ABN 12 143 890 671
ANNUAL
REPORT
2015
Musgrave Minerals is an
Australia focused gold
and base metal
exploration company.
ASX: MGV
Musgrave Minerals Limited is an Australia focused gold
and base metal exploration company.
Corporate Information
Musgrave plans to grow through the exploration
discovery and development of gold and base metal
resources.
A description of the Company’s operations and principal
activities is included in the Review of Operations and the
Directors’ Report.
The Company’s functional and presentational currency is
Australian Dollars.
ASX Code: MGV
Issued Shares: 121M
Cash Balance: $3.7M (as of 30 June 2015)
ABN: 12 143 890 671
Top Shareholders
Mithril Resources Ltd
Independence Group NL
Barrick (Australia Pacific) Ltd
Silver Lake Resources Ltd
Cover photo:
Reverse circulation drilling at the Mamba project in the
Fraser Range of Western Australia.
Directors
Graham Ascough (Non-Executive Chairman)
Robert Waugh (Managing Director)
Kelly Ross (Non-Executive Director)
John Percival (Non-Executive Director)
Company Secretary
Patricia (Trish) Farr
Registered Office & Principal Place
of Business
28 Richardson Street
West Perth, 6005
Western Australia
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 11, 172 St Georges Terrace
Perth, 6000
Western Australia
Auditor
Grant Thornton Audit Pty Ltd
Chartered Accountants
Level 1, 10 Kings Park Road
West Perth, 6005
Western Australia
Legal Advisors
O’Loughlins Lawyers
Level 2, 99 Frome Street
Adelaide, 5000
South Australia
i
Corporate Information
Contents
Chairman’s Letter
Review of Operations
Summary of Tenements
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
2
3
11
12
20
28
29
30
31
32
33
50
51
54
Contents
1
Chairman’s Letter
Dear Fellow Shareholder,
agreed to pay Musgrave an amount equal to 1% of
net smelter returns (“NSR”) in respect of all minerals
It is my pleasure to welcome you to Musgrave Minerals
produced from the Menninnie Dam and Nonning
Limited’s (ASX: MGV) Annual Report for the year ending
exploration licences, or buy back 50% of this NSR for
30 June 2015.
$1.25M within 60 days of receiving sale proceeds from
either of these tenements. Musgrave believes this was
The past year has not been an easy one for our
an excellent outcome for the Company.
Company, similarly to many of our peers focused on
early-stage mineral exploration. Market conditions
Going forward, the Company will focus on existing
remain difficult however we will continue to be an
projects in our portfolio including our Mamba Project
active explorer, developing and testing targets across
in the Fraser Range region of Western Australia, which
our projects and evaluating new opportunities on a
continues to gain attention as a mineral province and is
continuous basis to grow the Company. Our share price
home to the world-class Nova-Bollinger nickel-copper
has not reflected the hard work and dedication of our
sulphide deposits, and the Corunna Project in the
exploration team and I believe that this is largely due
Gawler Craton of South Australia. We also progressed
to the difficult market conditions. I assure you we are
targets at our Mimili Project in the Musgrave region
working as hard as possible to provide value to our
Shareholders, and to ensure we maximise in-ground
during the year, and will follow up the Roslin zinc target
and Zarek nickel-copper gossan with drilling in the
expenditure we have undertaken a number of measures
coming months after securing financial support from
in the past year to reduce overheads and increase
the South Australian Government to do so. We are also
efficiency. As a result the Company has reduced staff
continuing to focus on obtaining a new gold or base
and relocated our registered office and register of
metal project within Australia to balance our current
securities to Perth in recent months.
project portfolio.
As a result of the relocation of corporate activities
In closing, I wish to thank our management and staff
Donald Stephens retired as Company Secretary. We
for their hard work and dedication over the past year,
thank Mr Stephens for his contribution to the Company
as well as our Shareholders for your support. I hope this
since our listing and wish him well. Mrs Patricia Farr has
will continue into the coming year, and I look forward to
been appointed as Company Secretary and we welcome
reporting more progress across our project portfolio.
Mrs Farr to the Musgrave team.
A strategic review of our projects and exploration
activities led us to terminate our earn-in agreement with
Menninnie Metals Pty Ltd (“MMPL”) in regards to the
Graham Ascough
Menninnie Dam Project in the Southern Gawler Craton
Chairman
of South Australia. As part of the termination, MMPL
2
Chairman’s Letter
Review of Operations
Musgrave Minerals Limited (ASX: MGV) is an Australia
focused gold and base metal exploration company.
Musgrave plans to grow through the exploration
discovery and development of gold and base metal
resources within Australia. We are currently focused
on base metal, gold and silver exploration in the Fraser
Range of Western Australia and the Musgrave Range
was $468,772 (of which $95,447 occurred in the period
1 January 2014 to 30 June 2014). The irregularities
are consistent with the fraudulent misappropriation of
Company funds. An employee of the Company was
suspended pending the investigation and terminated in
September 2014.
These irregularities were brought to the attention of
the Major Fraud Squad, Western Australia Police for
investigation and prosecution. As a result the matter is
and Gawler Craton regions of South Australia (Figure 1).
currently before the WA Courts.
Corporate
During the past year, Musgrave Minerals spent $2.29
million on exploration activities.
The Directors of Musgrave are pursuing various avenues
for recovery of the funds and to date $36,043 has been
returned to the Company.
During the second half of the year, the Company
implemented a significant reduction in staffing,
corporate and administration costs aligned with market
conditions and a review of projects and exploration
activities. As a function of this process Musgrave
relocated its registered office and register of securities to
Perth. Coinciding with this, Mr Donald Stephens retired
as Company Secretary and Mrs Patricia (Trish) Farr,
based in West Perth, was appointed as his replacement.
On February 12, 2015 the Board informed the
market that investigations into a number of irregular
transactions previously reported in the financial
statements for the year ended 30 June 2014, had
been completed. The investigations identified that the
amount of funds involved in the irregular transactions
During the June quarter, Musgrave received $895,575
from the Australian Tax Office under the Federal
Government’s Research and Development Tax Incentive
Scheme for its research and development activities
during the 2014 financial year. Musgrave has strong
links with government and research organisations in the
regions in which it operates including the Geological
Survey of South Australia and the Commonwealth
Scientific and Industrial research Organisation
(“CSIRO”).
Musgrave Minerals continues to assess a large range
of gold and base metal projects for joint venture or
acquisition within Australia.
At the end of June 2015, the Company was well-
resourced with $3.7 million in cash.
There was no change to the number of ordinary shares
on issue during the year which is currently 121M shares.
Exploration Activities
The Company’s exploration during the 2015 financial
year focused on planning and implementation of field
programs for the Mamba project in Western Australia
and the Corunna project in South Australia. Diamond
drilling was undertaken at the Pallatu targets on
the Deering Hills project in the Musgrave province
of South Australia along with diamond drilling and
Figure 1: Musgrave Minerals’ Project Location Map
ground electromagnetic (“EM”) surveys at Menninnie
Review of Operations
3
Dam. Towards the end of the financial year drilling
Musgrave was granted the tenement on 5 February
commenced at the Mamba project in the Fraser Range
2015.
of WA and at the Corunna project in SA.
Fraser Range
Mamba Project
E28/2405 (100% Musgrave Minerals Ltd)
• The project is located in the same belt as the world
class Nova-Bollinger nickel-copper deposits
• Late-time basement EM conductors identified
• RC drilling on the M8 conductor identified
chalcopyrite (copper sulphide) and low level Pt
(platinum) and Pd (palladium) in RC chips
The Mamba tenement covers 180km2 in the same belt
as the world class Nova-Bollinger nickel-copper sulphide
discoveries of Sirius Resources NL (ASX: SIR) in south-
eastern WA. The tenement is along strike from Sirius’
Nova deposit and only 5km from the Trans Australian
rail line (Figure 2). The project is on a significant regional
gravity high, which is interpreted to represent a large
accumulation of mafic rocks prospective for massive
nickel-copper sulphide mineralisation.
The Company commenced a detailed aeromagnetic
survey over the Mamba project in late August that
covered the entire tenement at 100m line spacing. The
survey identified 11 high priority targets that showed
magnetic characteristics consistent with mafic-ultramafic
intrusive bodies, the prospective host for nickel-copper
sulphide mineralisation in the district. These magnetic
targets are comparable in size to Sirius’s Nova “Eye”
feature.
A heritage survey has been completed over the entire
tenement area, and following a detailed interpretation
of aeromagnetic survey data and integration with
historical exploration data, 11 priority targets were
identified and followed up with a combination of
high powered fixed and moving loop EM surveys.
This identified three late-time basement ground EM
conductors. The strongest conductor, M8, was a high
conductance late-time basement response in an area of
no previous drilling and interpreted shallow sedimentary
cover, making surface geochemistry ineffective. The
relatively high conductance for the ground EM model
(>10,000S) was consistent with the response expected
for massive Ni-Cu sulphide mineralisation or semi-
massive graphite + Fe-sulphide horizon.
In June-July 2015 Musgrave completed a two-hole,
806m reverse circulation (“RC”) drilling program to
test the M8 EM bedrock conductor. The drill holes
intersected a combination of stringer pyrrhotite and
pyrite with minor chalcopyrite and graphite within a
sequence of mafic and intermediate granulite. A down
hole electromagnetic (“DHEM”) survey was completed
which confirmed the source of the surface EM
conductor was intersected in the drill holes.
Geological logging of RC chips was completed on
site and samples collected for multi-element assay
and petrological studies. Maximum values occurred in
MAMRC001 from 360m to 364m.
• 4m at 73.5ppb Au, 2.2g/t Ag, 705ppm Cu, 147ppm
Ni, 19.8 ppb Pd and 18.3ppm Mo from 360m.
•
Including 1m at 214ppb Au, 2.4g/t Ag, 730ppm Cu,
Figure 2: Location of Musgrave’s Mamba Project
159ppm Ni and 19ppm Mo from 363m.
4
Review of Operations
Although the assay results were disappointing and
The next stage of exploration is to complete a gravity
the minor sulphides of low tenor, there is geochemical
survey across the entire tenement and use this data
evidence to suggest the sulphides may have links to
in conjunction with existing detailed magnetics to
magmatic processes. These magmatic processes are key
generate aircore drill targets. It is then proposed
in the formation of nickel-copper sulphide deposits.
to drill these targets to test for both Ni-Cu and Au
As such the tenement area is considered to remain
mineralisation and confirm prospective near surface
prospective for Ni-Cu-PGE sulphides, as well as gold
lithologies.
mineralisation.
Geological logging - Mamba
DHEM set up – Mamba
RC drilling at Mamba
Review of Operations
5
Musgrave Region Projects
Deering Hills Project
EL5172, EL5173 & EL5317 – (100% Musgrave
Minerals Ltd)
• Disseminated sulphide intersected at two targets at
Pallatu
• Same geological domain that hosts Nebo-Babel
nickel-copper deposits
The Deering Hills Project is in the centre of the Musgrave
geological province; approximately 200km west of the
Stuart Highway and Adelaide to Darwin rail line in the
far north-west of South Australia (Figure 3).
The targets are 1km from previously intersected massive
and disseminated nickel sulphide mineralisation at
Pallatu 3 and in the same geological domain that hosts
the large Nebo-Babel nickel-copper sulphide deposits.
Approximately 20km of untested contact prospective for
massive nickel-copper sulphide at Pallatu and Deering
Hills has been identified to date.
Musgrave is currently seeking a joint venture partner
to maximise the value in the Pallatu and Deering Hills
targets.
Mimili Project
EL5175 (100% Musgrave Minerals Ltd)
The Company completed two holes for 441m at
• New zinc-copper target identified at Roslin prospect
the Pallatu 6 & 7 ground EM targets and intersected
• Nickel-copper gossan identified at Zarek prospect
disseminated sulphide at both targets in July 2014.
A down-hole EM survey was undertaken but did not
identify any strong off-hole conductors.
The Mimili Project consists of one wholly-owned
exploration licence located in the eastern portion of the
Figure 3: Location of MGV’s Musgrave Geological Province tenements, South Australia
6
Review of Operations
Musgrave region (Figure 3) following the surrender of
Other Musgrave Projects
tenement EL5174 during the September quarter.
EL5171 & EL4850 (100% Musgrave Minerals Ltd)
A new nickel-copper gossan has been identified at
the Zarek prospect. Follow-up surface geochemistry
has identified a 200m long Ni, Cu, Co geochemical
anomaly associated with the gossan on the margin
of a discrete gabbroic intrusive. The gossan and
geochemical response may reflect the surface expression
of weathered nickel-copper sulphide mineralisation.
Ground EM is required to test for a conductive response
below the geochemical target.
The Company undertook ground EM surveys within
EL5175 on a number of co-incident magnetic, gravity
and geochemical targets at Mimili. It identified a
basement EM conductor at the Roslin target with co-
No significant exploration was undertaken on EL5171
(Mt Woodroffe) and EL4850 (Eunyarinna Hill) during
the year. Musgrave surrendered three low-priority
tenements, EL4851, EL4852 and EL4853, during the
June quarter as part of the Company’s strategic review.
Southern Gawler Project
Corunna Project
EL5497 (100% Musgrave Minerals Ltd)
• Anomalous lead, zinc and silver identified in aircore
drilling at the Corunna project in South Australia
incident anomalous Zn, Cu and Co in surface soil and
• Anomalous silver-lead-zinc zone identified over
gossanous rock chip samples. Roslin is only 10km east
300m strike and open to north and south
of Zarek (Figure 4). Further work is required to refine the
target prior to drilling.
Musgrave was successful in securing funds to drill test
Zarek and Roslin, with the Company eligible to receive
$90,000 for drilling through the South Australian
Government’s Plan for Accelerating Exploration
(“PACE”) Frontiers Initiative. The grant is subject to
Musgrave matching 50% of direct drilling costs and
completing the drilling program before 1 May 2016.
