ABN 12 143 890 671
Gound Floor,
5 Ord Street
West Perth WA 6005
Telephone: +61 (8) 9324 1061
Facsimile: +61 (8) 9324 1014
Email:
Web:
info@musgraveminerals.com.au
www.musgraveminerals.com.au
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CORPORATE DIRECTORY
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
Ground Floor, 5 Ord Street
West Perth, WA 6005
Telephone:
+61 (8) 9324 1061
Facsimile:
+61 (8) 9324 1014
Email: info@musgraveminerals.com.au
Web: www.musgraveminerals.com.au
AUDITOR
BDO Audit (WA) PTY LTD
38 Station Street
Subiaco, WA 6008
LEGAL ADVISORS
O’Loughlins Lawyers
Level 2, 99 Frome Street
Adelaide, SA 5000
SHARE REGISTRY
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth, WA 6000
Telephone:
+61 (8) 9323 2000
Facsimile:
+61 (8) 9323 2033
SECURITIES EXCHANGE LISTING
The Company is listed on the Australian Securities Exchange Ltd (“ASX”)
Home Exchange: Perth, Western Australia
ASX Code: MGV
Musgrave Minerals Ltd (“Musgrave”
or “the Company”) (ASX: MGV) is an
Australian resources company focused
on gold exploration and development
at the Cue Project in the Murchison
Province of Western Australia.
A description of the Company’s
operations and principal activities is
included in the Review of Operations
and the Directors’ Report.
CONTENTS
CORPORATE DIRECTORY
CHAIRMAN’S LETTER
REVIEW OF OPERATIONS
TENEMENT SCHEDULE
DIRECTORS’ REPORT
Cover photos:
West Core diamond drilling, A Zone,
Lake Austin North
AUDITOR’S INDEPENDENCE DECLARATION
FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
ADDITIONAL INFORMATION
IFC
2
3
14
15
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57
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 1
CHAIRMAN’S LETTER
On behalf of the Board of Directors, it is my pleasure
to present the 2019 Annual Report for Musgrave
Minerals Limited (“Musgrave” or “Company”).
The Company’s focus continues to be on the Cue
Project (“Cue”) in the well-endowed, gold producing
Murchison region of Western Australia where our
main objective is to significantly grow our gold
resources through extensional and greenfield
exploration drilling. Exploration success continued
through 2019, the main highlight being the discovery
of extensive gold mineralisation under transported
cover at Lake Austin North.
The potential of Lake Austin North is highlighted by
drill intersections received to date, such as 242m
@ 1.0g/t Au, including 45m @ 3.3g/t Au (see ASX
announcement 3 December 2018, “Diamond Drilling
Confirms Significant Gold Discovery at Lake Austin
North” ). There is still a lot of work to be completed
at Lake Austin as our 2019 drilling campaign
identified basement gold mineralisation over a strike
extent of more than 500m and this large gold zone
is still open along strike and at depth. Also, the Lake
Austin North discovery is within a more than 3km
long, regolith gold anomaly and regional aircore
drilling has identified a broad zone of more than
8km in combined strike of basement gold targets
that require follow-up basement drill testing. This
large exploration program will require significant
long term funding but we remain confident that Lake
Austin has the potential for further discoveries and is
host to a significant gold system.
In March 2019, The Company entered an option
agreement to acquire 100% of the non-alluvial gold
rights to the Mainland Project in the Cue region.
Mainland lies along strike, to the north of Lake
Austin and produced significant quantities of alluvial
gold over the years but has only seen very limited
basement drilling.
At the Lena deposit to the south of Lake Austin, the
team identified several high-grade shoots that have
the potential to significantly grow the gold resource
beyond the current JORC estimate. Drilling at both
Mainland and Lena commenced in the new financial
year and both prospects are delivering excellent,
early results.
Given the ongoing drilling success at Cue, the current
resource figure of 440koz of gold is expected to grow.
As stated above, Cue is located in the gold producing
Murchison region of Western Australia, a region
that is host to four operating gold plants including
Westgold’s Tuckabianna plant.
At the end of the last financial year Musgrave and
Westgold agreed to a non-binding Term Sheet
that provided the scope on which a formal Mine
Management and Profit Sharing Agreement could
be negotiated. Although these negotiations did not
lead to a formal agreement, the Company continues
to advance its internal optimisation and development
studies to assist in forecasting production goals and
potential development pathways for the project.
In the meantime, Musgrave will continue to look
at funding options to capitalise on the exploration
upside and accelerate drilling programs across a
range of high priority targets including Mainland,
Lena and Lake Austin North, with the aim of making
further high-grade gold discoveries that could
support a stand-alone operation or alternatively be
mined in partnership with an existing local producer.
The Company completed a capital raising in
December 2018 to raise $5.5M through a share
placement to institutional and sophisticated
investors. The Placement attracted several new
investors to the Company and was supported by
many existing shareholders. I would like to take this
opportunity, on behalf of the Board, to thank all our
Shareholders for their ongoing support.
I would also like to thank the staff, management,
contractors and my fellow directors for their ongoing
efforts. We are committed to progressing the
Company by advancing targets towards discovery
and development through corporate deals, high-
quality exploration and technical studies for the
benefit of all Musgrave shareholders.
Graham Ascough
Chairman
Aircore Drilling - Lake Austin
PAGE 2
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
REVIEW OF OPERATIONS
Musgrave Minerals Ltd (“Musgrave” or “the
Company”) (ASX:MGV) is an Australian resources
company focused on gold exploration and
development at the Cue Project in the Murchison
Province of Western Australia.
Exploration activities for the financial year have been
focused on gold exploration at Cue. The Company
has had significant exploration success during the
year with the discovery of high grade gold under
transported cover at Lake Austin North.
Musgrave has an estimated 440koz of gold in
resources on the Cue Project and completed more
than 30,000m of drilling during the year. The total
Indicated and Inferred JORC Mineral Resources on
the project are; 4.83 Mt @ 2.84g/t Au for 440,000
ounces of gold (see ASX announcement 15 October
2018, “Annual Report”).
The Break of Day and Lena Mineral Resource
estimates are being used as the basis for in-house
near term development studies.
Musgrave’s intent is to secure exploration finance,
grow the resource base and develop a low-cost
operation to enable the Company to self-fund
exploration and growth through continuous
discovery.
2019 was a successful year for Musgrave, with a very
positive and extensive lake drilling campaign, the
discovery of gold mineralisation at Lake Austin North
and the divestment of the base metal interests on
our northern Cue tenements. Our focus continues to
be on the Cue Project (“Cue”) which is located in the
well-endowed, gold producing Murchison region of
Western Australia.
The Company will look to de-risk our funding
requirements and expanding our gold resources
through extensional and new greenfield exploration
drilling at Cue. Exceptional hits such as 242m @
1.0g/t Au, including 45m @ 3.3g/t Au (see ASX
announcement 3 December 2018, “Diamond Drilling
Confirms Significant Gold Discovery at Lake Austin
North”) have highlighted the potential of the Lake
Austin North area with basement gold mineralisation
now confirmed over a strike extent of more than
500m where it is still open along strike and at depth.
The Lake Austin North prospect is within a 3km long
regolith gold anomaly which is still largely untested.
Regional aircore drilling on Lake Austin has identified
more than 8km of basement gold targets within
multiple zones of strong regolith gold anomalism
that require follow-up basement drill testing. Secure
long term funding will be required to fully test the
gold potential of these new under cover targets.
At Lena, the team has identified a number of high-
grade shoots that have the potential to significantly
grow the gold resource beyond the current
resource estimate. An analysis of historical data has
highlighted a number of intercepts below the existing
resource including, 6.0m @ 31.1g/t Au (MGDD3) and
6.2m @ 18.6g/t Au (MGDD2) (see ASX announcement
12 July 2019, “Opportunity to Extend Lena High-
Grade Resource at Cue”). A drilling program has
commenced to test these new target zones with
positive results returned in early drilling.
Figure 1
Musgrave Minerals’ Project Location Map
Musgrave also has tenement applications in the
Musgrave Geological Province of South Australia
(Figure 1).
Corporate
During the year, Musgrave spent $6.0 million on
exploration activities.
In March 2019, Musgrave entered into an option
agreement to acquire 100% of the non-alluvial gold
rights to the Mainland Project in the Cue region.
The Mainland area has seen very limited basement
drilling but produced significant quantities of alluvial
gold over the years. Drilling has commenced at
Mainland with encouraging early drill results.
Musgrave successfully completed a capital raising
in December 2018 to raise $5.5M through a share
placement to institutional and sophisticated
investors.
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 3
REVIEW OF OPERATIONS
In February 2019 the Company executed a Binding
Term Sheet with Cyprium Australia Pty Ltd
(“Cyprium”) regarding an option, earn-in and joint
venture on the non-gold rights over the northern
tenements at the Cue Project in Western Australia’s
Murchison region. Cyprium made an initial payment
of $10,000 for an exclusive 90-day option period
and on 31 May 2019 exercised the option to earn
an 80% interest by the payment to the Company of
$250,000 worth of shares in ARC Exploration Limited
(subsequently renamed Cyprium Metals Limited
ASX:CYM). Cyprium is required to spend $2 million
on exploration within two years to complete the
acquisition of the 80% interest. Musgrave will retain
a 20% free-carried interest to the completion of a
definitive feasibility study.
