Directors evaluate estimates and judgments incorporated into the financial report based on
historical knowledge and best available current information. Estimates assume a reasonable expectation
of future events and are based on current trends and economic data, obtained both externally and
within the Company.
Key Estimates — Exploration and evaluation
the Company’s policy for exploration and evaluation is discussed in note 2(i). the application of this
policy requires management to make certain assumptions as to future events and circumstances. Any
such estimates and assumptions may change as new information becomes available. if, after having
capitalised exploration and evaluation expenditure, management concludes that the capitalised
expenditure is unlikely to be recovered by future sale or exploration, then the relevant capitalised
amount will be written off through the Statement of Comprehensive income.
Notes to the Financial Statements
49
p.
Earnings per share
Basic earnings per share is calculated as net profit attributable to members of the Company, adjusted to
exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by
the weighted average number of ordinary shares, adjusted for any bonus element.
in accordance with AASB 133 ‘Earnings per Share’, as potential ordinary shares may only result in a
situation where their conversion results in an increase in loss per share or decrease in profit per share
from continuing operations, no dilutive effect has been taken into account in 2011 or 2010.
q. New Accounting Standards for Application in Future Periods
During the current year the Company adopted all of the new and revised Australia Accounting
Standards and interpretations applicable to its operations which became mandatory.
Recently issued accounting standards to be applied in future reporting periods
the accounting standards that have not been early adopted for the period ended 30 June 2011, but
will be applicable to the Company in future reporting periods are detailed below. Apart from these
standards, we have considered other accounting standards that will be applicable in future reporting
periods, however they have been considered insignificant to the Company.
i) Joint Arrangements
iFRS 11: “Joint Arrangements” was issued by the iASB in May 2011 and provides for a more
realistic reflection of joint venture arrangements by focusing on the rights and obligations
of the arrangement, rather than its legal form. the standard addresses inconsistencies in
the reporting of joint arrangements by requiring a single method to account for interest in
jointly controlled entities. this standard is applicable from 1 July 2013, with early adoption
permitted. Management is assessing the impact on the company, but at this stage it is
believed there will be an insignificant impact.
ii) Disclosure of interests in Other Entities
iFRS 12: “Disclosure of interests in other Entities” was issued by the iASB in May 2011 and
is a new and comprehensive standard on disclosure requirements for all forms of interests
in other entities, including subsidiaries, joint arrangements, associates, special purpose
vehicles and other off balance sheet vehicles. this standard is applicable from 1 July 2013
and management is currently assessing the impacts of the standard, which will be limited
to disclosure impacts only. there have also been consequential amendments to iAS 28:
50
Notes to the Financial Statements
“investments in Associates” as a result of the above new standard. these amendments are
applicable from 1 July 2013.
iii) Fair Value Measurement
iFRS 13: “Fair Value Measurements” was issued by the iASB in May 2011 and provides a
precise definition of fair value, as a single source of fair value measurement and prescribes
disclosure requirements for use across iFRS. the requirements do not extend the use of fair
value accounting, but provide guidance on how it should be applied where its use is already
required or permitted by other standards within iFRS. the standard will apply to the Company
from 1 July 2013 and at this stage it is believed there will be no impact.
iv) Other
in addition to the above recently issued accounting standards that are applicable in future
years, we note the following new accounting standards that are applicable in future years:
• AASB 124: “Related Party Disclosures”;
• AASB 2009-12: “Amendments to Australian Accounting Standards”;
• AASB 2010-4: “Further Amendments to Australian Accounting Standards arising from the
Annual Improvements Project”;
• AASB 2010-5: “Amendments to Australian Accounting Standards”;
• AASB 2010-8: “Amendments to Australian Accounting Standards - Deferred Tax: Recovery
of Underlying Assets”; and
• AASB 2011-4: “Amendments to Australian Accounting Standards to Remove Individual
Key Management Personnel Disclosure Requirements”.
We do not expect these standards to materially impact our financial results upon adoption.
r.
Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
Notes to the Financial Statements
51
3. Segment information
the Board has considered the requirements of AASB 8 Operating Segments and the internal reports that are
reviewed by the chief operating decision maker (the Managing Director) in allocating resources and have
concluded at this time that there are no separately identifiable segments.
4. Revenue and Expenses
(a) Employees benefits expense
Wages, salaries, directors fees and other remuneration
expenses
transfer to exploration assets
Superannuation
Share-based payments expense
(b) Depreciation expense
Depreciation of non-current assets
Plant and equipment
Motor vehicles
(c) Other expenses from ordinary activities
Secretarial, professional and consultancy
Occupancy costs
Share register maintenance
insurance costs
Promotion and advertising
Securities exchange fees
travel expenses
Audit fees
Other expenses
2011
$
2010
$
653,428
(215,317)
19,982
1,385,000
1,843,093
11,212
1,811
13,023
105,258
35,616
9,986
11,935
28,611
6,959
27,939
14,000
71,191
311,495
19,214
(17,366)
-
-
1,848
68
-
68
405
1,019
-
-
-
-
-
1,750
670
3,844
52
Notes to the Financial Statements
5. income tax
A reconciliation between tax expense and the product
of accounting loss before income tax multiplied by the
Company’s applicable income tax rate is as follows:
2011
$
2010
$
Accounting loss before income tax
(1,941,475)
(5,760)
At the Company’s statutory income tax rate of 30% (2010:
30%)
(582,443)
(1,728)
Expenditure not allowable for income tax purposes
415,624
immediate write off for capital items
(860,873)
-
-
Other deductible items
(64,905)
(9,607)
Deferred tax asset not realised as recognition criteria of
AASB 112 not met
1,092,597
11,335
Subtotal
-
tax portion of Capital raising costs written off
310,225
310,225
-
986
986
the Company has tax losses arising in Australia of $3,662,652 (2010: $6,417) that are available indefinitely
for offset against future taxable profits of the Company.
these tax losses will only be utilised if:
• future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be
realised; and
• the conditions for deductibility imposed by tax legislation continue to be complied with; and
• no changes in tax legislation adversely affect the Company in realising the benefit.
Notes to the Financial Statements
53
6. Earnings Per Share
the following reflects the income and share data used in the basic and diluted earnings per share
computations:
Net loss attributable to ordinary equity holders of the
Company
Weighted average number of ordinary shares for basic
earnings per share
2011
$
2010
$
(2,251,700)
(6,746)
29,781,868
4,000,000
Effect of dilution
N/A
N/A
Weighted average number of ordinary shares adjusted
for the effect of dilution
29,781,868
4,000,000
there have been no other transactions involving ordinary shares or potential ordinary shares between the
reporting date and the date of completion of these financial statements.
7. Cash and Cash Equivalents
Cash at bank and in hand
Short-term deposits
(a) Reconciliation to Statement of Cash Flows
For the purposes of the Statement of Cash Flows, cash and
cash equivalents comprise the following at 30 June:
Cash at banks and in hand
Short-term deposits
2011
$
2010
$
651,987
17,130,000
17,781,987
651,987
17,130,000
17,781,987
200,000
-
200,000
200,000
-
200,000
54
Notes to the Financial Statements
7. Cash and Cash Equivalents (continued)
(b) Reconciliation of net loss after tax to net cash
flows used in operations
2011
$
2010
$
Net loss
(2,251,700)
(6,746)
Adjustments for non-cash items:
Depreciation
Share based payments
Deferred tax assets written off
Changes in assets and liabilities
(increase) in trade and other receivables
(increase) in prepayments
increase in trade and other payables
increase in employee entitlements
(Decrease) in net goods and service tax receivable
Net cash used in operating activities
13,023
1,419,500
310,225
(149,306)
(28,969)
42,941
24,026
-
(620,261)
68
-
986
-
-
10,039
-
(4,347)
-
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short-term deposits are made for varying periods of between one day and one year, depending on the
immediate cash requirements of the Company, and earn interest at the respective short-term deposit rates.