• Results include:
o 11m @ 1.0% Pb, 0.5% Zn and 4.2g/t Ag
from 19m
o 22m @ 0.5% Pb, 0.2% Zn and 13.2g/t Ag
from 17m
The Corunna tenement covers an area of 260km2
located approximately 50km west of Port Augusta, well
Figure 4: Location of Roslin and Zarek Targets, South Australia
Figure 5: Location of Musgrave’s Southern Gawler Projects in
South Australia
Review of Operations
7
positioned in regards to infrastructure and proximity to
Aircore drilling comprising 49 holes for a total of
the coast (Figure 5). It is prospective for silver-lead-zinc
1,740m was completed over the targets with five
and copper-gold mineralisation. Historical rock chip
holes intersecting base metals greater than 0.5%, with
samples on the project have been identified with up
anomalous silver. Drill hole depths varied from 9m
to 148g/t Ag and 0.5% Pb. The Corunna exploration
to 58m, with all holes terminating at the fresh rock
licence was granted in October 2014.
interface.
Recent exploration at Corunna by previous tenement
Anomalous Ag, Pb and Zn was identified at target Area
holders focused on uranium. Musgrave’s examination
1 on the western side of the tenement (Figure 6). The
of historic open file data has identified low level
best intersection include 11m @ 1.0% Pb, 0.5% Zn
regional multi-element soil sampling results of
and 4.2g/t Ag from 19m in drill hole COAC017; 13m @
interest. The historical survey assayed for a full suite
0.6% Pb, 0.4% Zn and 7.2g/t Ag from 32m in drill hole
of elements including Ag, Au, base metals and path
COAC019 and 22m @ 0.5% Pb, 0.2% Zn and 13.2g/t
finder elements on a nominal 400m grid. From this, the
Ag from 17m in drill hole COAC021.
Company identified six high-priority silver-lead-zinc-
copper geochemical targets and completed infill soil
The anomalous zone is 300m long and open to the
geochemistry.
north and south. The results show there is potential
for lead-zinc-silver mineralisation in this under-
Musgrave established a Native Title Access Agreement
explored region. All data is currently being reviewed
with Barngarla Aboriginal Corporation in the December
quarter to enable exploration access, and completed
in preparation for further exploration to follow-up this
encouraging result.
a heritage survey in the June quarter. This allowed the
Company to commence drilling.
Musgrave is eligible to receive up to $55,000 for drilling
at Corunna through the South Australian Government’s
PACE Frontiers Initiative. The grant was subject to
Musgrave matching 50% of direct drilling costs and
completing the drilling program before 1 May 2016.
Geological reconnaissance at Corunna
Toondulya Bluff Project
EL5403 (100% Musgrave Minerals Ltd)
The Toondulya Bluff tenement, in the Southern Gawler
Craton, covers 390km2 and is prospective for high-
grade gold mineralisation. Historical exploration data is
currently being compiled to identify targets and plan for
further exploration.
Figure 6: High Priority Epithermal Ag-Pb-Zn-Cu Targets Shown
on Gridded Silver Soil Geochemical Image with Landsat
Backdrop
8
Review of Operations
Menninnie Dam Project
EL5039, 4813, 5453 (formally 4285), 4669, 4865
Menninnie Dam comprises five Exploration Licences
covering a contiguous area of 2,471km² in the Gawler
Craton, about 100km west of Port Augusta (Figure 5).
During the December quarter, Musgrave completed a
terminate its Menninnie Dam Mining Farm-In and Joint
Venture Agreement. As part of the termination, MMPL
agreed to pay Musgrave an amount equal to 1% NSR
in respect of all minerals produced from each of EL5039
(Menninnie Dam) and EL4813 (Nonning). MMPL has
the right (but not the obligation) to buy back 50% of
the NSR (being 0.5%) for $1,250,000 within 60 days of
first receiving product sales proceeds from any of these
six drill hole program to test three base metal targets at
tenements.
Menninnie. A combination of diamond and RC drilling
was completed totalling 1,495m.
No significant mineralisation was encountered in the
drilling.
Research and Development
Musgrave has established a strong relationship with
CSIRO, the Commonwealth Scientific and Industrial
Research Organisation, Australia’s national science
A ground EM survey was also completed over the Taal
agency, with a research agreement focused on new
target area but failed to define a significant bedrock
understandings and data interpretations that can be
conductor.
applied to our exploration in the Musgrave Province.
We have also instigated research into developing a new
During the March quarter, Musgrave completed all drill,
geological model and techniques to improve exploration
site and track rehabilitation and undertook a review of
efficiency and increase the probability of success for our
all available data.
exploration in the Southern Gawler Craton of South
Australia. We look forward to continuing our research
Following a strategic review of the Company’s project
partnerships in the coming year and the exciting
portfolio and subsequent to the end of the reporting
developments that they may deliver on our current and
period, Musgrave agreed with MMPL, a wholly-owned
potential future project portfolio.
subsidiary of Terramin Australia Ltd (ASX: TZN) to
Corunna Project, South Australia
Review of Operations
9
Competent Person’s Statement
The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is
based on information compiled and/or 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 2012 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.
Forward Looking Statements
This report has been prepared by Musgrave Minerals
Ltd (“MGV”). The information contained in this report
appropriate. All securities transactions involve risks, which
include (among others) the risk of adverse or unanticipated
market, financial or political developments.
is a professional opinion only and is given in good faith.
To the fullest extent permitted by law, MGV, its officers,
Certain information in this document has been derived
employees, related bodies corporate, agents and advisers
from third parties and though Musgrave Minerals has
do not make any representation or warranty, express
no reason to believe that it is not accurate, reliable or
or implied, as to the currency, accuracy, reliability or
complete, it has not been independently audited or
completeness of any information, statements, opinions,
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
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.
to satisfy themselves as to the accuracy and completeness
Any forward-looking statements included in this document
of the information, statements and opinions contained.
involve subjective judgment and analysis and are subject to
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 presentation are
not intended to represent recommendations of particular
investments to particular persons. Recipients should seek
professional advice when deciding if an investment is
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.
10
Review of Operations
Summary of Tenements
Tenement
Previous
Tenement
ID
Project
Locality
Status
EL4850
EL5171
EL5172
EL5173
EL5175
EL5317
EL5205
EL5403
EL5497
E28/2405
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
EL2008/154
EL3941
EL3942
EL3953
EL3955
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
EL4047
Musgrave PMC JV
Toondulya Bluff
Corunna
Mamba
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave PMC JV
Musgrave PMC JV
Musgrave PMC JV
Musgrave PMC JV
Musgrave PMC JV
Musgrave PMC JV
Musgrave PMC JV
Musgrave PMC JV
Musgrave PMC JV
Musgrave PMC JV
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
Musgrave
SA
SA
SA
SA
SA
SA
SA
SA
SA
WA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
SA
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Area
(km2)
2385
427
565
714
1908
12
MGV Interest
100%
100%
100%
100%
100%
100%
1535
0% (may earn up to 75%)
380
260
180
519
463
653
1854
620
1301
2198
1230
2136
1783
1507
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
1013
0% (may earn up to 75%)
595
0% (may earn up to 75%)
1241
0% (may earn up to 75%)
1656
0% (may earn up to 75%)
1721
0% (may earn up to 75%)
2308
0% (may earn up to 75%)
666
0% (may earn up to 75%)
2108
0% (may earn up to 75%)
1926
0% (may earn up to 75%)
1957
0% (may earn up to 75%)
1040
835
1815
2015
624
215
152
692
338
37
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Summary of Tenements
11
Directors’ Report
Your Directors present their report on Musgrave
Minerals Ltd and its subsidiary (“the Group”) for the
financial year ended 30 June 2015.
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 25 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.
Other directorships:
Mithril Resources Ltd (Appointed 9 October 2006)
Phoenix Copper Ltd (Appointed 10 December 2012)
Avalon Minerals Ltd (Appointed 29 November 2013)
Former directorships:
Reproductive Health Science Ltd (Retired 2 April 2014)
Aguia Resources Ltd (Resigned 15 November 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 ten years in the
Musgrave region. Mr Waugh was a critical member
of the WMC Resources Ltd 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 in a number of companies including
WMC Resources (“WMC”) and BHP Billiton Exploration
Ltd (“BHP”). Mr Waugh 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.
Other directorships:
Mr Ascough is a geophysicist by training and was the
None
Managing Director of ASX listed Mithril Resources Ltd
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
Mrs Kelly Ross
BBus, CPA, AGIA (Non-Executive Director), Director since
Canadian resources house, Falconbridge Ltd (acquired
26 May 2010
by Xstrata Plc in 2006).
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 committee.
Kelly Ross is a qualified accountant holding a Bachelor
of Business (Accounting) and has the designation CPA
from the Australian Society of Certified Practicing
Accountants. Mrs Ross is a Chartered Secretary
with over 25 years’ experience in accounting and
12
Directors’ Report
administration in the mining industry and was the
Holdings Ltd (resigned 14 December 2012), Papyrus
Company Secretary of Independence Group NL (“IGO”)
Australia Ltd (retired 24 August 2015) and Reproductive
for 10 years from 2001 to 2011. Mrs Ross was also a
Health Science Ltd (resigned 31 August 2015).
senior accountant at Resolute Ltd from 1987 to 2000.
Additionally, he is Company Secretary to Highfield
Mrs Ross was a Non-Executive Director of ASX listed
Resources Ltd, Minotaur Exploration Ltd, Mithril
Independence Group NL for 12 years from 2002 to
Resources Ltd and Petratherm Ltd. He holds other public
2014. Mrs Ross retired from IGO on 24 December 2014.
company secretarial positions and directorships with
Mrs Ross is the chair of the Company’s audit committee.
private companies and provides corporate advisory
services to a wide range of organisations.
Former directorships:
Independence Group NL (Retired 24 December 2014)
Other directorships:
None
Mr John Percival
(Non-Executive Director), Director since 26 May 2010
Mrs Patricia (Trish) Farr
GradCertProfAcc, GradDipACG, AGIA, ACIS, GAICD
(Company Secretary) – appointed 30 June 2015
Trish Farr is an experienced Chartered Secretary with
over 17 years’ experience in the exploration and
mining industry in the areas of corporate governance,
compliance and administration. Mrs Farr was previously
Mr Percival has been involved in investment and
merchant banking for over 25 years including 15
the Company Secretary of uranium junior Energy
Metals Limited from its listing in 2005 to 2010 and
years as Investment Manager of Barclays Bank New
Fox Resources Ltd from 2013 to 2014. Mrs Farr is also
Zealand Ltd. In addition he has extensive experience
a Director and the Company Secretary of Jindalee
in stockbroking, corporate finance and investment
Resources Limited. Mrs Farr is an associate member
management. In 1995 Mr Percival was appointed to
of Chartered Secretaries & Administrators and the
the Board of Goldsearch Limited and in 2000 became
Governance Institute of Australia (formerly Chartered
an Executive Director. In May 2014 Goldsearch
Secretaries Australia) and a graduate member of the
changed direction and Mr Percival resigned his executive
Australian Institute of Company Directors.
position. In May 2015 Mr Percival was appointed
as a Non-Executive Director of Verde Science Inc. a
Pharmaceutical Cannabinoid based research company
listed in the USA.
Other directorships:
Goldsearch Ltd (Appointed 11 October 1995)
Interests in the shares,
performance shares and options
of the Company and related
bodies corporate
As at the date of this report, the interests of the
Directors in the ordinary shares and options of Musgrave
Company Secretary
Minerals Ltd were:
Mr Donald Stephens
BAcc, FCA (Company Secretary) – retired 30 June 2015
Mr Stephens is a Chartered Accountant and corporate
Graham Ascough
adviser with over 25 years’ experience in the accounting
industry, including 14 years as a partner of HLB Mann
Judd (SA) Pty Ltd, a firm of Chartered Accountants.
He is a director of Mithril Resources Ltd, Lawson Gold
Ltd, Petratherm Ltd, and was formerly a director of TW
Robert Waugh
John Percival
Kelly Ross
Number of
Ordinary Shares
Number of
Options over
Ordinary Shares
595,000
361,000
200,000
50,000
750,000
5,000,000
500,000
500,000
Directors’ Report
13
Dividends
No dividends were paid or declared since the start of
the financial year. No recommendation for payment of
dividends has been made.
Principal activities
The principal activities of the Group during the financial
year were:
• to carry out exploration of mineral tenements both
on a joint venture basis and by the Group in its own
right;
• to continue to seek extensions of areas held and to
seek out new areas with mineral potential; and
• to evaluate results achieved through surface
sampling, geophysical surveys and drilling activities
carried out during the year.
Functional currency
The functional and presentational currency for the
Group is Australian dollars and unless otherwise stated,
all amounts listed in this report refer to Australian
dollars.
Significant changes in the state
of affairs
No significant changes in the state of affairs occurred
during the financial year.
Significant events after the
reporting date
On 27 July 2015, the Group announced the termination
first receiving product sales proceeds from any of these
tenements.
Likely developments and
expected results
The Group intends to continue to pursue the objectives
outlined in the principal activities for the Group.
The Group is still at the point of exploration on its
exploration ground. No comment on the expected
results from these efforts is included in this report.
Environmental regulation and
performance
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
Western Australia and the Group followed procedures
and pursued objectives in line with guidelines published
by the South Australian and Western Australian
Governments. 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.
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 exploration programs
of the Menninnie Dam Joint Venture with Menninnie
should have little or no long-lasting impact on the
Metals Pty Ltd (“MMPL”), a wholly owned subsidiary
environment and the Group has formed a best practice
of Terramin Australia Ltd. In conjunction with the
policy for the management of its exploration programs.
agreement, MMPL has agreed to pay Musgrave an
The Group properly monitors and adheres to this
amount equal to 1% of net smelter returns (“NSR”) in
approach and there were no environmental incidents
respect of all minerals produced from each of EL5039
to report for the year under review. Furthermore,
(Menninnie Dam) and EL4813 (Nonning). MMPL has
the Group is in compliance with the state and/or
the right (but not the obligation) to buy back 50% of
commonwealth environmental laws for the jurisdictions
the NSR (being 0.5%) for $1,250,000 within 60 days of
in which it operates.