In May 2018 Musgrave and Westgold agreed to a
non-binding Term Sheet that provided the scope on
which a formal Mine Management and Profit Sharing
Agreement could be negotiated. Although these
negotiations did not lead to a formal agreement,
the Company continues to advance its internal
optimisation and development studies to assist in
defining a development pathway for the project.
Musgrave will continue to maximise its exploration
strengths and accelerate drilling across high priority
targets including Mainland, Lena, Break of Day and
Lake Austin North, with the aim of making further
high-grade gold discoveries that could support a
stand-alone operation or alternatively be mined in
partnership with an existing producer.
During the year the Company continued to refine
its exploration portfolio, applying for additional
tenements in the Cue region and divesting the
Corunna Project in South Australia.
After the sale of its Fraser Range tenements in
February 2017, Musgrave holds 10 million shares and
10 million unlisted options in Legend Mining Limited,
currently valued at approximately $350,000.
The Company successfully secured an Exploration
Incentive Scheme (“EIS”) co-funded drilling grant of
$150,000 for the Cue Project to drill test gold targets
in 2019-20 on Lake Austin.
Events since the end of the financial year
On 17 September 2019 Musgrave announced that
it had entered into an Earn-In and Joint Venture
Exploration Agreement with Evolution Mining
Limited over a select area of Lake Austin and
surrounds (JV Area) of the Cue Project in the
Murchison District of Western Australia. The JV Area
excludes all the known resources including Lena and
Break of Day and the Mainland option area. Evolution
can earn a 75% interest in the JV Area by sole
funding A$18 million on exploration over a five year
term with a minimum commitment of A$4 million
in the first two years. Musgrave will manage the JV
during the initial period. As part of the Agreement,
Evolution has agreed to subscribe for 18,587,361
ordinary shares in Musgrave through a share
placement (“Placement”) at a price of $0.0807 per
share. The placement was set at the 30-day VWAP for
Musgrave shares and represents a holding of 4.59%
(undiluted) in the Company.
There has not arisen in the interval between the end
of the financial year and the date of this report any
other item, transaction or event of a material and
unusual nature likely, in the opinion of the Directors,
to affect significantly the operations, the results of
those operations, or the state of affairs of the Group
in future financial years.
Exploration Activities
Musgrave continued its successful exploration
at Cue with a new gold discovery at Lake Austin
North (Figure 2) where encouraging basement gold
mineralisation was intersected over a strike extent of
more than 500m, below a regolith (weathered rock)
gold halo that extends for a strike length of more
than 3km. This broader target area remains untested
with further basement drilling set to continue in early
2020.
Managing Director, Rob Waugh viewing RC drill chips
PAGE 4
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
REVIEW OF OPERATIONS
Diamond Drilling – A Zone, Lake Austin North
Significant intercepts include thick moderate grade
gold zones with higher grade cores:
242m @ 1.0g/t Au (18MODD008), incl
o
45m @ 3.3g/t Au
94m @ 2.2g/t Au (18MORC057), incl
o
o
52m @ 3.8g/t Au, incl
29m @ 5.1g/t Au
84m @1.7g/t Au (18MORC039), incl
o
o
36m @ 3.6g/t Au, incl
20m @ 6.1g/t Au
(see MGV ASX releases dated 31/08/2018, 8/10/2018,
29/10/2018, 31/10/2018 and 3/12/2018)
Drilling results from the new Lake Austin North target
continue to be encouraging with more than 8km of
strike of basement targets now identified, supporting
our belief that there is a large gold system buried
beneath the salt lake. Options to fund this large scale
ongoing salt lake exploration are currently being
considered (see MGV ASX release dated 20/08/2019).
An initial drill program has been completed at the
newly acquired Mainland Project with high-grade
gold intersected at Consols (3m @ 5.4g/t Au) where it
remains open.
At Lena, a reassessment of historical drilling data has
highlighted a 500m long high-grade gold shoot with
significant down plunge potential. Follow-up drilling
has commenced returning highly encouraging first
assay results including 4m @ 13.1g/t Au (see MGV
ASX release 20 August 2019, “High-Grade Gold
Intersected at Lena and Mainland, Cue Project”).
Drilling is continuing.
Figure 2: Southern Cue, Prospect Location
Map with Targets
“The broad drilling intercepts, geological
context, shear zone and alteration support
the Company’s view that the Lake Austin
North prospect demonstrates the potential
for a large gold system.”
A significant exploration program is planned for the
coming year with the objective to grow the resource
base and progress development studies to define a
clear path to gold production.
Murchison
Gold Focus
Musgrave continued to sharpen its focus on gold in
the Murchison with the acquisition of the Mainland
Project in February 2019 and the divestment of the
non-gold rights to the northern Cue tenure (Figure 3)
to Cyprium Australia Pty Ltd.
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 5
REVIEW OF OPERATIONS
Lake Austin North, with the aim of expanding the
current resources and making further high-grade
gold discoveries that could support a stand-alone
operation or alternatively be mined in partnership
with an existing producer. There are six gold plants
within the district (Figure 4) and the Great Northern
Highway runs within 3km of the existing Cue gold
resources.
Figure 3: Cue prospect locations and tenure
Development Options
Following the expiry of the non-binding Term Sheet
with Westgold, the Company has focussed on
internal studies to optimise and assist in forecasting
production goals and potential development
pathways for the Cue project. Musgrave has been
granted a 5C water extraction licence, and is
progressing mine permitting at Break of Day and
Lena.
Musgrave will continue to maximise its exploration
strengths and accelerate drilling across high priority
targets including Mainland, Lena, Break of Day and
Regional Drilling - Lake Austin
Figure 4: Cue Project location and local gold
processing infrastructure (Gold plants not owned or
operated by Musgrave)
“Pursuing multiple development opportunities
from partnering with an existing producer to
defining a stand-alone operation will provide
development flexibility for the Company.”
Lena and Break of Day
The Lena deposit has a JORC 2012 resource of
2,682kT @ 1.77g/t Au for 153koz Au (see MGV ASX
release 15 October 2018, “Annual Report”) which is
only estimated to a maximum vertical depth of 160m
on Lena Main lode (Figure 5) and more shallowly on
the peripheral lodes.
PAGE 6
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
REVIEW OF OPERATIONS
The Lena deposit consists of a number of gold
lodes, with some having significant high-grade
depth potential. Interpretation of historical drill data
has identified a 500m-long, high-grade southerly
plunging shoot on the main Lena lode that remains
open at depth below the current JORC resource.
A number of historical high-grade diamond drill
intercepts lie within this interpreted extension of the
high-grade gold lode (Figure 6) including:
3.1m @ 16.9g/t Au from 304.5m down hole
(MGDD1) including;
o
1.0m @ 46.5g/t Au from 304.5m down hole
6.2m @ 18.6g/t Au from 372.2m down hole
(MGDD2)
6.0m @ 31.1g/t Au from 354.8m down hole
(MGDD3) including;
o
0.6m @ 206.0g/t Au from 358.9m down
hole
3.0m @ 25.2g/t Au from 364.9m down hole
(MGDD9)
4.3m @ 14.1g/t Au from 367.9m down hole
(MGDD12)
2.0m @ 82.0g/t Au from 220.0m down hole
(MGDD21)
(see MGV ASX release 12 July 2019, “Opportunity to
Extend Lena High-Grade Resource at Cue”)
The majority of this historical drilling was undertaken
by Perilya in the 1990’s. These intercepts were not
incorporated in the most recent resource estimate
due to the broad nature of the drill hole spacing. An
infill drilling program has commenced at Lena with
the goal of significantly growing the resource.
The current program will consist of a combination
of RC (pre-collars) and diamond drilling to better
define and infill this high-grade gold shoot below
the existing resource. The aim of the program is to
improve the geological confidence and demonstrate
continuity of the mineralisation by reducing the drill
spacing to enable an upgrade of the Lena resource
estimate.
“The upside at Lena is significant with drilling
confirming high-grade gold mineralisation
below the existing resource that remains
open down plunge.”
Initial Lena follow-up drill results have been
encouraging with intercepts including:
1m @ 25.7g/t Au from 110m down hole which
is approximately 50m vertically beneath the
existing resource on the Eastern lode, and
24m @ 3.2g/t Au from 140m down hole
including;
o
4m @ 13.1g/t Au from 151m
approximately 5m below the existing
resource on the Main Lena lode (Figure 5
and 6)
(see MGV ASX release 20 August 2019, “High-Grade
Gold Intersected at Lena and Mainland, Cue Project”)
Figure 5: Lena schematic long section showing combined lodes and planned holes. A long section is a vertical
section along the plane of the strike of the deposit
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 7
REVIEW OF OPERATIONS
The mineralisation is open at depth on all lodes.
Mainland
Following the execution of an Option Agreement to
acquire the Mainland tenements near Cue (Figure
2) in March 2019, the Company completed an
initial RC drilling program to test three high-priority
targets (Figure 7) in late June 2019. The drilling
was successful returning 3m @ 5.4g/t Au from 74m
down hole (19MORC008) (see MGV ASX release 20
August 2019, “High-Grade Gold Intersected at Lena
and Mainland, Cue Project”). The intercept is in the
western most drill hole and is open to the west and
at depth.
The initial targets drill tested at Mainland relate to a
series of historical workings with limited historical
drill testing. The Mainland Prospect area covers the
northern extension of the shear corridor that hosts
Musgrave’s Break of Day and Lena gold deposits and
the Lake Austin North prospect (Figure 2).
