Musgrave Minerals Limited Annual Report 2013

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FY2013 Annual Report · Musgrave Minerals Limited

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ANNUAL REPORT 2013

Exploration for base metal deposits,

silver and gold mineralisation in

South Australia

ABN 12 143 890 671

Musgrave Minerals Limited is a dedicated exploration

company focused on base metals, silver and gold in the highly

prospective Musgrave Province and Gawler Craton regions of

South Australia.

The Company’s functional and presentational 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

Issued Shares: 121M

Cash Balance: $9.6M (30th June 2013)

ABN: 12 143 890 671

Top shareholders

Mithril Resources Ltd

Independence Group NL

Goldsearch Ltd

Barrick (Australia Pacific) Ltd

Silver Lake Resources Ltd

Corporate Information

Directors

Graham Ascough (Non-Executive Chairman)

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

Share Registry

Computershare Investor Services Pty Ltd

Level 5, 115 Grenfell Street

Adelaide, SA, 5000

Auditor

Grant Thornton South Australian Partnership

Chartered Accountants

Level 1, 67 Greenhill Road

Wayville, SA, 5034

Legal Advisors

O’Loughlins Lawyers

Level 2, 99 Frome Street

Adelaide, SA, 5000

Musgrave Minerals Ltd

Corporate Information

Contents

Chairman’s Letter

Review of Operations

Summary of Tenements

JORC 2012 Table 1

Directors’ Report

Corporate Governance Statement

Auditor’s Independence Declaration

Statement of Comprehensive Income

Statement of Financial Position

Statement of Changes in Equity

Statement of Cash Flows

Notes to the Financial Statements

Directors’ Declaration

Independent Auditor’s Report

ASX Additional Information

Contents
Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

Chairman’s Letter

Dear Fellow Shareholder,

priority EM and geochemical targets at the Deering Hills

Project that warrant drilling, and we also identified targets for

It gives me great pleasure to present the 2013 Annual Report

follow-up after a soil geochemical program over the Ragnar

for Musgrave Minerals Limited. The past 12 months have

target at Mimili, along with EM and geochemical targets at Mt

been very active as the Company further establishes itself as

Woodroffe.

an explorer in the highly prospective regions of the Musgrave

Province and Gawler Craton in South Australia.

The recently granted Pallatu tenement has been identified

Our agreement signed with Menninnie Metals Pty Ltd, a

a large nickel sulphide system with coincident geophysical

subsidiary of ASX-listed Terramin Australia Ltd (TZN), to earn

anomalies in a favourable geological setting. We look forward

as a priority area as the targets show all the right criteria for

up to a 75% stake in the Menninnie Dam silver-lead-zinc

to advancing this target in 2013.

project in the Gawler Craton, has proved to be an important

decision for the Company. Menninnie Dam is well located

Our work during the past year has demonstrated that

in terms of infrastructure, already has an existing mineral

Musgrave Minerals is moving in the right direction with the

resource, and there is plenty of exploration upside to add to

objective of making significant discoveries across our projects.

this, with a growing number of high-quality targets awaiting

We are well-funded to continue exploration, with $9.6 million

drill testing.

in the bank – a position many of our peers would no doubt

Already our team has discovered new base metal

envy.

mineralisation on the project being the zinc, silver and gold

I would like to thank our management and staff for their

mineralisation discovered at the Tank Hill target. An airborne

exceptional hard work and dedication over the past year,

geophysical survey identified VTEM (versatile time domain

and to our shareholders for their loyalty and support. The

electromagnetic) anomalies co-incident with silver geochemical

upcoming year will undoubtedly be busy again for our team

targets and these will be our focus at Menninnie Dam in the

and we look forward to sharing with you the results of their

immediate future.

work.

We have again been active across our tenement package in

the Musgrave Province, continuing our approach of systematic

exploration that we believe will return the best results for the

Graham Ascough

Company and our shareholders. We currently have high-

Chairman

MGV Board members (from left) Robert Waugh, Graham Ascough, Kelly Ross and John Percival

Musgrave Minerals Ltd
Musgrave Minerals Ltd

Chairman’s Letter

Review of Operations

Musgrave Minerals Limited (ASX: MGV) is an Australian-based

exploration company focused on base metal, gold and silver

exploration in the Musgrave Geological Province and Gawler

Craton regions of South Australia.

Musgrave Minerals is focused on exploring for massive and

disseminated nickel and copper sulphide mineralisation in the

Musgrave region and high grade silver-zinc-lead mineralisation

at Menninnie Dam.

During the year the Company focused on three main project

areas, Deering Hills and Mt Woodroffe in the Musgrave

and Menninnie Dam. During this period, we successfully

completed four drilling campaigns, one at Deering Hills and

three at Menninnie Dam, along with two airborne VTEM

surveys and a range of other field activities to advance

targets to a drill-ready stage. The Company has successfully

demonstrated the prospectivity of all three project areas and

will continue to advance targets through to drilling.

In South Australia, the Musgrave Province lies almost entirely

within Anangu Pitjantjatjara Yankunytjatjara (“APY”) land

Figure 1: Musgrave Minerals’ project location map

(Aboriginal freehold land). Musgrave Minerals continues to

also located just 20km from the recent Paris silver discovery.

develop a strong relationship with the APY and is continuing

Historical drilling at Menninnie Dam has focused on the

to progress new exploration tenements to grant in our region.

existing resource area leaving significant potential for new

discoveries in the region.

Menninnie Dam, approximately 100km west of Port Augusta

in South Australia, is a silver- zinc-lead project comprising five

licences which cover an area of 2,471km2 in the southern

Musgrave returned a very encouraging drill result from the

Gawler Craton.

initial drilling at Tank Hill at Menninnie Dam returning 6m @

4.9% Zn, 0.7% Pb, 62g/t Ag, 1.2g/t Au in MDRC039. The

The Company has an agreement with Menninnie Metals Pty

mineralisation is only 5km north-east of the existing Menninnie

Ltd, a subsidiary of Terramin Australia Limited (ASX: TZN), to

Central and Viper deposits.

earn a 51% interest in the Menninnie Dam Project in the first

stage, and up to a 75% interest thereafter.

Musgrave Minerals is committed to exploration success and

making the next significant discovery to drive shareholder

The project hosts the Menninnie Central and Viper mineralised

value.

zones which have a JORC-compliant Inferred Mineral Resource

of 7.7Mt at 27g/t Ag, 3.1% Zn and 2.6% Pb (estimated by

Terramin Australia Limited in 2011 in accordance with the

2004 JORC code). These zones are not closed off and there

is potential for further resources to be defined. The project is

Review of Operations
Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

Corporate

Exploration Activities

Musgrave Minerals Ltd listed on the Australian Securities

Exchange (“ASX”) on 29 April 2011.

Menninnie Dam Project
EL5039, 4813, 4285, 4669, 4865 (Musgrave Minerals Ltd

During the past year, Musgrave spent $3.9 million on

earning up to 75%)

exploration and administration activities and received $0.29

million in regard to the 2011/2012 Financial Year Research and

Development refund.

• MGV commenced aggressive exploration program in

November 2012 after signing Heads of Agreement to

acquire up to 75% of the Project

At the end of June 2013, the Company was well resourced,

• Zinc, silver and gold mineralisation discovered at

holding $9.6 million in cash.

Tank Hill target which remains open

In October 2012, the Company signed a Heads of Agreement

with Menninnie Metals Pty Ltd on the Menninnie Dam Ag-Zn-

Pb project in the Southern Gawler Craton of South Australia.

Much of Musgrave’s exploration activities during the past year

o MDRC39 intersected 6m @ 4.9% Zn, 0.7% Pb,

62g/t Ag, 1.2g/t Au

• Silver, zinc and graphite intersected at the

Mannequin prospect

have focused on this project.

• New co-incident VTEM and silver geochemical targets

identified for further work

During the March quarter, new exploration licences for the

Musgrave tenement package were granted for a period of two

Musgrave Minerals is earning a 51% interest in the Menninnie

years, replacing the existing tenure.

MGV Geologist viewing core at Deering Hills

Dam silver-zinc-lead project in South Australia in the first

stage, and up to a 75% interest thereafter, after signing a

Heads of Agreement with Menninnie Metals Pty Ltd, a 100%

subsidiary of Terramin Australia Limited (ASX: TZN).

Menninnie Dam comprises five Exploration Licences (ELs)

covering a contiguous area of 2,471km² in the Gawler Craton,

about 100km west of Port Augusta. The project hosts two

zones, Menninnie Central and Viper, that have an Inferred

Mineral Resource of 7.7Mt at 27g/t silver, 3.1% zinc and

Drilling at Tank Hill, Menninnie Dam

Musgrave Minerals Ltd
Musgrave Minerals Ltd

Review of Operations

Figure 2: Location of the Menninnie Dam Project, South Australia

2.6% lead (estimated by Terramin in 2011 in accordance with

Au soil geochemistry. The Company drilled 13 holes into this

the 2004 JORC code) which are not closed off. The project

target during the year with encouraging results.

has significant potential to discover new economic mineral

deposits.

Drill hole MDRC39 at Tank Hill intersected 6m @ 4.9%

Zn, 0.7% Pb, 62g/t Ag, 1.2g/t Au from 133m down hole

Musgrave Minerals commenced its exploration at Menninnie

in fresh rock within a broader zone of 30m @ 1.9% Zn,

Dam in November 2012, focusing on five target areas, Tank

0.5% Pb, 21g/t Ag, 0.27g/t Au from 132m down hole. The

Hill, Mannequin, Viper South, Nonning and Phone Hill.

mineralisation is only 5km north-east of the existing Menninnie

Musgrave completed three drilling campaigns on the project

Central and Viper deposits at Menninnie Dam.

during the year, drilling 31 reverse circulation (RC) drill holes

for 5,250m and one diamond drill hole to a depth of 267m.

As a result of the mineralisation intersected at Tank Hill,

Tank Hill

MGV commenced further RC drilling in May focusing on this

prospect and following up the encouraging zinc-silver-gold

The Tank Hill target is a 2km long induced polarisation (“IP”)

and lead intersection in MDRC39. The program consisted of six

anomaly with co-incident anomalous surface Zn, Pb, Ag and

RC holes and a single diamond hole.

Review of Operations
Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

Sieved sulphide at Menninnie Dam

Results include 2m @ 4.2% Zn, 0.9% Pb, 267g/t Ag, 0.44g/t

quality information is available at this stage. The graphite is

Au from 138m down hole in fresh rock within a broader zone

co-incident with a strong airborne VTEM conductor identified

of 22m @ 0.7% Zn, 0.4% Pb, 44g/t Ag, 0.09g/t Au, from

at the Mannequin target. Follow-up drilling is currently being

126m down hole in drill hole MDRC44. Current interpretation

planned.

suggests that the true width of the mineralisation will

be approximately 70-80% of the intersection widths.

Viper

Mineralisation remains open to the northwest and southeast.

Drilling at Viper targeted the up-dip projection of the

Mannequin

interpreted Ag-Pb-Zn lodes. MDRC26 at Viper intersected 6m

@ 49.4g/t Ag from 60m suggesting that the Viper lodes may

The Mannequin target is a 3km long IP anomaly. This IP

be offset by one or more faults.

response is more extensive and more intense than the

responses over the inferred resource at Menninnie Central.

Nonning

The modelled source of the IP response extends from near-

The Nonning target is a 1.5km long IP chargeability anomaly.

surface to significant depth. The area is covered by transported

The IP response is in an area of favourable geology and major

overburden making surface geochemistry ineffective. The

regional structural intersections with no previous drilling.

Mannequin target was tested with six RC drill holes.

The area is covered by thin sedimentary cover and surface

geochemical data is not yet available for this target. A single

Highly anomalous silver, zinc and total graphitic carbon (TGC)

RC hole was drilled at Nonning but failed to reach target

values were intersected (Figure 3). This includes a result of

depth due to excessive ground water. This target remains

20m @ 12.4g/t Ag from 68m down hole in weathered clay in

untested.

drill hole MDRC28. At the base of this anomalous silver zone

was 1m @ 3.5% Zn, 0.7% Pb and 21.1g/t Ag from 87m down

Surface geochemical surveys have identified a number of

hole.

encouraging Ag, Pb, Zn, Cu and Au anomalies for follow-

up exploration. The survey included analysis for low level

Further analysis of graphitic zones intersected in drill holes

silver (Ag) geochemistry which has not been undertaken

MDRC31 and MDRC32 returned a best intersection of 10m

on the Menninnie Dam tenements before. Low level silver

@ 6.3% TGC in hole MDRC32. No grain size or carbon

geochemistry through soil sampling was a key factor in the

Musgrave Minerals Ltd
Musgrave Minerals Ltd

Review of Operations

Figure 3: Menninnie Dam drill hole locations on IP chargeability image and landsat background

Review of Operations
Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

discovery of the Paris silver deposit by Investigator Resources

only 20km to the west of Menninnie.

MGV undertook a 398 line km airborne VTEM survey across

the Menninnie Dam project during the June quarter. The

survey aimed to define new base metal and graphitic targets

within the Menninnie Dam project area.

The VTEM survey identified seven high-priority targets, four

of which are co-incident with silver geochemical anomalism.

Mineralised rock-chip samples up to 13.3g/t Ag were identified

within a strongly altered epithermal zone at the Erebus target.

The Erebus geochemical anomaly, where there has been no

drilling to date, is approximately 1.5km in length and is co-

incident with high quality VTEM anomalies (Figure 5).

Follow-up exploration will include additional mapping, rock-

chip sampling and infill soil geochemistry to better define

targets for drill testing.

Figure 4: Tank Hill drill hole locations and significant results on
IP chargeability image and landsat background

Figure 5: Menninnie Dam priority VTEM anomalies on silver
soil geochemical image with Paris insert for anomaly size
comparison

* JORC (2004 Edition)-compliant inferred resource for the
Menninnie Central and Viper deposits was reported by
Terramin Australia Limited (ASX: TZN) on 1st March 2011

Zone

Tonnes
x103

Zn
(%)

Pb
(%)

Ag
(%)

Pb + Zn
(%)

Total Menninnie

Central

5,240

3.5

2.7

6.1

Total Viper

2,460

2.3

2.4

4.8

Total Menninnie

Central

and Viper

7,700

3.1

2.6

5.7

Inferred Resource (at 2.5% Pb+Zn cut-off) as at 15 February 2011

MGV is not aware of any new information that would affect the

material nature of this resource calculation.

*Competent Person’s Statement

The information in this report that relates to Mineral Resources or Ore Reserves is based on information thoroughly reviewed by Mr Robert Waugh, a

Competent Person who is a Fellow of the Australasian Institute of Mining and Metallurgy (AusIMM) and a Member of the Australian Institute of Geoscientists

(AIG). Mr Waugh is Managing Director and a full-time employee of Musgrave Minerals Ltd. Mr Waugh has sufficient experience that is relevant to the

style of mineralisation and type of deposit under consideration 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 his

information in the form and context in which it appears.

Musgrave Minerals Ltd
Musgrave Minerals Ltd

Review of Operations

Deering Hills Project
EL5172 & EL5173 – formerly EL3941 & EL3942 (100%

Musgrave Minerals Ltd)

• Extensive geochemical vacuum drilling program

completed

• Regional gravity survey completed defining areas of

prospective Giles Complex rocks under cover

• Minbar and Caliban targets returned highly

anomalous nickel, copper and PGE (Platinum Group

Elements) values increasing the prospectivity for

massive Ni-Cu sulphides

• Vacuum drilling at Alvey target identified area

prospective for stratiform PGE mineralisation

• Grant of high priority Pallatu tenement

• Basement drill testing of targets planned for late in

2013

The Deering Hills Project is in the centre of the Musgrave

geological province about 200km west of the Stuart Highway

and Adelaide to Darwin rail line (Figure 6).

The focus at Deering Hills is to continue to define and develop

targets in preparation for basement drill testing for massive

nickel-copper sulphides. A total of 813 shallow geochemical

vacuum holes for more than 14,000m were drilled at Deering

Hills during the year to a maximum depth of 55m. This

drilling defined co-incident basement nickel-copper and PGE

anomalies at Minbar, Caliban (formally called West Pallatu) and

Alvey for further follow-up exploration. All three targets are

co-incident with strong gravity highs and magnetic responses

permissive with possible magmatic nickel-copper sulphide

mineralisation.

Results from shallow geochemical vacuum drilling at the

Minbar target returned highly anomalous nickel, copper and

PGE values over an area that is 1.5km in length. Peak values

at Minbar were 1847ppm Ni, 482ppm Cu and 121ppb Pt + Pd

(PGE). These values are high for shallow geochemical drilling

and suggest a sulphide source.

Previous drilling by Mithril Resources Ltd intersected a PGE

mineralised horizon with the best intersection 17.1m @

Review of Operations
Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

Figure 6: Location of MGV’s Musgrave geological province tenements, South Australia.

0.49g/t Pt + Pd including 8m @ 0.77g/t Pt + Pd. Shallow

vacuum geochemical drilling by Musgrave at the Alvey target

identified a second, to date untested horizon, prospective for

stratiform PGE mineralisation similar to that in the PGE-rich

Bushveld Complex of South Africa. The geochemical target

has been defined over a strike length of approximately 2.5km

within rock types favourable to host this style of mineralisation.

At the Alvey PGE target, two detailed infill geochemical

vacuum drill lines (25m spaced holes) returned two strong gold

assays of 43ppb and 66ppb Au. These holes also contained

strong PGE, nickel and copper anomalism.

The Caliban nickel-copper geochemical target (Figure 7)

extends over 1km of strike in favourable gabbroic basement

rock types. The results at Caliban and Minbar are highly

anomalous for this style of sampling. The Caliban geochemical

anomaly is 3km along strike from the highly rated Pallatu

VTEM targets.

Vacuum drilling at Deering Hills

10 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Review of Operations

Figure 7: Image showing new Pallatu licence with Ni-Cu vacuum geochemical
drilling result and VTEM targets (red stars) on orthoimage and VTEM B-field
image as insert

Review of Operations
11 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

Figure 8: Image showing new Pallatu licence with VTEM targets, co-incident Bouguer gravity anomaly and magnetic anomalies in
relation to the known Giles Complex mafic/ultramafic intrusives. The remainder of the licence is under shallow sand cover.

The vacuum geochemical drilling program also covered initial

traverses across the Lyta, Dius and Vintari targets. Ground EM

over VTEM and geochemical anomalies is planned for later in

Mimili Project
EL5174 & EL5175 – formerly EL3954 & EL3955 (100%

2013 to better define precise drill hole locations for basement

Musgrave Minerals Ltd)

drill testing at Deering Hills.

• Geochemical sampling completed at Ragnar target

The granting of the Pallatu tenement (EL5317) in August 2013

• Regional soil geochemical program identified nickel

is a significant step towards accessing and drill testing ten high

and copper targets for follow-up

priority VTEM targets within this new exploration licence.