8. trade and Other Receivables
Goods and services tax receivable
2011
$
2010
$
194,824
194,824
4,347
4,347
Notes to the Financial Statements
55
9. Other Current Assets
Prepayments
Accrued income
10. Plant and Equipment
At incorporation
Additions
Depreciation
At 30 June 2010, net of accumulated depreciation
At 30 June 2010
Cost
Accumulated depreciation
Net carrying amount
At 1 July 2010
Additions
Depreciation
At 30 June 2011, net of accumulated depreciation
At 30 June 2011
Cost
Accumulated depreciation
Net carrying amount
2011
$
2010
$
28,969
149,306
178,275
-
-
-
Plant and
Equipment
$
Motor Vehicles
$
Total
$
-
4,612
(68)
4,544
4,612
(68)
4,544
4,544
124,149
(11,212)
117,481
128,761
(11,280)
117,481
-
-
-
-
-
-
-
-
97,097
(1,811)
95,286
97,097
(1,811)
95,286
-
4,612
(68)
4,544
4,612
(68)
4,544
4,544
221,246
(13,023)
212,767
225,858
(13,091)
212,767
56
Notes to the Financial Statements
Impairment of plant and equipment
No impairment loss was recognised or reversed for the year ended 30 June 2011 with respect to plant and
equipment.
Refer to Note 14 for assets acting as security for borrowings.
11. Exploration and Evaluation Assets
Exploration and evaluation costs carried forward in respect
of areas of interest
Non-Current
Exploration and evaluation phases
Total
2011
$
2010
$
9,597,272
9,597,272
9,597,272
32,023
32,023
32,023
Exploration
Total
Capitalised tenement expenditure movement reconciliation
Balance at 1 July 2010
32,023
32,023
Additions through issue of equity instruments
7,488,000
7,488,000
Additions through expenditure capitalised
2,077,249
2,077,249
Balance at end of year
9,597,272
9,597,272
the ultimate recoupment of costs carried forward for exploration and evaluation phases is dependent on the
successful development and commercial exploitation or sale of the respective mining areas.
12. Share-Based Payments
Employee Share Option Plan
the Company has established the Musgrave Minerals Ltd Employee Share Option Plan and a summary of the
Rules of the Plan are set out below:
Notes to the Financial Statements
57
• All employees (full and part time) will be eligible to participate in the Plan after a qualifying period of 12
months employment by a member of the Company, although the board may waive this requirement.
• Options are granted under the Plan at the discretion of the board and if permitted by the board, may be
issued to an employee’s nominee.
• Each option is to subscribe for one fully paid ordinary share in the Company and will expire 5 years from its
date of issue. An option is exercisable at any time from its date of issue. Options will be issued free. the
exercise price of options will be determined by the board, subject to a minimum price equal to the market
value of the Company’s shares at the time the board resolves to offer those options. the total number
of shares, the subject of options issued under the Plan, when aggregated with issues during the previous
5 years pursuant to the Plan and any other employee share plan, must not exceed 5% of the Company’s
issued share capital.
•
If, prior to the expiry date of options, a person ceases to be an employee of the Company for any reason
other than retirement at age 60 or more (or such earlier age as the board permits), permanent disability,
redundancy or death, the options held by that person (or that person’s nominee) automatically lapse on
the first to occur of a) the expiry of the period of 6 months from the date of such occurrence, and b) the
expiry date. if a person dies, the options held by that person will be exercisable by that person’s legal
personal representative.
• Options cannot be transferred other than to the legal personal representative of a deceased option holder.
• The Company will not apply for official quotation of any options.
• Shares issued as a result of the exercise of options will rank equally with the Company’s previously issued
shares.
• Option holders may only participate in new issues of securities by first exercising their options.
the Board may amend the Plan Rules subject to the requirements of the Listing Rules. the expense recognised
in the statement of comprehensive income in relation to share-based payments is disclosed in note 4(a). the
following table illustrates the number (No.) and weighted average exercise prices (WAEP) and movements in
share options issued during the year:
2011
No.