Mainland has a long history of alluvial (historical and
recent) and high-grade basement gold production
Figure 6: Cross section 13675N at Lena showing
drilling. A cross section is a vertical plane sliced
perpendicular to the interpreted strike of the
mineralisation
Figure 7: Mainland Prospect showing targets, and maiden drilling results.
PAGE 8
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
REVIEW OF OPERATIONS
Significant basement intercepts include:
242m @ 1.0g/t Au (18MODD008), incl;
o
45m @ 3.3g/t Au
94m @ 2.2g/t Au (18MORC057), incl;
o
o
52m @ 3.8g/t Au, incl;
29m @ 5.1g/t Au
84m @1.7g/t Au (18MORC039), incl;
o
o
36m @ 3.6g/t Au, incl;
20m @ 6.1g/t Au
43.9m @ 2.0g/t Au (19MODD013) incl;
o
18.0m @ 3.5g/t Au
93.0m @ 1.3g/t Au (19MODD008) incl;
o
o
8.9m @ 4.3g/t Au and
7.1m @ 4.3g/t Au
(see MGV ASX releases dated 31/08/2018, 8/10/2018,
29/10/2018, 31/10/2018 and 3/12/2018, 29/03/2019 and
1/05/2019)
Lake Austin - Regional
As part of a significant focus on Lake Austin
during the year, Musgrave completed a regional
aircore drilling program to obtain geological and
geochemical information to integrate with new
detailed geophysical data to provide vectors to focus
basement drilling and make new gold discoveries.
In addition to the extensive Lake Austin North
A-Zone target, multiple zones of anomalous regolith
gold have also been identified sub-parallel to the
A-Zone, many of which have an individual strike
of more than 1km (Figures 8 and 9) and are all yet
to be tested with basement drilling. Some are still
open and further drilling is required to define their
limits. The combined basement strike potential of
the Lake Austin North system is now over 8km with
only ~500m of this potential tested with basement
drilling to date. This equates to approximately 6% of
the basement target zone tested to date, highlighting
the significant upside potential of this gold system,
which will require significant long term funding to
properly test.
Many of the aircore drill holes terminated in
mineralisation highlighting the possible proximity to
basement gold mineralisation and the necessity for
further drill testing. A detailed regional aeromagnetic
survey covering the entire package of southern
Cue tenements has recently been completed and is
currently being processed and integrated into the
targeting model to prioritise zones for further drilling.
View South through old circa 1900 building,
Mainland area, Cue
dating back to circa 1900, with significant untested
basement gold potential. Multiple new targets have
been generated for drill testing during a larger phase
two drilling program scheduled to commence in the
December 2019 quarter.
Historical records indicate that the main underground
mines at Mainland produced 20,148oz gold from
1897-1901 and 1925-1930 at an average grade of
69.2g/t Au *.
*Source: de la Hunty, L.E. (1970). Explanatory
Notes on the Cue 1:250,000 Geological Sheet,
Western Australia. Geological Survey of
Western Australia, Record 1970/7, Table 1.
Lake Austin North
During the year the Company made the significant
discovery of broad intervals of basement gold
mineralisation at Lake Austin North. Aircore drilling
has extended the Lake Austin North A-Zone gold
target, located approximately 3km north of Break
of Day/Lena to a strike of over 3km where it is still
open to the north and south (Figure 8). This extensive
gold regolith ‘halo’ follows the tonalite-mafic
contact along a major shear zone, the Lena-Break
of Day shear corridor. Only ~500m of the A-Zone
basement target has been drilled to date leaving a
large, prospective 2.5km zone, as yet untested with
basement drilling, below the transported cover.
The geological model for A-Zone is continuing
to develop with the mineralisation characterised
by high-strain (typically higher grade gold) zones
surrounded by crackle breccia zones (typically lower
grade gold) (Figure 10).
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 9
REVIEW OF OPERATIONS
Aircore drilling is a reconnaissance exploration
technique used to better define basement geology
below the lake cover and provides a direct detection
geochemical tool to define areas of gold anomalism
for follow-up basement drilling at depth. The aircore
technique can only effectively drill to the top of fresh
rock through the lake clays and oxidised rock that
is the Archaean regolith. Low-grade aircore results
can provide a geochemical indication of higher-
grade mineralisation in the basement beneath as is
commonly seen throughout the Western Australian
Yilgarn region.
Figure 8: Plan showing A-Zone target
at Lake Austin North
Significant assay results from the aircore program
include:
50m @ 1.1g/t Au from 114m down hole
(19MOAC173)
28m @ 1.17g/t Au from 114m down hole
(19MOAC172)
7m @ 1.06g/t Au from 129m down hole
(19MOAC109)
5m @ 1.89g/t Au from 70m down hole
(19MOAC094)
15m @ 0.52g/t Au from 72m down hole
(19MOAC088)
Figure 9: Regional drill location plan showing aircore
gold anomalism
9m @ 0.54g/t Au from 105m down hole to
EOH (19MOAC087)
Other Projects
7m @ 0.47g/t Au from 124m down hole
(19MOAC067)
(see MGV ASX release 28 May 2019, “Scout Drilling
Extends Gold Zone to >3km at Lake Austin North”)
Musgrave currently holds tenement applications in
the central Musgrave province of South Australia.
No field activity was completed by Musgrave on
these tenements during the period.
PAGE 10
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
REVIEW OF OPERATIONS
Lake Austin North Drill Core, Cue - 19MODD004
Figure 10: Cross section 6939200mN at Lake Austin
North, A Zone target with current drilling – Note: Drill
holes 18MOAC075 and 18MOAC108 are projected
onto the east-west cross section (a cross-section
is a vertical section perpendicular to the line of
mineralisation)
Chief Geologist, Glenn Martin and Non-Executive Director John Percival inspecting core at Lake Austin North
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 11
REVIEW OF OPERATIONS
Table 1: Summary of JORC Resources and Reserves for the Cue Project
Mineral Resources
Gold Mineral Resources as at 30 June 2019
Deposit
Moyagee
Break of Day
Lena
Leviticus
Numbers
SUBTOTAL
Eelya
Hollandaire
Rapier South
SUBTOTAL
Tuckabianna
Jasper Queen
Gilt Edge
SUBTOTAL
Indicated Resources
Inferred Resources
Total Resources
Tonnes
‘000s
Au
g/t
oz. Au
‘000s
Tonnes
‘000s
Au
g/t
oz. Au
‘000s
Tonnes
‘000s
Au
g/t
oz. Au
‘000s
445
1,288
–
–
1,733
473
473
–
–
–
7.73
1.69
–
–
3.24
1.4
1.4
–
–
–
111
70
–
–
181
21
21
–
–
–
423
1,394
42
278
2,137
45
171
216
175
96
271
6.54
1.85
6.0
2.5
2.94
1.1
2.2
1.9
2.6
3.1
2.8
89
83
8
22
202
2
12
13
15
9
24
868
2,682
42
278
3,870
518
171
689
175
96
271
7.15
1.77
6.00
2.46
3.07
1.35
2.15
1.55
2.60
3.06
2.8
2.84
199
153
8
22
382
22
12
34
15
9
24
441
TOTAL
2,206
2.84
202
2,623
2.84
239
4,830
Copper Mineral Resources as at 30 June 2019 (1)
Deposit
Hollandaire
Copper
Indicated Resources
Grade
%
Tonnes
‘000s
Tonnes
Cu
‘000s
Inferred Resources
Grade
%
Tonnes
‘000s
Tonnes
Cu
‘000s
Total Resources
Grade
%
Tonnes
‘000s
Tonnes
Cu
‘000s
1,891
2.0
38
122
1.4
2
2,013
2.0
40
Silver Mineral Resources as at 30 June 2019 (1)
Deposit
Hollandaire
Silver
Ore Reserves
Indicated Resources
Grade
g/t
Tonnes
‘000s
oz. Au
‘000s
Inferred Resources
Grade
g/t
Tonnes
‘000s
oz. Au
‘000s
Total Resources
Grade
g/t
Tonnes
‘000s
oz. Au
‘000s
1,925
6.3
390
728
4.7
110
2,653
5.9
500
Copper Ore Reserves as at 30 June 2019 (1)
Deposit
Hollandaire
Copper
Proven Reserves
Grade
%
Tonnes
‘000s
Tonnes
Cu
‘000s
Probable Reserves
Grade
%
Tonnes
‘000s
Tonnes
Cu
‘000s
Total Reserves
Grade
%
Tonnes
‘000s
Tonnes
Cu
‘000s
–
–
–
442
3.3
15
442
3.3
15
Silver Ore Reserves as at 30 June 2019 (1)
Deposit
Hollandaire
Silver
Proven Reserves
Grade
g/t
Tonnes
‘000s
oz. Au
‘000s
Probable Reserves
Grade
g/t
Tonnes
‘000s
oz. Au
‘000s
Total Reserves
Grade
g/t
Tonnes
‘000s
oz. Au
‘000s
–
–
–
574
8.2
151
574
8.2
151
* Due to effects of rounding, the total may not represent the sum of all components.
PAGE 12
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
REVIEW OF OPERATIONS
(1) Notes to Table 1
The Break of Day and Lena Mineral Resources at Moyagee are reported in accordance with the 2012 Edition
of the Australian Code of Reporting of Mineral Resources and Ore Reserves (JORC 2012). The remaining
Mineral Resources and Ore Reserve estimates were first prepared and disclosed in accordance with the
2004 Edition of the Australian Code of Reporting of Mineral Resources and Ore Reserves (JORC 2004)
and have not been updated since to comply with JORC 2012 on the basis that the information has not
materially changed since it was last reported. For further details refer to Musgrave Minerals Ltd (MGV) ASX
announcement 14 July 2017, “Resource Estimate Exceeds 350koz Gold” and Silver Lake Resources Limited
(SLR) ASX Announcement 26 August 2016, “Mineral Resources and Ore Reserves Update”.