14
Directors’ Report
Occupational health, safety and
welfare
In running its business, the Company aims to protect
the health, safety and welfare of employees, contractors
and guests. For the reporting year ended 30 June 2015, the
Company experienced one lost time injury. The Company
reviews its Health and Safety policy at regular intervals to
ensure a high standard of Health and Safety.
Share options
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 Jul 2014
Options Lapsed
Balance at
30 Jun 2015
17/02/2011
17/02/2011
19/04/2011
09/05/2011
24/01/2012
06/03/2013
24/03/2013
11/03/2014
17/02/2016
17/02/2016
19/04/2016
08/05/2016
23/01/2017
05/03/2018
24/03/2018
10/03/2019
$0.36
$0.50
$0.25
$0.36
$0.25
$0.25
$0.25
$0.12
4,750,000
2,500,000
7,750,000
500,000
375,000
500,000
75,000
575,000
17,025,000
-
-
-
-
-
-
-
(25,000)
(25,000)
4,750,000
2,500,000
7,750,000
500,000
375,000
500,000
75,000
550,000
17,000,000
No shares were issued during the year as a result of the exercise of options. No additional options were issued during the
financial year. On 16 September 2015, 1,025,000 unlisted options which had been cancelled due to an administrative
oversight were re-issued and are included in the table above.
Indemnification and insurance of
directors and officers
The Company paid a premium during the year in respect
Directors’ meetings
The number of meetings of Directors (including meetings
of committees of Directors) held during the year and the
of directors’ and officers’ liability insurance policy,
numbers of meetings attended by each Director were as
insuring the Directors and officers of the Company
follows:
against a liability incurred whilst acting in the capacity
of a director, secretary or executive officer to the extent
permitted by the Corporations Act 2001. The Directors
have not included details of the nature of the liabilities
covered or the amount of the premium paid in respect
of the policy as such disclosure is prohibited under the
terms of the contract of insurance.
Indemnification of auditors
The Group has not entered into an agreement with its
current auditors indemnifying them against claims by a
third party arising from their position as auditor.
Directors’ Meetings
Audit Committee
Eligible
Attended
Eligible
Attended
Graham
Ascough
Robert
Waugh
Kelly Ross
John
Percival
11
11
11
11
11
11
11
11
2
2
2
2
2
2
2
2
Directors’ Report
15
Audit and risk committee:
Kelly Ross (Chairman)
Graham Ascough
Robert Waugh
John Percival
who are defined as those persons having authority and
responsibility for planning, directing and controlling the
major activities of the Company and the Group, directly
or indirectly, including any Director (whether executive
or otherwise) of the Company.
i. Non-Executive Directors and Managing Director
Proceedings on behalf of the
Company
No person has applied to the Court under section
Mr Graham Ascough
(Chairman), appointed 26 May 2010
Mr Robert Waugh
237 of the Corporations Act 2001 for leave to bring
(Managing Director), appointed 6 March 2011
proceedings on behalf of the Company, or to intervene
in any proceedings to which the Company is a party,
for the purpose of taking responsibility on behalf of the
Company for all or part of those proceedings.
Auditor
Grant Thornton Audit Pty Ltd is in office in accordance
with section 327 of the Corporations Act 2001.
Non-audit services
Grant Thornton Audit Pty Ltd, in its capacity as
auditor for Musgrave Minerals Ltd, has not provided
any non-audit services during the financial year. The
auditor’s independence declaration for the year ended
30 June 2015 as required under section 307C of the
Corporations Act 2001 has been received and can be
found on page 28.
Remuneration report (audited)
This Remuneration Report for the year ended 30 June
2015 outlines the remuneration arrangements of
Mrs Kelly Ross
(Non-Executive Director), appointed 26 May 2010
Mr John Percival
(Non-Executive Director), appointed 26 May 2010
ii. Other KMPs
Mr Donald Stephens
(Company Secretary), retired 30 June 2015
Mrs Patricia Farr
(Company Secretary), appointed 30 June 2015
Mr Justin Gum
(Principal Geologist), ceased employment 11 March 2015
Mr Ian Warland
(Exploration Manager), ceased employment 7 August 2015
Remuneration philosophy
The Board is responsible for determining remuneration
policies applicable to Directors and senior executives
of the entity. The broad policy is to ensure that
remuneration properly reflects the individual’s duties
and responsibilities and that remuneration is competitive
in attracting, retaining and motivating people with
appropriate skills and experience. At the time of
the Company and the Group in accordance with the
determining remuneration, consideration is given by the
requirements of the Corporations Act 2001 (the Act)
Board to the Group’s financial position.
and its regulations. This information has been audited as
required by section 308(3C) of the Act.
Use of Remuneration Consultants
Independent external advice is sought from
Introduction
The remuneration report details the remuneration
remuneration consultants when required, however no
advice has been sought during the year ended 30 June
arrangements for key management personnel (“KMP”)
2015.
16
Directors’ Report
Voting and comments made at the
Company’s 2014 Annual General Meeting
(“AGM”)
Musgrave Minerals Ltd’s motion in relation to the
approval of the 2014 remuneration report passed with
a vote total of more than 95% at the AGM held on
26 November 2014. The Company did not receive any
specific feedback at the 2014 AGM on its remuneration
report.
Director remuneration arrangements
The Board seeks to set aggregate remuneration at a
the Company), based on the annual salary component.
Termination payments are generally not payable on
resignation or dismissal for serious misconduct. In
the instance of serious misconduct the Company can
terminate employment at any time.
The employment conditions of the Exploration Manager,
Mr Ian Warland, were formalised in a contract of
employment. Mr Warland commenced employment on
6 March 2013 and his gross annual salary, inclusive of
superannuation guarantee was $218,000. Either party
could terminate the employment contract without cause
by providing one (1) month’s written notice or making
level that provides the Company with the ability to
payment in lieu of notice (in the case of the Company)
attract and retain directors of the highest calibre, whilst
or forfeiture of one month’s salary (in the case of Mr
incurring a cost that is acceptable to shareholders.
Warland), based on the annual salary component.
Termination payments are generally not payable on
The Company’s constitution and the ASX listing rules
resignation or dismissal for serious misconduct. In
specify that the Non-Executive Director fee pool shall
the instance of serious misconduct the Company can
be determined from time to time by a general meeting.
The last determination disclosed in the Company’s
terminate employment at any time.
replacement prospectus dated 8 March 2011 approved
The employment conditions of the Principal Geologist,
an aggregate fee pool of $250,000 per year. The Board
Dr Justin Gum, were formalised in a contract of
will not seek any increase for the Non-Executive Director
employment. Dr Gum commenced employment on 1
pool at the Company’s 2015 Annual General Meeting.
October 2010 and his gross annual salary, inclusive of
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 with his current gross annual salary, inclusive
of 9.5% superannuation guarantee, being $291,330.
Either party may terminate the employment contract
without cause by providing six (6) months written notice
or by making payment in lieu of notice (in the case of
superannuation guarantee, was $171,675. Either party
could terminate the employment contract without cause
by providing one (1) month’s written notice or making
payment in lieu of notice (in the case of the Company)
or forfeiture of one month’s salary (in the case of
Dr Gum), based on the annual salary component.
Termination payments are generally not payable on
resignation or dismissal for serious misconduct. In
the instance of serious misconduct the Company can
terminate employment at any time.
Directors’ Report
17
Table 1: Remuneration of key management personnel
Financial
Year
Salary and
fees
$
Short
term
benefits
$
Share
based
payments
$
Post-
employment/
Super-
annuation
$
Total
$
Remuneration
consisting of
options
%
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
G Ascough *
R Waugh
K Ross *
J Percival
J Gum
I Warland
D Stephens *
FY 15
FY 14
65,000
65,000
256,985
256,414
45,000
45,000
49,388
49,163
148,160
157,500
194,697
201,180
39,525
49,050
798,755
823,307
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,220
-
10,440
-
-
-
15,660
-
-
24,414
23,718
4,275
4,163
-
-
14,042
14,569
18,496
18,500
-
-
61,227
60,950
65,000
65,000
281,399
280,132
49,275
49,163
49,388
49,163
162,202
177,289
213,193
230,120
39,525
49,050
859,982
899,917
-
-
-
-
-
-
-
-
-
2.9%
-
4.5%
-
-
* 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. Kelly Ross was a Non-Executive Director of
Independence Group NL (retired 24 December 2014) which is the beneficial holder of 7.46% of the issued capital of
Musgrave Minerals Ltd.
No element of remuneration of the key management personnel listed above was performance based. Whilst as
discussed in the remuneration philosophy, consideration is given to financial performance, there is no direct relationship
between KMP remuneration and the Company’s performance in the last 5 years.
Table 2: Option holdings of key management personnel
Opening Balance
1 July
Granted as
Remuneration
Options
Exercised
Net change other
Balance at 30
June
G Ascough
R Waugh
J Percival
K Ross
D Stephens
J Gum
I Warland
750,000
5,000,000
500,000
500,000
500,000
600,000
700,000
8,550,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(600,000)
-
-
750,000
5,000,000
500,000
500,000
500,000
-
700,000
7,950,000
18
Directors’ Report
Table 3: Shareholdings of key management personnel – ordinary fully paid shares
Opening Balance
1 July
Granted as
Remuneration
Options
exercised
Net change other
Balance at 30
June
G Ascough
R Waugh
J Percival
K Ross
J Gum
200,000
80,000
200,000
50,000
80,000
610,000
-
-
-
-
-
-
-
-
-
-
-
-
395,000
281,000
-
-
-
595,000
361,000
200,000
50,000
80,000
676,000
1,286,000
Other transactions and balances with key
management personnel and their related
parties
basis and in aggregate for the year ended 30 June
2015 totalled $12,898 excluding GST (2014: $Nil). No
amounts were outstanding at 30 June 2015 (2014:
$Nil).
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 2015
totalled $96,039 excluding GST (2014: $90,351). A
total of $4,476 including GST was outstanding at 30
June 2015 (2014: $6,862).
During the year, Musgrave Minerals Ltd invoiced Mithril
in relation to expenditure incurred by Musgrave on
Mithril’s behalf. These transactions were undertaken
on an arm’s length basis and in aggregate for the year
ended 30 June 2015 totalled $11,513 excluding GST
(2014: $7,133). No amounts were outstanding at 30
June 2015 (2014: $Nil).
During the year, Musgrave Minerals Ltd invoiced
Avalon Minerals Limited (“Avalon”) in relation to work
performed for a geophysical review performed for
Avalon. This work was undertaken on an arm’s length
HLB Mann Judd (SA) Pty Ltd has received professional
fees for accounting, taxation, secretarial and
transactional services provided during the period
amounting to $117,618 including GST, (2014: $97,690).
A total of $8,250 including GST was outstanding at
30 June 2015 (2014: $13,489). Donald Stephens, the
former Company Secretary, is a consultant with HLB
Mann Judd (SA) Pty Ltd.
End of Remuneration report.
Signed in accordance with a resolution of the Directors.
Mr Graham Ascough
Chairman
25 September 2015
Directors’ Report
19
Corporate Governance
Statement
Musgrave Minerals Limited (“the Company”) and the
Board are committed to achieving and demonstrating
the highest standards of corporate governance. The
Board continues to review the framework and practices
to ensure they meet the interests of Shareholders.
The Company and its controlled entities together are
referred to as the Group in this statement.
• reviewing and approving business plans, the annual
budget and financial plans including available
resources and major capital expenditure initiatives;
• overseeing and monitoring the organisational
performance and the achievement of the Group’s
strategic goals and objectives;
• monitoring financial performance including approval
of the annual and half-year financial reports and
liaison with the Company’s Auditors;
• appointment and performance assessment of the
Managing Director;
• ratifying the appointment and/or removal and
A description of the Group’s main corporate governance
contributing to the performance assessment for the
practices is set out below. All these practices, unless
members of the senior management team, including
otherwise stated, were in place for the entire year.
the Company Secretary;
On 27 March 2014, the ASX Corporate Governance
Council released the 3rd Edition of its Corporate
Governance Principles and Recommendations
(Recommendations). The Group has reviewed its
corporate governance and reporting practices
against the Recommendations during the year ended
30 June 2015. The disclosures in this Corporate
Governance Statement reflect this and, as at the
date of this statement, the Group complies with the
Recommendations (unless otherwise stated).
Principle 1: Lay solid foundations
for management and oversight
The relationship between the Board and Senior
• ensuring there are effective management processes
in place and approving major corporate initiatives;
• enhancing and protecting the reputation of the
organisation;
• overseeing the operation of the Group’s system
for compliance and risk management reporting to
Shareholders; and
• ensuring appropriate resources are available to
Senior Management.
Day to day management of the Group’s affairs and the
implementation of the corporate strategy and policy
initiatives are formally delegated by the Board to the
Managing Director. This delegation is reviewed on an
annual basis.
Management is critical to the Group’s long-term
A copy of the Board Charter outlining the respective
success. The Directors are responsible to Shareholders
roles and responsibilities of the Board and management
for the performance of the Group in both the short
is available from the Company’s website.
and the longer term and seek to balance objectives in
the best interests of the Group as a whole. Their focus
is to enhance the interests of Shareholders and other
key stakeholders and to ensure the Group is properly
managed.
Roles and Responsibilities of the Board and
Management
The responsibilities of the Board include:
• providing strategic guidance to the Group including
contributing to the development of and approving
the corporate strategy;
20
Corporate Governance Statement
Director Checks
The Company performs checks on all potential
Directors which include checks on a person’s character,
experience, education, criminal record and bankruptcy
history. Potential Directors are required to provide their
consent for the Company to conduct any background or
other such checks and also acknowledge they will have
sufficient time available to fulfill their responsibilities as
Director of the Company.