• New VTEM anomalies identified at West Graben

The new licence (Figure 7) covers a very prospective area of

known Giles Complex intrusives adjacent to a number of high

priority VTEM conductors modelled under shallow sand cover.

Giles Complex intrusives are known to host nickel sulphide

mineralisation elsewhere in the Musgrave Province. A VTEM

survey flown by Musgrave Minerals to detect massive sulphide

mineralisation highlighted a cluster of 10 priority conductive

targets at Pallatu for follow-up.

The VTEM targets at Pallatu are along strike from the

anomalous nickel-copper-PGE (platinum group element)

geochemical anomalies identified from shallow vacuum drilling

at Caliban and Minbar (Figure 7) and are co-incident with a

large gravity anomaly and magnetic response (Figure 8). This

is consistent with the geophysical response from other known

magmatic nickel sulphide deposits of this model type.

Musgrave Minerals owns 100% of the Mimili Project which

consists of two exploration licences, EL5174 and EL5175.

The project is situated 40km west of the Stuart Highway and

approximately 70km north-west of Marla in South Australia

(Figure 6).

Moorilyanna Prospect

The Moorilyanna copper-gold prospect is located on tenement

EL5175 less than 40km from the Stuart Highway and Adelaide

to Darwin rail line.

Musgrave Minerals undertook a regional soil geochemical

program over the Ragnar target area at Moorilyanna. The

survey successfully identified a number of copper geochemical

targets for follow-up exploration including an anomaly

overlying the untested IP target near MOORC016 (Figure 9).

The 2012 VTEM survey delineated three local bedrock

conductors in the south west corner of EL5175 referred to

as the West Graben targets. Follow up work will include

geochemical sampling and ground EM.

12 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Review of Operations

Figure 9: Schematic gridded image of Ragnar copper geochemical targets shown on orthoimage

Bryson Hill landscape

Review of Operations
13 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

Mimili Regional

Mt Woodroffe Project

Musgrave Minerals undertook a regional mapping and surface

geochemical sampling over the Mail Road target area in the

EL5171 – formerly EL3940 (100% Musgrave Minerals Ltd)

northern part of EL5175. The survey confirmed a number

• Airborne VTEM survey identifies targets for further

of copper and nickel geochemical targets for follow-up

exploration

exploration including anomalous surface copper and nickel

samples at Valeri containing peak values of 308ppm Cu

and 491ppm Ni. This is encouraging as the Valeri target is

coincident with both an aeromagnetic and gravity high.

Further follow-up is planned.

• Surface Ni-Cu geochemical soil anomalies identified

at the Rimmer target

• Rock chip sampling at the Kochanski target returned

anomalous peak values of 0.14% Cu and 727ppm Ni.

The Mt Woodroffe Project is situated on EL5171 within a large,

geologically complex area, straddling the Mann Fault Complex

and Woodroffe Thrust Zone in the central Musgrave Province

(Figure 6). It covers an area of approximately 424km2.

Musgrave flew a 645 line km airborne VTEM survey over the

Mt Woodroffe tenement and identified a number of priority

targets for follow-up including the Lister, Rimmer, Skutters,

Kochanski and Starbug targets (Figure 10). All five targets are

co-incident with regional gravity and magnetic highs consistent

with the magmatic nickel-copper sulphide model.

Follow-up of these targets commenced with Musgrave

conducting geochemical sampling over the targets in the June

quarter. A number of surface geochemical soil anomalies

were identified including peak copper and nickel anomalism

of 308ppm Cu and 171ppm Ni at the Rimmer target and

443ppm Ni at the Skutters target.

Further exploration including additional soil and rock-chip

sampling and ground EM surveys are planned.

Field camp at Moorilyanna

14 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Review of Operations

Figure 10: Mt Woodroffe VTEM targets with VTEM colour EM
amplitude image overlaying ortho-image

Bryson Hill Project
EL5205 – formerly 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

SA Musgrave Province. The tenement is covered by spinifex

sand plains and dunes with only very minimal sub-crop. Little

previous exploration has been undertaken within the tenement

area.

Musgrave flew an airborne VTEM survey over portions of

the large Bryson Hill project area and identified a number

of priority targets for follow-up. Mapping and geochemical

sampling commenced at Bryson Hill in the June quarter.

Other Musgrave Province Projects
During the year, Musgrave Minerals submitted heritage survey

requests for tenements EL4850, EL4851, EL4852 and EL4853.

Heritage surveys have commenced on EL4850 with exploration

due to commence later this year.

Musgrave Minerals holds a 100% interest in three of the

licences (EL4850, EL4852, and EL4853) and can earn up to a

75% interest in EL4851.

The new licences cover areas that are considered prospective

for magmatic nickel-copper sulphide deposits and are

interpreted to be predominantly covered by thin (<20m)

aeolian sand with minor outcropping and sub-cropping

geology. With the newly granted licences, Musgrave Minerals

has a total of 10 granted exploration licences and 32

exploration licence applications in the South Australian portion

of the Musgrave Province.

Musgrave Principal Geologist Justin Gum mapping at
Mt Woodroffe

Review of Operations
15 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

Competent Person’s Statement

The information in this report that relates to Exploration Results is based on information compiled by Mr Robert Waugh. Mr Waugh is a fellow 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 20012 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.

Forward Looking Statements

(among others) the risk of adverse or unanticipated market, financial or

This report has been prepared by Musgrave Minerals Ltd (MGV). The

information contained in this report is a professional opinion only and is

given in good faith. Certain information in this document has been derived

from third parties and though Musgrave Minerals has no reason to believe

that it is not accurate, reliable or complete, it has not been independently

audited or verified by MGV.

This report is in summary form and does not purport to be all inclusive or

complete. Recipients should conduct their own investigations and perform

their own analysis in order to satisfy themselves as to the accuracy and

completeness of the information, statements and opinions contained.

This is for information purposes only. Neither this nor the information

contained in it constitutes an offer, invitation, solicitation or

recommendation in relation to the purchase or sale of MGV shares in

any jurisdiction. This does not constitute investment advice and has

been prepared without taking into account the recipient’s investment

objectives, financial circumstances or particular needs and the opinions

and recommendations in this report are not intended to represent

recommendations of particular investments to particular persons.

Recipients should seek professional advice when deciding if an investment

is appropriate. All securities transactions involve risks, which include

political developments.

To the fullest extent permitted by law, MGV, its officers, employees, related

bodies corporate, agents and advisers do not make any representation

or warranty, express or implied, as to the currency, accuracy, reliability

or completeness of any information, statements, opinions, estimates,

forecasts or other representations contained in this report. No responsibility

for any errors or omissions from this arising out of negligence or otherwise

is accepted.

Any forward-looking statements included in this document involve

subjective judgment and analysis and are subject to uncertainties, risks

and contingencies, many of which are outside the control of, and may

be unknown to, MGV. In particular, they speak only as of the date of

this document, they assume the success of MGV’s strategies, and they

are subject to significant regulatory, business, competitive and economic

uncertainties and risks. Actual future events may vary materially from the

forward-looking statements and the assumptions on which the forward-

looking statements are based. Recipients of this document (Recipients)

are cautioned to not place undue reliance on such forward-looking

statements.

16 Musgrave Minerals Ltd
Musgrave Minerals Ltd

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

EL1997/053

EL1997/055

EL1997/056

EL1997/057

EL1997/058

EL1997/059

EL1997/060

EL1997/061

EL1997/062

EL1997/063

EL1997/143

EL1997/144

EL1997/186

EL1997/297

EL1997/321

EL1997/468

EL1997/605

EL1999/035

EL2001/031

Previous
Tenement
ID

Project

Locality

Status

Musgrave

Musgrave PMC JV

Musgrave

Application

Area
(km2)

519

463

653

1854

620

1301

2198

1230

2136

1783

1507

1013

595

1241

1656

1721

2308

666

2108

1926

1957

1040

835

1815

2015

624

215

152

692

338

MGV
Interest

100%

0% (may earn up to 75%)

100%

Summary of Tenements
17 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

Previous
Tenement
ID

Tenement

EL2008/154

EL2008/156

Project

Locality

Status

Musgrave

Musgrave PMC JV

Musgrave

EL3940

Musgrave

EL3941

Musgrave

EL3942

Musgrave

EL3954

Musgrave

EL3955

Musgrave

EL4047

Musgrave PMC JV

Musgrave-

Menninnie Metals

Musgrave-

Area
(km2)

2385

2360

1342

1256

424

427

565

714

1906

1535

MGV
Interest

100%

0% (may earn up to 75%)

100%

0% (may earn up to 75%)

Application

Granted

101

0% (may earn up to 75%)

Menninnie Metals

Granted

312

0% (may earn up to 75%)

Musgrave-

Menninnie Metals

Granted

208

0% (may earn up to 75%)

Musgrave-

Menninnie Metals

Granted

988

0% (may earn up to 75%)

Musgrave-

Menninnie Metals

Granted

862

0% (may earn up to 75%)

EL4850

EL4851

EL4852

EL4853

EL5170

EL5171

EL5172

EL5173

EL5174

EL5205

EL5039

EL4813

EL4285

EL4669

EL4865

18 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Summary of Tenements

Appendix 1: Summary of Menninnie Dam Drill Hole Locations and Significant Results

Drill Hole
ID

Drill
Type

Prospect

Easting
(m)

Northing
(m)

Dip
(degrees)

Total
Depth
(m)

From
(m)

Interval
(m)

Zn
(%)

Pb
(%)

Ag
(g/t)

Au
(g/t)

MDRC16

MDRC17

MDRC18

MDRC19

MDRC20

MDRC21

MDRC22

MDRC23

MDRC24

Phone Hill

629646

6383501

283

Phone Hill

629647

6383103

275

Phone Hill

629893

6383505

277

Phone Hill

630103

6383515

280

Phone Hill

630604

6383554

280

Phone Hill

630304

6383903

Phone Hill

630253

6383904

106

Phone Hill

629895

6384620

277

Viper

632877

6385154

270

-60

294

296

120

302

150

310

319

144

318

198

303

MDRC25

Viper

632943

6385007

270

-60

309

125

MDRC26

MDRC27

Viper

632950

6384801

270

632885

6385276

270

-60

MDRC28

Viper

635998

6387546

270

-60

MDRC29

RC Mannequin

635755

6387645

270

MDRC30

RC Mannequin

635835

6387649

270

-60

287

156

275

156

284

156

Including

276

102

280

102

MDRC31

RC Mannequin

635247

6388556

270

-60

272

132

MDRC32

RC Mannequin

635337

6388557

270

-60

276

121

MDRC33

MDRC34

MDRC35

MDRC36

MDRC37

Tank Hill

635207

6392249

277

Tank Hill

635003

6392255

Tank Hill

635297

6392267

277

Tank Hill

635194

6392406

270

Tank Hill

635346

6391986

270

-60

265

198

149

265

151

268

158

268

109

NSA

0.46

NSA

0.14

0.42

0.56

1.23

4.8

2.3

2.9

0.46

0.47

49.4

0.75

0.90

4.0

0.26

0.07

12.4

3.49

0.74

21.1

NSA

0.43

0.45

0.44

0.12

7.3

5.3

4.5

11.4

4.2

1.0

2.4

5.7

0.40

5.7

0.40

0.72

0.06

2.9

0.02

NSA

273

199

125

0.34

0.04

5.70

0.03

Summary of Tenements
19 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

Drill
Hole ID

Drill
Type

Prospect

Easting
(m)

Northing
(m)

Dip
(degrees)

Total
Depth
(m)

From
(m)

Interval
(m)

Zn
(%)

Pb
(%)

Ag
(g/t)

Au
(g/t)

MDRC38

Mannequin

North

635593

6389679

270

-60

220

121

MDRC39

Tank Hill

636002

6391753

180

-60

261

211

including

MDRC39

Tank Hill

636002

6391753

180

-60

261

211

MDRC40

Tank Hill

635998

6391696

180

-60

262

156

MDRC40

Tank Hill

635998

6391696

180

-60

262

156

including

MDRC40

Tank Hill

635998

6391696

180

-60

262

156

MDRC41

Tank Hill

636003

6391814

180

-60

262

210

MDRC41

Tank Hill

636003

6391814

180

-60

262

210

including

MDRC41

Tank Hill

636003

6391814

180

-60

262

210

MDRC42

Tank Hill

635942

6391633

180

-60

260

234

MDRC42

Tank Hill

635942

6391633

180

-60

260

234

including

101

132

168

181

102

124

101

174

180

189

190

191

196

199

0.04

0.01

5.10

0.02

0.06

0.02

10.10

0.02

0.59

0.22

1.20

0.02

0.03

5.10

0.04

0.03

4.60

0.02

0.06

0.02

4.70

0.05

0.03

4.75

0.07

0.26

9.10

1.90

0.46

20.51

0.27

4.92

0.74

62.13

1.17

0.47

0.20

17.30

0.03

0.47

0.05

3.80

0.10

0.01

0.56

0.90

0.01

0.46

0.70

0.06

0.26

7.93

0.03

0.07

0.49

19.70

0.12

0.03

0.08

4.60

0.04

0.44

0.06

1.90

0.64

0.10

2.50

0.76

0.19

6.40

0.11

0.37

0.06

9.00

0.03

0.57

0.07

2.35

0.01

0.31

0.04

5.90

0.05

0.35

5.80

0.05

0.02

0.01

4.00

0.23

0.13

0.26

8.60

0.18

0.07

0.02

6.30

0.10

0.21

0.71

21.40

0.33

0.09

0.13

10.90

1.58

1.04

12.60

0.01

3.03

1.91

21.40

0.39

0.26

6.60

0.30

0.10

7.50

0.06

0.00

0.03

6.40

0.10

0.51

0.04

0.70

0.29

0.18

4.50

0.02

0.67

0.33

6.54

0.04

1.55

0.48

10.50

0.01

20 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Summary of Tenements

Drill Hole
ID

Type Prospect Easting
Drill

(m)

Northing
(m)

Dip
(degrees)

Total
Depth
(m)

From
(m)

Interval
(m)

Zn
(%)

Pb
(%)

Ag
(g/t)

Au
(g/t)

MDRC42

Tank Hill

635942

6391633

180

-60

260

234

MDRC43

Tank Hill

636066

6391747

180

-60

258

114

MDRC44

Tank Hill

636167

6391751

180

-60

264

192

MDRC44

Tank Hill

636167

6391751

180

-60

264

192

including

MDRC44

Tank Hill

636167

6391751

180

-60

264

192

MDRC44

Tank Hill

636167

6391751

180

-60

MDRC44

MDRC45

Tank Hill

636167

6391751

180

Tank Hill

635838

6391532

270

-60

264

192

including

264

192

262

157

188

204

211

120

126

138

143

0.24

0.13

4.85

0.02

0.46

0.04

0.90

0.06

0.03

9.45

0.03

0.01

5.42

0.13

0.01

4.80

0.11

0.17

0.05

4.60

0.32

0.09

6.40

1.34

0.05

1.00

0.28

0.05

4.00

0.01

0.02

7.50

0.21

0.11

0.08

16.30

0.09

0.19

0.07

6.25

0.04

0.39

0.42

23.72

0.06

0.60

1.69

88.50

0.07

0.39

0.17

8.10

0.71

0.38

44.1

0.09

4.17

0.87

267

0.44

0.19

10.50

0.05

NSA

156.00

2.50

0.30

0.07

162.50

1.50

0.22

0.09

5.4

9.2

0.11

0.08

MD117

Diam Tank Hill

636002

6391785

180

-60

262

267

171.50

1.00

0.71

0.18

13.7

0.04

194.18

0.82

0.05

0.07

7.5

0.11

206.15

0.70

0.34

0.15

13.3

0.04

NORC01

Nonning

638829

6395996

270

-60

235

103

NSA

Drill Hole
ID

Drill
Type

Prospect

Easting
(m)

Northing
(m)

Azimuth
(degrees)

Dip
(degrees)

Total
Depth
(m)

From
(m)

To
(m)

Interval
(m)

TGC
(%)

MDRC31

Mannequin

635247

6388556

270

-60

132

MDRC32

Mannequin

635337

6388557

270

-60

7.1*

6.3

5.9

6.2*

Notes (see JORC 2012 Table 1 Menninie Dam Project for further details)

1. All intervals recorded in this table are above 0.4% Zn and containing no more than 1m of internal dilution below 0.4% Zn

2. High grade interval is above 1.0% Zn

3. NSA (no significant assay) – No assay above 4g/t Ag, 0.4% Zn or 0.4% Pb or 5.0% TGC

4. No high grade cut was used

5. g/t (grams per tonne)

Summary of Tenements
21 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

Appendix 2a: Summary of MGV Deering Hills Vacuum Drill Hole Locations and Significant Results

Drill Hole
ID

Target

Easting
(m)

Northing
(m)

Azimuth
(degrees)

Dip
(degrees)

Total
Depth
(m)

From
(m)

To
(m)

Interval
(m)

Ni
(ppm)

Cu
(ppm)

Pt +
Pd
(ppb)

DEEVAC220

Alvey

612000

7095750

DEEVAC220

Alvey

612000

7095750

DEEVAC228

Alvey

612500

7094750

DEEVAC892

Alvey

612500

7095400

DEEVAC1078

Alvey

613101

7094902

DEEVAC1079

Alvey

613098

7094925

DEEVAC1079

Alvey

613098

7094925

DEEVAC1080

Alvey

613099

7094952

DEEVAC1080

Alvey

613099

7094952

DEEVAC1081

Alvey

613102

7094976

DEEVAC1082

Alvey

613100

7094998

DEEVAC1083

Alvey

613099

7095026

DEEVAC1083

Alvey

613099

7095026

DEEVAC1084

Alvey

613101

7095053

DEEVAC1084

Alvey

613101

7095053

DEEVAC1085

Alvey

613096

7095076

DEEVAC1089

Alvey

612001

7095824

DEEVAC1090

Alvey

611996

7095854

DEEVAC1091

Alvey

612000

7095873

DEEVAC1093

Alvey

611700

7095550

DEEVAC279

Caliban

587500

7099500

DEEVAC1170 Caliban

587506

7099699

DEEVAC1172 Caliban

587500

7099900

DEEVAC1176 Caliban

587500

7100399

DEEVAC083

Minbar

598500

7098000

DEEVAC083

Minbar

598500

7098000

DEEVAC083

Minbar

598500

7098000

DEEVAC104

Minbar

601500

7096500

DEEVAC361

Minbar

598000

7098500

DEEVAC361

Minbar

598000

7098500

DEEVAC690

Minbar

599000

7098700

DEEVAC695

Minbar

599000

7098100

DEEVAC722

Minbar

598000

7099200

DEEVAC725

Minbar

597500

7098300

360

-90

28.8

25.2

12.6

10.8

12.6

17.4

15.6

17.4

37.2

35.4

37.2

33.6

35.4

37.2

35.4

37.2

33.6

35.4

37.2

35.4

37.2

35.4

37.2

35.4

37.2

31.8

33.6

37.2

33.6

35.4

33.6

31.8

33.6

31.8

33.6

31.8

28.2

24.6

26.4

28.65

26.4

28.2

13.8

53.4

49.8

51.6

37.2

22.8

24.6

26.4

17.2

25.2

19.8

25.2

19.8

21.6

25.2

21.6

23.4

29.7

6.6

4.8

28.8

4.8

6.6

15.6

13.8

15.6

28.2

26.4

28.2

13.8

8.4

6.6

13.8

8.4

1.8

485

486

552

337

775

622

566

456

489

486

551

801

550

509

444

406

525

640

416

764

446

614

931

625

1397

619

1847

1044

946

976

483

400

972

524

174

155

325

180

142

121

107

136

107

145

210

318

234

230

161

141

121

155

100

121

402

302

163

442

305

135

331

482

105

364

308

412

331

309

116

139

109

119

172

176

161

104

103

114

121

103

22 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Summary of Tenements

Notes (see JORC 2012 Table 1. Musgrave Project for further details)