2011
WAEP ($)
2010
No.
2010
WAEP ($)
Outstanding at the beginning of the year
-
Granted during the year
15,500,000
Cancelled during the year
-
Outstanding at the end of the year
15,500,000
Exercisable at the end of the year
500,000
-
0.33
-
0.33
0.36
-
-
-
-
-
-
-
-
-
-
58
Notes to the Financial Statements
the outstanding balance as at 30 June 2011 is represented by:
• A total of 7,750,000 options exercisable any time until 20 August 2015 with a strike price of $0.25
(escrowed until 28 April 2013).
• A total of 2,500,000 options exercisable any time until 17 February 2016 with a strike price of $0.50
(escrowed until 28 April 2013).
• A total of 4,750,000 options exercisable any time until 17 February 2016 with a strike price of $0.36
(escrowed until 28 April 2013).
• A total of 500,000 options exercisable any time until 8 May 2016 with a strike price of $0.36.
the weighted average remaining contractual life for the share options outstanding as at 30 June 2011 is 4.40
years (2010: nil).
the range of exercise prices for options outstanding at the end of the year was $0.25-$0.50 (2010: nil).
the weighted average fair value of options granted during 2011 was $0.188.
the fair value of the equity-settled share options granted under the option plan is estimated as at the date of
grant using a Black-Scholes model taking into account the terms and conditions upon which the options were
granted.
the following table lists the inputs to the model used for the year ended 30 June 2011 (there were no options
issued and valued in the year ended 30 June 2010):
Historial Volatility (%)
Risk-free interest Rate (%)
Expected Life of Option (years)
2011
100% -135%
5%
5
the expected life of the options is based on historical data and is not necessarily indicative of exercise patterns
that may occur. the expected volatility reflects the assumption that the historical volatility is indicative of
future trends, which may also not necessarily be the actual outcome. Volatility is calculated as the average
historical volatility of the Company share price for the period of the option life. No other features of options
granted were incorporated into the measurement of fair value.
Notes to the Financial Statements
59
13. trade and Other Payables
trade payables (i)
Other payables
2011
$
2010
$
239,838
225,658
465,496
47,804
2,157
49,961
i. trade payables are non-interest bearing and are normally settled on 60-day terms.
14. Borrowings
Current
Hire purchase contracts
Non-Current
Hire purchase contracts
2011
7,925
7,925
89,155
89,155
Assets with a written down value of $95,285 (2010: nil) act as security for these borrowings.
15. Provisions
Current
Annual Leave Provision
Opening Balance
transfer to provision
Closing Balance
2011
$
2010
$
-
-
22,830
22,830
-
-
-
-
60
Notes to the Financial Statements
15. Provisions (continued)
Non-current
Long Service leave Provision
Opening Balance
transfer to provision
Closing Balance
16. Auditor’s Remuneration
Audit or review of financial report
Other Non Audit Services*
2011
$
2010
$
-
-
1,196
1,196
24,026
2011
$
2010
$
14,000
6,250
20,250
-
-
-
-
-
1,750
-
1,750
*the auditor also prepared the investigating Accountants’ Report for the prospectus dated 8 March 2011.
17. issued Capital
121,000,000 (2010: 4,000,000) fully paid ordinary shares
2011
$
2010
$
26,729,469
26,729,469
197,699
197,699
Notes to the Financial Statements
61
17. issued Capital (continued)
2011
2010
Number
$
Number
$
Opening balance
4,000,000
197,699
4,000,000
200,000
Share issue on 18 November 2010
10,178,000
1,017,800
Share issue on 7 December 2010
2,822,000
282,200
Shares issued pursuant to prospectus
80,000,000
20,000,000
Shares issued as consideration for tenements
acquired
24,000,000
6,000,000
transaction costs on share issue (net of tax)
-
(768,230)
-
-
-
-
-
-
-
-
-
(2,301)
Balance at end of financial year
121,000,000
26,729,469
4,000,000
197,699
Fully paid ordinary shares carry one vote per share and carry the right to dividends (in the event such a
dividend was declared).