(1) On 19 February 2019, Musgrave entered into a binding Term Sheet with Cyprium Australia Pty Ltd
regarding an option to earn-in and joint venture on the non-gold rights over the northern Cue tenure
including Hollandaire.
Mineral Resources and Ore Reserves
The information in this report that relates to Mineral Resources at Break of Day and Lena is based on information compiled
by Mr Aaron Meakin. Mr Meakin is a full-time employee of CSA Global Pty Ltd and is a Member of the Australasian Institute
of Mining and Metallurgy. Mr Meakin has sufficient experience relevant to the style of mineralisation and type of deposit
under consideration and to the activity which he is undertaking to qualify as Competent Persons as defined in the 2012
edition of the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code).
Mr Meakin consents to the disclosure of the information in this report in the form and context in which it appears.
The information in this report that relates to the Hollandaire, Rapier South, Jasper Queen, Gilt Edge, Leviticus and Numbers
Mineral Resource and Ore Reserve estimates is extracted from the report created by Silver Lake Resources Limited entitled
“Mineral Resources and Ore Reserves Update”, 26 August 2016 and is available to view on Silver Lake’s website (www.
silverlakeresources.com.au) and the ASX (www.asx.com.au). The Company confirms that it is not aware of any new
information or data that materially effects the information included in the original market announcement and, in the case of
estimates of Minerals Resources and Ore Reserves that all material assumptions and technical parameters underpinning the
estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms
that the form and context in which the Competent Person’s findings are presented, have not been materially modified from
the original market announcement.
Exploration Results
The information in this presentation that relates to Exploration Results, Mineral Resources or Ore Reserves is based on
information compiled and thoroughly reviewed by Mr Robert Waugh. Mr Waugh is a Fellow of the Australasian Institute of
Mining and Metallurgy (FAusIMM) and a Member of the Australian Institute of Geoscientists (MAIG). Mr Waugh is Managing
Director of Musgrave Minerals Ltd. Mr Waugh has sufficient industry experience 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 the information in the form and context in which it
appears.
Forward Looking Statements
This document may contain certain forward-looking statements. Forward-looking statements include, but are not limited to
statements concerning Musgrave Minerals Limited’s (Musgrave’s) current expectations, estimates and projections about the
industry in which Musgrave operates, and beliefs and assumptions regarding Musgrave’s future performance. When used in
this document, words such as “anticipate”, “could”, “plan”, “estimate”, “expects”, “seeks”, “intends”, “may”, “potential”,
“should”, and similar expressions are forward-looking statements. Although Musgrave believes that its expectations
reflected in these forward-looking statements are reasonable, such statements are subject to known and unknown risks,
uncertainties and other factors, some of which are beyond the control of Musgrave and no assurance can be given that actual
results will be consistent with these forward-looking statements.
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 13
TENEMENT SCHEDULE
Tenement Schedule as at 19 September 2019
Project / Tenement
Location
Status
Interest
Cue Project
Western Australia
E20/606
E20/608
E20/616
E20/629
E20/630
E20/659
E20/698
E20/699
E20/700
E20/836
E21/129
E21/144
E21/177
E21/194
E21/200
E21/204
E21/207
E21/208
E58/335
E59/507
M20/225
M20/245
M20/277
M21/106
M21/107
M58/224
M58/225
P20/2279
P21/0757
P58/1709
P59/1710
L20/57
P21/731
P21/732
P21/735
P21/736
P21/737
P21/739
P21/741
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
100% (Cyprium Option)
100% (Cyprium Option)
100% (Cyprium Option)
100% (Cyprium Option)
100% (Cyprium Option)
90% (Cyprium Option)
100% (Cyprium Option)
100% (Cyprium Option)
100% (Cyprium Option)
100% (Cyprium Option)
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100% (Cyprium Option)
100% (Cyprium Option)
100% (Cyprium Option)
100%
100%
100%
100%
100% (Cyprium Option)
100%
100%
100%
100%
Earning 100% (Mainland Option)
Earning 100% (Mainland Option)
Earning 100% (Mainland Option)
Earning 100% (Mainland Option)
Earning 100% (Mainland Option)
Earning 100% (Mainland Option)
Earning 100% (Mainland Option)
PAGE 14
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
DIRECTORS’ REPORT
Your Directors present their report on the
consolidated entity consisting of Musgrave Minerals
Limited (“the Company”) and its subsidiary (“the
Group” or “the Consolidated Entity”) at the end of
the year ended 30 June 2019.
DIRECTORS
The following persons were Directors of the
Company during the whole of the financial year and
up to the date of this report:
Mr Graham Ascough, Non-Executive Chairman
Mr Robert Waugh, Managing Director
Ms Kelly Ross, Non-Executive Director
Mr John Percival, Non-Executive Director
PRINCIPAL ACTIVITIES
During the year, the principal continuing activities of
the Group consisted of:
exploration of mineral tenements, both on a
joint venture basis and by the Group in its own
right, with the intent to progress to development
in the near to mid-term;
development studies on existing resources;
continuing to seek extensions of areas held and
to seek out new areas with mineral potential;
and
evaluating results received through surface
sampling, geophysical surveys and drilling
activities carried out during the year.
FINANCIAL RESULTS
The consolidated loss of the Group after providing
for income tax for the year ended 30 June 2019 was
$1,329,040 (2018: $189,475).
DIVIDENDS
No dividends have been paid or declared since the
start of the financial year. No recommendation for
the payment of a dividend has been made by the
Directors.
OPERATIONS AND FINANCIAL REVIEW
Information on the operations of the Group and its
prospects is set out in the “Review of Operations”
section of this Report.
FINANCIAL
Exploration and evaluation costs totalling $336,589
(2018: $41,108) were impaired during the year. The
impaired exploration and evaluation costs primarily
comprise previously capitalised costs in relation to
the Company’s Corunna Project (EL5497) in South
Australia.
As at 30 June 2019, the Group had net assets of
$20,092,444 (2018: $16,086,195) including cash and
cash equivalents of $3,543,732 (2018: $5,230,122).
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs of the
Group during the financial year were as follows:
Exploration continues to be a major focus for the
Company with exceptional drilling results at the Cue
Project as discussed in the Review of Operations
section of this report.
On 19 December 2018, the Company completed a
placement to corporate, institutional, professional
and sophisticated investors of 59,782,609 ordinary
shares at an issue price of 9.2 cents per share raising
$5,500,000 before costs.
In February 2019, the Company executed a
Binding Term Sheet with Cyprium Australia Pty Ltd
(“Cyprium”) regarding an option, earn-in and joint
venture on the non-gold rights over the northern
tenements at the Cue Project in Western Australia’s
Murchison region. Cyprium made an initial payment
of $10,000 for an exclusive 90-day option period
and on 31 May 2019 exercised the option to earn
an 80% interest by the payment to the Company of
$250,000 worth of shares in ARC Exploration Limited
(subsequently renamed Cyprium Metals Limited
(ASX:CYM)). Cyprium is required to spend $2 million
on exploration within two years to acquire the 80%
interest. Musgrave will retain a 20% free-carried
interest to the completion of a definitive feasibility
study.
In March 2019, the Company entered into an Option
Agreement (“Agreement”) to acquire the non-alluvial
gold rights to the Mainland Project which is located
within the boundaries of the Company’s Cue Gold
Project. Musgrave paid $125,000 for a 100% interest
in the tenements (excluding the vendor’s interest
in alluvial gold) with a further $100,000 due within
18 months and an additional $300,000 to be paid
as milestone payments in Musgrave shares or cash
(at the Company’s discretion) before the fourth
anniversary of the Agreement. The vendor will be
entitled to a 1% gross royalty on any gold produced
by the Company from the tenements (excluding any
alluvial gold).
In March 2019, the non-binding Term Sheet with
Westgold Resources Limited to explore the potential
profit sharing development of Lena and Break of Day
expired. Westgold remains a substantial shareholder.
There were no other significant changes in the state
of affairs of the Group during the financial year.
EVENTS SINCE THE END OF THE FINANCIAL YEAR
On 17 September 2019 Musgrave announced that
it had entered into an Earn-In and Joint Venture
Exploration Agreement with Evolution Mining
Limited over a select area of Lake Austin and
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 15
DIRECTORS’ REPORT
surrounds (JV Area) of the Cue Project in the
Murchison District of Western Australia. The JV Area
excludes all the known resources including Lena and
Break of Day and the Mainland option area. Evolution
can earn a 75% interest in the JV Area by sole
funding A$18 million on exploration over a five year
term with a minimum commitment of A$4 million
in the first two years. Musgrave will manage the JV
during the initial period. As part of the Agreement,
Evolution has agreed to subscribe for 18,587,361
ordinary shares in Musgrave through a share
placement (“Placement”) at a price of $0.0807 per
share. The placement was set at the 30-day VWAP for
Musgrave shares and represents a holding of 4.59%
(undiluted) in the Company.
There has not arisen in the interval between the end
of the financial year and the date of this report any
other item, transaction or event of a material and
unusual nature likely, in the opinion of the Directors,
to affect significantly the operations, the results of
those operations, or the state of affairs of the Group
in future financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
OF OPERATIONS
The Directors are not aware of any developments
that might have a significant effect on the operations
of the Group in subsequent financial years not
already disclosed in this report.