1. All intervals with coincident Ni (>400ppm Ni) and Cu (>100ppm Cu) are recorded here

2. NSA (no significant assay)

3. ppm (parts per million)

4. ppb (parts per billion)

Appendix 2b: Summary of Historical Mithril Resources Ltd Deering Hills RC Drill Hole Locations
and Significant Results

Drill
Hole ID

Target Easting

(m)

Northing
(m)

Azimuth
(degrees)

Dip
(degrees)

To (m)

From
(m)

Interval
(m)

Ni
(ppm)

Cu
(ppm)

Pt + Pd
(ppb)

Total
Depth
(m)

MAD 1

Alvey

611764

7095200

389

-60

358

MAD 2

Alvey

611960

7095135

399

-60

358

including

273

277

358

382

386

287.4

14.4

283

360.8

399.1

394

2.8

17.1

461

381

546

485

531

335

181

223

465

813

451

494

771

Notes (see JORC 2012 Table 1, Musgrave Project for

7. Sample preparation by dry pulverisation and multi element

further details)

1. Co-ordinates are in UTM grid (GDA94 Z52) and have been

measured by hand-held GPS

2. Drilling was undertaken utilising a diamond drilling rig

3. Diamond core was cut using a manually operated core saw

4. All samples are analysed at geological intervals between

0.2 and 2m lengths

5. Geological sample logging was undertaken at variable

intervals based on geology with colour, alteration and

lithology recorded for each interval

6. Sample preparation and sample analysis is undertaken by

ALS Chemex

analysis by four acid digest (hydrochloric, nitric, perchloric

and hydrofluoric acid) and ICP-AES to acceptable detection

limits and Au, Pt and Pd by 30g FA 1CP-AES

8. Analysis for a total of 36 elements is recorded including

possible deleterious elements such as arsenic

9. An accurate dip and strike of the mineralisation is yet to be

determined and the true width of the intercepts is not yet

known

10. ppm (parts per million)

11. ppb (parts per billion)

Summary of Tenements
23 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

The following section is provided to ensure compliance with the JORC (2012) requirements for the reporting of exploration results.

Menninnie Dam Project

JORC 2012 TABLE 1
Section 1 Sampling Techniques and Data

Criteria

Explanation

Commentary

Sampling techniques

Nature and quality of sampling (eg cut

Drilling is undertaken on a priority basis with

channels, random chips, or specific

drill type and hole spacing influenced by

specialised industry standard measurement

geological, topographical and physical factors.

tools appropriate to the minerals under

Sampling is undertaken using standard

investigation, such as down hole gamma

industry practices.

sondes, or handheld XRF instruments, etc).

These examples should not be taken as

limiting the broad meaning of sampling.

Surface geochemical sampling is undertaken

following standard industry practice using

stainless steel or nylon mesh sieves.

Include reference to measures taken to ensure

Drill hole co-ordinates are in UTM grid

sample representivity and the appropriate

(GDA94 Z53) and have been measured by

calibration of any measurement tools or

hand-held GPS with an accuracy of ±4 metres.

systems used.

Aspects of the determination of mineralisation

Diamond drilling is used to obtain samples

that are Material to the Public Report. In

varying in length from 0.2 to 2m. Reverse

cases where ‘industry standard’ work has

circulation (RC) drilling was used to obtain 1m

been done this would be relatively simple (eg

samples.

‘reverse circulation drilling was used to obtain

1m samples from which 3kg was pulverised

to produce a 30g charge for fire assay’).

In other cases more explanation may be

required, such as where there is coarse gold

that has inherent sampling problems. Unusual

commodities or mineralisation types (eg

submarine nodules) may warrant disclosure of

detailed information.

All RC samples are chips and are

homogenously split using a cyclone splitter

and analysed as 5m composites or individual

1m samples. Individual 1m samples were

analysed where elevated base metals or

favourable alteration was identified.

Individual samples weigh less than 3kg to

ensure total preparation at the laboratory

pulverization stage.

The sample size is deemed appropriate for the

grain size of the material being sampled.

Drilling techniques

Drill type (eg core, reverse circulation, open-

A combination of RC and diamond drilling is

hole hammer, rotary air blast, auger, Bangka,

undertaken. Diamond core is a combination

sonic, etc) and details (eg core diameter, triple

of NQ2 and HQ. Drill core is orientated

or standard tube, depth of diamond tails,

using a down hole spear and structural

face-sampling bit or other type, whether core

measurements recorded in “Geo-calculator”

is oriented and if so, by what method, etc).

software program.

Drill sample recovery

Method of recording and assessing core and

Diamond core recoveries are logged and

chip sample recoveries and results assessed.

recorded in the database. No significant core

loss issues were identified.

Total RC sample weights are monitored but

not individually recorded in reconnaissance

drilling and as such sample recovery is not

accurately measured.

24 Musgrave Minerals Ltd
Musgrave Minerals Ltd

JORC 2012 Table 1

Criteria

Explanation

Commentary

Drill sample recovery (continued)

Measures taken to maximise sample recovery

Diamond core is reconstructed into

and ensure representative nature of the

continuous intervals on angle iron racks for

samples.

orientation and reconciliation against core

block markers. Rod and metre counts are

routinely carried out by the driller.

RC samples are split using a cyclone or riffle

splitter to ensure representative sampling.

Composite samples are combined using a

spear (tube) sampler.

Whether a relationship exists between sample

No bias has been observed between sample

recovery and grade and whether sample bias

recovery and grade.

may have occurred due to preferential loss/

gain of fine/coarse material.

Logging

Whether core and chip samples have been

Geotechnical logging was carried out on

geologically and geotechnically logged to a

diamond core for recovery and RQD. All

level of detail to support appropriate Mineral

geological, structural and alteration related

Resource estimation, mining studies and

observations are stored in the database for

metallurgical studies.

both RC and diamond core.

Whether logging is qualitative or quantitative

Logging of lithology, structure, alteration,

in nature. Core (or costean, channel, etc)

mineralisation, colour and other features of

photography.

core or RC chips is undertaken on a routine

basis. Both wet and dry photography of

diamond core is undertaken on a tray by tray

basis.

The total length and percentage of the

All drill holes are logged in full.

relevant intersections logged.

Sub-sampling techniques and sample

If core, whether cut or sawn and whether

Diamond core is cut and sampled on

preparation

quarter, half or all core taken.

geological intervals. A diamond core saw was

used to cut the core and selected half core

intervals were submitted for analysis.

If non-core, whether riffled, tube sampled,

RC samples are cyclone split at 1m intervals

rotary split, etc and whether sampled wet or

and tube sampled as 5m composites. All

dry.

measures are taken to maintain a dry sample

although some samples are wet when

significant groundwater is intersected.

For all sample types, the nature, quality and

Sample preparation and base metal and

appropriateness of the sample preparation

precious metal analysis is undertaken by

technique.

Intertek Genalysis, in Wingfield, South

Australia.

Sample preparation by dry pulverisation to

90% passing 75 micron.

Quality control procedures adopted for

Field QC procedures involve the use of

all sub-sampling stages to maximise

certified reference standards, duplicates and

representivity of samples.

blanks at appropriate intervals.

Measures taken to ensure that the sampling is

Sampling was carried out using MGV

representative of the in situ material collected,

protocols and QAQC procedures as per

including for instance results for field

industry best practice. Duplicate samples are

duplicate/second-half sampling.

routinely checked against originals.

Whether sample sizes are appropriate to the

Sample sizes are considered appropriate for

grain size of the material being sampled.

the commodities and elements explored and

analysed for.

JORC 2012 Table 1
25 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

Criteria

Explanation

Commentary

Quality of assay data and laboratory tests

The nature, quality and appropriateness of the

Drill sample analysis is undertaken by Intertek

assaying and laboratory procedures used and

Genalysis, in Wingfield, South Australia,

whether the technique is considered partial

multi element analysis by four acid total

or total.

digest (hydrochloric, nitric, perchloric and

hydrofluoric acid) and ICP-OES and ICP-MS to

acceptable detection limits and Au by FA25/

MS.

Analysis for a total of 37 elements is recorded.

Sample preparation and total graphitic carbon

(TGC) analysis was undertaken by Intertek

Genalysis, in Maddington, Western Australia.

Sample preparation by dry pulverisation and

total graphitic carbon analysis by CS Analyser

to 0.1% TGC.

Soil geochemical sample analysis is

undertaken by ACME Labs in Vancouver,

Canada. Multi element analysis by aqua regia

digestion Ultratrace ICP-MS analysis (1F05 &

1F04)

For geophysical tools, spectrometers,

No geophysical tools were used to estimate

handheld XRF instruments, etc, the

mineral or element percentages. A portable

parameters used in determining the analysis

XRF, Niton XL3t 950 GOLD+ was used to

including instrument make and model,

assist with sample selection intervals for

reading times, calibrations factors applied and

laboratory analysis.

their derivation, etc.

Nature of quality control procedures adopted

In addition to MGV standards, duplicates

(eg standards, blanks, duplicates, external

and blanks, Genalysis incorporate laboratory

laboratory checks) and whether acceptable

QAQC including standards, blanks and

levels of accuracy (ie lack of bias) and

repeats as a standard procedure. Certified

precision have been established.

reference materials that are relevant to the

type and style of mineralisation targeted are

inserted at regular intervals.

ACME incorporate laboratory QAQC including

standards, blanks and repeats as a standard

procedure.

Verification of sampling and assaying

The verification of significant intersections by

At least two company representatives verify

either independent or alternative company

significant intersections including , either the

personnel.

Managing Director, Exploration Manager,

Principal Geologist or Project Geologist.

The use of twinned holes.

No twin holes have yet been drilled by MGV.

Documentation of primary data, data entry

Primary data is collected using a standard set

procedures, data verification, data storage

of Excel templates on a Toughbook laptop

(physical and electronic) protocols.

computer using lookup codes. Geological

sample logging was undertaken on one metre

intervals for RC drilling with colour, structure,

alteration and lithology recorded for each

interval. Data is verified before loading to a

CSA Global database. Geological logging of

all diamond core was undertaken.

Discuss any adjustment to assay data.

No adjustments or calibrations were made to

any assay data reported by MGV.

26 Musgrave Minerals Ltd
Musgrave Minerals Ltd

JORC 2012 Table 1

Criteria

Explanation

Commentary

Location of data points

Accuracy and quality of surveys used to locate

Drill hole co-ordinates and surface

drill holes (collar and down-hole surveys),

geochemical sample locations are in UTM grid

trenches, mine workings and other locations

(GDA94 Z53) and have been measured by

used in Mineral Resource estimation.

hand-held GPS with an accuracy of ±4 metres.

Down hole surveys were undertaken utilised

a single shot camera recording at intervals

varying between 12 and 30m.

Specification of the grid system used.

Drill hole co-ordinates are in UTM grid

(GDA94 Z53)

Quality and adequacy of topographic control.

Drill hole RL’s are approximate using hand

held GPS.

Data spacing and distribution

Data spacing for reporting of Exploration

Variable drill hole spacings were used to

Results.

adequately test targets.

Soil samples were collected on variable grid

spacings.

Whether the data spacing and distribution is

The mineralisation has not yet been

sufficient to establish the degree of geological

demonstrated to have sufficient continuity to

and grade continuity appropriate for the

support the definition of Mineral Resource

Mineral Resource and Ore Reserve estimation

and Reserves under the classification applied

procedure(s) and classifications applied.

under the 2012 JORC Code.

Whether sample compositing has been

Composite samples on 5m intervals were

applied.

undertaken outside visually mineralised zones

to determine background responses.

Orientation of data in relation to geological

Whether the orientation of sampling achieves

The precise dip and strike of the

structure

unbiased sampling of possible structures and

mineralisation is not yet known and it is

the extent to which this is known, considering

unclear at this stage whether any sampling

the deposit type.

has a set bias.

If the relationship between the drilling

No orientation based sampling bias is known

orientation and the orientation of key

at this time.

mineralised structures is considered to have

introduced a sampling bias, this should be

assessed and reported if material.

Sample security

The measures taken to ensure sample security. Chain of custody is managed by MGV.

Samples are stored on site and transported

to Intertek Genalysis in Wingfield, South

Australia by a licenced reputable transport

company. When at Genalysis samples are

stored in a locked yard before being processed

and tracked through preparation and analysis

using the Lab Track system.

Audits or reviews

The results of any audits or reviews of

No external audits or reviews of sampling

sampling techniques and data.

techniques and data have been undertaken.

JORC 2012 Table 1
27 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

Section 2 Reporting of Exploration Results

Criteria

Explanation

Commentary

Mineral tenement and land tenure status

Type, reference name/number, location and

All drilling has been within tenements EL5039

ownership including agreements or material

and EL4813 within the Menninnie Dam Joint

issues with third parties such as joint ventures,

Venture between Musgrave Exploration Pty

partnerships, overriding royalties, native

Ltd, a wholly owned subsidiary of Musgrave

title interests, historical sites, wilderness or

Minerals Ltd and Menninnie Metals Pty Ltd, a

national park and environmental settings.

wholly owned subsidiary of Terramin Australia

Limited. Musgrave has the right to earn a

51% interest in the Menninnie Dam Project

in the first stage, and up to a 75% interest

thereafter.

The tenements are within the Gawler

Range Aboriginal Corporation, Native Title

Determination Area.

Exploration done by other parties

Acknowledgment and appraisal of exploration

Terramin Australia and other parties have

The security of the tenure held at the time of

The tenements are in good standing and no

reporting along with any known impediments

known impediments exist.

to obtaining a licence to operate in the area.

by other parties.

historically held the area but very little

basement drilling has been undertaken

outside the Menninnie Central and Viper

deposit areas.

Geology

Deposit type, geological setting and style of

Musgrave is exploring for multi commodity

mineralisation.

style deposits consistent with porphyry-

epithermal style systems.

Drill hole Information

A summary of all information material to

Refer to appendix 1 in the body of this report.

the understanding of the exploration results

including a tabulation of the following

information for all Material drill holes:

• easting and northing of the drill hole collar

• elevation or RL (Reduced Level – elevation

above sea level in metres) of the drill hole

collar

• dip and azimuth of the hole

• down hole length and interception depth

• hole length.

Data aggregation methods

In reporting Exploration Results, weighting

Refer to notes below appendix 1 in the body

averaging techniques, maximum and/or

of this report.

minimum grade truncations (eg cutting of

high grades) and cut-off grades are usually

Material and should be stated.

Where aggregate intercepts incorporate

Refer to notes below appendix 1 in the body

short lengths of high grade results and

of this report.

longer lengths of low grade results, the

procedure used for such aggregation should

be stated and some typical examples of such

aggregations should be shown in detail.

The assumptions used for any reporting of

No metal equivalent values are currently used

metal equivalent values should be clearly

for reporting of exploration results.

stated.

28 Musgrave Minerals Ltd
Musgrave Minerals Ltd

JORC 2012 Table 1

Criteria

Explanation

Commentary

Relationship between mineralisation widths

These relationships are particularly important

An accurate dip and strike and the controls

and intercept lengths

in the reporting of Exploration Results.

on mineralisation are yet to be determined

and the true width of the intercepts is not yet

known.

If the geometry of the mineralisation with

respect to the drill hole angle is known, its

nature should be reported.

If it is not known and only the down hole

lengths are reported, there should be a clear

statement to this effect (eg ‘down hole

length, true width not known’).

Diagrams

Appropriate maps and sections (with scales)

Refer to figures 1, 2, 3, 4 and 5 and Appendix

and tabulations of intercepts should be

1 in the body of this report.

included for any significant discovery being

reported These should include, but not be

limited to a plan view of drill hole collar

locations and appropriate sectional views.

Balanced reporting

Where comprehensive reporting of all

All drill results are reported.

Exploration Results is not practicable,

representative reporting of both low and high

grades and/or widths should be practiced

to avoid misleading reporting of Exploration

Results.

Other substantive exploration data

Other exploration data, if meaningful and

All material results from geochemical and

material, should be reported including (but

geophysical surveys related to these prospects

not limited to): geological observations;

have previously been reported.

geophysical survey results; geochemical survey

results; bulk samples – size and method of

treatment; metallurgical test results; bulk

density, groundwater, geotechnical and

rock characteristics; potential deleterious or

contaminating substances.

Analysis for a total of 37 elements is

undertaken including possible deleterious

elements such as arsenic. Anomalous results

are reported.

Further work

The nature and scale of planned further

A range of exploration techniques are being

work (eg tests for lateral extensions or depth

considered to progress exploration including

extensions or large-scale step-out drilling).

additional drilling.

Diagrams clearly highlighting the areas of

Refer to figures, 3, 4 and 5 in the body of this

possible extensions, including the main

report.

geological interpretations and future drilling

areas, provided this information is not

commercially sensitive.

JORC 2012 Table 1
29 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

Musgrave Project

JORC 2012 TABLE 1
Section 1 Sampling Techniques and Data

Criteria

Explanation

Commentary

Sampling techniques

Nature and quality of sampling (eg cut

Drilling is undertaken on a priority basis with

channels, random chips, or specific

drill type and hole spacing influenced by

specialised industry standard measurement

geological, topographical and physical factors.

tools appropriate to the minerals under

Sampling is undertaken using standard

investigation, such as down hole gamma

industry practices.

sondes, or handheld XRF instruments, etc).

These examples should not be taken as

limiting the broad meaning of sampling.

Surface geochemical sampling is undertaken

following standard industry practice using

stainless steel or nylon mesh sieves.

Include reference to measures taken to ensure

Drill hole co-ordinates are in UTM grid

sample representivity and the appropriate

(GDA94 Z52) and have been measured by

calibration of any measurement tools or

hand-held GPS with an accuracy of ±4 metres.

systems used.