Newly appointed Directors must stand for
number of employees, the Board does not consider
reappointment at the next Annual General Meeting
it appropriate at this time to formally set measurable
(“AGM”) of the Company. The Notice of Meeting
objectives for gender diversity. The total proportion of
for the AGM provides shareholders with information
men and women on the Board, in senior positions and
about each Director standing for election or re-election
across the whole organisation is listed below:
including details regarding the length of their tenure,
relevant skills and experience.
Written Agreements with Directors
The Company has entered into a Service Agreement
with its Managing Director Mr Robert Waugh and all
other senior executives are subject to employment
agreements with standard commercial terms which are
summarised in the Directors’ Report.
Category
Board
Senior Management
(excluding the
managing director
captured above)
Whole Organisation
Men
Women
3
2
6
1
1
3
Non-Executive Directors have entered into a service
agreement with the Company in the form of a letter of
appointment. The letter summarises the Board’s policies
and terms of appointment, including compensation
relevant to the office of Director.
Company Secretary
The Company Secretary is accountable directly to the
Assessment of Board Performance
The Group has a policy of reviewing the performance
of its Board, its Committees and individual Directors
on an annual basis. The process is managed by an
independent Non-Executive Director and feedback is
received from the Chairman. This review involves the
performance of the Board against agreed strategic
goals. A review was underway but incomplete during
Board, through the Chair, on all matters to do with the
the reporting period due to a Company-wide review of
proper functioning of the Board. All Directors have
the Company’s policies and procedures. However the
access to the Company Secretary.
assessment was finalised in the subsequent reporting
period with the results tabled and discussed at a
Details of the qualifications and experience of the
meeting of Directors.
Company Secretary are provided in the Directors’ Report
contained within the Annual Report.
The decision to appoint or remove the Company
Secretary is made and approved by the Board.
Diversity
The Company has a Diversity Policy, which documents
the principles and commitment in relation to
maintaining a diverse Group of employees within the
Company. This policy is disclosed on the Company’s
website. The Company however has not fully complied
with recommendation 1.5 in that it has not set
measureable objectives for achieving gender diversity.
The Board continues to monitor diversity across the
Group and is satisfied with the current level of gender
Performance evaluation of Senior
Executives
A performance assessment for senior executives took
place during the year in accordance with the Group’s
agreed policy. Briefly, this involved the review of staff
performance against agreed KPI’s and feedback was
received from the Board where appropriate.
Principle 2: Structure the Board
to add value
Nomination Committee
The Board has not established a Nomination Committee
diversity within the Company as disclosed below. Due
in accordance with Recommendation 2.1. The Board
to the size of the Company, its activity level and small
takes ultimate responsibility for these matters and
Corporate Governance Statement
21
continues to monitor its composition and the roles and
resignation on 24 December 2014 of Mrs Kelly Ross
responsibilities of its members. The Group however is
as a Director of Independence Group NL who are a
conscious of ensuring Board renewal and succession
substantial shareholder of the Company, Mrs Ross is
planning for the Group is dealt with at a Board level.
also considered to be an Independent Director. Details
The Board (in conjunction with its annual review of
of the Directors’ qualifications and experience are set
performance) reviews the size, composition and diversity
out in the Directors’ Report of the Annual Report and
of the Board and the mix of existing and desired
also available on the Company’s website.
competencies across its membership.
Skills Matrix
The Board aims in its membership to maintain a diverse
mix of skills and experience that ensure the Board
has the expertise to meet both its responsibilities to
stakeholders and its strategic objectives. A Board
Skills Matrix has been prepared and was reviewed by
the Board in conjunction with the review of Board
performance.
The Board Skills Matrix sets out the mix of skills,
experience and expertise the Board currently has across
its membership. As well as general skills expected
for Board membership, the matrix includes skills or
professional qualifications in areas such as: geology,
mining, commerce, risk & compliance, finance/
accounting, capital markets, leadership and strategy.
Each of these areas is currently well represented on the
Board.
Independence
The Board consists of the following Directors:
• Mr Graham Ascough, Chairman
(Appointed 26 May 2010)
• Mr Robert Waugh, Managing Director
(Appointed 6 March 2011)
• Mr John Percival, Non-Executive Director
(Appointed 26 May 2010)
• Mrs Kelly Ross, Non-Executive Director
(Appointed 26 May 2010)
The Board has determined that subsequent to
Goldsearch Limited ceasing to be a Shareholder of the
Company on 4 July 2014, Mr John Percival who was a
director of Goldsearch Limited, to be an independent
Director of the Company. Furthermore, following the
The Company has not complied with Recommendation
2.4 in that a majority of the Board are not
independent Directors. In considering the Corporate
Governance Council’s definition of independence
and recommendation that a majority of Directors and
the Chair be independent (bearing in mind that in
determining independence the Company is required
to take into account reasonable perceptions as well as
actual facts and circumstances) each individual member
of the Board is satisfied that whilst the Company may
not comply with Recommendation 2.4, all Directors
bring an independent judgment to bear on Board
decisions.
It is considered that in the present circumstances of the
Company and its current size and stage of development,
that the Board is of a sufficient size and comprises a
diverse mix of persons with appropriate qualifications,
commitment, skills and experience to govern the
Company and that the costs involved in appointing
additional Non-Executive Directors in order to comply
with the recommendation would outweigh the benefit
of making such appointment. The Board will consider
the appointment of additional Non-Executive Directors
where required by law, if an outstanding candidate is
identified or if it is considered that additional expertise is
required in specific areas as the Company develops.
The Board is conscious of the need for independence
and ensures that where a conflict of interest may arise,
the relevant Director(s) leave the meeting to ensure
a full and frank discussion of the matter(s) under
consideration. Those Directors who have interests in
specific transactions or potential transactions do not
receive Board papers related to those transactions or
potential transactions, do not participate in any part of
a Directors’ meeting which considers those transactions
22
Corporate Governance Statement
or potential transactions, are not involved in the
the highest standards of behaviour and professionalism
decision making process in respect of those transactions
and the practices necessary to maintain confidence
or potential transactions, and are asked not to discuss
in the Group’s integrity and to take into account
those transactions or potential transactions with other
legal obligations and reasonable expectations of the
Directors.
Company’s stakeholders.
Chairman should be an Independent
Director
The Company’s Chairman, Mr Graham Ascough is not
an independent Director, however Mr Ascough does
not fulfil the role of CEO. Although the Company has
not complied fully with Recommendation 2.5, the Board
believes its structure to be appropriate at this time
given the size and nature of the Company’s operations.
The Board will continue to review its leadership
and governance structures in line with its policy on
succession planning.
Director Induction
The Company has established a program for the
induction of new Directors. The induction program
covers all aspects of the Company’s activities,
operations, policies and procedures.
In order to develop and maintain the skills and
In summary, the Code requires that all Company
personnel act with the utmost integrity, objectivity and
in compliance with the letter and the spirit of the law
and Company policies.
The Company has a Securities Trading Policy which
outlines the restrictions, closed periods and processes
required when Directors, Managing Director and Key
Management Personnel trade Company securities.
Broadly, it restricts the purchase and sale of Company
securities by Directors and employees during the
following time periods:
I. the period between the end of the March, June,
September and December quarters and the release
of the Company’s quarterly report to ASX for so long
as the Company is required by the Listing Rules to
lodge quarterly reports; and
II. 24 hours after the following events:
a. Any major announcements;
knowledge required to perform their role, all Directors
b. The release of the Company’s quarterly, half
are encouraged to undergo continual professional
yearly and annual financial results to the ASX;
development. Subject to approval, Directors are to
and
be provided with reasonable access to resources and
training to address skill gaps where they are identified
and to receive continuing education concerning key
developments in the Company and the industry and
environment within which the Company operates.
Principle 3: Act ethically and
responsibly
Code of Conduct
The Company has developed a Code of Conduct and
Ethics (“the Code”) endorsed by the Board and applies
to all Directors and Employees. The Code is regularly
reviewed and updated as necessary to ensure it reflects
c. The Annual General Meeting and all other
General Meetings.
Any transactions undertaken in the above mentioned
periods must be notified to the Board in advance and
include a statement the proposed dealing is not as a
result of access to, nor the receipt of inside information.
The Directors are satisfied that the Group has complied
with its policies on ethical standards, including trading
in securities.
A copy of the Code and the Securities Trading Policy are
available on the Company’s website.
Corporate Governance Statement
23
Principle 4: Safeguard integrity in
financial reporting
Audit Committee
The Audit Committee consists of the following
Directors:
• Mrs Kelly Ross (Chair)
• Mr Graham Ascough
• Mr John Percival
The Company’s Audit Committee does not comply with
all of the requirements of Recommendation 4.1 given it
does not consist of a majority of independent Directors.
Nevertheless the Board has determined the composition
of the Audit Committee represents a mix of Directors
who are financially literate and have an appropriate
understanding of the business in which the Group
operates.
Details of the Directors’ qualifications and attendance at
Audit Committee meetings are set out in the Directors’
Report included in the Annual Report.
• consider the independence and competence of the
external auditor on an ongoing basis;
• review and approve the level of non-audit services
provided by the external auditors and ensure it does
not adversely impact on auditor independence;
• review and monitor related party transactions and
assess their propriety; and
• report to the Board on matters relevant to the
Committee’s role and responsibilities.
In fulfilling its responsibilities, the Audit Committee:
• receives regular reports from management and the
external auditors;
• meets with the external auditors at least twice a
year, or more frequently if necessary;
• reviews the processes the Managing Director and
Company Secretary (acting as CFO) have in place to
support their certifications to the Board;
• reviews any significant disagreements between the
auditors and management, irrespective of whether
they have been resolved;
• meets separately with the external auditors at least
twice a year without the presence of management;
The Audit Committee operates in accordance with a
and
Charter which is available on the Company’s website.
The main responsibilities of the Committee are to:
• review, assess and approve the annual reports, the
• provides the external auditors with a clear line of
direct communication at any time to either the Chair
of the Audit Committee or the Chair of the Board.
half-year financial report and all other financial
The Audit Committee has authority, within the scope
information published by the Company or released
of its responsibilities, to seek any information it requires
to the market;
from any employee or external party.
• assist the Board in reviewing the effectiveness of the
organisation’s internal control environment covering:
- effectiveness and efficiency of operations;
- reliability of financial reporting; and
- compliance with applicable laws and
regulations.
• oversee the effective operation of the risk
management framework;
• recommend to the Board the appointment, removal
and remuneration of the external auditors, and
review the terms of their engagement, the scope
and quality of the audit and assess performance;
CEO and CFO assurance
The Board receives regular reports on the Group’s
financial and operational results in conjunction with its
Board meetings.
Prior to approving the financial statements for the full
year and half year the Company’s Managing Director
and Chief Financial Officer have provided the Board
with appropriate declarations including a section 295A
24
Corporate Governance Statement
declaration. The Company however has not complied
for communications with the Australian Securities
fully with recommendation 4.2 as formal certification of
Exchange (“ASX”). This role includes responsibility for
the quarterly cashflow reports was implemented for the
ensuring compliance with the continuous disclosure
quarter ended 30 June 2015 and will be provided for
requirements in the ASX Listing Rules and overseeing
subsequent periods.
External Auditors
The Company’s policy is to appoint external auditors
who clearly demonstrate quality and independence.
The performance of the external auditor is reviewed
annually and applications for tender of external audit
services are requested as deemed appropriate, taking
into consideration assessment of performance, existing
value and tender costs. Grant Thornton Audit Pty Ltd
(“Grant Thornton”) was appointed as the external
auditor in 2011. It is Grant Thornton’s policy to rotate
audit engagement partners on listed companies in
accordance with the requirements of the Corporations
Act 2001, which is generally after five years, subject to
certain exceptions.
The amount of fees paid to the external auditors
is provided in a note to the financial statements. It
is the policy of the external auditors to provide an
annual declaration of their independence to the Audit
Committee.
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.
Principles 5: Make timely and
balanced disclosure
Continuous Disclosure
The Company has written policies and procedures
on information disclosure that focus on continuous
disclosure of any information concerning the Group that
a reasonable person would expect to have a material
effect on the price of the Company’s securities.
The Managing Director and Company Secretary
have been nominated as the persons responsible
and co-ordinating information disclosure to the ASX,
Shareholders, the media and the public.
All information released to the ASX is available on
the Company’s website. The Company’s website also
enables users to provide feedback on Company matters
and includes a “Corporate Governance” section that
discloses all relevant corporate governance information,
including policies and procedures.
A copy of the Continuous Disclosure Policy is available
on the Company’s website.
Principle 6: Respect the rights of
Security holders
Information about the Company and its
governance
The Company has a website (www.musgraveminerals.
com.au) where investors can locate information about
the Company, Directors, senior executives and the
Company’s governance.
Information is conveyed to Shareholders via the annual
report, quarterly reports and other announcements
which are delivered to the Australian Securities
Exchange and posted under the Investor Centre section
of the Company’s website.
Investor relations
Due to the size of the Company and its current stage
of development the Company does not have a formally
appointed investor relations manager.
The Company instead provides the opportunity for
investors to engage with the Board and management
at the Company’s AGM. Security holders and other
financial market participants are also able to contact the
Company directly to discuss any matters of concern or
interest they may have from time to time.
Corporate Governance Statement
25
The Board has adopted a policy to promote effective
management’s actions in the evaluation, management,
communication with Shareholders. A copy of the policy
monitoring and reporting of material operational,
is available from the Company’s website.
financial, compliance and strategic risks. In providing
this oversight, the Committee:
Participation at meetings of Security
holders
Shareholders are encouraged to participate and
engage with the Board and Management at Annual
General Meetings and other specially convened General
Meetings of the Company. The Board encourages the
attendance and participation of Shareholders at these
meetings by holding meetings in a location accessible to
a large number of Shareholders.
• reviews the framework and methodology for risk
identification, the degree of risk the Company is
willing to accept, the management of risk and the
processes for auditing and evaluating the Company’s
risk management system;
• reviews Group-wide objectives in the context of the
abovementioned categories of corporate risk;
• reviews and, where necessary, approves guidelines
and policies governing the identification, assessment
The Company has policies and procedures that enable
and management of the Company’s exposure to risk;
Shareholders to receive reports and participate in
meetings via attendance or by written communication.