ENVIRONMENTAL REGULATION
The Group is subject to significant environmental
regulation in respect of its exploration activities.
Tenements in Western Australia and South Australia
are granted subject to adherence to environmental
conditions with strict controls on clearing, including
a prohibition on the use of mechanised equipment
or development without the approval of the relevant
Government agencies, and with rehabilitation
required on completion of exploration activities.
These regulations are controlled by the Department
of Mines, Industry Regulation and Safety (Western
Australia) and the Department of State Development
(South Australia).
which requires entities to report annual greenhouse
gas emissions and energy use. The Directors
have assessed that there are no current reporting
requirements for the year ended 30 June 2019.
However, reporting requirements may change in the
future.
INFORMATION ON DIRECTORS
Graham Ascough BSc, PGeo, MAusIMM
(Non-Executive Chairman)
Director since 26 May 2010
Experience and expertise
Graham Ascough is a senior resources executive
with more than 30 years of industry experience
evaluating mineral projects and resources in
Australia and overseas. He has had broad industry
involvement ranging from playing a leading role
in setting the strategic direction for significant
country-wide exploration programs to working
directly with mining and exploration companies.
Mr Ascough is a geophysicist by training and
was the Managing Director of ASX listed Mithril
Resources 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 Canadian resources house,
Falconbridge Ltd (acquired by Xstrata Plc in 2006).
He is a Member of the Australasian Institute of
Mining and Metallurgy (“AusIMM”) and is a
Professional Geoscientist of Ontario, Canada.
Other current directorships
PNX Metals Ltd (appointed 10 December 2012)
Sunstone Metals Ltd (formerly Avalon Minerals Ltd)
(appointed 29 November 2013)
Former directorships in last three years
Mithril Resources Ltd (appointed 9 October 2006 –
ceased 15 May 2019)
Special responsibilities
Chair of the Board
Member of the Audit Committee
Interests in shares and options
Musgrave Minerals Limited conducts its exploration
activities in an environmentally sensitive manner and
the Group is not aware of any breach of statutory
conditions or obligations.
Ordinary shares – Musgrave Minerals
Limited
Unlisted options – Musgrave Minerals
Limited
1,091,172
3,000,000
Greenhouse gas and energy data reporting
requirements
The Directors have considered compliance with the
National Greenhouse and Energy Reporting Act 2007
PAGE 16
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
DIRECTORS’ REPORT
Mr Robert Waugh MSc, BSc, FAusIMM, MAIG
(Managing Director)
Director since 6 March 2011
Experience and expertise
Robert Waugh has over 25 years of experience in
the resources sector and was a critical member of
the WMC Resources Ltd (“WMC”) 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
and BHP Billiton Exploration Ltd. Mr Waugh has
extensive exploration and mining experience in
a range of commodities including gold, nickel,
copper, 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 AusIMM and a Member of the Australian
Institute of Geoscientists.
Mrs Kelly Ross BBus, CPA, AGIA
(Non-Executive Director)
Director since 26 May 2010
Experience and expertise
Kelly Ross is a qualified accountant holding a
Bachelor of Business (Accounting) and has the
designation CPA from the Australian Society of
Certified Practicing Accountants. Mrs Ross is a
Chartered Secretary with over 25 years’ experience
in accounting and administration in the mining
industry.
Mrs Ross was a senior accountant at Resolute Ltd
from 1987 to 2000 during which time Resolute
became a gold producer in Ghana, Tanzania and at
several mines in Western Australia.
Mrs Ross was the Company Secretary of
Independence Group NL (“IGO”) for 10 years from
2001 to 2011. IGO listed on the ASX in 2002 and
commenced mining at the Long Nickel Mine during
that year. Mrs Ross was a Director of IGO for 12
years from 2002 to 2014. Mrs Ross retired from the
Board of IGO on 24 December 2014.
Mrs Ross was appointed a Director of Musgrave
Minerals on 26 May 2010 and is the Chairman of
the Audit Committee.
Other current directorships
Other current directorships
None
Yandal Resources Ltd (appointed 6 April 2018)
Former directorships in last three years
Former directorships in last three years
None
Special responsibilities
Managing Director
Interests in shares and options
Ordinary shares – Musgrave Minerals
Limited
Unlisted options – Musgrave Minerals
Limited
None
Special responsibilities
Chair of the Audit Committee
Interests in shares and options
1,717,172
6,100,000
Ordinary shares – Musgrave Minerals
Limited
Unlisted options – Musgrave Minerals
Limited
181,492
2,000,000
Challenge Drilling (Mainland)
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 17
DIRECTORS’ REPORT
Mr John Percival
(Non-Executive Director),
Director since 26 May 2010
Experience and expertise
John Percival has been involved in investment
and merchant banking for over 25 years including
15 years as Investment Manager of Barclays Bank
New Zealand Ltd. In addition, he has extensive
experience in stockbroking, corporate finance and
investment management. In 1995 Mr Percival was
appointed to the Board of Goldsearch Limited and
was an Executive Director from 2000 to 2014. In
May 2014, Goldsearch changed direction and Mr
Percival resigned his executive position.
Other current directorships
None
Former directorships in last three years
Zoono Group Limited (formerly Goldsearch Ltd)
(resigned 26 April 2017)
Special responsibilities
Member of the Audit Committee
Interests in shares and options
Ordinary shares – Musgrave Minerals
Limited
Unlisted options – Musgrave Minerals
Limited
694,559
2,000,000
COMPANY SECRETARY
Mrs Patricia (Trish) Farr, GradCertProfAcc,
GradDipACG, FGIA, FCIS, GAICD
appointed 30 June 2015
Trish Farr is an experienced Chartered Secretary
with over 20 years’ experience in the exploration
and mining industry in the areas of corporate
governance, compliance and administration. Mrs
Farr has provided company secretarial services to
several ASX listed and unlisted companies having
previously been the Company Secretary of uranium
junior Energy Metals Limited from its listing in
2005 to 2010 and Fox Resources Ltd from 2013 to
2014. Mrs Farr is also a Director and the Company
Secretary of Jindalee Resources Limited.
Mrs Farr is a fellow member of Chartered
Secretaries & Administrators and the Governance
Institute of Australia (formerly Chartered
Secretaries Australia) and a graduate member of
the Australian Institute of Company Directors.
MEETINGS OF DIRECTORS
The numbers of meetings of the Company’s Board of
Directors and of each Board committee held during
the year ended 30 June 2019, and the numbers of
meetings attended by each Director were:
Board of
Directors
Audit
Committee
A
9
10
10
10
B
10
10
10
10
A
2
B
2
n/a
n/a
2
2
2
2
Graham Ascough
Robert Waugh
Kelly Ross
John Percival
A Number of meetings attended.
B Number of meetings held during the time the
Director held office or was a member of the
committee during the year.
RETIREMENT, ELECTION AND CONTINUATION IN
OFFICE OF DIRECTORS
Mr Graham Ascough, being the Director retiring by
rotation who, being eligible, will offer himself for re-
election at the 2019 Annual General Meeting.
REMUNERATION REPORT (AUDITED)
The Directors present the Musgrave Minerals Limited
2019 Remuneration Report, outlining key aspects of
the Company’s remuneration policy and framework,
and remuneration awarded this year.
The report contains the following sections:
a) Key management personnel covered in this
report
b) Remuneration governance and the use of
remuneration consultants
c)
Executive remuneration policy and framework
d) Relationship between remuneration and the
Group’s performance
e) Non-executive director remuneration policy
f)
Voting and comments made at the Company’s
2018 Annual General Meeting
g) Details of remuneration
h) Service agreements
i)
j)
Details of share-based compensation and
bonuses
Equity instruments held by key management
personnel
k)
Loans to key management personnel
l) Other transactions with key management
personnel.
PAGE 18
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
DIRECTORS’ REPORT
a) Key management personnel covered in this
acceptable to shareholders.
report
Non-Executive and Executive Directors (see
pages 16 to 18 for details about each director)
Name
Name
Graham Ascough Non-Executive Chairman
Robert Waugh
Managing Director
Kelly Ross
Non-Executive Director
John Percival
Non-Executive Director
b) Remuneration governance and the use of
remuneration consultants
The Company does not have a Remuneration
Committee. Remuneration matters are handled
by the full Board of the Company. In this respect
the Board is responsible for:
the over-arching executive remuneration
framework;
the operation of the incentive plans
which apply to executive directors and
senior executives (the executive team),
including key performance indicators and
performance hurdles;
remuneration levels of executives; and
non-executive director fees.
The objective of the Board is to ensure that
remuneration policies and structures are fair
and competitive and aligned with the long-term
interests of the Company.
In addition, all matters of remuneration are
handled in accordance with the Corporations
Act 2001 requirements, especially with regard
to related party transactions. That is, none of
the Directors participate in any deliberations
regarding their own remuneration or related
issues.
Independent external advice is sought from
remuneration consultants when required,
however no advice was sought during the
period ended 30 June 2019.
c)
Executive remuneration policy and framework
In determining executive remuneration, the
Board aims to ensure that remuneration
practices are:
competitive and reasonable, enabling the
Company to attract and retain key talent;
aligned to the Company’s strategic and
business objectives and the creation of
shareholder value;
transparent and easily understood; and
All executives receive consulting fees or
a salary, part of which may be taken as
superannuation, and from time to time, options.