Aspects of the determination of mineralisation

Diamond drilling is used to obtain samples

that are Material to the Public Report. In

varying in length from 0.2 to 2m.

cases where ‘industry standard’ work has

been done this would be relatively simple (eg

‘reverse circulation drilling was used to obtain

Reverse circulation (RC) drilling was used to

obtain 1m samples.

1m samples from which 3kg was pulverised

All samples are chips and are homogenously

to produce a 30g charge for fire assay’).

split using a cyclone splitter and are analysed

In other cases more explanation may be

as 5m composites or individual 1m samples.

required, such as where there is coarse gold

Individual 1m samples were analysed where

that has inherent sampling problems. Unusual

elevated base metals or favourable alteration

commodities or mineralisation types (eg

was identified.

submarine nodules) may warrant disclosure of

detailed information.

Individual samples weigh less than 3kg to

ensure total preparation at the laboratory

pulverization stage.

The sample size is deemed appropriate for the

grain size of the material being sampled.

Vacuum drilling is used as a geochemical

sampling process to enable metal detection

and the interpretation of basement lithology

in areas of alluvial, colluvial and aeolian cover.

Individual 1.8m samples are only collected

from the cover-insitu regolith contact and end

of hole.

Drilling techniques

Drill type (eg core, reverse circulation, open-

A combination of RC and diamond drilling is

hole hammer, rotary air blast, auger, Bangka,

undertaken. Diamond core is a combination

sonic, etc) and details (eg core diameter, triple

of NQ2 and HQ. Drill core is orientated

or standard tube, depth of diamond tails,

using a down hole spear and structural

face-sampling bit or other type, whether core

measurements recorded in “GeoCalculator”

is oriented and if so, by what method, etc).

software program.

30 Musgrave Minerals Ltd
Musgrave Minerals Ltd

JORC 2012 Table 1

Criteria

Drill sample recovery

Explanation

Commentary

Method of recording and assessing core and

Diamond core recoveries are logged and

chip sample recoveries and results assessed.

recorded in the database. No significant core

loss issues were identified.

Total vacuum and RC sample weights are

monitored but not individually recorded in

reconnaissance drilling and as such sample

recovery is not accurately measured.

Measures taken to maximise sample recovery

Diamond core is reconstructed into

and ensure representative nature of the

continuous intervals on angle iron racks for

samples.

orientation and reconciliation against core

block markers. Rod and meter counts are

routinely carried out by the driller.

RC samples are split using a cyclone or riffle

splitter to ensure representative sampling.

Composite samples are combined using a

spear (tube) sampler.

Vacuum samples are obtained using a tube

sampler.

Whether a relationship exists between sample

No bias has been observed between sample

recovery and grade and whether sample bias

recovery and grade.

may have occurred due to preferential loss/

gain of fine/coarse material.

Logging

Whether core and chip samples have been

Geotechnical logging was carried out on

geologically and geotechnically logged to a

diamond core for recovery and RQD. All

level of detail to support appropriate Mineral

geological, structural and alteration related

Resource estimation, mining studies and

observations are stored in the database for

metallurgical studies.

both RC and diamond core.

Whether logging is qualitative or quantitative

Logging of lithology, structure, alteration,

in nature. Core (or costean, channel, etc)

mineralisation, colour and other features

photography.

of core, RC chips and vacuum samples is

undertaken on a routine basis. Both wet

and dry photography of diamond core is

undertaken on a tray by tray basis.

The total length and percentage of the

All drill holes are logged in full.

relevant intersections logged.

Sub-sampling techniques and sample

If core, whether cut or sawn and whether

Diamond core is cut and sampled on

preparation

quarter, half or all core taken.

geological intervals. A diamond core saw was

If non-core, whether riffled, tube sampled,

RC samples are cyclone split at 1m intervals

rotary split, etc and whether sampled wet or

and tube sampled as 5m composites. All

used to cut the core and selected half core

intervals were submitted for analysis.

dry.

measures are taken to maintain a dry sample

although some samples are wet when

significant groundwater is intersected.

Vacuum samples are collected at selected

geochemical zones within the hole and

constitute 1.8m intervals sampled with a tube

sampler.

The 1.8m basement interface sample was

analysed in all holes where it was intersected.

Only selected samples were analysed within

drill holes from geological logging.

JORC 2012 Table 1
31 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

Criteria

Explanation

Commentary

Sub-sampling techniques and sample

For all sample types, the nature, quality and

Sample preparation and base metal and

preparation (continued)

appropriateness of the sample preparation

precious metal analysis is undertaken by

technique.

Intertek Genalysis, in Wingfield, South

Australia.

Sample preparation by dry pulverisation to

90% passing 75 micron.

Quality control procedures adopted for

Field QC procedures involve the use of

all sub-sampling stages to maximise

certified reference standards, duplicates and

representivity of samples.

blanks at appropriate intervals.

Measures taken to ensure that the sampling is

Sampling was carried out using MGV

representative of the in situ material collected,

protocols and QAQC procedures as per

including for instance results for field

industry best practice. Duplicate samples are

duplicate/second-half sampling.

routinely checked against originals.

Whether sample sizes are appropriate to the

Sample sizes are considered appropriate for

grain size of the material being sampled.

the commodities and elements explored and

analysed for.

Quality of assay data and laboratory tests

The nature, quality and appropriateness of the

Drill sample and soil geochemical analysis

assaying and laboratory procedures used and

is undertaken by Intertek Genalysis, in

whether the technique is considered partial

Wingfield, South Australia, multi element

or total.

analysis by four acid total digest (hydrochloric,

nitric, perchloric and hydrofluoric acid) and

ICP-OES and ICP-MS to acceptable detection

limits and Au by FA25/MS.

Analysis for a total of 37 elements is recorded.

For geophysical tools, spectrometers,

No geophysical tools were used to estimate

handheld XRF instruments, etc, the

mineral or element percentages. A portable

parameters used in determining the analysis

XRF, Niton XL3t 950 GOLD+ was used to

including instrument make and model,

assist with sample selection intervals for

reading times, calibrations factors applied and

laboratory analysis.

their derivation, etc.

Nature of quality control procedures adopted

In addition to MGV standards, duplicates

(eg standards, blanks, duplicates, external

and blanks, Genalysis incorporate laboratory

laboratory checks) and whether acceptable

QAQC including standards, blanks and

levels of accuracy (ie lack of bias) and

repeats as a standard procedure. Certified

precision have been established.

reference materials that are relevant to the

type and style of mineralisation targeted are

inserted at regular intervals.

Verification of sampling and assaying

The verification of significant intersections by

At least two company representatives verify

either independent or alternative company

significant intersections including, either the

personnel.

Managing Director, Exploration Manager,

Principal Geologist or Project Geologist.

The use of twinned holes.

No twin holes have yet been drilled by MGV.

Documentation of primary data, data entry

Primary data is collected using a standard set

procedures, data verification, data storage

of Excel templates on a Toughbook laptop

(physical and electronic) protocols.

computer using lookup codes. Geological

sample logging was undertaken on one metre

intervals (RC) and 1.8m intervals (vacuum)

with colour, structure, alteration and lithology

recorded for each interval. Data is verified

before loading to a CSA Global database.

Geological logging of all diamond core was

undertaken.

Discuss any adjustment to assay data.

No adjustments or calibrations were made to

any assay data reported by MGV.

32 Musgrave Minerals Ltd
Musgrave Minerals Ltd

JORC 2012 Table 1

Criteria

Explanation

Commentary

Location of data points

Accuracy and quality of surveys used to locate

Drill hole co-ordinates and surface

drill holes (collar and down-hole surveys),

geochemical sample locations are in UTM grid

trenches, mine workings and other locations

(GDA94 Z52) and have been measured by

used in Mineral Resource estimation.

hand-held GPS with an accuracy of ±4 metres.

Down hole surveys were undertaken for all RC

and diamond drill holes utilised a single shot

camera recording at intervals varying between

12 and 30m.

No down hole surveys where undertaken on

vacuum drill holes. All vacuum drill holes are

vertical.

Specification of the grid system used.

Drill hole co-ordinates are in UTM grid

(GDA94 Z52)

Quality and adequacy of topographic control.

Drill hole RL’s are approximate using hand

held GPS.

Data spacing and distribution

Data spacing for reporting of Exploration

Variable drill hole spacings were used to

Results.

adequately test targets (RC & diamond

drilling) and to adequately cover target areas

with vacuum drilling.

Soil samples were collected on variable grid

spacings.

Whether the data spacing and distribution is

The mineralisation has not yet been

sufficient to establish the degree of geological

demonstrated to have sufficient continuity to

and grade continuity appropriate for the

support the definition of Mineral Resource

Mineral Resource and Ore Reserve estimation

and Reserves under the classification applied

procedure(s) and classifications applied.

under the 2012 JORC Code.

Whether sample compositing has been

In RC drill holes composite samples on 5m

applied.

intervals were undertaken outside visually

mineralised zones to determine background

responses.

No compositing of samples was undertaken

on diamond or vacuum drill holes.

Orientation of data in relation to geological

Whether the orientation of sampling achieves

The precise dip and strike of the

structure

unbiased sampling of possible structures and

mineralisation is not yet known and it is

the extent to which this is known, considering

unclear at this stage whether any sampling

the deposit type.

has a set bias.

If the relationship between the drilling

No orientation based sampling bias is known

orientation and the orientation of key

at this time.

mineralised structures is considered to have

introduced a sampling bias, this should be

assessed and reported if material.

Sample security

The measures taken to ensure sample security. Chain of custody is managed by MGV.

Samples are stored on site and transported

to Intertek Genalysis in Wingfield, South

Australia by a licenced reputable transport

company. When at Genalysis samples are

stored in a locked yard before processing and

then tracked through preparation and analysis

using the Lab Track system.

Audits or reviews

The results of any audits or reviews of

No external audits or reviews of sampling

sampling techniques and data.

techniques and data have been undertaken.

JORC 2012 Table 1
33 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

Section 2 Reporting of Exploration Results

Criteria

Explanation

Commentary

Mineral tenement and land tenure status

Type, reference name/number, location and

All drilling has been within wholly owned

ownership including agreements or material

MGV tenements EL5173 and EL5175 within

issues with third parties such as joint ventures,

the Musgrave Project area.

partnerships, overriding royalties, native

title interests, historical sites, wilderness or

national park and environmental settings.

The tenements are APY aboriginal freehold

lands.

All surface geochemical sampling was within

Musgrave Minerals tenure.

The security of the tenure held at the time of

The tenements are in good standing and no

reporting along with any known impediments

known impediments exist.

to obtaining a licence to operate in the area.

Exploration done by other parties

Acknowledgment and appraisal of exploration

No historical drilling has been undertaken by

by other parties.

any third party that is relevant to the current

targets.

Geology

Deposit type, geological setting and style of

Musgrave is exploring for multi commodity

mineralisation.

style deposits consistent with low MgO

magmatic Ni-Cu systems.

Drill hole Information

A summary of all information material to

Refer to appendix 2 in the body of this report.

the understanding of the exploration results

including a tabulation of the following

information for all Material drill holes:

• easting and northing of the drill hole collar

• elevation or RL (Reduced Level – elevation

above sea level in metres) of the drill hole

collar

• dip and azimuth of the hole

• down hole length and interception depth

• hole length.

Data aggregation methods

In reporting Exploration Results, weighting

Refer to notes below appendix 2 in the body

averaging techniques, maximum and/or

of this report.

minimum grade truncations (eg cutting of

high grades) and cut-off grades are usually

Material and should be stated.

Where aggregate intercepts incorporate

Refer to notes below appendix 2 in the body

short lengths of high grade results and

of this report.

longer lengths of low grade results, the

procedure used for such aggregation should

be stated and some typical examples of such

aggregations should be shown in detail.

The assumptions used for any reporting of

No metal equivalent values are currently used

metal equivalent values should be clearly

for reporting of exploration results.

stated.

34 Musgrave Minerals Ltd
Musgrave Minerals Ltd

JORC 2012 Table 1

Criteria

Explanation

Commentary

Relationship between mineralisation widths

These relationships are particularly important

An accurate dip and strike and the controls

and intercept lengths

in the reporting of Exploration Results.

on mineralisation are yet to be determined

and the true width of the intercepts is not yet

known.

If the geometry of the mineralisation with

respect to the drill hole angle is known, its

nature should be reported.

If it is not known and only the down hole

lengths are reported, there should be a clear

statement to this effect (eg ‘down hole

length, true width not known’).

Diagrams

Appropriate maps and sections (with scales)

Refer to figures 1, 6, 7, 8, 9 and 10 and

and tabulations of intercepts should be

Appendix 2 in the body of this report.

included for any significant discovery being

reported These should include, but not be

limited to a plan view of drill hole collar

locations and appropriate sectional views.

Balanced reporting

Where comprehensive reporting of all

All RC and diamond drill results are reported.

Exploration Results is not practicable,

All vacuum drill results are shown on the

representative reporting of both low and high

gridded geochemical image in figure 7 of this

grades and/or widths should be practiced

report.

to avoid misleading reporting of Exploration

Results.

Other substantive exploration data

Other exploration data, if meaningful and

All material results from geochemical and

material, should be reported including (but

geophysical surveys related to these prospects

not limited to): geological observations;

have previously been reported.

geophysical survey results; geochemical survey

results; bulk samples – size and method of

treatment; metallurgical test results; bulk

density, groundwater, geotechnical and

rock characteristics; potential deleterious or

contaminating substances.

Analysis for a total of 37 elements is

undertaken including possible deleterious

elements such as arsenic. Anomalous results

are reported.

Further work

The nature and scale of planned further

A range of exploration techniques are being

work (eg tests for lateral extensions or depth

considered to progress exploration including

extensions or large-scale step-out drilling).

additional drilling.

Diagrams clearly highlighting the areas of

Refer to figures 7, 8, 9 and 10 in the body of

possible extensions, including the main

this report.

geological interpretations and future drilling

areas, provided this information is not

commercially sensitive.

JORC 2012 Table 1
35 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

Directors’ Report

He is a Member of the Australian Institute of Mining and

Metallurgy, and is a Professional Geoscientist of Ontario,

Canada. Mr Ascough is a member of the Company’s audit

Your directors present their report on Musgrave Minerals Ltd

and its subsidiary (the Group) for the financial year ended 30

committee.

June 2013.

Directors

The names of the Directors in office at any time during, or

since the end of, the year are:

Graham Ascough, Non-Executive Chairman

Robert Waugh, Managing Director

Kelly Ross, Non-Executive Director

John Percival, Non-Executive Director

Directors have been in office since the start of the financial

year to the date of this report.

Names, qualifications, experience and special
responsibilities

Mr Graham Ascough

BSc, PGeo, MAusIMM (Non-Executive Chairman), Director

since 26 May 2010

Graham Ascough is a senior resources executive with more

than 24 years of industry experience evaluating mineral

projects and resources in Australia and overseas. He has had

broad industry involvement ranging from playing a leading role

in setting the strategic direction for significant country-wide

exploration programs to working directly with mining and

exploration companies.

Mr Ascough is a geophysicist by training and was the

Managing Director of ASX listed Mithril Resources

Limited from October 2006 until June 2012. Prior to joining

Mithril in 2006, 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).

Other directorships:

Mithril Resources Ltd (Appointed 9 October 2006)

Aguia Resources Limited (Appointed 19 October 2010)

Phoenix Copper Limited (Appointed 10 December 2012)

AO Energy Limited (Appointed 31 July 2013)

Mr Robert Waugh

MSc, BSc, FAusIMM, MAIG (Managing Director), Director since

6 March 2011

Robert Waugh has over 24 years of 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 Nebo-Babel

nickel/copper/PGM deposit at West Musgrave in 2000. He

was subsequently Project Manager of the team that defined

the initial resource at Nebo-Babel. Mr Waugh has held senior

exploration management roles at WMC Resources (WMC),

BHP Billiton Exploration Limited (BHP), Fusion Resources

Limited, Cameco Australia Limited and 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 Master of Science

in Mineral Economics from Curtin University and the Western

Australian School of Mines. Mr Waugh is a Fellow 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.

Other directorships:

None

36 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Directors’ Report

Mrs Kelly Ross

Ltd (resigned 14 December 2012). Additionally he is Company

BBus, CPA, ACSA (Non-Executive Director), Director since 26

Secretary to Minotaur Exploration Ltd, Mithril Resources Ltd,

May 2010

Petratherm Ltd and Toro Energy Limited. He holds other public

company secretarial positions and directorships with private

Kelly Ross is a qualified accountant holding a Bachelor of

companies and provides corporate advisory services to a wide

Business (Accounting) and has the designation CPA from the

range of organisations.

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

Operating Results

years. Mrs Ross is currently a Non-Executive Director of ASX

The loss of the Group after providing for income tax amounted

listed Independence Group NL. Mrs Ross is the chair of the

to $585,809 (2012: $276,182).

Company’s audit committee.

Other directorships:

Independence Group NL (Appointed 16 September 2002)

Interests in the Shares and
Options of the Company and
Related Bodies Corporate

Mr John Percival

As at the date of this report, the interests of the directors in

Non-Executive Director, Director since 26 May 2010

the shares and options of Musgrave Minerals Ltd were:

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 ASX listed Goldsearch Limited. Mr

Percival is a member of the Company’s audit committee.

Other directorships:

Goldsearch Limited (Appointed 11 October 1995)

Company Secretary

Mr Donald Stephens

Number of
Ordinary Shares

Number of
Options over
Ordinary Shares

200,000

80,000

200,000

50,000

750,000

5,000,000

500,000

Graham Ascough

Robert Waugh

John Percival

Kelly Ross

Dividends Paid or Recommended

No dividends were paid or declared since the start of the

financial year. No recommendation for payment of dividends

has been made.

BAcc, FCA, Company Secretary since 26 May 2010

Principal Acitivites

Mr Stephens is a Chartered Accountant and corporate adviser

with over 25 years experience in the accounting industry,

The principal activities of the Group during the financial year

were:

including 14 years as a partner of HLB Mann Judd (SA), a

•

to carry out exploration of mineral tenements both on a

firm of Chartered Accountants. He is a director of Mithril

joint venture basis and by the Group in its own right;

Resources Ltd, Papyrus Australia Ltd, Lawson Gold Ltd, AO

Energy Limited and was formerly a director of TW Holdings

•

to continue to seek extensions of areas held and to seek

out new areas with mineral potential; and

Directors’ Report
37 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

•

to evaluate results achieved through surface sampling,

geophysical surveys and drilling activities carried out during

Environmental Regulations

the year.

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 is designed to

meet stakeholders’ needs and manage business risk.

The Group 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 work carried out was in South Australia and the entity

followed procedures and pursued objectives in line with

guidelines published by the South Australian Government.

These guidelines encompass not only the impact on the land

and vegetation but cover such subjects as pollution, approvals

from relevant parties including land owners and land users,

heritage, health and safety and proper restoration practices.