26,500,000 ordinary shares are escrowed for 24 months from the date of listing being 29 April 2013.
8,500,000 ordinary shares are escrowed for 12 months from the date of issue being 19 April 2012.
18. Reserves
the share option reserve records items recognised as expenses on valuation of employee share options and
other equity settled transactions.
Share option reserve
2010
$
2011
$
2,907,500
2,907,500
2011
2010
Number
$
Number
$
Balance at beginning of financial year
-
-
issue of options to Directors and Company
Secretary
2,250,000
418,500
issue of options to Managing Director
2,500,000
465,000
issue of options to Managing Director
2,500,000
437,500
-
-
-
-
-
-
-
-
-
-
62
Notes to the Financial Statements
18. Reserves (continued)
2011
2010
Number
$
Number
$
issue of options to tenement vendors
7,750,000
1,488,000
issue of options to employee under Employee
Share Option Plan
500,000
98,500
Balance at end of financial year
15,500,000
2,907,500
-
-
-
18. Retained Losses
Opening Balance
Net loss attributable to members
Balance at end of financial year
20. Commitments for Expenditure
Commitments for Expenditure
Operating leases
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Hire purchase commitments
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Less: future finance charges
2011
$
2010
$
(6,746)
(2,251,700)
(2,258,446)
2011
$
2010
$
96,598
169,046
265,644
86,488
43,456
(32,864)
97,080
-
-
-
-
(6,746)
(6,746)
-
-
-
-
-
-
-
Notes to the Financial Statements
63
Exploration leases
in order to maintain current rights of tenure to exploration tenements held under agreement with founding
shareholders, the Company will be required to spend in the year ending 30 June 2012 net amounts of
approximately $1,200,000 (2011: $1,180,000) in respect of tenement lease rentals and to meet minimum
expenditure requirements. these obligations are expected to be fulfilled in the normal course of operations.
Bank Guarantee
the Company has various bank guarantees totalling $50,000 at 30 June 2011 which act as collateral over the
lease of offices at 19 Richardson St, West Perth and the Company’s Visa business credit cards.
Contingent Liabilities
At 30 June 2011 there were no contingent liabilities.
21. Financial Risk Management Objectives and Policies and
Financial instruments
Capital risk management
the Company manages its capital to ensure that entities in the Company will be able to continue as a going
concern while maximising the return to stakeholders.
the capital structure of the Company consists of cash and cash equivalents and equity attributable to equity
holders of the parent, comprising issued capital and accumulated losses as disclosed in notes 17 and 19
respectively. Proceeds from share issues are used to maintain and expand the Company’s exploration activities
and fund operating costs.
Categories of financial instruments
Financial Assets
Cash and cash equivalents
trade and other receivables
2011
$
2010
$
17,781,987
194,824
17,976,811
200,000
4,347
204,347
64
Notes to the Financial Statements
Categories of financial instruments (continued)
Financial Liabilities
trade and other receivables
Hire purchase contracts
2011
$
2010
$
465,496
97,080
562,576
49,961
-
49,961
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the Company. the Company has adopted a policy of only dealing with creditworthy counterparties as a
means of mitigating the risk of financial loss from activities.
the Company does not have any significant credit risk exposure to any single counterparty or any Company
of counterparties having similar characteristics. the credit risk on liquid funds is limited because the
counterparties are banks with high credit-ratings assigned by international credit-rating agencies.
the carrying amount of financial assets recorded in the financial statements, net of any allowances for losses,
represents the Company’s maximum exposure to credit risk.
Interest rate sensitivity analysis
At reporting date, if interest rates had been 0.5% higher or lower and all other variables were held constant,
the Company’s:
• Net loss would increase or decrease by $11,259 which is attributable to the Company’s exposure to
interest rates on its variable bank deposits.
Liquidity risk management
ultimate responsibility for liquidity risk management rests with the board of directors, who have built an
appropriate liquidity risk management framework for the management of the Company’s short, medium
and long-term funding and liquidity management requirements. the Company manages liquidity risk by
maintaining adequate reserves.