• reviews and approves the delegations of financial
authorities and addresses any need to update these
Electronic Communications
The Company aims to promote effective communication
with investors. Shareholders with access to the
internet are encouraged to register on the Company’s
website (www.musgraveminerals.com.au) to receive
email notifications when an announcement is made
by the Company to the ASX. Shareholders are also
encouraged to register with the Company’s share
authorities on an annual basis, and
• reviews compliance with agreed policies.
The Committee recommends any actions it deems
appropriate to the Board for its consideration. Details
pertaining to the Committee’s membership and
attendance at meetings is disclosed in the Directors’
Report contained within the annual report.
registry (Computershare) to communicate electronically.
Management is responsible for designing, implementing
Principle 7: Recognise and
manage risk
and reporting on the adequacy of the Company’s risk
management and internal control system and has to
report to the Audit Committee on the effectiveness of:
The Board acknowledges recognising and managing
during the year, and
risk is a crucial part of the role of the Board and
• the Group’s management of its material business
• the risk management and internal control system
Management. The Board is responsible for satisfying
itself annually, or more frequently as required, that
risks.
Management has developed and implemented a
The Group does not have a separate internal audit
sound system of risk management and internal control.
function.
Detailed work on this task is delegated to the Audit
Committee and is reviewed by the full Board.
A review of the risk management framework
commenced during the year in accordance with the
The Audit Committee is responsible for ensuring there
agreed process mentioned above and was completed
are adequate policies in relation to risk management,
subsequent to the end of the reporting period with
compliance and internal control systems. They monitor
results and recommendations of the review evaluated at
the Company’s risk management by overseeing
a subsequent Board meeting. A copy of the Company’s
Risk Management Policy is available on the website.
26
Corporate Governance Statement
Exposure to material economic,
environmental and social sustainability risk
The Group’s policy it to identify and manage potential or
apparent business, economic, environmental and social
sustainability risks (if appropriate). The Group at present
has not identified specific material risk exposure in these
categories.
Principle 8: Remunerate fairly
and responsibly
Remuneration Committee
The Board has not established a Remuneration
Committee and therefore has not complied with
recommendation 8.1.
Due to the early stage and small size of the Company a
separate Remuneration Committee was not considered
to add any efficiency to the process of determining the
levels of remuneration for Directors and key executives.
The Board considers it is more appropriate to set aside
time at a Board meeting each year to specifically address
matters that would ordinarily fall to a remuneration
committee such as reviewing remuneration,
recruitment, retention and termination procedures to
structure is reviewed by the Board on an on-going
basis and, where necessary, is revised to accommodate
changes in the Group’s needs and requirements.
Further information on Directors’ and Executives’
remuneration, including principles used to determine
remuneration, is set out in the Directors’ Report under
the heading ‘Remuneration Report’. The Group has a
policy to distinguish the remuneration of Executives and
senior staff from that of the Non-Executive Directors.
All Executives and senior staff are subject to annual
reviews, where the remuneration arrangements are
reviewed and benchmarked against industry averages.
The Group additionally uses the Employee Share Option
Plan to provide incentives to employees, which are
reviewed annually in conjunction with the available
option pool. The Non-Executive Directors’ remuneration
is set from a pool that is approved by Shareholders,
which presently is set at $250,000 per annum. The
Group has a policy of obtaining Shareholder approval
for any share based remuneration (such as options) to
be granted to Directors in accordance with the ASX
Listing Rules.
Equity based remuneration scheme policy
The Company has an Employee Share Option Plan
ensure remuneration packages and incentives remain
(“ESOP”) which was approved by Shareholders at the
appropriate and in accordance with the Company’s
2013 AGM. A summary of the ESOP was included in
commercial interests.
Disclosure of remuneration policies and
practices
Every employee of the Group signs a formal
employment contract at the time of their appointment
covering a range of matters including their duties,
rights, responsibilities and any entitlements on
termination. The standard contract refers to a specific
formal job description. The Group’s human resources
the Company’s 2013 Notice of General Meeting, a copy
of which is available on the Company’s website.
In accordance with the Plan and the Company’s Share
Trading Policy, Directors, Officers and Employees are
not permitted to enter into any transactions or financial
arrangements that would limit the economic risk of
options or other securities.
Non-Executive Directors are excluded from the ESOP.
Corporate Governance Statement
27
Auditor’s Independence Declaration
28
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
For the year ended 30 June 2015
Revenue from operating activities
Impairment of exploration and evaluation assets
Employee benefits expense
Depreciation expense
Finance expenses
Funds misappropriated
Other expenses
Loss before income tax expense
Income tax benefit/(expense)
4(a)
11
4(d)
4(b)
4(c)
4(f)
4(e)
5
30 June 2015
$
30 June 2014
$
177,436
(7,649,239)
(360,119)
(34,036)
(96)
(337,282)
(521,913)
308,551
(4,373,984)
(561,869)
(66,923)
(1,727)
(95,447)
(557,070)
(8,725,249)
(5,348,469)
895,575
488,608
Loss from continuing operations
(7,829,674)
(4,859,861)
Loss attributable to members of the parent entity
(7,829,674)
(4,859,861)
Other comprehensive income
-
-
Total comprehensive loss for the year
(7,829,674)
(4,859,861)
Loss per share:
Basic earnings per share
Diluted earnings per share
6
6
Cents
(6.47)
(6.47)
Cents
(4.02)
(4.02)
The accompanying notes form part of these financial statements.
Statement of Comprehensive Income
29
Consolidated Statement of Financial Position
As at 30 June 2015
Note
30 June 2015
$
30 June 2014
$
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 provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Long-term provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Retained losses
TOTAL EQUITY
7
8
9
10
11
12
13
13
14
15
16
3,737,403
47,158
29,520
3,814,081
96,188
10,391,152
10,487,340
6,139,459
89,786
25,498
6,254,743
135,723
15,748,622
15,884,345
14,301,421
22,139,088
297,064
77,237
374,301
19,385
19,385
219,690
151,076
370,766
30,913
30,913
393,686
401,679
13,907,735
21,737,409
26,718,899
2,858,705
(15,669,869)
13,907,735
26,718,899
2,973,818
(7,955,308)
21,737,409
The accompanying notes form part of these financial statements.
30
Statement of Financial Position
Consolidated Statement of Changes in Equity
For the year ended 30 June 2015
Note
Issued capital
ordinary
Share Option
Reserve
Accumulated
losses
Total equity
Balance at 1 July 2013
26,718,899
2,958,083
(3,109,727)
26,567,255
Total comprehensive loss for the year
Share based payments
17
Transfer from share option reserve due to lapse of
options under employee share option plan
-
-
-
-
(4,859,861)
(4,859,861)
30,015
-
30,015
(14,280)
14,280
-
Balance at 30 June 2014
26,718,899
2,973,818
(7,955,308)
21,737,409
Balance at 1 July 2014
26,718,899
2,973,818
(7,955,308)
21,737,409
Total comprehensive loss for the year
Transfer from share option reserve due to lapse of
options under employee share option plan
-
-
-
(7,829,674)
(7,829,674)
(115,113)
115,113
-
Balance at 30 June 2015
26,718,899
2,858,705
(15,669,869)
13,907,735
The accompanying notes form part of these financial statements.
Statement of Changes in Equity
31
Consolidated Statement of Cash Flows
For the year ended 30 June 2015
Note
30 June 2015
$
30 June 2014
$
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Misappropriated funds
Interest received
Finance costs
Receipt of Research and Development Tax Concession
NET CASH USED IN OPERATING ACTIVITIES
7
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
Repayment of borrowings
NET CASH USED IN FINANCING ACTIVITIES
Net decrease in cash and cash equivalents
Cash at the beginning of the year
(926,233)
(337,282)
153,920
(96)
895,575
(214,116)
-
(2,187,940)
(2,187,940)
-
-
(2,402,056)
6,139,459
(1,011,639)
(95,447)
306,105
(1,274)
488,608
(313,647)
(33,318)
(3,032,829)
(3,066,147)
(46,453)
(46,453)
(3,426,247)
9,565,706
CASH AT THE END OF THE YEAR
7
3,737,403
6,139,459
The accompanying notes form part of these financial statements.
32
Statement of Cash Flows
Notes to the
Consolidated Financial
Statements
For the year ended 30 June 2015
2.2. Compliance with International
Financial Reporting Standards
The financial report also complies with International
Financial Reporting Standards (“IFRS”) as issued by the
International Accounting Standards Board.
1. Corporate information
The consolidated financial statements of Musgrave
Minerals Limited (the “Company” or the “Parent”)
and its subsidiaries (collectively, “the Group”) for the
year ended 30 June 2015 were authorised for issue in
accordance with a resolution of the Directors on 25
September 2015.
The Company is a for profit company limited by shares
incorporated in Australia whose shares are publicly
traded on the Australian Securities Exchange.
The Company’s principal activities are to carry out
exploration of mineral tenements, to continue to seek
extensions of areas held and to seek out new areas
with mineral potential and to evaluate results achieved
through surface sampling, geophysical surveys and
2.3. Changes in accounting policy,
disclosures, standards and
interpretations
Changes in accounting policies
(i)
The accounting policies adopted in the preparation of
this Annual Report are consistent with those followed
in the preparation of the Group’s annual consolidated
financial statements for the year ended 30 June 2014.
(ii) New and amended Standards and
Interpretations
The Group applied, for the first time, certain standards
and amendments which are effective for annual periods
beginning on or after 1 July 2014. The nature and the
impact of each new standard and/or amendment is
drilling activities.
described below:
2. Summary of significant
accounting policies
2.1. Basis of preparation
The financial report is a general purpose financial
report, which has 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. The financial report has also been
prepared on a historical cost basis.
The consolidated financial statements provide
comparative information in respect of the previous
period. The financial report is presented in Australian
dollars, being the functional and presentational currency
for the Group.
Remove Individual Key Management Personnel
Disclosure Requirements – Amendments to AASB 124
This amendment deletes from AASB 124 individual key
management personnel disclosure requirements for
disclosing entities that are not companies. It has resulted
in individual KMP disclosures being removed from the
notes and have been relocated to the remuneration
report. It also removes the individual KMP disclosure
requirements for all disclosing entities in relation
to equity holdings, loans and other related party
transactions. This amendment has resulted in reduced
disclosures in the Group’s financial statements.
Recoverable Amount Disclosures for Non-Financial
Assets – Amendments to AASB 136
The amendments include the requirement to
disclose additional information about the fair value
measurement when the recoverable amount of impaired
assets is based on fair value less costs of disposal. This
amendment has resulted in increased disclosures in the
Group’s financial statements.
Notes to the Financial Statements
33
Offsetting Financial Assets and Financial Liabilities -
a management entity. Payments made to a
Amendments to AASB 132
management entity in respect of KMP services
These amendments clarify the meaning of ’currently
should be separately disclosed.
has a legally enforceable right to set-off’ and the
criteria for non-simultaneous settlement mechanisms of
clearing houses to qualify for offsetting and is applied
retrospectively. These amendments have no impact on
the Group, since none of the entities in the Group has
any offsetting arrangements.
AASB 2014-1 Amendments to Australian Accounting
Standards - Part A Annual Improvements to IFRSs
This standard sets out amendments to Australian
Accounting Standards arising from the issuance by the
International Accounting Standards Board (“IASB”) of
International Financial Reporting Standards (“IFRSs”)
Annual Improvements to IFRSs 2010–2012 Cycle and
Annual Improvements to IFRSs 2011–2013 Cycle.
Annual Improvements to IFRSs Cycle addresses the
following items:
• AASB 2 - Clarifies the definition of ‘vesting
• AASB 13 - Clarifies that the portfolio exception in
paragraph 52 of AASB 13 applies to all contracts
within the scope of AASB 139 or AASB 9, regardless
of whether they meet the definitions of financial
assets or financial liabilities as defined in AASB 132.
• AASB 140 - Clarifies that judgment is needed to
determine whether an acquisition of investment
property is solely the acquisition of an investment
property or whether it is the acquisition of a group
of assets or a business combination in the scope of
AASB 3 that includes an investment property. That
judgment is based on guidance in AASB 3.
AASB 2014-2 Amendments to AASB 1053 – Transition
To and Between Tiers, and Related Tier 2 Disclosure
Requirements (applicable to the Group from 1 January
2015)
This Standard makes amendments to AASB 1053
Application of Tiers of Australian Accounting Standards
conditions’ and ‘market condition’ and introduces
to:
the definition of ‘performance condition’ and
‘service condition’.
• AASB 3 - Clarifies the classification requirements for
contingent consideration in a business combination
by removing all references to AASB 137.
• AASB 8 - Requires entities to disclose factors used
to identify the entity’s reportable segments when
operating segments have been aggregated. An
entity is also required to provide a reconciliation of
total reportable segments’ assets to the entity’s total
assets.
• AASB 116 & AASB 138 - Clarifies that the
determination of accumulated depreciation does not
depend on the selection of the valuation technique
and that it is calculated as the difference between
the gross and net carrying amounts.
• clarify that AASB 1053 relates only to general
purpose financial statements;
• make AASB 1053 consistent with the availability
of the AASB 108 Accounting Policies, Changes in
Accounting Estimates and Errors option in AASB
1 First-time Adoption of Australian Accounting
Standards;
• clarify certain circumstances in which an entity
applying Tier 2 reporting requirements can apply
the AASB 108 option in AASB 1; permit an entity
applying Tier 2 reporting requirements for the first
time to do so directly using the requirements in
AASB 108 (rather that applying AASB 1) when,
and only when, the entity had not applied, or
only selectively applied, applicable recognition
and measurement requirements in its most recent
• AASB 124 - Defines a management entity providing
previous annual special purpose financial statements;
KMP services as a related party of the reporting
and
entity. The amendments added an exemption from
the detailed disclosure requirements in paragraph
17 of AASB 124 for KMP services provided by
• specify certain disclosure requirements when an
entity resumes the application of Tier 2 reporting
requirements.