The Board reviews executive packages annually
by reference to the executive’s performance and
comparable information from industry sectors
and other listed companies in similar industries.
All remuneration paid to specified executives is
valued at the cost to the Group and expensed.
Options are valued using a Black-Scholes option
pricing model.
d) Relationship between remuneration and the
Group’s performance
Emoluments of Directors are set by reference
to payments made by other companies of
similar size and industry, and by reference to
the skills and experience of Directors. Fees paid
to Non-Executive Directors are not linked to
the performance of the Group. This policy may
change once the exploration phase is complete
and the Group is generating revenue. At present
the existing remuneration policy is not impacted
by the Group’s performance including earnings
and changes in shareholder wealth (e.g.
changes in share price).
The Board has not set short term performance
indicators, such as movements in the
Company’s share price, for the determination
of Non-Executive Director emoluments as the
Board believes this may encourage performance
which is not in the long-term interests of the
Company and its shareholders. The Board has
structured its remuneration arrangements in
such a way it believes is in the best interests of
building shareholder wealth. The Board believes
participation in the Company’s Employee
Share Option Plan motivates and aligns key
management and executives with the long-term
interests of shareholders.
e) Non-executive director remuneration policy
On appointment to the Board, all Non-Executive
Directors enter into a service agreement
with the Company in the form of a letter of
appointment. The letter summarises the Board
policies and terms, including remuneration
relevant to the office of Director.
The Board policy is to remunerate Non-
Executive Directors at commercial market
rates for comparable companies for their time,
commitment and responsibilities. Non-Executive
Directors receive a Board fee but do not receive
fees for chairing or participating on Board
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 19
DIRECTORS’ REPORT
committees. Board members are allocated superannuation guarantee contributions as required by law, and
do not receive any other retirement benefits. From time to time, some individuals may choose to sacrifice
their salary or consulting fees to increase payments towards superannuation.
The maximum annual aggregate Non-Executive Directors’ fee pool limit is $250,000 as disclosed in the
Company’s Replacement Prospectus dated 8 March 2011.
Fees for Non-Executive Directors are not linked to the performance of the Group. Non-Executive Directors’
remuneration may also include an incentive portion consisting of options, subject to approval by
shareholders.
f) Voting and comments made at the Company’s 2018 Annual General Meeting
Musgrave Minerals Limited received more than 98% of “yes” votes on its remuneration report for the
2018 financial year. The Company did not receive any specific feedback at the Annual General Meeting or
throughout the year on its remuneration practices.
g) Details of remuneration
The following table shows details of the remuneration received by the Group’s key management personnel
for the current and previous financial year.
Short-term employment benefits
Post-
employment
benefits
Share-
based
payments
Salary &
fees
$
Bonus
$
Non-
monetary
Benefit
$
Super-
annuation
$
Options
$
Total
$
Options
%
Perf
Related
%
2019
Directors
G Ascough
R Waugh
K Ross
J Percival
TOTALS
2018
Directors
G Ascough
R Waugh
K Ross
J Percival
TOTALS
65,000
–
275,433 54,415 (1)
–
–
54,415
45,000
45,000
430,433
65,000
268,716
45,000
45,000
423,716
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
31,336
4,275
4,275
39,886
–
25,528
4,275
4,275
34,078
75,878
151,755
50,585
50,585
328,803
140,878
512,939
99,860
99,860
853,537
32,670
65,340
21,780
21,780
141,570
97,670
359,584
71,055
71,055
599,364
53.9
29.6
50.7
50.7
33.4
18.2
30.7
30.7
–
10.6
–
–
–
–
–
–
(1) Discovery bonus for Lake Austin North discovery.
h) Service agreements
On appointment to the Board, all Non-Executive Directors enter into a service agreement with the
Company in the form of a letter of appointment. The letter summarises the Board policies and terms of
appointment, including compensation relevant to the office of Director. Remuneration and other terms of
employment for other members of key management personnel are formalised in service agreements as
summarised below.
R Waugh, Managing Director
Mr Waugh is remunerated pursuant to an Executive Services Agreement. Under the agreement the
Company agrees to employ Mr Waugh as Managing Director of the Company with a base salary of
$275,433 plus statutory superannuation. Either party may terminate the employment contract without
cause by providing six months written notice or by making payment in lieu of notice (in the case of 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.
PAGE 20
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
DIRECTORS’ REPORT
i)
Details of share-based compensation and bonuses
Options
Options over ordinary shares in Musgrave Minerals Limited are granted under the Employee Share
Option Plan (“ESOP”). Participation in the ESOP and any vesting criteria are at the Board’s discretion and
no individual has a contractual right to participate in the scheme or to receive any guaranteed benefits.
Any options issued to Directors of the Company are subject to shareholder approval. Options issued to
Directors in the 2019 financial year were approved by shareholders at the 2018 Annual General Meeting.
The terms and conditions of each grant of options affecting remuneration in the current or future reporting
periods are set out below.
Option series
Issue date
Vesting and
exercise date
Expiry date
S
T
21 Nov 2018
21 Nov 2018
16 Nov 2021
30 Nov 2018
30 Nov 2018
16 Nov 2021
Exercise
price
$0.1275
$0.1275
Value per
option at
grant date
$0.0506
$0.0506
% Vested
100%
100%
The fair value of options at grant date are independently determined using a Black-Scholes option pricing
model that takes into account the exercise price, the term of the option, the share price at grant date and
expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate
for the term of the option.
Further information on the fair value of share options and assumptions is set out in Note 23 to the financial
statements.
Bonus
During the year the Board awarded a Discovery Bonus to the Managing Director of 20% of base salary
and to staff and contractors of 10% or 20% of base salary. The bonus was in recognition of the successful
discovery of gold mineralisation at Lake Austin North.
j)
Equity instruments held by key management personnel
The following tables detail the number of fully paid ordinary shares and options over ordinary shares in the
Company that were held during the financial year by key management personnel of the Group, including
their close family members and entities related to them.
Options
2019
Directors
Opening
balance at
1 July
Granted as
remuneration
Options
exercised
Balance at
30 June
Net
change
(other)
Vested
but not
exercisable
Vested and
exercisable
Vested
during
the year
G Ascough 1,500,000
R Waugh
3,100,000
K Ross
1,000,000
J Percival
1,000,000
TOTAL
6,600,000
1,500,000
3,000,000
1,000,000
1,000,000
6,500,000
–
–
–
–
–
– 3,000,000
– 6,100,000
– 2,000,000
– 2,000,000
– 13,100,000
–
–
–
–
3,000,000 1,500,000
6,100,000 3,000,000
2,000,000 1,000,000
2,000,000 1,000,000
– 13,100,000 6,500,000
During the year, no ordinary shares in the Company were provided as a result of the exercise of
remuneration options.
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 21
DIRECTORS’ REPORT
Shareholdings
2019
Directors
G Ascough
R Waugh
K Ross
J Percival
TOTAL
Opening
balance at 1
July
1,091,172
1,457,172
181,492
694,559
3,424,395
Granted as
remuneration
Options
exercised
Net change
(other)
Balance at 30
June
–
–
–
–
–
–
–
–
–
–
–
260,000
–
–
1,091,172
1,717,172
181,492
694,559
260,000
3,684,395
k)
Loans to key management personnel
There were no loans to individuals or any key management personnel during the financial year or the
previous financial year.
l) Other transactions with key management personnel
There were no other transactions with key management personnel during the financial year or the previous
financial year.
END OF REMUNERATION REPORT (AUDITED)
SHARES UNDER OPTION
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Date options issued
Expiry date
Issue price of shares
Number under option
22 April 2016
4 November 2016
4 November 2016
29 November 2017
7 December 2017
21 November 2018
30 November 2018
22 April 2021
3 November 2019
3 November 2021
29 November 2020
29 November 2020
16 November 2021
16 November 2021
$0.045
$0.167
$0.195
$0.097
$0.097
$0.1275
$0.1275
500,000
2,550,000
800,000
3,250,000
2,250,000
7,500,000
2,950,000
No option holder has any right under the options to participate in any other share issue of the Company or any
other entity.
SHARES ISSUED ON THE EXERCISE OF OPTIONS
There were no other shares issued on the exercise of options during the year and up to the date of this report.
TOTAL:
19,800,000
CORPORATE GOVERNANCE STATEMENT
The Company’s 2019 Corporate Governance Statement has been released as a separate document and is
located on the Company’s website at http://www.musgraveminerals.com.au/corporate-governance.
PROCEEDINGS ON BEHALF OF THE GROUP
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for
the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.
PAGE 22
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
DIRECTORS’ REPORT
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
During the financial year, the Company paid a premium to insure the Directors and Officers of the consolidated
entity against any liability incurred as a Director or Officer to the extent permitted by the Corporations Act 2001.
The contract of insurance prohibits the disclosure of the nature of the liabilities covered or the amount of the
premium paid.
The Group has not entered into any agreement with its current auditors indemnifying them against claims by a
third party arising from their position as auditor.
NON-AUDIT SERVICES
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where
the auditor’s expertise and experience with the Company and/or the Group are important.
Details of the amounts paid or payable to the auditors BDO Audit (WA) Pty Ltd and Grant Thornton Audit Pty Ltd
for audit and non-audit services provided during the year are set out in Note 18. During the year ended 30 June
2019 no fees were paid or were payable for non-audit services provided by the auditors of the consolidated
entity (2018: $Nil).
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001
is set out on the following page.