Notes to the Financial Statements
65
Liquidity and interest risk tables
the following table details the Company’s remaining contractual maturity for its non-derivative financial
liabilities. the table has been drawn up based on the undiscounted cash flows of financial liabilities based on
the earliest date on which the Company can be required to pay.
Consolidated
< 1year
> 1 - < 5 years
Non- Interest
Bearing
Total
Financial Liabilities
Fixed Rate
7,925
89,155
465,496
562,576
Consolidated
< 1year
> 1 - < 5 years
Non- Interest
Bearing
Total
Financial Liabilities
Fixed Rate
-
-
49,961
49,961
the following table details the Company’s expected maturity for its non-derivative financial assets. the table
below has been drawn up based on the undiscounted contractual maturities of the financial assets including
interest that will be earned on those assets except where the Company anticipates that the cash flow will
occur in a different period.
Consolidated
< 1year
> 1 - < 5 years
Non- Interest
Bearing
Year ended 30 June 2011
$
$
$
Total
$
Financial Liabilities
Fixed rate
term Deposits
-
17,130,000
Weighted average effective interest rate
6.10%
Floating Rate
651,987
Weighted average effective interest rate
-
-
-
-
-
-
194,824
194,824
-
-
-
-
17,130,000
-
651,987
-
66
Notes to the Financial Statements
Consolidated
< 1year
> 1 - < 5 years
Non- Interest
Bearing
Year ended 30 June 2010
$
$
$
Total
$
Financial Assets
Fixed rate
-
Weighted average effective interest rate
0.00%
Floating Rate
200,000
Weighted average effective interest rate
0.01%
-
-
-
-
4,347
4,347
-
-
-
-
200,000
-
22. Related Party Disclosure and Key Management Personnel
Remuneration
Payments to related parties
throughout the year ended 30 June 2011, Mithril Resources Ltd, of which Messrs Ascough and Stephens
are directors, provided the Company with access to exploration personnel and equipment. in exchange for
these services, Mithril Resources Ltd has received income in the form of service charges. All transactions were
conducted on commercial terms and were arms length transactions. the total amount paid or to be paid to
Mithril Resources Ltd through the year ended 30 June 2011 was $153,356 (2010: $19,755). At 30 June 2011,
the Company owed $5,750 (2010: $47,804) to Mithril Resources Ltd for service charges and reimbursements.
Interests of Key Management Personnel (KMP)
table 1: Directors remuneration for the year ended 30 June 2011 and 30 June 2010
Short Term
Benefits
Post Employment
Share-based
payments
Total
Salary and Fees
Superannuation
Value of options
10,900
-
84,829
-
7,500
-
7,500
-
110,729
-
-
-
7,635
-
675
-
675
-
8,985
-
139,500
-
902,500
-
93,000
-
93,000
-
150,400
-
994,964
-
101,175
-
101,175
-
1,228,000
-
1,347,714
-
Mr Graham Ascough**
2011
2010
Mr Robert Waugh
2011
2010
Mr John Percival**
2011
2010
Mrs Kelly Ross**
Total
2011
2010
2011
2010
Notes to the Financial Statements
67
table 2: Remuneration of other key management personnel for the year ended 30 June
2011 and 30 June 2010
Short Term
Benefits
Post Employment
Share-based
payments
Total
Salary and Fees
Superannuation
Value of options
99,533
-
-
-
99,533
-
8,958
-
-
-
8,958
-
98,500
-
93,000
-
191,500
-
206,991
-
93,000
-
299,991
-
Dr Justin Gum
2011
2010
Donald Stephens * & **
Total
2011
2010
2011
2010
Options
the number of options over ordinary shares held by each KMP of the Company during the financial year is as
follows:
30 June 2011
Mr Graham Ascough
Mr Robert Waugh
Mr Robert Waugh
Mr John Percival
Mrs Kelly Ross
Dr Justin Gum
Mr Donald Stephens
Balance at
Beginning
of Year
Granted as
Remuneration
Balance at
End of Year
Exercise
Price
First Exercise
Date
Last Exercise
Date
-
-
-
-
-
-
-
750,000
750,000
$0.36
28/04/2013
17/02/2016
2,500,000
2,500,000
$0.36
28/04/2013
17/02/2016
2,500,000
2,500,000
$0.50
28/04/2013
17/02/2016
500,000
500,000
$0.36
28/04/2013
17/02/2016
500,000
500,000
$0.36
28/04/2013
17/02/2016
500,000
500,000
$0.36
9/05/2011
8/05/2016
500,000
500,000
$0.36
28/04/2013
17/02/2016
(*) HLB Mann Judd (SA) Pty Ltd have received professional fees for accounting, taxation and secretarial services provided during the year
of $68,300 (2010: Nil). Donald Stephens, the Company Secretary, is a consultant with HLB Mann Judd (SA) Pty Ltd.