34
Notes to the Financial Statements
(iii) Accounting Standards and Interpretations
that companies should use professional judgment in
issued but not yet effective
determining where and in what order information is
Australian Accounting Standards and Interpretations
presented in the financial disclosures.
that have recently been issued or amended that
potentially impact the Group but are not yet effective
The Group has assessed that this Standard is unlikely to
and have not been adopted by the Group for the annual
have any material effect for the Group at this point in
reporting period ended 30 June 2015 are outlined
time.
below. The Group has assessed that these amendments
are unlikely to have any material effect for the Group.
AASB 2014-4 Clarification of Acceptable Methods of
Depreciation and Amortisation (Amendments to AASB
116 and AASB 138) (applicable to the Group from 1
July 2015)
AASB 116 and AASB 138 both establish the principle
for the basis of depreciation and amortisation as being
the expected pattern of consumption of the future
economic benefits of an asset.
The IASB has clarified that the use of revenue-based
methods to calculate the depreciation of an asset is not
appropriate because revenue generated by an activity
that includes the use of an asset generally reflects
factors other than the consumption of the economic
benefits embodied in the asset.
The amendment also clarified that revenue is generally
presumed to be an inappropriate basis for measuring
the consumption of the economic benefits embodied in
an intangible asset. This presumption, however, can be
rebutted in certain limited circumstances.
2.4. Significant accounting policies
(a) Basis of consolidation
The consolidated financial statements comprise the
financial statements of the Group and its subsidiaries as
at 30 June 2015. Control is achieved when the Group
is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to
affect those returns through its power over the investee.
Specifically, the Group controls an investee if and only if
the Group has:
• Power over the investee (i.e. existing rights that give
it the current ability to direct the relevant activities of
the investee);
• Exposure, or rights, to variable returns from its
involvement with the investee; and
• The ability to use its power over the investee to
affect its returns.
When the Group has less than a majority of the voting
or similar rights of an investee, the Group considers all
relevant facts and circumstances in assessing whether it
The Group has assessed that these amendments are
has power over an investee, including:
unlikely to have any material effect for the Group.
• The contractual arrangement with the other vote
Amendments to IAS 1 (applicable to the Group from 1
• Rights arising from other contractual arrangements;
holders of the investee;
January 2016)
As part of the IASB’s Disclosure Initiative projects,
the IASB issued Amendments to IAS 1 in December
2014. The amendments are designed to further
encourage companies to apply professional judgment
in determining what information to disclose in the
financial statements. For example, the amendments
make clear that materiality applies to the whole
of financial statements and that the inclusion of
immaterial information can inhibit the usefulness of
financial disclosures. The amendments also clarify
and
• The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an
investee if facts and circumstances indicate that there
are changes to one or more of the three elements of
control. Consolidation of a subsidiary begins when the
Group obtains control over the subsidiary and ceases
when the Group loses control of the subsidiary. Assets,
liabilities, income and expenses of a subsidiary acquired
Notes to the Financial Statements
35
or disposed of during the year are included in the
All other assets are classified as non-current. A liability is
statement of comprehensive income from the date the
current when:
Group gains control until the date the Group ceases to
•
It is expected to be settled in the normal operating
control the subsidiary.
cycle;
When necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting
policies into line with the Group’s accounting policies.
All intra-group assets and liabilities, equity, income,
expenses and cash flows relating to transactions
between members of the Group are eliminated in full
on consolidation.
A change in the ownership interest of a subsidiary,
without a loss of control, is accounted for as an equity
transaction. If the Group loses control over a subsidiary,
it:
• De-recognises the assets (including goodwill) and
liabilities of the subsidiary;
• De-recognises the carrying amount of any non-
controlling interests;
• De-recognises the cumulative translation differences
recorded in equity;
• Recognises the fair value of the consideration
received;
•
•
It is held primarily for the purpose of trading;
It is due to be settled within twelve months after the
reporting period; or
• There is no unconditional right to defer the
settlement of the liability for at least twelve months
after the reporting period.
The Group classifies all other liabilities as non-current.
(c) Revenue recognition
Revenue is recognised to the extent that it is probable
that the economic benefits will flow to the Group and
the revenue can be reliably measured, regardless of
when the payment is being made. Revenue is measured
at the fair value of the consideration received or
receivable, taking into account contractually defined
terms of payment and excluding taxes or duty. The
Group has concluded that it is acting as a principal in
all of its revenue arrangements since it is the primary
obligor in all the revenue arrangements, has pricing
latitude and is also exposed to inventory and credit risks.
• Recognises the fair value of any investment retained;
The specific recognition criteria described below must
• Recognises any surplus or deficit in profit or loss; and
also be met before revenue is recognised.
• Reclassifies the parent’s share of components
previously recognised in other comprehensive
income to profit or loss or retained earnings, as
appropriate, as would be required if the Group had
directly disposed of the related assets or liabilities.
(b) Current versus non-current classification
The Group presents assets and liabilities in the
Statement of Financial Position based on current/non-
current classification. An asset is current when it is:
• Expected to be realised or intended to be sold or
consumed in the normal operating cycle;
• Held primarily for the purpose of trading;
• Expected to be realised within twelve months after
the reporting period; or
• Cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least
twelve months after the reporting period.
Interest income
For all financial instruments measured at amortised
cost and interest-bearing financial assets classified as
available-for-sale, interest income is recorded using
the effective interest rate (“EIR”). EIR is the rate that
exactly discounts the estimated future cash payments
or receipts over the expected life of the financial
instrument or a shorter period, where appropriate, to
the net carrying amount of the financial asset or liability.
Interest income is included in interest revenue in the
statement of comprehensive income.
(d) Taxes
Current income tax
Current income tax assets and liabilities are measured
at the amount expected to be recovered from or paid
to the taxation authorities. The tax rates and tax laws
used to compute the amount are those that are enacted
36
Notes to the Financial Statements
or substantively enacted at the reporting date in the
at the time of the transaction, affects neither the
countries where the Group operates and generates
accounting profit nor taxable profit or loss; or
taxable income. Included in the income tax benefits are
research and development claims.
• when the deductible temporary difference is
associated with investments in subsidiaries,
Current income tax relating to items recognised
directly in equity is recognised in equity and not in the
statement of profit or loss. Management periodically
evaluates positions taken in the tax returns with respect
to situations in which applicable tax regulations are
subject to interpretation and establishes provisions
where appropriate.
Deferred tax
Deferred tax is provided using the liability method on
temporary differences between the tax bases of assets
and liabilities and their carrying amounts for financial
reporting purposes at the reporting date.
Deferred income tax liabilities are recognised for all
taxable temporary differences except:
• when the deferred income tax liability arises from
associates or interests in joint ventures, in which case
a deferred tax asset is only recognised to the extent
that it is probable that the temporary difference
will reverse in the foreseeable future and taxable
profit will be available against which the temporary
difference can be utilised.
The carrying amount of deferred income tax assets
is reviewed at each balance date and reduced to the
extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the
deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed
at each balance date and are recognised to the extent
that it has become probable that future taxable profit
will allow the deferred tax asset to be recovered.
the initial recognition of goodwill or of an asset
Deferred income tax assets and liabilities are measured
or liability in a transaction that is not a business
at the tax rates that are expected to apply to the year
combination and that, at the time of the transaction,
when the asset is realised or the liability is settled, based
affects neither the accounting profit nor taxable
on tax rates (and tax laws) that have been enacted or
profit or loss; or
substantively enacted at the reporting date.
• when the taxable temporary difference is associated
with investments in subsidiaries, associates or
interests in joint ventures, and the timing of
the reversal of the temporary difference can be
controlled and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all
deductible temporary differences, carry-forward of
unused tax assets and unused tax losses, to the extent
that it is probable that taxable profit will be available
against which the deductible temporary differences and
the carry-forward of unused tax credits and unused tax
losses can be utilised, except:
• when the deferred income tax asset relating to
the deductible temporary difference arises from
the initial recognition of an asset or liability in a
transaction that is not a business combination and,
Income taxes relating to items recognised directly in
equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset
only if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred
tax assets and liabilities relate to the same taxable entity
and the same taxation authority.
Leases
(e)
The determination of whether an arrangement is,
or contains, a lease is based on the substance of the
arrangement at the inception date. The arrangement
is assessed for whether fulfilment of the arrangement
is dependent on the use of a specific asset or assets
or the arrangement conveys a right to use the asset or
assets, even if that right is not explicitly specified in an
arrangement.
Notes to the Financial Statements
37
Group as a lessee
Classification and subsequent measurement
Finance leases that transfer substantially all the risks
Financial instruments are subsequently measured at
and benefits incidental to ownership of the leased item
fair value, amortised cost using the effective interest
to the Group, are capitalised at the commencement
method, or cost.
of the lease at the fair value of the leased property or,
if lower, at the present value of the minimum lease
Amortised cost is the amount at which the financial
payments. Lease payments are apportioned between
asset or financial liability is measured at initial
finance charges and reduction of the lease liability so as
recognition less principal repayments and any reduction
to achieve a constant rate of interest on the remaining
for impairment, and adjusted for any cumulative
balance of the liability. Finance charges are recognised
amortisation of the difference between that initial
in finance costs in the statement of comprehensive
amount and the maturity amount calculated using the
income.
effective interest method.
A leased asset is depreciated over the useful life of the
Fair value is determined based on current bid prices for
asset. However, if there is no reasonable certainty that
all quoted investments. Valuation techniques are applied
the Group will obtain ownership by the end of the lease
to determine the fair value for all unlisted securities,
term, the asset is depreciated over the shorter of the
including recent arm’s length transactions, reference to
estimated useful life of the asset and the lease term.
similar instruments and option pricing models.
Operating lease payments are recognised as an
operating expense in the statement of comprehensive
The effective interest method is used to allocate interest
income or interest expense over the relevant period and
income on a straight-line basis over the lease term.
is equivalent to the rate that discounts estimated future
(f) Borrowing costs
Borrowing costs directly attributable to the acquisition,
cash payments or receipts (including fees, transaction
costs and other premiums or discounts) through the
expected life (or when this cannot be reliably predicted,
construction or production of an asset that necessarily
the contractual term) of the financial instrument to the
takes a substantial period of time to get ready for its
net carrying amount of the financial asset or financial
intended use or sale are capitalised as part of the cost
liability. Revisions to expected future net cash flows will
of the asset. All other borrowing costs are expensed in
necessitate an adjustment to the carrying value with a
the period in which they occur. Borrowing costs consist
consequential recognition of an income or expense item
of interest and other costs that an entity incurs in
in profit or loss.
connection with the borrowing of funds.
(g) Financial Instruments
Recognition and initial measurement
The Group does not designate any interests in
subsidiaries, associates or joint venture entities as being
subject to the requirements of Accounting Standards
Financial assets and financial liabilities are recognised
specifically applicable to financial instruments.
when the entity becomes a party to the contractual
provisions to the instrument. For financial assets, this is
(i) Loans and receivables
equivalent to the date that the Group commits itself to
Loans and receivables are non-derivative financial
either the purchase or sale of the asset (i.e. trade date
assets with fixed or determinable payments that are
accounting is adopted).
not quoted in an active market and are subsequently
measured at amortised cost.
Financial instruments are initially measured at fair value
plus transaction costs, except where the instrument is
Loans and receivables are included in current assets,
classified “at fair value through profit or loss,” in which
where they are expected to mature within 12 months
case transaction costs are expensed to profit or loss
after the end of the reporting period.
immediately.
38
Notes to the Financial Statements
(ii) Classification and subsequent measurement of
are reported within short-term borrowings in current
financial liabilities
liabilities in the statement of financial position.
The Group’s financial liabilities consist of trade and other
payables.
(j) Goods and Services Tax (“GST”)
Revenues, expenses and assets are recognised net of
Financial liabilities are measured at amortised cost using
the amount of GST, except where the amount of GST
the effective interest method.
incurred is not recoverable from the Australian Taxation
All interest-related charges and, if applicable, changes in
an instrument’s fair value that are reported in profit or
Receivables and payables are stated exclusive of the
loss are included within finance costs or finance income.
amount of GST receivable or payable. The net amount
Office (“ATO”).
(h) Provisions
Provisions are recognised when the Group has a legal
or constructive obligation, as a result of past events,
of GST recoverable from, or payable to, the ATO is
included with other receivables or payables in the
statement of financial position.
for which it is probable that an outflow of economic
Cash flows are presented on a gross basis. The GST
benefits will result and that outflow can be reliably
components of cash flows arising from investing or
measured.
financing activities which are recoverable from, or
payable to, the ATO are presented as operating cash
Provisions are measured using the best estimate of the
amounts required to settle the obligation at the end of
flows included in receipts from customers or payments
to suppliers.
the reporting period.
Long service leave and annual leave
Impairment of assets
(k)
The Group assesses, at each reporting date, whether
The Group does not expect its long service leave to
there is an indication that an asset may be impaired.
be settled wholly within 12 months of each reporting
If any indication exists, or when annual impairment
date. The Group recognises a liability for long service
testing for an asset is required, the Group estimates
leave measured as the present value of expected future
the asset’s recoverable amount. An asset’s recoverable
payments to be made in respect of services provided by
amount is the higher of an asset’s or cash-generating
employees up to the reporting date using the projected
unit’s (“CGU’s”) fair value less costs of disposal and its
unit credit method. Consideration is given to expected
value in use. Recoverable amount is determined for an
future wage and salary levels, experience of employee
individual asset, unless the asset does not generate cash
departures, and periods of service. Expected future
inflows that are largely independent of those from other
payments are discounted using market yields at the
assets or groups of assets. When the carrying amount
reporting date on national government bonds with
of an asset or CGU exceeds its recoverable amount, the
terms to maturity and currencies that match, as closely
asset is considered impaired and is written down to its
as possible, the estimated future cash outflows. Annual
recoverable amount.
leave benefits are expected to be wholly settled within
12 months and are recorded at the nominal amount of
In assessing value in use, the estimated future cash
leave outstanding at each reporting date.
flows are discounted to their present value using a
Cash and Cash Equivalents
(i)
Cash and cash equivalents include cash on hand,
pre-tax discount rate that reflects current market
assessments of the time value of money and the risks
specific to the asset. In determining fair value less costs
deposits available on demand with banks, other short-
of disposal, recent market transactions are taken into
term highly liquid investments with original maturities of
account. If no such transactions can be identified, an
3 months or less, and bank overdrafts. Bank overdrafts
appropriate valuation model is used. These calculations
Notes to the Financial Statements
39
are corroborated by valuation multiples, quoted share
the successful development of the area or where
prices for publicly traded companies or other available
activities in the area have not yet reached a stage that
fair value indicators.
permits reasonable assessment of the existence of
economically recoverable reserves.