Signed in accordance with a resolution of the Directors.
Graham Ascough
Chairman
Perth, 19 September 2019
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 23
AUDITOR’S INDEPENDENCE DECLARATION
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY GLYN O'BRIEN TO THE DIRECTORS OF MUSGRAVE MINERALS LIMITED
As lead auditor of Musgrave Minerals Limited for the year ended 30 June 2019, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Musgrave Minerals Limited and the entity it controlled during the
period.
Glyn O'Brien
Director
BDO Audit (WA) Pty Ltd
Perth, 19 September 2019
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
PAGE 24
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2019
Revenue from continuing operations
Other income
Employee benefits expense
Depreciation expense
Impairment expense
Other expenses
Change in fair value of derivate financial instruments
CONSOLIDATED
Notes
3(a)
3(a)
3(b)
10
3(c)
9(a)
2019
$
108,996
260,000
(676,034)
(25,747)
(336,589)
(335,666)
(324,000)
2018
$
66,077
15,493
(370,660)
(13,080)
(41,108)
(390,323)
418,000
Loss from continuing operations before income tax
Income tax benefit
(1,329,040)
5
–
(315,601)
126,126
Loss after income tax for the period attributable to the owners
of Musgrave Minerals Limited
(1,329,040)
(189,475)
Other comprehensive income/(loss)
Items that will not be reclassified to profit or loss
Change in fair value of financial assets at fair value through OCI
9(b)
(354,425)
470,000
Other comprehensive income/(loss) for the period (net of tax)
(354,425)
470,000
Total comprehensive profit/(loss) for the period attributable to
the owners of Musgrave Minerals Limited
Profit/(loss) per share attributable to the owners of
Musgrave Minerals Limited
Basic loss per share
Diluted loss per share
(1,683,465)
Cents
per share
280,525
Cents
per share
17
17
0.37
0.37
0.07
0.07
The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes.
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
MUSMUMUSGRAGRAGRAVE VE VV MIMMINERNERALALSLSSAL LLTLTLTLTLTD D DD ANNANNNNUALUALUALU
RERERERER PORPORPORPORPO TTTTT T 20120120122012 9 9 99
PAGE 25
PAGE 25
E EE 252525
PAGPAGPAGP
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Derivate financial instruments
Total Current Assets
Non-Current Assets
Financial assets at fair value through other comprehensive
income
Property, plant and equipment
Exploration and evaluation
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Provisions
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
CONSOLIDATED
Notes
2019
$
2018
$
6
7
8
9(a)
9(b)
10
12
13
14
15
16
3,543,732
5,230,122
133,758
21,211
131,000
114,650
14,611
455,000
3,829,701
5,814,383
505,575
74,948
15,976,794
16,557,317
610,000
45,493
10,256,138
10,911,631
20,387,018
16,726,014
177,614
116,960
294,574
530,869
108,950
639,819
294,574
639,819
20,092,444
16,086,195
44,592,770
1,128,652
39,436,729
971,276
(25,628,978)
(24,321,810)
20,092,444
16,086,195
The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
PAGE 26
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
ATTRIBUTABLE TO EQUITY HOLDERS OF THE ENTITY
Issued Capital
$
Options
Reserve
$
Financial
Asset Reserve
$
Accumulated
Losses
$
Total
Equity
$
At 1 July 2017
32,646,322
303,494
16,789
(24,190,900)
8,775,705
Total comprehensive loss for the
period
Other comprehensive income
Profit/(loss) after income tax for
the period (net of tax)
Transactions with owners in
their capacity as owners:
–
–
–
Issue of shares
7,010,050
Transaction costs of issuing
shares
Transfer from share option
reserve:
- Due to exercise of options
- Due to expiry of options
- Issue of options
(219,643)
–
–
–
(36,938)
(21,627)
239,558
–
(189,475)
(189,475)
470,000
–
470,000
470,000
(189,475)
280,525
–
–
–
–
–
–
–
7,010,050
(219,643)
36,938
21,627
–
–
–
239,558
At 30 June 2018
39,436,729
484,487
486,789
(24,321,810)
16,086,195
At 1 July 2018
39,436,729
484,487
486,789
(24,321,810)
16,086,195
Total comprehensive loss for the
period
Other comprehensive loss
Loss after income tax for the
period (net of tax)
Transactions with owners in
their capacity as owners:
–
–
–
Issue of shares
5,500,000
Transaction costs of issuing
shares
Transfer from share option
reserve:
- Due to expiry of options
- Issue of options
(343,959)
–
–
(21,872)
533,673
–
(1,329,040)
(1,329,040)
(354,425)
–
(354,425)
(354,425)
(1,329,040)
(1,683,465)
–
–
–
–
–
–
5,500,000
(343,959)
21,872
–
–
533,673
–
–
–
–
–
–
–
–
–
–
At 30 June 2019
44,592,770
996,288
132,364
(25,628,978)
20,092,444
The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 27
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
Research and development tax rebate received
CONSOLIDATED
Notes
2019
$
(743,881)
102,396
–
2018
$
(539,570)
61,773
362,491
NET CASH FLOWS USED IN OPERATING ACTIVITIES
24
(641,485)
(115,306)
NET CASH FLOWS USED IN INVESTING ACTIVITIES
Payments for property, plant and equipment
Payments for tenements
Proceeds from sale of non-gold rights
Payments for exploration activities
10
3(a)
(55,202)
(125,000)
10,000
(9,763)
(1,500,000)
–
(6,030,744)
(3,480,531)
NET CASH FLOWS USED IN INVESTING ACTIVITIES
(6,200,946)
(4,990,294)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Proceeds from exercise of options
Share issue costs
NET CASH FLOWS FROM FINANCING ACTIVITIES
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period
14(b)
5,500,000
–
14(b)
(343,959)
5,156,041
(1,686,390)
5,230,122
6,977,000
18,000
(219,643)
6,775,357
1,669,757
3,560,365
CASH AND CASH EQUIVALENTS AT END OF PERIOD
6
3,543,732
5,230,122
The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
PAGE 28
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
1
CORPORATE INFORMATION
The consolidated financial report of Musgrave Minerals Limited for the year ended 30 June 2019 was
authorised for issue in accordance with a resolution of the Directors on 19 September 2019.
Musgrave Minerals Limited is a for profit company incorporated in Australia and limited by shares which
are publicly traded on the Australian Securities Exchange. The nature of the operation and principal
activities of the consolidated entity are described in the attached Directors’ Report.
The principal accounting policies adopted in the preparation of these consolidated financial statements
are set out below and have been applied consistently to all periods presented in the consolidated financial
statements and by all entities in the consolidated entity.
2
STATEMENT OF COMPLIANCE
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent
Issues Group Interpretations and the Corporations Act 2001.
Compliance with IFRS
The consolidated financial statements of Musgrave Minerals Limited also comply with International
Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board
(“IASB”).
New and amended accounting standards and interpretations adopted by the Group
The following standards relevant to the operations of the Group and effective from 1 July 2018 have been
adopted.
AASB 9: Financial Instruments;
AASB 15: Revenue from Contracts with Customers; and
AASB 2016-5: Amendments to Australian Accounting Standards - Classification and Measurement of
Share-based Payment Transactions.
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the
financial performance or position of the Group. Details of each standards’ impact, and the new accounting
policies adopted are set out below.
Impact of adoption of AASB 9: Financial Instruments (“AASB 9”)
AASB 9 replaces the provisions of AASB 139: Financial Instruments: Measurement and Recognition,
that relate to the recognition, classification and measurement of financial assets and financial liabilities,
derecognition of financial instruments, impairment of financial assets and hedge accounting.
The adoption of AASB 9 resulted in minimal changes in accounting policies. The new accounting policies
are set out in Notes 7 and 9. There was no significant impact on the financial performance or position of
the Group on the date of initial application, 1 July 2018, or at the reporting date, 30 June 2019. Details are
below.
Classification and measurement of financial assets
On the date of initial application, 1 July 2018, the financial instruments of the Group were as follows, with
any reclassifications noted.
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 29
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
2
STATEMENT OF COMPLIANCE CONTINUED
Measurement category
Carrying amount
Original (AASB 139)
New (AASB 9)
Original $
New $
Difference $
Current financial assets
Trade and other
receivables
Derivative
financial
instruments
Amortised cost
Amortised cost
114,650
114,650
Fair value through
profit or loss
(“FVPL”)
Fair value
through profit or
loss (“FVPL”)
455,000
455,000
Non-current financial assets
Listed equities
Available–for–sale
610,000
610,000
Fair value
through other
comprehensive
income
(“FVOCI”)
–
–
–
The Group elected to present in other comprehensive income changes in the fair value of all its listed
equities previously classified as available-for-sale. As a result, listed equities with a fair value of $610,000
were reclassified from available-for-sale recognised under non-current available-for-sale financial assets to
financial assets at FVOCI on 1 July 2018.
Impairment of trade and other receivables
Prior to the adoption of AASB 9, in accordance with AASB 139 Financial Instruments: Measurement and
Recognition, the Group applied an incurred credit loss model. Upon adoption of AASB 9, the Group has
elected to apply the simplified approach to measuring expected credit losses, which uses the lifetime
expected loss allowance for all trade and other receivables.
Due to the nature of the Group’s trade and other receivables, there was no impact of the expected loss
allowance under AASB 9 against the loss incurred under AASB 139 to the Group.