(**) Graham Ascough is the Managing Director and Donald Stephens is a Non-Executive Director and Company Secretary of Mithril
Resources Ltd which is the beneficial holder of 7.67% of the issued capital of Musgrave Minerals Ltd. John Percival is an Executive
Director of Goldsearch Ltd which is the beneficial holder of 7.17% of the issued capital of Musgrave Minerals Ltd. Kelly Ross is a Non-
Executive Director of independence Group NL which is the beneficial holder of 7.46% of the issued capital of Musgrave Minerals Ltd.
68
Notes to the Financial Statements
Shareholdings
the number of ordinary shares held by each KMP of the Company during the financial year is as follows:
30 June 2011
Balance at
Beginning of Year
Shares Issued During Year
Balance at End of Year
Mr Graham Ascough
Mr Robert Waugh
Mr John Percival
Mrs Kelly Ross
Dr Justin Gum
Mr Donald Stephens
-
-
-
-
-
-
200,000
80,000
100,000
50,000
40,000
-
200,000
80,000
100,000
50,000
40,000
-
Graham Ascough is the Managing Director and Donald Stephens is a Non-Executive Director and Company
Secretary of Mithril Resources Ltd which is the beneficial holder of 7.67% of the issued capital of Musgrave
Minerals Ltd. John Percival is an Executive Director of Goldsearch Ltd which is the beneficial holder of 7.17%
of the issued capital of Musgrave Minerals Ltd. Kelly Ross is a Non-Executive Director of independence Group
NL which is the beneficial holder of 7.46% of the issued capital of Musgrave Minerals Ltd.
Other related party transactions
in conjunction with the Company’s initial Public Offering, Mithril Resources investments Pty Ltd (a wholly-
owned subsidiary of Mithril Resources Ltd) was issued 5,000,000 fully paid ordinary shares in the capital of
the Company and 2,500,000 unlisted options, having an exercise price of $0.25 and an expiry date of 19
April 2016. the fair value of the shares and options, being a total consideration of $1,730,000, represented
full payment for certain tenements acquired by Musgrave Minerals Ltd (refer to the Company’s prospectus for
further details). Graham Ascough is the Managing Director and Donald Stephens is a Non-Executive Director
and Company Secretary of Mithril Resources Ltd.
in addition, independence Group NL was issued 3,825,000 fully paid ordinary shares in the capital of the
Company and 1,912,500 unlisted options, having an exercise price of $0.25 and an expiry date of 19 April
2016. the fair value of the shares and options, being a total consideration of $1,323,450, represented full
payment for certain tenements acquired by Musgrave Minerals Ltd (refer to the Company’s prospectus for
further details). Kelly Ross is a Non-Executive Director of independence Group NL.
Finally, Goldsearch Ltd was issued 3,675,000 fully paid ordinary shares in the capital of the Company and
1,837,500 unlisted options, having an exercise price of $0.25 and an expiry date of 19 April 2016. the fair
value of the shares and options, being a total consideration of $1,271,550, represented full payment for
certain tenements acquired by Musgrave Minerals Ltd (refer to the Company’s prospectus for further details).