The Group 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 Group is committed to minimising environmental impacts

during all phases of exploration, development and production

through a best practice environmental approach. The Group

shares responsibility for protecting the environment for the

present and the future. It believes that carefully managed

•

Implementation of Board approved operating plans and

exploration programs should have little or no long-lasting

budgets and Board monitoring of progress against these

impact on the environment and the Group has formed a

budgets, including the establishment and monitoring

best practice policy for the management of its exploration

of performance indicators of both a financial and non-

programs. The Group properly monitors and adheres to this

financial nature.

Significant Changes in the State
of Affairs

No matters or circumstances have arisen since the end of the

financial year which significantly affected or may significantly

approach and there were no environmental incidents to

report for the year under review. Furthermore, the Group

is in compliance with the state and/or commonwealth

environmental laws for the jurisdictions in which it operates.

Occupational Health, Safety and
Welfare

affect the operations of the Group, the results of those

In running its business, Musgrave Minerals Ltd aims to protect

operations, or the state of affairs of the Group in future

the health, safety and welfare of employees, contractors and

financial years.

Future Developments

Disclosure of information regarding likely developments in

the operations of the Group in future financial years and

the expected results of those operations is likely to result in

guests. In the reporting year the Company experienced one

medical aid incident and no lost time injuries. The Company

reviews its Health and Safety policy at regular intervals to

ensure a high standard of Health and Safety.

Subsequent Events

unreasonable prejudice to the Company. Accordingly, this

There were no significant events that occurred after balance

information has not been disclosed in this report.

date.

38 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Directors’ Report

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
2012

Net Issued/
(Exercised or
expired)

Balance at 30 June
2013

21/08/2010

17/02/2011

09/05/2011

24/01/2012

06/03/2013

25/03/2013

20/08/2015

17/02/2016

08/05/2016

23/01/2017

05/03/2018

24/03/2018

$0.25

$0.36

$0.50

$0.36

$0.25

7,750,000

4,750,000

2,500,000

500,000

525,000

16,025,000

(150,000)

500,000

75,000

425,000

7,750,000

4,750,000

2,500,000

500,000

375,000

500,000

75,000

16,450,000

Share Options

Shares issued as a result of exercise of options
No shares were issued during the year as a result of the

exercise of options.

New options issued
During the financial year a total of 575,000 unlisted options

were issued to employees as an incentive. The options are

officers of their position or of information to gain advantage

for themselves or someone else or to cause detriment to the

Group.

Remuneration Report - Audited

This report outlines the remuneration arrangements in place

for Directors and Executives of Musgrave Minerals Ltd.

exercisable at $0.25 and expire 24 March 2018 (75,000) and

5 March 2018 (500,000). Refer to note 13 to the financial

Remuneration philosophy
The Board is responsible for determining remuneration policies

statements for further information.

Indemnification and Insurance of
Directors and Officers

To the extent permitted by law, the Group has indemnified

(fully insured) each Director and the Company Secretary of

the Group for a premium of $13,236. The liabilities insured

include costs 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 Group 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

wilful breach of duty by the officers or the improper use by the

applicable to Directors and senior executives of the Group.

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 Group’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,

Directors’ Report
39 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

being $290,000. Either party may terminate the employment

component. Termination payments are generally not payable

contract without cause by providing six (6) months written

on resignation or dismissal for serious misconduct. In the

notice or by making payment in lieu of notice (in the case

instance of serious misconduct the Company can terminate

of the Company), based on the annual salary component.

employment at any time.

Termination payments are generally not payable on resignation

or dismissal for serious misconduct. In the instance of serious

The employment conditions of the Principal Geologist, Dr

misconduct the Company can terminate employment at any

Justin Gum, are formalised in a contract of employment.

time.

Dr Gum commenced employment on 1 October 2010 and

his current gross annual salary, inclusive of superannuation

The employment conditions of the Exploration Manager, Mr

guarantee, is $171,675. Either party may terminate the

Ian Warland, are formalised in a contract of employment.

employment contract without cause by providing one (1)

Mr Warland commenced employment on 6 March 2013 and

month’s written notice or making payment in lieu of notice

his current gross annual salary, inclusive of superannuation

(in the case of the Company) or forfeiture of one month’s

guarantee, is $218,000. Either party may terminate the

salary (in the case of Dr Gum), based on the annual salary

employment contract without cause by providing one (1)

component. Termination payments are generally not payable

month’s written notice or making payment in lieu of notice

on resignation or dismissal for serious misconduct. In the

(in the case of the Company) or forfeiture of one month’s

instance of serious misconduct the Company can terminate

salary (in the case of Mr Warland), based on the annual salary

employment at any time.

Table 1: Director remuneration for the year ended 30 June 2013 and 30 June 2012

Short-term employee
benefits

Post employment
benefits

Share based
payments

Salary & Fees

Superannuation

Options

Total

Graham Ascough **

2013

2012

Robert Waugh **

2013

2012

Kelly Ross **

2013

2012

John Percival **

2013

2012

Total

2013

2012

65,000

65,100

266,055

45,000

46,012

45,000

422,067

421,155

23,945

4,050

3,038

4,050

31,033

32,045

65,000

65,100

290,000

49,050

453,100

453,200

40 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Directors’ Report

Table 2: Remuneration of key management personnel for the year ended 30 June 2013 and
30 June 2012

Short-term employee
benefits

Post employment
benefits

Share based
payments

Salary & Fees

Superannuation

Options

Total

Justin Gum

2013

2012

Ian Warland

2013

2012

Donald Stephens * & **

2013

2012

Total

2013

2012

156,875

139,000

14,119

24,500

170,994

163,500

51,571

4,641

21,550

77,762

208,446

139,000

18,760

24,500

21,550

248,756

163,500

* HLB Mann Judd (SA) Pty Ltd has received professional fees for accounting, taxation and secretarial services provided during the year amounting to $150,541

including GST (2012: $131,671). Donald Stephens, the Company Secretary, is a consultant with HLB Mann Judd (SA) Pty Ltd.

** Graham Ascough and Donald Stephens are Non-Executive Directors 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.

Use of Remuneration Consultants

Directors’ Meetings

During the financial year, there were no remuneration

The number of meetings of Directors (including meetings of

recommendations made in relation to key management

committees of Directors) held during the year and the number

personnel for the Company by any remuneration consultants.

of meetings attended by each Director were as follows:

Voting and Comments Made
at the Company’s 201 Annual
General Meeting

Musgrave Minerals Ltd received more than 98% of “yes”

votes on its remuneration report for the 2012 financial year by

proxy. The Company did not receive any specific feedback at

the AGM on its remuneration report.

Directors’ Meetings

Audit Committee

Director

Eligible

Attended

Eligible

Attended

Graham

Ascough

Robert

Waugh

John

Percival

Kelly Ross

Directors’ Report
41 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

Members acting on the audit committee are:

Kelly Ross (Chairperson)

Graham Ascough

Robert Waugh

John Percival

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.

Auditor Independence and
Non-Audit Services

Grant Thornton Audit Pty Ltd, in its capacity as auditor for

Musgrave Minerals Ltd, has not provided any non-audit

services throughout the reporting period. The auditor’s

independence declaration for the year ended 30 June 2013 as

required under section 307C of the Corporations Act 2001 has

been received and can be found on page 12.

Signed in accordance with a resolution of the Directors.

Mr Graham Ascough

Chairman

25 September 2013

42 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Directors’ Report

Corporate Governance
Statement

Introduction

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.

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.

• Ensuring all major business risks are identified and

effectively managed.

• Ensuring that the Group meets its legal and statutory

This Section addresses each of the Corporate Governance

obligations.

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

• Overseeing of the Company, including its control and

accountability systems.

The functions delegated to senior executives include:

the Company are located on the Company’s website.

•

Implementing the Company’s vision, values and business

Principle 1: Lay solid foundations
for management and oversight

Recommendation 1.1 - Functions reserved to
the Board and delegated to senior executives
The Board is accountable to Shareholders for the performance

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.

of the Company and has overall responsibility for its

• Sharing knowledge and experience to enhance success.

operations. Day to day management of the Company’s affairs,

and the implementation of the corporate strategy and policy

initiatives, is formerly delegated by the Board to the Managing

Director.

• 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

The Company has established functions reserved to the Board

relationships and engagement strategies.

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

• 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.

Corporate Governance Statement
43 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

The Company has not formally established the functions

transactions or potential transactions do not receive Board

reserved to the Board and those delegated to senior executives

papers related to those transactions or potential transactions,

in accordance with recommendations 1.1 and 1.3 of the

do not participate in any part of a Directors’ meeting which

ASX Corporate Governance Council. Given the size of the

considers those transactions or potential transactions, are not

Company, the Board has not considered it necessary to

involved in the decision making process in respect of those

formulate a Board charter.

transactions or potential transactions, and are asked not to

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

discuss those transactions or potential transactions with other

Directors.

Recommendation 2.1 - A majority of the
Board should be independent Directors
The Board is conscious of the need for independence and

established by the Board. A performance evaluation for

ensures that where a conflict of interest may arise, the relevant

senior executives will take place in the upcoming reporting

Director(s) leave the meeting to ensure a full and frank

period in accordance with the Company’s documented

discussion of the matter(s) under consideration by the rest

process. The performance of senior executives is reviewed by

of the Board. Those Directors who have interests in specific

comparing performance against agreed measures, examining

transactions or potential transactions do not receive Board

the effectiveness and results of their contribution and

papers related to those transactions or potential transactions,

identifying areas for potential improvement. In accordance

do not participate in any part of a Directors’ meeting which

with recommendations 1.2 and 1.3 of the ASX Corporate

considers those transactions or potential transactions, are not

Governance Council the Company has not disclosed a

involved in the decision making process in respect of those

description of the performance evaluation process in addition

transactions or potential transactions, and are asked not to

to the disclosure above.

Principle 2 - Structure the Board to add value
At the date of this statement the Board consists of the

following directors

Mr Graham Ascough, Non-Executive Chair

Mr Robert Waugh, Managing Director

Mrs Kelly Ross, Non-Executive Director

Mr John Percival, Non-Executive Director

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 this to be an appropriate composition

given the size and development of the Group at the present

The Board considers its current structure to be an appropriate

time. The names of directors including details of their

composition of the required skills and experience, given

qualification and experience are set out in the Directors’ Report

the experience of the individual Directors and the size and

of this Financial Report.

Independence

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

The Board is conscious of the need for independence and

Directors bring an independent judgment to bear on Board

ensures that where a conflict of interest may arise, the relevant

decisions.

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

44 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Corporate Governance Statement

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.

Recommendation 2.3 - The roles of chair and
Managing Director should be separated
The roles of the Chairman and the Managing Director are not

Principle 3 - Promote ethical and
responsible decision making

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).

being exercised by the same individual. The Company has

This policy provides that it is the responsibility of each

therefore complied with Recommendation 2.3.

Representative to ensure they do not breach the insider trading

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.

Recommendation 2.5 - Process for evaluating
the performance of the Board
The Board continues to review performance against

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:

1. the period between the end of the March, June,

September and December quarters and the release of

appropriate measures and identify ways to improve

the Company’s quarterly report to ASX for so long as the

performance. The Board has not formally disclosed the review

Company is required by the Listing Rules to lodge quarterly

process in accordance with recommendations 2.5 and 2.6

reports; and

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

2. 24 hours after the following events:

(a) Any major announcements;

stage.

Recommendation 2.6 - Additional
information concerning the Board and
Directors
The Company has included the disclosures required by

Recommendation 2.6 in this annual report. 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. A performance evaluation

for the board, its committees and directors has not taken place

during the reporting period.

(b) The release of the Company’s quarterly, half yearly and

annual financial results to the ASX; and

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.

Corporate Governance Statement
45 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

Recommendation 3.1 - Code of Conduct
The Board recognises the need for Directors and employees

to observe the highest standards of behaviour and business

Principle 4 - Safeguard integrity in
financial reporting

ethics when engaging in corporate activity. The Company

The Company has structured financial management to

maintains a reputation for integrity and is highly committed to

independently verify and safeguard the integrity of its financial

demonstrating appropriate corporate practices and decision

reporting. The structure established by the Company includes:

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 and ethics applying to the Board and all employees

in accordance with recommendations 3.1 and 3.5 of the

Corporate Governance Council.

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.

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.

• 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.

Recommendation 4.1 - Audit Committee
The Company has established an Audit Committee.

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. The details are as

follows:

•

the Audit Committee does not consist only of non-

executive Directors; there are three non-executive Directors

and one executive Director;

•

the Audit Committee does not consist of a majority of

independent Directors; and

The Company will assess all staff and Board appointments on

•

the Audit Committee is chaired by Mrs Kelly Ross, who is

their merits with consideration to diversity a driver in decision

not an independent Director.

making. The Company has not yet developed or disclosed a

Although none of the members of the Audit Committee are

formal diversity policy and therefore has not complied with the

independent, the Board has nevertheless determined that

recommendations 3.2 and 3.3 of the Corporate Governance

the composition of the Audit Committee represents the only

Council.

Recommendation 3.4 and 3.5 - Reporting in
Annual Report
At the date of this Annual Report, the Company employs 8

staff members (excluding the Non-Executive Directors and

the Managing Director), of which 2 are female. The Board of

Directors consists of 3 male directors and 1 female director.

The Company has disclosed the information suggested in

Recommendation 3.5 in this Annual Report.

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.

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;

46 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Corporate Governance Statement

•

review the annual and half-year financial reports and

in relation to continuous disclosure as well as the Company’s

recommend them for approval by the Board;

obligations under the Listing Rules and Corporations Act.

• nominate external auditors;

•

review the performance of the external auditors and

existing audit arrangements; and

The policy also provides procedures for internal notification

and external disclosures, as well as procedures for promoting

understanding of compliance with disclosure requirements.

• ensure compliance with laws, regulations and other

The policy reflects the matters set out in the commentary and

statutory or professional requirements, and the Company’s

guidance for Recommendation 5.1.

governance policies.

The Company has adopted an Audit Committee Charter which

sets out its role, responsibilities and membership requirements

Recommendation 5.2 - Continuous Disclosure
Policy
The disclosures required by Recommendation 5.2 are included

and reflects the matters set out in the commentary and

in this annual report.

guidance for Recommendation 4.3.

Recommendation 4.4 - Additional
Information concerning the Audit Committee
The disclosures required by Recommendation 4.4 are

contained within this annual report.

In accordance with the guide to reporting on Principle 4,

the Company’s Audit Committee Charter is available on the

Company’s website. The Board is responsible for the selection

and appointment of the external auditor and the Company’s

auditor Grant Thornton has complied with the Corporations

Act provisions requiring audit and review partner rotation

every 5 years.

Principle 5 - Make timely and
balanced disclosure

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.

Recommendation 6.1 - Shareholder
Communications Policy
Information is communicated to Shareholders through:

• annual, half-yearly and quarterly financial and activity

reports;

The Company has a policy that all shareholders and investors

have equal access to the Company’s information. The Board

• annual and other general meetings convened for

Shareholder review and approval of Board proposals;

ensures that all price sensitive information is disclosed to ASX

• continuous disclosure of material changes to ASX; and

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.

•

the Company’s website where all ASX announcements,

notices and financial reports are published as soon as

possible after release to ASX.

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

The auditor is required 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.

Corporate Governance Statement
47 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

The Company has adopted a Shareholder Communications

in accordance with recommendations 7.1 and 7.4 of the

Policy for:

Corporate Governance Council.

• promoting effective communication with shareholders; and

• encouraging shareholder participation at annual and other

general meetings.

Recommendation 6.2 - Availability of
Shareholder Communications Policy
The disclosures required by Recommendation 6.2 have been

included in this annual report.

Recommendation 7.2 - Risk Management and
Internal Control System
The Company has developed a risk management framework

which is supported by the Board of Directors and

management.

The policy provides a framework for identifying, assessing,

monitoring and managing risks of the Company.

A copy of the Company’s Shareholder Communications Policy

is available on the Company’s website.

The Board requires management to report on the policy as to

whether those risks are being managed effectively.

Principle 7 - Recognise and
manage risk

Recommendation 7.3 - Statement from the
Managing Director and Company Secretary
The Managing Director and the Company Secretary have

stated in writing to the Board that the Company’s financial

The Board has identified the significant areas of potential

reports present a true and fair view, in all material respects, of

business and legal risk of the Company. In addition the Board

the Company’s financial condition and operational results are

has developed the culture, processes and structures of the

in accordance with relevant accounting standards. Included

Company to encourage a framework of risk management

in this statement is a confirmation that the Company’s risk

which identifies, monitors and manages the material risks

management and internal controls are operating efficiently

facing the organisation.

and effectively.

Recommendation 7.1 - Risk Management
Policies
The identification, monitoring and, where appropriate,

Recommendation 7.4 - Additional
Information concerning Risk Management
The Company has included the disclosures required by

the reduction of significant risk to the Company is the

Recommendation 7.4 in this annual report.

responsibility of the Managing Director and the Board. The

Board has also established the Audit Committee which

The Company has publicly disclosed a risk management policy

addresses the risks of the Company.

outlining the oversight and management of material business

risks in accordance with recommendation 7.1 and 7.4 of the

The Board reviews and monitors the parameters under

Corporate Governance Council.

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 publicly disclosed a risk management policy

for the oversight and management of material business risks

Principle 8 - Remunerate fairly and
responsibly

Recommendation 8.1 - Remuneration
Committee
The Board has not established a Remuneration Committee or

disclosed a Committee Charter on the Company’s website and

48 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Corporate Governance Statement

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.

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.

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 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.

Recommendation 8.4 - Additional
Information concerning Remuneration
The Company has included the disclosures required by

Recommendation 8.4 in this annual report.