The Group bases its impairment calculation on detailed
budgets and forecast calculations, which are prepared
Accumulated costs in relation to an abandoned area are
separately for each of the Group’s CGUs to which the
written off in full against profit in the year in which the
individual assets are allocated. These budgets and
decision to abandon the area is made.
forecast calculations generally cover a period of five
years. For longer periods, a long-term growth rate is
When production commences, the accumulated costs
calculated and applied to project future cash flows after
for the relevant area of interest are amortised over the
the fifth year.
life of the area according to the rate of depletion of the
economically recoverable reserves.
Impairment losses of continuing operations, including
impairment on inventories, are recognised in the
A regular review is undertaken of each area of interest
statement of profit or loss in expense categories
to determine the appropriateness of continuing to
consistent with the function of the impaired asset,
capitalise costs in relation to that area of interest.
except for properties previously revalued with the
revaluation taken to other comprehensive income.
Costs of site restoration are provided over the life of
For such properties, the impairment is recognised in
other comprehensive income up to the amount of any
the project from when exploration commences and are
included in the costs of that stage. Site restoration costs
previous revaluation.
include the dismantling and removal of mining plant,
equipment and building structures, waste removal,
For assets excluding goodwill, an assessment is made
and rehabilitation of the site in accordance with local
at each reporting date to determine whether there is
laws and regulations and clauses of the permits. Such
an indication that previously recognised impairment
costs have been determined using estimates of future
losses no longer exist or have decreased. If such
costs, current legal requirements and technology on an
indication exists, the Group estimates the asset’s or
undiscounted basis.
CGU’s recoverable amount. A previously recognised
impairment loss is reversed only if there has been a
Any changes in the estimates for the costs are
change in the assumptions used to determine the asset’s
accounted for on a prospective basis. In determining
recoverable amount since the last impairment loss was
the costs of site restoration, there is uncertainty
recognised. The reversal is limited so that the carrying
regarding the nature and extent of the restoration
amount of the asset does not exceed its recoverable
due to community expectations and future legislation.
amount, nor exceed the carrying amount that would
Accordingly the costs have been determined on the
have been determined, net of depreciation, had no
basis that the restoration will be completed within one
impairment loss been recognised for the asset in prior
year of abandoning the site.
years. Such reversal is recognised in the statement of
profit or loss unless the asset is carried at a revalued
amount, in which case, the reversal is treated as a
revaluation increase.
(m) Contributed equity
Ordinary shares are classified as equity. Incremental
costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax,
Exploration and development expenditure
(l)
Exploration, evaluation and development expenditures
from the proceeds.
incurred are capitalised in respect of each identifiable
area of interest. These costs are only capitalised to the
(n) Earnings per share
Basic earnings per share is calculated as net profit
extent that they are expected to be recovered through
attributable to members of the parent, adjusted to
40
Notes to the Financial Statements
exclude any costs of servicing equity (other than
Black-Scholes model to determine the fair value of
dividends), divided by the weighted average number of
the liability incurred. The Group initially measures the
ordinary shares, adjusted for any bonus element.
cost of equity-settled transactions with employees
or contractors by reference to the fair value of the
Diluted earnings per share adjusts the figures used in
equity instruments at the date at which they are
the determination of basic earnings per share to take
granted. Estimating fair value for share-based payment
into account the weighted average number of shares
transactions requires determination of the most
assumed to have been issued for no consideration in
appropriate valuation model, which is dependent on the
relation to dilutive potential ordinary shares.
terms and conditions of the grant. This estimate also
(o) Comparative Figures
When required by Accounting Standards, comparative
requires determination of the most appropriate inputs
to the valuation model including the expected life of the
share option, volatility and dividend yield and making
figures have been adjusted to conform to changes in
assumptions about them. The assumptions and models
presentation for the current financial year.
used for estimating fair value for share-based payment
transactions are disclosed in Note 17.
(p) 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 and within the
Group.
Key estimates
Impairment
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.
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
3. Operating Segments
The Board has considered the requirements of AASB 8
Operating Segments and the internal reports that are
reviewed by the chief operation decision maker (the
Managing Director) in allocating resources and have
concluded at this time that there are no separately
identifiable segments.
4.
Revenue and expenses
(a) Revenue from
operating activities
Interest revenue
Other revenue
(b) Depreciation of non-
current assets
Plant and equipment
Consolidated
2015
$
2014
$
149,521
295,150
27,915
13,401
177,436
308,551
17,345
16,691
34,036
44,379
22,544
66,923
reporting period at $10,391,152 (2014: $15,748,622).
Motor vehicles
Share-based payments
The Group initially measures the cost of cash-settled
transactions with employees or contractors using a
Notes to the Financial Statements
41
Consolidated
(f) Funds misappropriation
2015
$
2014
$
10
86
96
-
1,727
1,727
(c) Finance expenses
Finance costs
Interest applied to hire
purchase
(d) Employees benefits
expense
Wages, salaries, directors
fees and other remuneration
1,196,465
1,406,121
expenses
Contributions to defined
contribution superannuation
87,104
130,872
As reported in the Company’s 2014 Annual Report and disclosed in
the Company’s announcement released to the ASX on 12 February
2015, investigations into a number of irregular transactions have
been undertaken by the Company. The investigations concluded
that the amount of funds involved in the irregular transactions
is $468,772. $373,325 of these funds were misappropriated
during the current reporting period with the remaining balance
misappropriated in the comparative reporting period. The
irregularities are consistent with fraudulent misappropriation of
Company funds. An employee of the Company was suspended on
19 September 2014 pending the abovementioned investigations,
and their employment has been subsequently terminated.
To date, $36,043 has been returned to the Company. The Board is
vigorously pursuing a number of avenues for the recovery of the
remaining funds.
The expenses involved in the irregularities have been declared on
the face of the Consolidated Statement of Profit and Loss in the
financial years in which they were incurred, net of any amounts
funds
Transfer to/(from) annual
leave provision
Transfer to/(from) long service
leave provision
Share-based payments
expense
Transfer to capitalised
tenements
(90,698)
48,559
refunded.
(11,528)
17,294
-
30,015
(821,224)
(1,070,992)
360,119
561,869
5.
Income tax
Current Income Tax
Current income tax charge/
(benefit)
Research and Development
Tax offset
Income tax expense/
(benefit) reported in the
consolidated statement of
profit or loss
Consolidated
2015
$
2014
$
-
-
(895,575)
(448,608)
(895,575)
(448,608)
(e) Other expenses
Secretarial, professional and
consultancy
146,668
126,984
Forensic accounting costs
34,296
-
Occupancy costs
121,007
112,703
20,432
33,783
22,140
47,958
Share register maintenance
Insurance costs
Promotion, advertising and
sponsorship
Audit fees
Computer expense and
software licensing
Employer related on-costs
Other expenses
7,732
34,135
A reconciliation between tax expense and the product of
accounting loss before income tax multiplied by the Group’s
33,625
29,548
applicable income tax rate is as follows:
29,249
18,853
29,316
65,805
521,913
35,108
129,641
557,070
Accounting profit/(loss)
before income tax
At Australia’s statutory
(7,829,674)
(4,859,861)
income tax rate of 30%
(2,348,902)
(1,457,958)
(2014: 30%)
42
Notes to the Financial Statements
Immediate write off of capital
expenditure
Expenditures not allowable
for income tax purposes
Consolidated
2015
$
2014
$
(687,531)
(920,002)
Effect of dilution
Share options
2,294,772
1,312,195
Weighted average
number of ordinary shares
Other deductible items
(65,811)
(64,905)
adjusted for the effect of
Consolidated
2015
$
2014
$
N/A
N/A
121,000,000
121,000,000
Tax losses not recognized due
to not meeting recognition
807,472
1,130,670
criteria
dilution
7.
Cash and cash equivalents
The Company has tax losses arising in Australia of
$15,674,230 (2014: $13,781,828).
Earnings per share
6.
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 outstanding during the year.
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.
The following reflects the income and share data used in
the basic and diluted earnings per share computations:
Consolidated
2015
$
2014
$
(7,829,674)
(4,859,861)
Net profit/(loss)
attributable to ordinary
equity holders of the
parent entity
Weighted average number
of ordinary shares for basic
121,000,000
121,000,000
earnings per share
Consolidated
2015
$
2014
$
Cash at bank
1,465,403
829,459
Short-term deposits
2,272,000
5,310,000
3,737,403
6,139,459
Reconciliation of total comprehensive loss for the year
to cash flows from operating activities
Consolidated
2015
$
2014
$
Net loss
(7,829,674)
(4,859,861)
Adjustments for non-cash
items:
Depreciation
Share based payments
34,036
-
66,923
30,015
Impairment expense
7,649,239
4,373,984
Changes in assets and
liabilities:
Decrease/(Increase) in trade
and other receivables
Decrease/(Increase) in
prepayments
Decrease/(Increase) interest
receivable
Increase/(Decrease) in trade
and other payables
Increase/(Decrease) in
employee entitlements
Net Cash (used in)
operating activities
42,628
33,895
(8,420)
3,117
4,399
25,544
(20,957)
(65,117)
(85,367)
77,853
(214,116)
(313,647)
Notes to the Financial Statements
43
Consolidated
2015
$
2014
$
Disposals
(5,500)
-
Balance at 30 June
243,076
248,576
Accumulated depreciation
Balance at 1 July
196,198
151,819
Depreciation for the year
17,345
44,379
Balance at 30 June
213,543
196,198
Net book value
29,533
52,378
Total
Cost
Opening balance
415,121
388,913
Additions
Disposals
-
26,208
(5,500)
-
Balance at 30 June
409,621
415,121
Accumulated depreciation
Opening balance
279,397
212,475
Depreciation for the year
Balance at 30 June
Net book value
34,036
313,433
96,188
66,923
279,398
135,723
11.
Exploration and evaluation
Exploration and evaluation
phases
Consolidated
2015
$
2014
$
10,391,152
15,748,622
10,391,152
15,748,622
The ultimate recoupment of costs carried forward for
exploration and evaluation phases is dependent on the
successful development and commercial exploitation or
sale of the respective mining areas.
8.
Trade and other receivables
GST Receivable
Other Receivables
Consolidated
2015
$
2014
$
45,098
2,060
47,158
54,343
35,443
89,786
Other receivables are non-interest bearing and are
generally received within 30 days. There were no
amounts past due but not impaired.
9.
Other current assets
Prepayments
Accrued Income
Consolidated
2015
$
2014
$
8,420
21,100
29,520
-
25,498
25,498
10.
Plant and equipment
Consolidated
2015
$
2014
$
166,545
166,545
166,545
166,545
83,199
16,691
99,890
66,655
60,655
22,544
83,199
83,346
Motor Vehicles
Cost
Balance at 1 July
Balance at 30 June
Accumulated depreciation
Balance at 1 July
Depreciation for the year
Balance at 30 June
Net book value
Plant and equipment
Cost
Balance at 1 July
248,576
222,368
Additions
-
26,208
44
Notes to the Financial Statements
Consolidated Group
13.
Provisions
Total
$
Balance at 1 July 2014
15,748,622
Additions through expenditure capitalised
2,291,769
Impairment of tenements *
Balance at 30 June 2015
(7,649,239)
10,391,152
Short-term
Annual leave
Consolidated
2015
$
2014
$
Exploration and evaluation expenditure has been carried
Balance at 1 July
151,076
90,517
forward to the extent that it is expected to be recouped
Net increase/(decrease in
through the successful development of the area or
provision)
(73,839)
60,559
where activities in the area have not yet reached a stage
Closing balance 30 June
77,237
151,076
that permits reasonable assessment of the existence of
economically recoverable reserves.
* During the year ended 30 June 2015, a total of
$7,649,239 (2014: $4,373,984) has been taken as an
impairment of the consolidated Group’s exploration and
evaluation assets. Of this amount, $4,295,475 relates
to the impairment of Exploration Licence Applications
within the South Australian Musgrave Region and
project generation expenditures. The remaining
Long-term
Long service leave
Balance at 1 July
Net increase/(decrease in
provision)
30,913
13,619
(11,528)
17,294
Closing balance 30 June
19,385
30,913
$3,353,764 relates to the termination of the Menninnie
14.
Issued capital
Dam Joint Venture.
12.
Trade and other payables
Trade Payables
Other Payables
Consolidated
2015
$
2014
$
115,268
181,796
297,064
100,501
119,189
219,690
121,000,000 fully paid
ordinary shares (2014:
121,000,000)
Consolidated
2015
$
2014
$
26,718,899
26,718,899
26,718,899
26,718,899
There were no movements in issued capital either in the
current year or for the year ended 30 June 2014.
Fully paid ordinary shares carry one vote per share and
Trade and other payables are non-interest bearing
carry the right to dividends (in the event such a dividend
and are normally settled on 30-day terms. Information
was declared). Refer to note 17 for details of share
regarding the credit risk of current payables is set out in
options.
note 22.