John Percival is an Executive Director of Goldsearch Ltd.
Notes to the Financial Statements
69
23. Significant Events After Balance Date
No subsequent events have occurred after the balance date.
70
Notes to the Financial Statements
Directors’ Declaration
in accordance with a resolution of the Directors of Musgrave Minerals Ltd, i state that:
1. in the opinion of the Directors:
a. the fi nancial statements and notes of the Company are in accordance with the Corporations Act
2001, including:
i. giving a true and fair view of the Company’s fi nancial position as at 30 June 2011 and of its
performance for the year ended on that date; and
ii. comply with Accounting Standards and Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
iii. comply with International Financial Reporting Standards as disclosed in Note 2; and
b. there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
On behalf of the Board of Directors
Mr Graham Ascough
Chairman
Dated this 28th day of September 2011
Directors’ Declaration
71
independent Auditor’s Report
72
Independent Auditor’s Report
Independent Auditor’s Report
73
74
Independent Auditor’s Report
ASX Additional information
Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this
report is as follows. the information is current as at 31 August 2011.
the use of cash and cash equivalents
the Company has used all cash and cash equivalents for the purpose of carrying out its stated business
objectives.
Distribution of equity securities
Ordinary share capital
• 121,000,000 fully paid ordinary shares are held by 1,264 individual shareholders. There are no restricted
and unquoted ordinary shares.
All issued ordinary shares carry one vote per share.
Options
• 15,500,000 unlisted options are held by 10 individual option holders. One holder, Mr Robert Waugh and
Mrs Sara Waugh , holds 5,000,000 unlisted options (equivalent to 32.26% of
total unlisted options).
ASX Additional Information
75
the number of shareholders, by size of holding, in each class are:
Fully Paid Ordinary Shares
Unlisted Options
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Holding less than a marketable parcel
Substantial shareholders
1
45
303
789
126
1,264
22
Ordinary shareholders
Fully Paid
Number
Percentage
Mithril Resources investments Pty Ltd
independence Group NL
Goldsearch Limited
J P Morgan Nominees Australia Limited
9,283,871
9,027,000
8,673,000
8,200,000
-
-
-
-
10
10
-
7.67%
7.46%
7.17%
6.78%
35,183,871
29.08%
76
ASX Additional Information
twenty largest holders of quoted equity securities
Fully Paid Ordinary Shares
Number
Percentage
Mithril Resources investments Pty Ltd
independence Group NL
Goldsearch Limited
J P Morgan Nominees Australia Limited
Barrick (Australia Pacific) Limited
integra Mining Limited
J P Morgan Nominees Australia Limited
Argonaut Resources NL
Mr Steven Harold Koppe
Forty traders Limited
Mr William Douglas Goodfellow
Hipete Pty Limited
Premar Capital Nominees Pty Ltd
Ms Jeanette Richardson
HSBC Custody Nominees (Australia) Limited
Merrill Lynch (Australia) Nominees Pty Ltd
Finico Pty Ltd
Octavian Services Pty Ltd
Yarandi investments Pty Ltd
Forsyth Barr Custodians Ltd
9,283,871
9,027,000
8,673,000
8,200,000
6,000,000
5,516,129
5,418,791
2,500,000
1,500,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
927,000
827,604
800,000
800,000
800,000
609,756
7.67%
7.46%
7.17%
6.78%
4.96%
4.56%
4.48%
2.07%
1.24%
0.83%
0.83%
0.83%
0.83%
0.83%
0.77%
0.68%
0.66%
0.66%
0.66%
0.50%
65,883,151
54.47%
ASX Additional Information
77
www.musgraveminerals.com.au
Administrative Office - Perth
19 Richardson Street
WESt PERtH WA 6005
Telephone: (08) 9324 1061
Facsimile: (08) 9324 1014
Adelaide Office
60 King William Road
GOODWOOD SA 5034
Telephone: (08) 8378 8200
Facsimile: (08) 8271 0037
ABN: 12 143 890 671
ASX:MGV