Corporate Governance Statement
49 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

50 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Auditor’s Independence Declaration

Consolidated Statement of Profit or Loss and Other Comprehensive
Income

For the Year Ended 30 June 2013

Other income

Impairment of exploration and evaluation assets

Employee benefits expense

Depreciation expense

Finance expenses

Other expenses

Loss before income tax expense

Income tax benefit/(expense)

Loss from continuing operations

Loss attributable to members of the parent entity

Other comprehensive income

Total comprehensive income for the year

Earnings per share:

Basic earnings per share

Diluted earnings per share

Note

5 (a)

5 (d)

5 (b)

5 (c)

5 (e)

Consolidated Group

Year ended

30 June 2013

Year ended

30 June 2012

581,613

926,309

(354,939)

(464,272)

(509,790)

(89,049)

(111,405)

(8,271)

(11,134)

(543,517)

(565,632)

(878,435)

(271,652)

292,626

(4,530)

(585,809)

(276,182)

(585,809)

(276,182)

(585,809)

(276,182)

Cents

(0.48)

(0.23)

This statement should be read in conjunction with the notes to the financial statements

Statement of Profit and Loss
51 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

Consolidated Statement of Financial Position

As at 30 June 2013

Consolidated Group

Note

30 June 2013

30 June 2012

Current Assets

Cash and cash equivalents

Trade and other receivables

Other current assets

Total Current Assets

Non-Current Assets

Property, plant and equipment

Exploration and evaluation assets

Total Non-Current Assets

Total Assets

Current Liabilities

Trade and other payables

Short-term borrowings

Short-term provisions

Total Current Liabilities

Non-Current Liabilities

Long-term borrowings

Long-term provisions

Total Non-Current Liabilities

Total Liabilities

Net Assets

Equity

Issued capital

Reserves

Retained earnings

Total Equity

9,565,706

13,570,860

123,681

54,160

133,257

182,029

9,743,547

13,886,146

176,439

17,055,933

17,232,372

26,975,919

251,061

47,293

90,517

388,871

6,174

13,619

19,793

408,664

224,276

13,538,949

13,763,225

27,649,371

313,432

64,587

87,060

465,079

50,854

4,182

55,036

520,115

26,567,255

27,129,256

26,718,899

2,958,083

(3,109,727)

26,567,255

26,718,899

2,944,985

(2,534,628)

27,129,256

This statement should be read in conjunction with the notes to the financial statements

52 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Statement of Financial Position

Consolidated Statement of Changes in Equity

For the Year Ended 30 June 2013

Consolidated Group

Note

Issued

Capital

Ordinary

Option

Reserve

Accumulated

Losses

Total

Equity

Balance at 1 July 2011

26,729,469

2,907,500

(2,258,446)

27,378,523

Total comprehensive loss for the year

Share based payments

Transaction costs (net of tax)

Balance at 30 June 2012

(10,570)

(276,182)

37,485

(10,570)

26,718,899

2,944,985

(2,534,628)

27,129,256

Balance at 1 July 2012

26,718,899

2,944,985

(2,534,628)

27,129,256

Total comprehensive loss for the year

Share based payments

Transfer from share option reserve

due to lapse of options under

employee share option plan

(585,809)

23,808

(10,710)

10,710

Balance at 30 June 2013

26,718,899

2,958,083

(3,109,727)

26,567,255

This statement should be read in conjunction with the notes to the financial statements

Statement of Changes in Equity
53 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

Consolidated Statement of Cash Flows

For the Year Ended 30 June 2013

Note

Consolidated Group

Year

ended

30 June 2013

Year

ended

30 June 2012

Cash Flows from Operating Activities

Payments to suppliers and employees

Interest received

Finance costs

Receipt of R&D Tax Concession

Net Cash Used in Operating Activities

Cash Flows From Investing Activities

Payments for property, plant and equipment

Payments for exploration activities

Net Cash Used in Investing Activities

Cash Flows from Financing Activities

Payment of transaction costs for issue of

Proceeds from borrowings

Repayment of borrowings

Net Cash Provided by/(Used in)

Financing Activities

Net increase/(decrease) in cash and cash

equivalents

Cash at the beginning of the year

Cash at the end of the Year

(1,073,892)

(1,069,074)

689,810

(7,991)

292,626

(99,447)

(39,112)

(3,800,309)

(3,839,421)

(66,286)

(4,005,154)

13,570,860

9,565,706

877,147

(10,564)

(202,491)

(152,240)

(3,860,767)

(4,013,007)

(14,012)

65,658

(47,275)

4,371

(4,211,127)

17,781,987

13,570,860

This statement should be read in conjunction with the notes to the financial statements

54 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Statement of Cash Flows

Notes to the Financial
Statements

For the Year Ended 30 June 2013

1. Nature of operations

the preparation of these financial statements are summarised

below.

The financial statements have been prepared using the

measurement bases specified by Australian Accounting

Standards for each type of asset, liability, income and expense.

The measurement bases are more fully described in the

accounting policies below.

Musgrave Minerals Ltd principal activities are to carry out

exploration of mineral tenements, to continue to seek

b. Principle of Consolidation
The consolidated financial statements incorporate the assets,

extensions of areas held and to seek out new areas with

liabilities and results of entities controlled by Musgrave

mineral potential and to evaluate results achieved through

Minerals Ltd at the end of the reporting period. A controlled

surface sampling, geophysical surveys and drilling activities.

entity is any entity over which Musgrave Minerals Ltd has the

2. General information and

statement of compliance

The general purpose financial statements of the Group have

been prepared in accordance with the requirements of the

Corporations Act 2001, Australian Accounting Standards

and other authoritative pronouncements of the Australian

Accounting Standards Board. Compliance with Australian

Accounting Standards results in full compliance with the

International Financial Reporting Standards (IFRS) as issued

by the International Accounting Standards Board (IASB).

Musgrave Minerals Ltd is a for-profit entity for the purpose of

preparing the financial statements.

Musgrave Minerals Ltd is a public company incorporated and

domiciled in Australia and listed on the ASX (ASX Code: MGV).

The financial statements for the year ended 30 June 2013

(including comparatives) were approved and authorised for

issue by the Board of Directors on 25 September 2013.

ability and right to govern the financial and operating policies

so as to obtain benefits from the entity’s activities.

Where controlled entities have entered or left the Group

during the year, the financial performance of those entities

is included only for the period of the year that they were

controlled. A list of controlled entities is contained in note 24

to the financial statements.

In preparing the consolidated financial statements, all

inter-group balances and transactions between entities in

the consolidated Group have been eliminated in full on

consolidation.

Non-controlling interests, being the equity in a subsidiary not

attributable, directly or indirectly, to a parent, are reported

separately within the equity section of the consolidated

statement of financial position and statement of profit or loss

and comprehensive income. The non-controlling interests

in the net assets comprise their interests at the date of the

original business combination and their share of changes in

equity since that date.

c. Business combinations
Business combinations occur where an acquirer obtains control

3. Summary of accounting

over one or more businesses.

policies

a. Overall considerations
The significant accounting policies that have been used in

A business combination is accounted for by applying the

acquisition method, unless it is a combination involving

entities or businesses under common control. The business

combination will be accounted for from the date that control

Notes to the Financial Statements
55 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

is attained, whereby the fair value of the identifiable assets

Deferred tax assets and liabilities are calculated at the tax rates

acquired and liabilities (including contingent liabilities) assumed

that are expected to apply to the period when the asset is

is recognised (subject to certain limited exemptions).

realised or the liability is settled and their measurement also

reflects the manner in which management expects to recover

When measuring the consideration transferred in the business

or settle the carrying amount of the related asset or liability.

combination, any asset or liability resulting from a contingent

consideration arrangement is also included. Subsequent to

Deferred tax assets relating to temporary differences and

initial recognition, contingent consideration classified as equity

unused tax losses are recognised only to the extent that it is

is not remeasured and its subsequent settlement is accounted

probable that future taxable profit will be available against

for within equity. Contingent consideration classified as an

which the benefits of the deferred tax asset can be utilised.

asset or liability is remeasured in each reporting period to fair

value, recognising any change to fair value in profit or loss,

Where temporary differences exist in relation to investments in

unless the change in value can be identified as existing at

subsidiaries, branches, associates, and joint ventures, deferred

acquisition date.

tax assets and liabilities are not recognised where the timing of

the reversal of the temporary difference can be controlled and

All transaction costs incurred in relation to business

it is not probable that the reversal will occur in the foreseeable

combinations are recognised as expenses in profit or loss when

future.

incurred.

The acquisition of a business may result in the recognition of

enforceable right of set-off exists and it is intended that net

goodwill or a gain from a bargain purchase.

settlement or simultaneous realisation and settlement of the

Current tax assets and liabilities are offset where a legally

d. Income Tax
The income tax expense (revenue) for the year comprises

current income tax expense (income) and deferred tax expense

(income).

Current income tax expense charged to profit or loss is the tax

payable on taxable income. Current tax liabilities (assets) are

measured at the amounts expected to be paid to (recovered

from) the relevant taxation authority.

Deferred income tax expense reflects movements in deferred

tax asset and deferred tax liability balances during the year as

well as unused tax losses.

Current and deferred income tax expense (income) is charged

or credited outside profit or loss when the tax relates to items

that are recognised outside profit or loss.

Except for business combinations, no deferred income tax is

recognised from the initial recognition of an asset or liability,

where there is no effect on accounting or taxable profit or loss.

respective asset and liability will occur. Deferred tax assets and

liabilities are offset where:

(a) a legally enforceable right of set-off exists; and

(b) the deferred tax assets and liabilities relate to income

taxes levied by the same taxation authority on either the

same taxable entity or different taxable entities where it is

intended that net settlement or simultaneous realisation

and settlement of the respective asset and liability will

occur in future periods in which significant amounts

of deferred tax assets or liabilities are expected to be

recovered or settled.

e. Property, Plant and Equipment
Each class of property, plant and equipment is carried at

cost or fair value as indicated less, where applicable, any

accumulated depreciation and impairment losses.

Plant and equipment

Plant and equipment are measured on the cost basis and

therefore carried at cost less accumulated depreciation and any

accumulated impairment. In the event the carrying amount of

plant and equipment is greater than the estimated recoverable

amount, the carrying amount is written down immediately to

56 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Notes to the Financial Statements

the estimated recoverable amount and impairment losses are

An asset’s carrying amount is written down immediately to its

recognised either in profit or loss or as a revaluation decrease

recoverable amount if the asset’s carrying amount is greater

if the impairment losses relate to a revalued asset. A formal

than its estimated recoverable amount.

assessment of recoverable amount is made when impairment

indicators are present.

Gains and losses on disposals are determined by comparing

proceeds with the carrying amount. These gains and losses

The carrying amount of plant and equipment is reviewed

are included in the statement of profit or loss and other

annually by directors to ensure it is not in excess of the

comprehensive income. When revalued assets are sold,

recoverable amount from these assets. The recoverable

amounts included in the revaluation surplus relating to that

amount is assessed on the basis of the expected net cash

asset are transferred to retained earnings.

flows that will be received from the asset’s employment and

subsequent disposal. The expected net cash flows have been

discounted to their present values in determining recoverable

f. Exploration and Development Expenditure
Exploration, evaluation and development expenditures incurred

amounts.

are capitalised in respect of each identifiable area of interest.

These costs are only capitalised to the extent that they are

The cost of fixed assets constructed within the consolidated

expected to be recovered through the successful development

group includes the cost of materials, direct labour, borrowing

of the area or where activities in the area have not yet reached

costs and an appropriate proportion of fixed and variable

a stage that permits reasonable assessment of the existence of

overheads.

economically recoverable reserves.

Subsequent costs are included in the asset’s carrying amount

Accumulated costs in relation to an abandoned area are

or recognised as a separate asset, as appropriate, only when

written off in full against profit in the year in which the

it is probable that future economic benefits associated with

decision to abandon the area is made.

the item will flow to the Group and the cost of the item

can be measured reliably. All other repairs and maintenance

When production commences, the accumulated costs for

are charged to the statement of profit or loss and other

the relevant area of interest are amortised over the life of the

comprehensive income during the financial period in which

area according to the rate of depletion of the economically

they are incurred.

Depreciation

recoverable reserves.

A regular review is undertaken of each area of interest to

The depreciable amount of all fixed assets including buildings

determine the appropriateness of continuing to capitalise costs

and capitalised lease assets, but excluding freehold land, is

in relation to that area of interest.

depreciated on a straight-line or diminishing value basis over

the asset’s useful life to the Group commencing from the time

Costs of site restoration are provided over the life of the

the asset is held ready for use. Leasehold improvements are

project from when exploration commences and are included

depreciated over the shorter of either the unexpired period of

in the costs of that stage. Site restoration costs include the

the lease or the estimated useful lives of the improvements.

dismantling and removal of mining plant, equipment and

The useful life for each class of depreciable assets are:

the site in accordance with local laws and regulations and

Class of Fixed Asset

Plant and equipment

Motor Vehicles

Useful life

2 - 10 years

6 - 8 years

clauses of the permits. Such costs have been determined

using estimates of future costs, current legal requirements and

technology on an undiscounted basis.

building structures, waste removal, and rehabilitation of

The assets’ residual values and useful lives are reviewed, and

adjusted if appropriate, at the end of each reporting period.

Notes to the Financial Statements
57 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

Any changes in the estimates for the costs are accounted on a

costs to sell and value-in-use. To determine the value-in-use,

prospective basis. In determining the costs of site restoration,

management estimates expected future cash flows from each

there is uncertainty regarding the nature and extent of

cash-generating unit and determines a suitable interest rate in

the restoration due to community expectations and future

order to calculate the present value of those cash flows. The

legislation. Accordingly the costs have been determined on the

data used for impairment testing procedures are directly linked

basis that the restoration will be completed within one year of

to the Group’s latest approved budget, adjusted as necessary

abandoning the site.

g. Leases
Leases of fixed assets where substantially all the risks and

to exclude the effects of future reorganisations and asset

enhancements. Discount factors are determined individually

for each cash-generating unit and reflect management’s

assessment of respective risk profiles, such as market and

benefits incidental to the ownership of the asset, but not the

asset-specific risks factors.

legal ownership that is transferred to the Group, are classified

as finance leases. Leased assets are depreciated on a straight-

All assets are subsequently reassessed for indications that an

line basis over the shorter of their estimated useful lives or the

impairment loss previously recognised may no longer exist.

lease term.

An impairment charge is reversed if the cash-generating unit’s

recoverable amount exceeds its carrying amount.

Lease payments for operating leases, where substantially all

the risks and benefits remain with the lessor, are recognised as

i. Financial Instruments

expenses in the periods in which they are incurred.

Recognition and initial measurement

Lease incentives under operating leases are recognised as a

Financial assets and financial liabilities are recognised when

liability and amortised on a straight-line basis over the lease

the entity becomes a party to the contractual provisions to the

term.

instrument. For financial assets, this is equivalent to the date

that the Group commits itself to either the purchase or sale of

Finance leases are capitalised by recognising an asset and a

the asset (ie trade date accounting is adopted).

liability at the lower of the amounts equal to the fair value of

the leased property or the present value of the minimum lease

Financial instruments are initially measured at fair value plus

payments, including any guaranteed residual values. Lease

transaction costs, except where the instrument is classified “at

payments are allocated between the reduction of the lease

fair value through profit or loss”, in which case transaction

liability and the lease interest expense for the period.

costs are expensed to profit or loss immediately.

h. Impairment testing of non-current assets
For impairment assessment purposes, assets are grouped at

Classification and subsequent measurement

Financial instruments are subsequently measured at fair value,

the lowest levels for which there are largely independent cash

amortised cost using the effective interest rate method, or

inflows (cash-generating units). As a result, some assets are

cost.

tested individually for impairment and some are tested at cash-

generating unit level.

Amortised cost is the amount at which the financial asset or

financial liability is measured at initial recognition less principal

All assets or cash-generating units are tested for impairment

repayments and any reduction for impairment, and adjusted

whenever events or changes in circumstances indicate that the

for any cumulative amortisation of the difference between that

carrying amount may not be recoverable.

initial amount and the maturity amount calculated using the

effective interest method.

An impairment loss is recognised for the amount by which

the asset’s or cash-generating unit’s carrying amount exceeds

Fair value is determined based on current bid prices for all

its recoverable amount, which is the higher of fair value less

quoted investments. Valuation techniques are applied to

58 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Notes to the Financial Statements

determine the fair value for all unlisted securities, including

establishment of a separate entity. The Group recognises its

recent arm’s length transactions, reference to similar

interest in the jointly controlled operations by recognising

instruments and option pricing models.

the assets that it controls and the liabilities that it incurs. The

Group also recognises the expenses that it incurs and its share

The effective interest method is used to allocate interest

of the income that it earns from the sale of goods or services

income or interest expense over the relevant period and is

by the jointly controlled operation.

equivalent to the rate that discounts estimated future cash

payments or receipts (including fees, transaction costs and

The Group has entered into a number of Joint Ventures with

other premiums or discounts) through the expected life (or

various parties to explore on certain tenements that the

when this cannot be reliably predicted, the contractual term)

Company has a beneficial interest in.

of the financial instrument to the net carrying amount of the

financial asset or financial liability. Revisions to expected future

net cash flows will necessitate an adjustment to the carrying

k. Equity-settled compensation
The Group operates an employee share option plan. Share-

value with a consequential recognition of an income or

based payments to employees are measured at the fair value

expense item in profit or loss.

of the instruments issued and amortised over the vesting

periods. Share-based payments to non-employees are

The Group does not designate any interests in subsidiaries,

measured at the fair value of goods or services received or the

associates or joint venture entities as being subject to the

fair value of the equity instruments issued, if it is determined

requirements of Accounting Standards specifically applicable to

the fair value of the goods or services cannot be reliably

financial instruments.

(i). Loans and receivables

Loans and receivables are non-derivative financial assets

with fixed or determinable payments that are not quoted

in an active market and are subsequently measured at

amortised cost.

Loans and receivables are included in current assets, where

they are expected to mature within 12 months after the

end of the reporting period.

(ii). Classification and subsequent measurement of

financial liabilities

The Group’s financial liabilities include borrowings and

trade and other payables.

Financial liabilities are measured at amortised cost using

the effective interest method.

All interest-related charges and, if applicable, changes in

an instrument’s fair value that are reported in profit or loss

are included within finance costs or finance income.

j. Interests in 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

measured, and are recorded at the date the goods or services

are received. The corresponding amount is recorded to the

share option reserve. The fair value of options is determined

using the Black-Scholes pricing model. The number of options

expected to vest is reviewed and adjusted at the end of each

reporting period such that the amount recognised for services

received as consideration for the equity instruments granted

is based on the number of equity instruments that eventually

vest.

l. Provisions
Provisions are recognised when the Group has a legal or

constructive obligation, as a result of past events, for which

it is probable that an outflow of economic benefits will result

and that outflow can be reliably measured.

Provisions are measured using the best estimate of the

amounts required to settle the obligation at the end of the

reporting period.

m. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits

available on demand with banks, other short-term highly

liquid investments with original maturities of 6 months or

less, and bank overdrafts. Bank overdrafts are reported within

Notes to the Financial Statements
59 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

short-term borrowings in current liabilities in the statement of

activities which are recoverable from, or payable to, the ATO

financial position.

are presented as operating cash flows included in receipts from

customers or payments to suppliers.

n. Revenue and Other Income
Revenue is measured at the fair value of the consideration

received or receivable after taking into account any trade

q. Government Grants
Government grants are recognised at fair value where there

discounts and volume rebates allowed. When the inflow

is reasonable assurance that the grant will be received and all

of consideration is deferred, it is treated as the provision

grant conditions will be met. Grants relating to expense items

of financing and is discounted at a rate of interest that is

are recognised as income over the periods necessary to match

generally accepted in the market for similar arrangements. The

the grant to the costs they are compensating. Grants relating

difference between the amount initially recognised and the

to assets are credited to deferred income at fair value and are

amount ultimately received is interest revenue. Revenue from

credited to income over the expected useful life of the asset on

the sale of goods is recognised at the point of delivery as this

a straight-line basis.

corresponds to the transfer of significant risks and rewards of

ownership of the goods and the cessation of all involvement in

those goods.

r. Contributed equity
Ordinary shares are classified as equity. Incremental costs

directly attributable to the issue of new shares or options are

Interest revenue is recognised using the effective interest rate

shown in equity as a deduction, net of tax, from the proceeds.

method.