Notes to the Financial Statements
45
15. Reserves
Consolidated
2015
$
2014
$
Reserves
Share option reserve (a)
2,858,705
2,973,818
2,858,705
2,973,818
months’ employment by a member of the Group,
although the Board may waive this requirement.
• Options are granted under the Plan at the discretion
of the Board and if permitted by the Board, may be
issued to an employee’s nominee.
• Each option is to subscribe for one fully paid ordinary
share in the Company and will expire 5 years from
its date of issue. An option is exercisable at any
time from its date of issue. Options will be issued
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 time the Board resolves
to offer those options. The total number of shares
2,973,818
2,958,083
-
30,015
the subject of options issued under the Plan, when
(115,113)
(14,280)
aggregated with issues during the previous 5 years
pursuant to the Plan and any other employee share
plan, must not exceed 5% of the Company’s issued
2,858,705
2,973,818
share capital.
•
If, prior to the expiry date of options, a person
ceases to be an employee of a Group company for
any reason other than retirement at age 60 or more
(or such earlier age as the Board permits), permanent
disability, redundancy or death, the options held by
that person (or that person’s nominee) automatically
lapse on the first to occur of a) the expiry of
the period of 6 months from the date of such
occurrence, and b) the expiry date. If a person dies,
Consolidated
2015
$
2014
$
(7,955,308)
(3,109,727)
the options held by that person will be exercisable by
that person’s legal personal representative. Options
(7,829,674)
(4,859,861)
cannot be transferred other than to the legal
115,113
14,280
• The Company will not apply for official quotation of
personal representative of a deceased option holder.
(15,669,869)
(7,955,308)
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.
(a) Share option reserve
Balance at beginning of
financial year
Issue of options to employees
under the Employee Share
Option Plan
Transfer to retained earnings
upon lapse of options
Balance at end of financial
year
16. Retained losses
Balance at beginning of
financial year
Net loss attributable to
members of the parent entity
Transfer from share option
reserve
Balance at end of financial
year
17.
Share based payments
Employee Share Option Plan
The Company has established the Musgrave Minerals
The Board may amend the Plan Rules subject to
Ltd Employee Share Option Plan and a summary of the
the requirements of the Listing Rules. The expense
Rules of the Plan are set out below:
• All employees (full and part time) will be eligible to
participate in the Plan after a qualifying period of 12
recognised in the Statement of Profit or Loss and Other
Comprehensive Income in relation to share-based
payments is disclosed in note 4(d). The following table
46
Notes to the Financial Statements
illustrates the number (“No.”) and weighted average
exercise prices (“WAEP”) and movements in share
options under the Company’s Employee Share Option
Plan issued during the year:
18. Related party disclosures
Remuneration of Key Management Personnel
2015
2015
2014
2014
No.
WAEP
No.
WAEP
17,025,000
0.32
16,450,000
0.32
Short-term
employee benefits
Share based
payments
Post-employment
benefits
Total
-
-
575,000
0.12
compensation
Outstanding
at the
beginning of
the year
Granted
during the
year
Expired/
2015
$
2014
$
798,755
823,307
-
15,660
61,227
60,950
859,982
899,917
lapsed during
(1,050,000)
0.27
-
-
the year
The range of exercise prices for options outstanding at
the end of the year was $0.12 – $0.50 (2014: $0.12 –
$0.50).
The fair value of the equity-settled share options
granted under the option plan is estimated as at the
date of grant using a Black-Scholes model taking into
account the terms and conditions upon which the
options were granted.
The following table lists the inputs to the model used
for the year ended 30 June 2014 (with no disclosure
listed for the current financial year due to no options
having been issued during the period):
Exercise price
Grant date
Expiry date
Share price at grant date
Historical volatility (%)
Risk-free interest rate (%)
Expected dividend yield
2014
$0.12
11 Mar 14
10 Mar 19
$0.077
96%
3.43%
0%
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 2015
totalled $96,039 excluding GST (2014: $90,351). A
total of $4,476 including GST was outstanding at 30
June 2015 (2014: $6,862).
During the year, Musgrave Minerals Ltd invoiced Mithril
in relation to expenditure incurred by Musgrave on
Mithril’s behalf. These transactions were undertaken
on an arm’s length basis and in aggregate for the year
ended 30 June 2015 totalled $11,513 excluding GST
(2014: $7,133). No amounts were outstanding at 30
June 2015 (2014: $Nil).
During the year, Musgrave Minerals Ltd invoiced
Avalon Minerals Limited (“Avalon”) in relation to work
performed for a geophysical review performed for
Avalon. This work was undertaken on an arm’s length
basis and in aggregate for the year ended 30 June
2015 totalled $12,898 excluding GST (2014: $Nil). No
amounts were outstanding at 30 June 2015 (2014:
$Nil).
HLB Mann Judd (SA) Pty Ltd has received professional
fees for accounting, taxation, secretarial and
transactional services provided during the period
amounting to $126,079 including GST (2014: $97,690).
A total of $8,250 including GST was outstanding at
Notes to the Financial Statements
47
30 June 2015 (2014: $13,489). Donald Stephens, the
21. Auditors remuneration
former Company Secretary, is a consultant with HLB
Mann Judd (SA) Pty Ltd.
19. Commitments for expenditure
An audit or review
of the financial
report
Consolidated
2015
$
2014
$
2015
$
2014
$
33,625
29,548
33,625
29,548
Operating leases
Not longer than 1 year
12,000
30,063
Longer than 1 year and not
longer than 5 years
Balance at end of financial
year
-
-
12,000
30,063
22.
Financial risk management
22.1 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 stakeholders.
Exploration Leases
In order to maintain current rights of tenure to
exploration tenements, the Company will be required
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
to spend in the year ending 30 June 2015 net amounts
and retained losses as disclosed in notes 14, 15 and 16
of approximately $461,000 (2014: $1,907,500)
in respect of tenement lease rentals and to meet
respectively.
minimum expenditure requirements. These obligations
are expected to be fulfilled in the normal course of
Proceeds from share issues are used to maintain and
expand the Group’s exploration activities and fund
operations.
operating costs.
20. Contingent liabilities and
contingent assets
At the date of this report, the Company is not aware of
any contingent asset or liability that should be disclosed
in accordance with AASB 137 Provisions, Contingent
Liabilities and Contingent Assets.
The Company has various bank guarantees totalling
$122,000 at 30 June 2015 (2014: 110,000) which act
as collateral over the lease of office at 28 Richardson
Street, West Perth and the Company’s business credit
cards.
2015
$
2014
$
3,737,403
6,139,459
FINANCIAL
ASSETS
Cash and cash
equivalents
Trade receivables
47,158
89,786
FINANCIAL
LIABILITIES
Payables
297,064
219,690
22.2 Credit risk
Credit risk refers to the risk that a counterparty will
default on its contractual obligations resulting in
financial loss to the Group. The Group has adopted a
48
Notes to the Financial Statements
policy of only dealing with creditworthy counterparties
as a means of mitigating the risk of financial loss from
activities.
22.4 Liquidity risk management
Ultimate responsibility for liquidity risk management
rests with the Board, which has built an appropriate
liquidity risk management framework for the
The Group does not have any significant credit risk
management of the Group’s short, medium and long
exposure to any single counterparty or any group of
term funding and liquidity management requirements.
counterparties having similar characteristics. The credit
The Group manages liquidity risk by maintaining
risk on liquid funds is limited because the counterparties
adequate reserves.
are banks with high credit-ratings assigned by
international credit-rating agencies.
The carrying amount of financial assets recorded in the
financial statements, net of any allowances for losses,
represents the Group’s maximum exposure to credit risk.
23.
Parent entity information
Consolidated
2015
$
2014
$
22.3 Interest rate risk
The table below details the Group’s interest bearing
Assets
assets, consisting solely of cash on hand and short
Current assets
3,814,081
6,254,743
term deposit (with all maturities less than one year in
duration)
Non-current assets
10,487,340
15,884,345
Total assets
14,301,421
22,139,088
Weighted
average
effective
interest rate
Less than one
year
%
$
3.14
3.61
0.97
1.19
2,180,000
5,310,000
1,557,403
829,459
Fixed interest rate
2015
2014
Variable interest
rate
2015
2014
Liabilities
Current liabilities
374,301
370,766
Non-current liabilities
19,385
30,913
Total liabilities
393,686
401,679
Equity
Issued capital
Reserves
26,718,899
26,718,899
2,858,705
2,973,818
Accumulated losses
(15,669,869)
(7,955,308)
Total shareholders’ equity
13,907,735
21,737,409
Financial Performance
At reporting date, if interest rates had been 50 basis
Loss for the year
(7,829,674)
(4,859,861)
points higher or lower and all other variables were held
Other comprehensive income
-
-
constant, the Group’s:
• Net loss would increase or decrease by $32,660
(2014: $38,863) which is mainly attributable to the
Groups exposure to interest rates on its variable
interest rate bank deposits.
Total comprehensive loss
(7,829,674)
(4,859,861)
Notes to the Financial Statements
49
Directors’ Declaration
The Directors of Musgrave Minerals Limited state that:
In the opinion of the Directors:
1.
The consolidated financial statements and notes, as set out on pages 29 to 49, are in accordance with the
Corporations Act 2001, and:
a.
comply with Australian Accounting Standards, which, as stated in accounting policy Note 2 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 2015 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 pay its debts as
and when they become due and payable; and
3.
The Managing Director and Chief Financial Officer 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.
c.
the financial statements and notes for the financial year comply with Accounting Standards; and
the financial statements and notes for the financial year give a true and fair view.
Signed in accordance with a resolution of the Directors.
Mr Graham Ascough
Chairman
25 September 2015
50
Directors’ Declaration
Independent Auditor’s Report
Independent Auditor’s Report
51
52
Independent Auditor’s Report
Independent Auditor’s Report
53
ASX Additional Information
The following additional information not shown elsewhere in this report is required by the Australian Securities
Exchange in respect of listed public companies only. This information is current as at 17 September 2015.
Securities
Quotation has been granted for 121,000,000 ordinary shares of the Company on the Australian Securities Exchange.
Quoted Securities
ASX Code
Number of Holders
Security Description
Total Securities
MGV
1,059
Ordinary Fully Paid
121,000,000
Unquoted Securities
ASX Code
Number of Holders
Security Description
Total Securities
MGVAM
MGVAO
MGVAQ
MGVAU
MGVAI
MGVAA
MGVAS
MGVAY
5
1
4
3
1
6
1
1
Options expiring 17/02/2016
Exercisable at $0.36
Options expiring 17/02/2016
Exercisable at $0.50
Options expiring 19/04/2016
Exercisable at $0.25
Options expiring 23/01/2017
Exercisable at $0.25
Options expiring 05/03/2018
Exercisable at $0.25
Options expiring 10/03/2019
Exercisable at $0.12
Options expiring 08/05/2016
Exercisable at $0.36
Options expiring 23/03/2018
Exercisable at $0.25
4,750,000
2,500,000
7,750,000
375,000
500,000
550,000
500,000
75,000
One holder Mr Robert Waugh and Mrs Sara Waugh hold 5,000,000 unlisted options
(equivalent to 29.41% of total unlisted options)
Voting Rights
The voting rights attached to each class of security are as follows:
• Ordinary Fully Paid shares – one vote per share held.
• Options – no voting rights are attached to unexercised options.
54
ASX Additional Information
Distribution schedule
Spread of Holdings - Ordinary Shares (ASX: MGV)
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 99,999,999
TOTAL
Holders
Units
Percentage
13
40
218
613
175
1,059
1,771
161,254
1,904,483
25,285,186
93,647,306
121,000,000
0.001
0.133
1.574
20.898
77.394
100%
Unmarketable Parcel
There are 515 Shareholders holding less than a marketable parcel of fully paid ordinary shares (a minimum parcel $500
shares, being 22,728 shares using a market value of $0.022).
Substantial Shareholding
The Company has received the following notices of substantial holding:
• Mithril Resources Investments Pty Ltd in relation to 9,283,871 ordinary shares
•
Independence Group NL in relation to 9,027,000 ordinary shares
Register of Securities
The Register of securities is held at Computershare Investor Services Pty Ltd at Level 11, 172 St Georges Terrace, Perth,
Western Australia. Telephone: (Australia) 1300 555 159 (overseas) + 61 3 9415 4062.
Buyback
No on-market share buy-back is current.
ASX Additional Information
55
Top Holders
The names of the twenty largest shareholders (ASX: MGV) are listed below:
Rank
Name
Units held
% of Units
1.
2.
3.
4.
5.
6.
7.
8.
9.
Mithril Resources Investments Pty Ltd
Independence Group NL
ABN Amro Clearing Sydney Nominees Pty Ltd
Barrick (Australia Pacific) Limited
Integra Mining Limited
Allise Pty Ltd
9,283,871
9,027,000
7,512,067
6,000,000
5,516,129
2,600,000
Cazna (Oxford 1) Limited + Cazna (Oxford 2) Limited
1,540,000
Forsyth Barr Custodians Ltd
Kimbriki Nominees Pty Ltd
10.
J P Morgan Nominees Australia Limited
11.
Mr Chor Leng Tan
12.
Citicorp Nominees Pty Limited
13.
Amalgamated Dairies Limited
14.
Hipete Pty Limited
15.
Como Investments Pty Ltd
16.
Mr Stephen Simunovic + Mr Dragan Simunovic
810,000
17.
Octifil Pty Ltd
18.
Cahami Pty Ltd
19.
Kavalex Pty Limited
20.
Mr Lindsay Heaven
800,000
725,000
680,000
677,558
56
ASX Additional Information
7.67
7.46
6.21
4.96
4.56
2.15
1.27
1.20
1.20
0.98
0.94
0.84
0.83
0.83
0.79
0.67
0.66
0.60
0.56
0.56
1,454,900
1,452,000
1,189,579
1,142,000
1,011,200
1,000,000
1,000,000
950,000
57
www.musgraveminerals.com.au
28 Richardson Street, West Perth, Western Australia 6005
Phone: +61 8 9324 1061 - Fax: +61 8 9324 1014