All revenue is stated net of the amount of goods and services

tax (GST).

o. Borrowing Costs
Borrowing costs directly attributable to the acquisition,

construction or production of assets that necessarily take a

s. Earnings per share
Basic earnings per share is calculated as net profit attributable

to members of the parent, adjusted to exclude any costs

of servicing equity (other than dividends), divided by the

weighted average number of ordinary shares, adjusted for any

bonus element.

substantial period of time to prepare for their intended use or

Diluted earnings per share adjusts the figures used in the

sale are added to the cost of those assets, until such time as

determination of basic earnings per share to take into account

the assets are substantially ready for their intended use or sale.

the weighted average number of shares assumed to have been

issued for no consideration in relation to dilutive potential

All other borrowing costs are recognised in profit or loss in the

ordinary shares.

period in which they are incurred.

p. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the

t. Comparative Figures
When required by Accounting Standards, comparative figures

have been adjusted to conform to changes in presentation for

amount of GST, except where the amount of GST incurred is

the current financial year.

not recoverable from the Australian Taxation Office (ATO).

Receivables and payables are stated inclusive of the amount of

GST receivable or payable. The net amount of GST recoverable

from, or payable to, the ATO is included with other receivables

or payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST

u. Critical Accounting Estimates and
Judgments
The Directors evaluate estimates and judgments incorporated

into the financial statements 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

components of cash flows arising from investing or financing

and within the Group.

60 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Notes to the Financial Statements

Key estimates

(i)

Impairment

on non-depreciable assets measured using the revaluation

model in AASB 116 Property, Plant and Equipment should

always be based on recovery through sale.

The Group assesses impairment at the end of each

reporting period by evaluating conditions and events

specific to the Company that may be indicative of

impairment triggers. Recoverable amounts of relevant

assets are reassessed using value-in-use calculations which

incorporate various key assumptions.

These amendments have had no impact on the Group.

AASB 2011-9 Amendments to Australian Accounting

Standards – Presentation of Items of Other

Comprehensive Income (Applies annual reporting

periods beginning on or after 1 July 2012)

(ii) Exploration and evaluation expenditure

The Group capitalises expenditure relating to exploration

and evaluation where it is considered likely to be

recoverable or where the activities have not reached

a stage that permits a reasonable assessment of the

existence of reserves. While there are certain areas of

interest from which no reserves have been extracted,

the Directors are of the continued belief that such

expenditure should not be written off since the evaluation

of such areas have not yet concluded. Such capitalised

expenditure is carried at the end of the reporting period at

$17,055,933 (2012: $13,538,949).

v. New and amended standards adopted by
the Group

AASB 2010-8 Amendments to Australian Accounting

Standard – Deferred Tax: Recovery of Underlying Assets

(Applies to annual reporting periods beginning on or

after 1 January 2012)

AASB 2010-8 provides clarification on the determination of

deferred tax assets and deferred tax liabilities when investment

properties are measured using the fair value model in

AASB 140 Investment Properties. It introduces a rebuttable

presumption that an investment property is recovered entirely

through sale. This presumption is rebutted if the investment

property is held within a business model where the objective

is to consume substantially all of the economic benefits

embodied in the investment property over time, rather than

through sale.

AASB 2010-8 also includes the requirement that the

measurement of deferred tax assets and deferred tax liabilities

AASB 2011-9 requires entities to group items presented in

Other Comprehensive Income on the basis of whether they

are potentially re-classifiable to profit or loss subsequently, and

changes the title of ‘statement of comprehensive income’ to

‘statement of profit or loss and other comprehensive income’.

The adoption of the new and revised Australian Accounting

Standards and Interpretations has had no significant impact

on the Group’s accounting policies or the amounts reported

during the current year. The adoption of AASB 2011-9 has

resulted in changes to the Group’s presentation of its financial

statements.

w. Accounting standards issued but not yet
effective and not been adopted early by the
Group

The Group notes the following Accounting Standards which

have been issued but are not yet effective at 30 June 2013.

These standards have not been adopted early by the Group.

The Group ‘s assessment of the impact of these new standards

and interpretations is set out below:

(i) AASB 9 Financial Instruments, AASB 2009-11

Amendments to Australian Accounting Standards arising

from AASB 9, AASB 2010-7 Amendments to Australian

Accounting Standards arising from AASB 9 (December

2010) and AASB 2012-6 Amendments to Australian

Accounting Standards – Mandatory Effective Date of AASB

9 and Transition Disclosures (effective from 1 January

2015)

Notes to the Financial Statements
61 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

AASB 9 introduces new requirements for the classification

Recognition and Measurement and have not been

and measurement of financial assets and liabilities.

changed. The Group has not yet decided when to adopt

These requirements improve and simplify the approach

for classification and measurement of financial assets and

AASB 9.

liabilities compared with the requirements of AASB 139.

(ii) AASB 10 Consolidated Financial Statements, AASB 11

The main changes are:

Financial assets that are debt instruments will be

Joint Arrangements, AASB 12 Disclosure of Interests

in Other Entities, revised AASB 127 Separate Financial

Statements, AASB 128 Investments in Associates and

classified based on (1) the objective of the entity’s

Joint Ventures, AASB 2011-7 Amendments to Australian

business model for managing the financial assets; and

Accounting Standards arising from the Consolidation

(2) the characteristics of the contractual cash flows.

and Joint Arrangements Standards and AASB 2012-10

- Allows an irrevocable election on initial recognition

Transition Guidance and Other Amendments (effective 1

Amendments to Australian Accounting Standards –

to present gains and losses on investments in equity

January 2013)

instruments that are not held for trading in other

comprehensive income (instead of in profit or loss).

- Dividends in respect of these investments that are

a return on investment can be recognised in profit

or loss and there is no impairment or recycling on

disposal of the instrument.

Financial assets can be designated and measured at

fair value through profit or loss at initial recognition

if doing so eliminates or significantly reduces a

measurement or recognition inconsistency that

would arise from measuring assets or liabilities, or

recognising the gains and losses on them, on different

bases.

- Where the fair value option is used for financial

liabilities the change in fair value is to be accounted

for as follows;

The change attributable to changes in credit risk are

presented in other comprehensive income (OCI) and;

- AASB 10 replaces all of the guidance on control

and consolidation in AASB 127 Consolidated and

Separate Financial Statements, and Interpretation 12

Consolidation – Special Purpose Entities.

The core principle that a consolidated entity presents a

parent and its subsidiaries as if they are a single economic

entity remains unchanged, as do the mechanics of

consolidation. However, the standard introduces a single

definition of control that applies to all entities. It focuses

on the need to have both power and rights or exposure to

variable returns. Power is the current ability to direct the

activities that significantly influence returns. Returns must

vary and can be positive, negative or both. Control exists

when the investor can use its power to affect the amount

of its returns.

When this standard is first adopted for the year ended 30

June 2014, there will be no impact on the transactions

and balances recognised in the financial statements.

The remaining change is presented in profit or loss.

- AASB 11 replaces AASB 131 Interests in Joint Ventures

There will be no impact on the Group’s accounting for

financial liabilities, as the new requirements only affect

the accounting for financial liabilities that are designated

at fair value through profit or loss and the Group does

not have any such liabilities. The de-recognition rules have

been transferred from AASB 139 Financial Instruments:

and AASB Interpretation 113 Jointly-controlled Entities

– Non-monetary Contributions by Ventures. AASB 11

uses the principle of control in AASB 10 to define joint

control, and therefore the determination of whether

joint control exists may change.

62 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Notes to the Financial Statements

In addition, AASB 11 removes the option to account

The Group is yet to undertake a detailed analysis of

for jointly-controlled entities using proportionate

the differences between the current fair valuation

consolidation. Instead, accounting for a joint arrangement

methodologies used and those required by AASB 13.

is dependent on the nature of the rights and obligations

However, when this standard is adopted for the first time

arising from the arrangement. Joint operations that

for the year ended 30 June 2014, there will be no impact

give the venturers a right to the underlying assets and

on the financial statements because the revised fair value

obligations for liabilities are accounted for by recognising

measurement requirements apply prospectively from 1

the share of those assets and liabilities. Joint ventures that

January 2013.

give the venturers a right to the net assets are accounted

for using the equity method.

When this standard is first adopted for the year ended 30

Amendments to Australian Accounting Standards arising

June 2014, there will be no impact on transactions and

from AASB 119 (September 2011)

(iv) Revised AASB 119 Employee Benefits and AASB 2011-10

balances recognised in the financial statements because

the joint arrangements in place relate to joint operations.

- AASB 12 sets out the required disclosures for entities

reporting under the two new standards, AASB 10 and

AASB 11, and replaces the disclosure requirements

currently found in AASB 127 and AASB 128.

Application of this standard by the Group will not

affect any of the amounts recognised in the financial

statements, but will impact the type of information

disclosed in relation to the Group’s investments.

Amendments to AASB 128 provide clarification that an

entity continues to apply the equity method and does

not remeasure its retained interest as part of ownership

changes where a joint venture becomes an associate,

and vice versa. The amendments also introduce a “partial

disposal” concept.

When this standard is first adopted for the year ended 30

June 2014, there will be no impact on the transactions

and balances recognised in the financial statements.

(iii) AASB 13 Fair Value Measurement and AASB 2011-8

Amendments to Australian Accounting Standards arising

from AASB 13 (effective 1 January 2013)

AASB 13 explains how to measure fair value and aims

to enhance fair value disclosures. Application of the new

standard will impact the type of information disclosed in

the notes to the financial statements.

The AASB released a revised standard on accounting

for employee benefits. It requires the recognition of all

re-measurements of defined benefit liabilities/assets

immediately in other comprehensive income (removal

of the so-called ‘corridor’ method), the immediate

recognition of all past service cost in profit or loss and the

calculation of a net interest expense or income by applying

the discount rate to the net defined benefit liability or

asset. This replaces the expected return on plan assets that

is currently included in profit or loss. The standard also

introduces a number of additional disclosures for defined

benefit liabilities/assets and could affect the timing of the

recognition of termination benefits. The amendments will

have to be implemented retrospectively.

The Group does not have any defined benefit plans.

Therefore, these amendments will have no impact on the

Group.

(v) AASB Interpretation 20 Stripping Costs in the Production

Phase of Surface Mining

This interpretation clarifies that costs of removing mine

waste materials (overburden) to gain access to mineral ore

deposits during the production phase of a mine must be

capitalised as inventories under AASB 102 Inventories, if

the benefits from stripping activity is realised in the form

of inventory produced. Otherwise, if stripping activity

provides improved access to the ore, stripping costs must

Notes to the Financial Statements
63 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

be capitalised as a non-current asset (if certain recognition

(viii) AASB 2012-3 Amendments to Australian Accounting

criteria are met, as an addition to, or enhancement of, an

Standards – Offsetting Financial Assets and Financial

existing asset).

Liabilities

The Group does not operate a surface mine. Therefore,

there will be no impact on the financial statements when

this interpretation is first adopted for reporting periods

commencing from 1 January 2013.

AASB 2012-3 adds application guidance to AASB 132 to

address inconsistencies identified in applying some of the

offsetting criteria of AASB 132, including clarifying the

meaning of “currently has a legally enforceable right of

set-off” and that some gross settlement systems may be

considered equivalent to net settlement.

(vi) AASB 2011-4 Amendments to Australian Accounting

Standards to Remove Individual Key Management

When AASB 2012-3 is first adopted for the year ended 30

Personnel Disclosure Requirements

June 2015, there will be no impact on the Group as this

standard merely clarifies existing requirements in AASB

The Standard amends AASB 124 Related Party Disclosures

132.

to remove the individual key management personnel

(KMP) disclosures required by Australian specific

paragraphs. This amendment reflects the AASB’s view that

these disclosures are more in the nature of governance

disclosures that are better dealt within the legislation,

rather than by the accounting standards.

When these amendments are first adopted for the year

ending 30 June 2014, they are unlikely to have any

significant impact on the Group.

(vii) AASB 2012-2 Amendments to Australian Accounting

Standards – Disclosures – Offsetting Financial Assets

and Financial Liabilities

This Standard amends the required disclosures in AASB 7

to include information that will enable users of an entity’s

financial statements to evaluate the effect or potential

effect of netting arrangements, including rights of set-off

associated with the entity’s recognised financial assets

and recognised financial liabilities, on the entity’s financial

position.

This Standard also amends AASB 132 to refer to the

additional disclosures added to AASB 7 by this Standard.

When this AASB 2012-2 is first adopted for the year

ended 30 June 2014, there will be no impact on

the Group as the Group does not have any netting

arrangements in place.

(ix) Recoverable Amount Disclosures for Non-Financial Assets

(Amendments to IAS 36)

These narrow-scope amendments address disclosure of

information about the recoverable amount of impaired

assets if that amount is based on fair value less costs of

disposal.

When these amendments are adopted for the first time on

1 January 2014, they are unlikely to have any significant

impact on the Group given that they are largely of the

nature of clarification of existing requirements.

(x)

IFRIC Interpretation 21 Levies

IFRIC 21 addressed how an entity should account for

liabilities to pay levies imposed by governments, other

than income taxes, in its financial statements (in particular,

when the entity should recognise a liability to pay a levy).

IFRIC 21 is an interpretation of IAS 37 Provisions,

Contingent Liabilities and Contingent Assets. IAS 37 sets

out criteria for the recognition of a liability, one of which is

the requirement for the entity to have a present obligation

as a result of a past event (known as an obligating event).

64 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Notes to the Financial Statements

The Interpretation clarifies that the obligating event that

There are no other standards that are not yet effective

gives rise to a liability to pay a levy is the activity described

and that are expected to have a material impact on the

in the relevant legislation that triggers the payment of

entity in the current or future reporting periods and on

the levy. For example, if the activity that triggers the

foreseeable future transactions.

payment of the levy is the generation of revenue in the

current period and the calculation of that levy is based on

the revenue that was generated in a previous period, the

obligating event for that levy is the generation of revenue

4. Operating Segments

in the current period. The generation of revenue in the

The Board has considered the requirements of AASB 8

previous period is necessary, but not sufficient, to create a

Operating Segments and the internal reports that are reviewed

present obligation.

by the chief operating decision maker (the Managing Director)

in allocating resources and have concluded at this time that

When this interpretation is adopted for the first time on 1

there are no separately identifiable segments.

January 2014, there will be no significant impact on the

financial statements as the Group is not subject to any

levies addressed by this interpretation.

Notes to the Financial Statements
65 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

5. Revenue and expenses

(a) Other income

Interest revenue

Fuel tax credits

(b) Depreciation of non current assets

Plant and equipment

Motor Vehicles

Finance costs

Interest applicable to hire-purchase

(d) Employees benefits expense

Wages, salaries, directors fees and other remuneration expenses

Superannuation expense

Transfer to/(from) annual leave provision

Transfer to/(from) long service leave provision

Share-based payments expense

Transfer to capitalised tenements

(e) Other expenses from ordinary activities

Secretarial, professional and consultancy

Occupancy costs

Share register maintenance

Insurance costs

Promotion, advertising and sponsorship

Audit fees

Computer expenses

Recruitment costs

Employer related on-costs

Other expenses

Consolidated

2013

2012

578,699

2,914

581,613

60,199

28,850

89,049

8,186

8,271

1,228,097

103,772

3,457

9,437

23,808

(904,299)

464,272

184,824

104,550

33,836

30,529

31,467

30,264

47,053

55,161

25,833

543,517

914,964

11,345

926,309

81,411

29,994

111,405

592

10,542

11,134

1,173,740

101,473

64,230

2,986

37,485

(870,124)

509,790

88,776

100,722

34,495

33,766

25,301

13,250

39,438

31,610

34,563

163,711

565,632

66 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Notes to the Financial Statements

6. Income tax (benefit)/expense

Income Tax

The major components of income tax expense are:

Statement of Profit or Loss and Other Comprehensive Income

Current income tax

Current income tax charge/(benefit)

Research and Development Tax offset

Income tax expense/(benefit) reported in the income

statement

Consolidated

2013

2012

4,530

(292,626)

4,530

A reconciliation between tax expense and the product of accounting profit before income tax multiplied by the Group’s applicable income tax

rate is as follows:

Accounting profit/(loss) before income tax

(878,435)

(271,652)

At the Group’s statutory income tax rate of 30% (2012: 30%)

(263,531)

(81,496)

Immediate write off of capital expenditure

(1,161,577)

(1,182,503)

Expenditure not allowable for income tax purposes

113,993

11,830

Other deductible items

(64,905)

Tax losses not recognised due to not meeting recognition criteria

1,376,020

1,317,074

Tax portion of share issue costs

4,530

The Company has tax losses arising in Australia of $11,102,030 (2012: $6,649,093) that are available indefinitely for offset against

future taxable profits of the companies in which the losses arose.

Notes to the Financial Statements
67 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

7. Earnings per share

8. Cash and cash equivalents

Basic earnings per share amounts are calculated by dividing

net profit for the year attributable to ordinary equity holders of

the parent by the weighted average number of ordinary shares

Consolidated

2013

2012

outstanding during the year.

Cash and Cash Equivalents

Diluted earnings per share amounts are calculated by dividing

the net profit attributable to ordinary equity holders of the

parent by the weighted average number of ordinary shares

outstanding during the year plus the weighted average

number of ordinary shares that would be issued on the

conversion of all the dilutive potential ordinary shares into

ordinary shares.

Cash at bank and in hand

1,155,706

460,860

Short-term deposits

8,410,000

13,110,000

9,565,706

13,570,860

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

1,155,706

460,860

The following reflects the income and share data used in the

Short-term deposits

8,410,000

13,110,000

basic and diluted earnings per share computations:

9,565,706

13,570,860

Reconciliation of net loss after tax to net cash flows from

Consolidated

2013

2012

(585,809)

(276,182)

Net profit/(loss)

attributable to ordinary

equity holders of the

parent entity

Weighted average number

of ordinary shares for basic

121,000,000

earnings per share

Effect of dilution

Share options

N/A

Weighted average number

121,000,000

of ordinary shares adjusted

for the effect of dilution

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 taking into account.

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.

operations

Net loss

Adjustments for non-cash

items:

Depreciation

Share based payments

Non cash income tax expense

Changes in assets and

liabilities

Decrease/(Increase) in trade

and other receivables

Decrease/(Increase) in

prepayments

Decrease/(Increase) in interest

receivable

Increase/(Decrease) in trade

and other payables

Increase/(Decrease) in

employee entitlements

Net cash (used in)/provided

by operating activities

(585,809)

(276,182)

89,049

23,808

111,405

37,485

4,530

9,576

643

127,226

223,166

12,894

61,567

32,730

(28,962)

(212,280)

67,216

(99,447)

(202,491)

68 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Notes to the Financial Statements

9. Trade and other receivables

11. Property, plant and equipment (continued)

Consolidated

2013

2012

Consolidated

2013

2012

Goods & Services Tax

receivable

116,656

121,912

equipment

Property, plant and

Fuel tax credits receivable

7,025

11,345

Cost

123,681

133,257

Balance at 1 July

181,156

128,761

Information regarding the credit risk of current receivables is

set out in note 23.

Additions

Disposals

41,212

54,478

(2,083)

Balance at 30 June

222,368

181,156

10. Other current assets

Accumulated depreciation

Balance at 1 July

Depreciation for the year

Consolidated

Disposals

91,620

60,199

151,819

70,549

11,280

81,411

(1,071)

91,620

89,536

Balance at 30 June

Net book value

Total

Cost

Opening balance

347,701

225,858

Additions

Disposals

41,212

123,926

(2,083)

Balance at 30 June

388,913

347,701

Accumulated depreciation

Opening balance

123,425

13,091

Depreciation for the year

89,049

111,405

Disposals

(1,071)

Balance at 30 June

212,474

123,425

Net book value

176,439

224,276

Prepayments

Accrued income

2013

3,118

51,042

54,160

2012

3,761

178,268

182,029

11. Property, plant and equipment

Consolidated

2013

2012

166,545

97,097

69,448

Motor vehicles

Cost

Balance at 1 July

Additions

Balance at 30 June

166,545

Accumulated depreciation

Balance at 1 July

Depreciation for the year

Balance at 30 June

31,805

28,850

60,655

1,811

29,994

31,805

Net book value

105,890

134,740

Notes to the Financial Statements
69 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

12. Exploration and evaluation
assets

• 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.

Consolidated

2013

2012

Exploration and evaluation

17,055,933

13,538,949

phases

17,055,933

13,538,949

• 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 without cost

to the employee. 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

The ultimate recoupment of costs carried forward for

time the Board resolves to offer those options. The total

exploration and evaluation phases is dependent on the

number of shares the subject of options issued under the

successful development and commercial exploitation or sale of

Plan, when aggregated with issues during the previous 5

the respective mining areas.

years pursuant to the Plan and any other employee share

plan, must not exceed 5% of the Company’s issued share

Consolidated group

Exploration

Total

capital.

•

If, prior to the expiry date of options, a person ceases to

Balance 1 July 2012

13,538,949

be an employee of a Group company for any reason other

Additions through expenditure

3,871,923

than retirement at age 60 or more (or such earlier age as

capitalised

the Board permits), permanent disability, redundancy or

Imairment of relinquished

(354,939)

death, the options held by that person (or that person’s

tenements

nominee) automatically lapse on the first to occur of a)

Balance at 30 June 2013

17,055,933

the expiry of the period of 6 months from the date of

Exploration and Evaluation expenditure has been carried

forward to the extent that it is 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

recovered reserves.

13. 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:

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 Profit or Loss and Other Comprehensive

• All employees (full and part time) will be eligible to

Income in relation to share-based payments is disclosed in

participate in the Plan after a qualifying period of 12

note 6(d). The following table illustrates the number (No.) and

months employment by a member of the Group, although

weighted average exercise prices (WAEP) and movements in

the Board may waive this requirement.

share options under the Company’s Employee Share Option

Plan issued during the year:

70 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Notes to the Financial Statements

2013

2012

No.

WAEP

No.

WAEP

Outstanding

16,025,000

0.33

15,500,000

0.33

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.

575,000

0.25

525,000

0.25

year ended 30 June 2013 and 30 June 2012:

The following table lists the inputs to the model used for the

at the

beginning of

the year

Granted

during the

year

2013

2012

Historical volatility (%)

82%

114%

Risk-free interest rate (%)

3.12%

3.43%

Expected life of option (years)

Expired/

(150,000)

0.25

lapsed during

the year

Outstanding

16,450,000

0.32

16,025,000

0.33

at the end of

the year

Exercisable

16,450,000

0.32

1,025,000

0.30

14. Trade and other payables

at the end

of the year

The outstanding balance as at 30 June 2013 is represented by

the following options:

Trade payables (i)

Other payables (ii)

Consolidated

2013

2012

94,018

43,606

157,043

269,826

251,061

313,432

Issue Date

Expiry Date

21/08/2010

20/08/2015

17/02/2011

17/02/2016

17/02/2011

17/02/2016

09/05/2011

08/05/2016

24/01/2012

23/01/2017

06/03/2013

05/03/2018

25/03/2013

24/03/2018

Exercise
Price

Number
of options
outstanding

$0.25

$0.36

$0.50

$0.36

$0.25

7,750,000

4,750,000

2,500,000

500,000

375,000

500,000

75,000

16,450,000

Trade payables are non-interest bearing and are normally

settled on 30-day terms.

ii. Other payables are non-interest bearing and are normally

settled within 30 - 90 days. Information regarding the

credit risk of current payables is set out in note 23.

15. Borrowings

The weighted average remaining contractual life for the share

options outstanding as at 30 June 2013 is 2.50 years (2012:

3.44 years).

Current

Hire purchase contracts

The range of exercise prices for options outstanding at the end

of the year was $0.25 - $0.50 (2012: $0.25 - $0.50).

Non-current

The weighted average fair value of options granted during the

year was $0.041 (2012: $0.071).

Hire purchase contracts

Consolidated

2013

2012

47,293

6,174

64,587

50,854

Motor vehicles with a carrying value of $100,923 (2012:

$128,117) act as security for the hire purchase liabilities.

Notes to the Financial Statements
71 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

16. Provisions

Current

Annual leave provision:

Consolidated

2013

2012

21. Contingent liabilities and
contingent assets

At the date of signing this report, the Company is not aware

of any Contingent Asset or Liability that should be disclosed

in accordance with AASB 137. It is however noted that the

Company has various bank guarantees totalling $110,000 at

Balance at 1 July

87,060

22,830

30 June 2013 (2012: $110,000) which act as collateral over

Net increase/(decrease in

provision)

3,457

64,230

Company’s Visa business credit cards.

the lease of offices at 19 Richardson St, West Perth and the

Closing balance 30 June

90,517

87,060

Non-current

Long service leave:

Balance at 1 July

Net increase/(decrease in

provision)

4,182

9,437

Closing balance 30 June

13,619

1,196

2,986

4,182

17. Issued capital

Consolidated

2013

2012

121,000,000 fully paid ordinary

shares (2012: 121,000,000)

26,718

26,718,899

22. Auditor’s remuneration

Consolidated

2013

2012

Audit or review of the financial

report

30,264

13,250

30,264

13,250

23. Financial risk management

Capital risk management
The Group manages its capital to ensure that it will be able to

continue as a going concern while maximising the return to

26,718,899

stakeholders.

There were no movements in issued capital either in the

current year or for the year ended 30 June 2012.

Effective 1 July 1998, the Corporations legislation in place

abolished the concepts of authorised capital and par value

shares. Accordingly, the Company does not have authorised

capital nor par value in respect of its issued shares.

Fully paid ordinary shares carry one vote per share and carry

the right to dividends (in the event such a dividend was

declared).

The capital structure of the Group consists of cash and cash

equivalents and equity attributable to equity holders of the

parent, comprising issued capital, reserves and accumulated

losses as disclosed in notes 17, 18 and 19 respectively.

Proceeds from share issues are used to maintain and expand

the Group’s exploration activities and fund operating costs.

Financial Assets

Cash and cash

equivalents

Trade receivables

Financial Liabilities

Payables

Borrowings

2013
$

2012
$

9,565,706

13,570,860

123,681

133,257

251,061

53,467

313,432

115,441

72 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Notes to the Financial Statements

Credit risk management
Credit risk refers to the risk that a counterparty will default

Liquidity risk management
Ultimate responsibility for liquidity risk management rests

on its contractual obligations resulting in financial loss to the

with the Board, which has built an appropriate liquidity

Group. The Group has adopted a policy of only dealing with

risk management framework for the management of the

creditworthy counterparties as a means of mitigating the risk

Group’s short, medium and long-term funding and liquidity

of financial loss from activities.

management requirements. The Group manages liquidity risk

by maintaining adequate reserves.

The Group does not have any significant credit risk exposure to

any single counterparty or any group of counterparties having

similar characteristics. The credit risk on liquid funds is limited

Liquidity and interest risk tables
The following table details the Company’s remaining

because the counterparties are banks with high credit-ratings

contractual maturity for its non-derivative financial liabilities.

assigned by international credit-rating agencies.

The table has been drawn up based on the undiscounted cash

The carrying amount of financial assets recorded in the

the Company can be required to pay. The table includes both

flows of financial liabilities based on the earliest date on which

financial statements, net of any allowances for losses,

interest and principal cash flows.

represents the Group’s maximum exposure to credit risk.

Weighted
average
effective
interest
rate %

Less than
one year
$

Longer than
1 year
and not
longer
than 5 years
$

8.66

47,293

6,174

251,061

Weighted
average
effective
interest
rate %

Less than
one year
$

Longer than
1 year
and not
longer
than 5 years
$

8.66

64,587

50,854

313,432

2013

Interest

bearing

Non-interest

bearing

2012

Interest

bearing

Non-interest

bearing

Interest rate risk
The tables below detail the Group’s interest bearing assets,

consisting solely of cash on hand and on short term deposit

(with all maturities less than one year in duration).

Weighted
average
effective
interest rate %

Less than one
year
$

2013

Fixed interest rate

Variable interest rate

4.21

8,410,000

1,155,706

Weighted
average
effective
interest rate %

Less than one
year
$

2012

Fixed interest rate

5.54

13,110,000

Variable interest rate

460,860

At reporting date, if interest rates had been 50 basis points

higher or lower and all other variables were held constant, the

Group’s:

• net loss would increase or decrease by $42,050 which is

mainly attributable to the Group’s exposure to interest

rates on its variable bank deposits.

Notes to the Financial Statements
73 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

24. Controlled entities

Country of
incorporation

Ownership interest

2013

2012

Australia

100

Name of

entity

Parent entity

Musgrave

Minerals Ltd

Subsidiaries

Musgrave

Exploration

Pty Ltd

Guarantees
Musgrave Minerals Ltd has not entered into any guarantees, in

the current or previous financial year, in relation to the debts

of its subsidiaries.

Contingent Liabilities
Contingent liabilities of the parent entity have been

incorporated into the Group information in note 21. The

contingent liabilities of the parent are consistent with that of

the Group.

Contractual Commitments
Contractual Commitments of the parent entity have been

incorporated into the Group information in note 20. The

contractual commitments of the parent are consistent with

25. Parent entity information

that of the Group.

2013
$

2012
$

Financial Position

Assets

Current Assets

9,743,547

13,886,146

Non-current Assets

17,232,372

13,763,225

26. Related party disclosure and
key management personnel
remuneration

26,975,919

27,649,371

The following individuals are classified as key management

personnel in accordance with AASB 124 ’Related Party

Liabilities

Disclosures’:

Current liabilities

388,871

465,079

Graham Ascough, Non-Executive Chairman

Non-current Liabilities

19,793

55,036

Robert Waugh, Managing Director

408,664

520,115

Kelly Ross, Non-Executive Director

Equity

Issued Capital

26,718,899

Reserves

2,958,083

2,944,985

Retained Earnings

(3,109,727)

(2,534,628)

John Percival, Non-Executive Director

Donald Stephens, Company Secretary

Justin Gum, Principal Geologist

Ian Warland, Exploration Manager

Financial Performance

found in the remuneration report.

26,567,255

27,129,256

Details of key management personnel’s remuneration can be

(Loss) for the year

(585,809)

(276,182)

Other comprehensive

income

(585,809)

(276,182)

74 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Notes to the Financial Statements

a). Aggregate remuneration for Key Management Personnel

Short-term employee benefits

Post employment benefits

Share-based payments

Consolidated

2013

2012

630,513

49,793

21,550

701,856

560,155

56,545

616,700

(b). Option holdings of Key Management Personnel

30-Jun-13

Balance at
beginning
of period

Granted as
remuneration

Options
Exercised

Net
change
other

Balance
at end of
period

Vested at 30 June 2013

Expiry
Date

First
Exercise
Date

Last
Exercise
Date

Graham Ascough

750,000

Robert Waugh

John Percival

Kelly Ross

Donald Stephens

Justin Gum

Ian Warland

2,500,000

500,000

750,000

17/02/16

28/04/13

17/02/16

2,500,000

17/02/16

28/04/13

17/02/16

2,500,000

17/02/16

28/04/13

17/02/16

500,000

17/02/16

28/04/13

17/02/16

500,000

17/02/16

28/04/13

17/02/16

500,000

17/02/16

28/04/13

17/02/16

500,000

08/05/16

09/05/11

08/05/16

500,000

05/03/18

06/03/15

05/03/18

30-Jun-12

Balance at
beginning
of period

Granted as
remuneration*

Options
Exercised

Net
change
other

Balance
at end of
period

Vested at 30 June 2012

Expiry
Date

First
Exercise
Date

Last
Exercise
Date

Graham Ascough

750,000

Robert Waugh

John Percival

Kelly Ross

Donald Stephens

Justin Gum

2,500,000

500,000

750,000

17/02/16

28/04/13

17/02/16

2,500,000

17/02/16

28/04/13

17/02/16

2,500,000

17/02/16

28/04/13

17/02/16

500,000

17/02/16

28/04/13

17/02/16

500,000

17/02/16

28/04/13

17/02/16

500,000

17/02/16

28/04/13

17/02/16

500,000

08/05/16

09/05/11

08/05/16

Notes to the Financial Statements
75 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

(c). Shareholdings of Key Management Personnel

30 June 2013

Balance at 1 July 12

On Exercise of
Options

Net Change Other

Balance 30 June 13

Directors

Graham Ascough

Robert Waugh

John Percival

Kelly Ross

Donald Stephens

Justin Gum

Ian Warland

200,000

80,000

100,000

50,000

40,000

30 June 2012

Balance at 1 July 11

On Exercise of
Options

Directors

Graham Ascough

Robert Waugh

John Percival

Kelly Ross

Donald Stephens

Justin Gum

200,000

80,000

100,000

50,000

40,000

100,000

Net Change Other

200,000

80,000

200,000

50,000

40,000

Balance 30 June 12

200,000

80,000

100,000

50,000

40,000

Director related entities
During the year, Musgrave Minerals Ltd was invoiced by Mithril Resources Ltd (‘Mithril’) in relation to expenditure incurred by Mithril

on Musgrave’s behalf. These transactions were undertaken on an arm’s length basis and in aggregate for the year ended 30 June

2013 totalled $54,802 excluding GST (2012: $51,810).

HLB Mann Judd (SA) Pty Ltd has received professional fees for accounting, taxation and secretarial services provided during the year

amounting to $150,541 including GST (2012: $131,671). Donald Stephens, the Company Secretary, is a consultant with HLB Mann

Judd (SA) Pty Ltd.

27. Subsequent events

The Directors are not aware of any significant events that have occurred since the end of the reporting period that should be

disclosed.

76 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Notes to the Financial Statements

Directors’ Declaration

In accordance with a resolution of the Directors of Musgrave Minerals Ltd, the Directors of the Company declare that:

1. the consolidated financial statements and notes, as set out on pages 51 to 76, are in accordance with the Corporations Act 2001

and:

a. comply with Australian Accounting Standards, which, as stated in accounting policy Note 1 to the financial statements,

constitutes compliance with International Financial Reporting Standards (IFRS); and

b. give a true and fair view of the financial position as at 30 June 2013 and of the performance for the year ended on that date

of the consolidated Group;

2. in the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they

become due and payable; and

3. the Managing Director and Company Secretary have each declared that:

a. the financial records of the company for the financial year have been properly maintained in accordance with section 286 of

the Corporations Act 2001;

b. the financial statements and notes for the financial year comply with Accounting Standards; and

c. the financial statements and notes for the financial year give a true and fair view; and

This declaration is made in accordance with a resolution of the Board of Directors.

Mr Graham Ascough

Chairman

25 September 2013

Directors’ Declaration
77 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

78 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Independent Auditor’s Report

Independent Auditor’s Report
79 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

80 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Independent Auditor’s Report

ASX Additional
Information

Additional information required by the Australian Stock

Exchange Limited and not shown elsewhere in this report is as

The number of shareholders, by size of holding, in each class are:

Substantial shareholders

Ordinary shareholders

Fully paid

Number

Mithril Resources Investments Pty Ltd

9,283,871

7.67%

follows. The information is current as at 25 September 2013.

Independence Group NL

9,027,000

7.46%

Goldsearch Ltd

8,673,000

7.17%

Distribution of equity securities

Number of
shareholders

Unlisted
Options

1 - 1,000

1,001 - 5,000

5,001 - 10,000

10,001 - 100,000

100,001 and over

257

696

163

1,170

Ordinary share capital

• 121,000,000 fully paid ordinary shares are held by 1,170

Fully Paid Ordinary
Shares

Ordinary shareholders

Number

Mithril Resources Investments Pty Ltd

9,283,871

7.67%

Independence Group NL

9,027,000

7.46%

Goldsearch Ltd

8,673,000

7.17%

Barrick (Australia Pacific) Limited

6,000,000

4.96%

Integra Mining Limited

5,516,129

4.56%

Argonaut Resources NL

2,500,000

2.07%

Kimbriki Nominees Pty Ltd

2,000,000

1.65%

individual shareholders.

Mr William Douglas Goodfellow

1,540,000

1.27%

All issued ordinary shares carry one vote per share and carry

the rights to dividends.

Options

JP Morgan Nominees Australia

Limited

1,429,662

1.18%

Octifil Pty Ltd

1,300,000

1.07%

King Town Holdings Pty Ltd

1,100,000

0.91%

1,000,000

0.83%

1,000,000

0.83%

• 16,450,000 unlisted options are held by 16 option holders.

Allise Pty Ltd

One holder, Mr Robert Waugh and Mrs Sara Waugh

Forty Traders Limited

, holds 5,000,000 unlisted

options (equivalent to 30.40% of total unlisted options).

Hipete Pty Limited

1,000,000

0.83%

Premar Capital Nominees Pty Ltd

1,000,000

0.83%

Kavalex Pty Limited

800,000

0.66%

Citicorp Nominees Pty Limited

731,764

0.60%

Forsyth Barr Custodians Ltd

Mr Stephen Simunovic + Mr Dragan

696,900

0.58%

Simunovic

Merrill Lynch (Australia) Nominees

Pty Limited

657,604

0.54%

55,944,830

46.24%

ASX Additional Information
81 Musgrave Minerals Ltd
Musgrave Minerals Ltd

Annual Report 2013

Musgrave Minerals Ltd

19 Richardson Street, West Perth, 6005

Western Australia

T: +61 (8) 9324 1061

F: +61 (8) 9324 1014

info@musgraveminerals.com.au