Impact of adoption of AASB 15: Revenue from Contracts with Customers (“AASB 15”)
AASB 15 replaces AASB 118 Revenue. AASB 15 provides a single, principles based five step model to be
applied to all contracts with customers.
The adoption of AASB 15 resulted in minimal changes in accounting policies. The new accounting policies
are set out in Note 3. There was no impact on the financial performance or position of the Group on the
date of initial application, 1 July 2018, or at reporting date, 30 June 2019.
New accounting standards and interpretations
The following new and amended accounting standards and interpretations relevant to the operations of the
Group have been published but are not mandatory for the current financial year. The Group has decided
against early adoption of these standards and has not yet determined the potential impact on the financial
statements from the adoption of these standards and interpretations.
PAGE 30
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
2
STATEMENT OF COMPLIANCE CONTINUED
The key new standards which may impact the Group in future years are detailed below:
New or revised requirement
AASB 16: Leases
Application date
of standard
Application date
for Group
1 Jan 2019
1 Jul 2019
This Standard sets out the principles for the recognition,
measurement, presentation and disclosure of leases. The objective
is to ensure that lessees and lessors provide relevant information
in a manner that faithfully represents those transactions. This
information gives a basis for users of financial statements to
assess the effect that leases have on the financial position, financial
performance and cash flows of an entity.
The entity is yet to undertake a detailed assessment of the
impact of AASB 16. However, based on the entity’s preliminary
assessment, the Standard is expected to have an impact on the
transactions and balances recognised in the financial statements
when it is first adopted for the year ending 30 June 2020.
a) Basis of measurement
Historical cost convention
These consolidated financial statements have been prepared under the historical cost convention,
except where stated.
Critical accounting estimates
The preparation of financial statements requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the process of applying the Group’s
accounting policies. The areas involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the financial statements, are disclosed where
appropriate.
b) Going concern
These consolidated financial statements have been prepared on the going concern basis, which
contemplates continuity of normal business activities and the realisation of assets and the settlement
of liabilities in the ordinary course of business.
c)
Principles of consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of the Company’s
subsidiary at 30 June 2019 and the results of its subsidiary for the year then ended. The Company and
its subsidiary together are referred to in this financial report as the Group or the consolidated entity.
Subsidiaries are all entities (including structured entities) over which the Group has control. The
Group controls an entity when the Group is exposed to, or has rights to, variable returns from its
investment with the entity and has the ability to affect those returns through its power to direct the
activities of the entity.
The acquisition method of accounting is used to account for business combinations by the Group.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They
are de consolidated from the date that control ceases.
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
2
STATEMENT OF COMPLIANCE CONTINUED
Intercompany transactions, balances and unrealised gains on transactions between Group companies
are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an
impairment of the transferred asset. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the
consolidated Statement of Profit or Loss and Other Comprehensive Income, consolidated statement of
financial position and the consolidated statement of changes in equity respectively.
d) Critical accounting judgements and key sources of estimation uncertainty
The application of accounting policies requires the use of judgments, estimates and assumptions
about carrying values of assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are
recognised in the period in which the estimate is revised if it affects only that period, or in the period
of the revision and future periods if the revision affects both current and future periods.
e)
Functional and presentation currency
The consolidated financial statements are presented in Australian dollars, which is the Group’s
functional and presentational currency.
f)
Leases
Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks
and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s
inception at the fair value of the leased property or, if lower, the present value of the minimum lease
payments. The corresponding rental obligations, net of finance charges, are included in other short-
term and long-term payables.
Each lease payment is allocated between the liability and finance cost. The finance cost is charged
to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period. The property, plant and equipment acquired under
finance leases is depreciated over the asset’s useful life or over the shorter of the asset’s useful life
and the lease term if there is no reasonable certainty that the Group will obtain ownership at the end
of the lease term.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the
Group as lessee are classified as operating leases. Payments made under operating leases (net of
any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the
period of the lease.
g) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost
of acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The
net amount of GST recoverable from, or payable to, the taxation authority is included with other
receivables or payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing
or financing activities which are recoverable from, or payable to the taxation authority, are presented
as operating cash flows.
PAGE 32
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
3
REVENUE AND EXPENSES
a) Revenue and other income
Revenue from continuing operations
Interest revenue
Other Income
Option fee and shares - Cyprium Metals Limited (i)
Other
Total revenue and other income
CONSOLIDATED
2019
$
2018
$
108,996
66,077
260,000
–
260,000
368,996
–
15,493
15,493
81,570
(i)
In February 2019, the Company executed a Binding Term Sheet with Cyprium Australia Pty Ltd
(“Cyprium”) regarding an option, earn-in and joint venture on the non-gold rights over the northern
tenements at the Cue Project in Western Australia’s Murchison region. Cyprium made an initial
payment of $10,000 for an exclusive 90-day option period and on 31 May 2019 exercised the option to
earn an 80% interest by the payment to the Company of $250,000 worth of shares in ARC Exploration
Limited (subsequently renamed Cyprium Metals Limited ASX:CYM).
Revenue is recognised at an amount that reflects the consideration to which the Group expects to be
entitled to in exchange for transferring services to a customer. Revenue and expenses are recognised on an
accruals basis.
Interest income is recognised on a time proportion basis using the effective interest method.
b) Employee benefits expense
Wages, salaries, directors’ fees and other remuneration expenses
Superannuation contributions
Transfer to/(from) annual leave provision
Transfer to/(from) long service leave provision
Share-based payments expense (Note 23)
Transfer to capitalised exploration expenditure
Total employee benefits expense
c) Other expenses
Secretarial, professional and consultancy costs
Occupancy costs
Share register maintenance
ASX / ASIC
Promotion, advertising and sponsorship
Employer related on-costs
Other expenses
Transfer to capitalised exploration expenditure
Total other expenses
CONSOLIDATED
2019
$
1,382,360
125,149
(10,290)
18,300
533,673
(1,373,158)
676,034
2018
$
993,426
88,848
5,025
14,694
239,558
(970,891)
370,660
CONSOLIDATED
2019
$
113,335
97,831
18,030
50,789
56,843
53,748
177,356
(232,266)
335,666
2018
$
116,685
48,912
15,489
38,596
73,104
25,820
147,688
(75,971)
390,323
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
4
SEGMENT INFORMATION
The Group operates in one geographical segment, being Australia and in one operating category, being
mineral exploration. Therefore, information reported to the chief operating decision maker (the Board
of Musgrave Minerals Limited) for the purposes of resource allocation and performance assessment is
focused on mineral exploration within Australia. The Board has considered the requirements of AASB 8:
Operating Segments and the internal reports that are reviewed by the chief operation decision maker in
allocating resources and have concluded at this time that there are no separately identifiable segments.
5
INCOME TAX
Statement of Profit or Loss and Other Comprehensive Income
Current income tax:
- Current income tax benefit at a rate of 27.5% (2018: 27.5%)
- R&D tax concession
Deferred income tax:
CONSOLIDATED
2019
$
2018
$
–
–
–
(126,126)
- Relating to origination and reversal of temporary differences
- Deferred tax liability offset by deferred tax asset losses
- Temporary difference not recognised in the current period
(1,336,722)
1,746,832
(410,110)
(1,278,715)
1,221,996
56,719
Income tax expense/(benefit) reported in the
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
A reconciliation of income tax expense/(benefit) applicable to
accounting profit/(loss) before income tax at the statutory income
tax rate to income tax expense/(benefit) at the Company’s effective
income tax is as follows:
Accounting loss from continuing operations before income tax
At the statutory income tax rate of 27.5% (2018: 27.5%)
Add:
–
(126,126)
(1,329,040)
(365,486)
(315,601)
(86,790)
- Immediate write-off of capital expenditure
(1,631,367)
(1,038,184)
- Expenditures not allowable / income assessable
- Other deductible items
390,477
(140,456)
- Tax losses not recognised due to not meeting recognition criteria
1,746,832
–
125,436
(222,458)
1,221,996
–
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income
based on the applicable income tax rate, adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at
the end of the reporting period. Management periodically evaluates positions taken in tax returns with respect
to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.
PAGE 34
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
5
INCOME TAX (CONTINUED)
CONSOLIDATED
CONSOLIDATED
2019
2019
$
20182018
$
Deferred income tax
Recognised on the Statement of Financial Position, deferred income
tax at the end of the reporting period relates to the following: (2019:
27.5%, 2018: 27.5%)
Deferred income tax liabilities:
- Capitalised expenditure deductible for tax purposes
4,001,553
2,433,147
- Trade and other receivables
- Derivative financial instruments
- Available for sale financial instruments
Deferred income tax assets:
- Trade and other payables
- Employee benefits
- Capital raising costs
- Provisions
- Tax losses available to offset DTL
Net deferred tax asset/(liability)
13,750
24,750
36,400
12,691
113,850
133,867
4,076,453
2,693,555
(4,895)
(32,164)
(155,445)
–
(7,013)
(29,961)
(108,861)
(493)
(3,883,949)
(2,547,227)
–
–
The Company and its 100% owned controlled entity have formed a tax consolidated group. The head entity
of the tax consolidated group is Musgrave Minerals Limited. The tax consolidated group has potential
revenue tax losses of $30,775,748 (2018: $24,423,633).
The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred
tax assets have not been recognised in respect of these items because it is not probable that future taxable
profit will be available against which the Group can utilise benefits.
The utilisation of tax losses is dependent on the Group satisfying the continuity of ownership test or the
same business test at the time the tax losses are applied against taxable income.
6
CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short-term deposits
CONSOLIDATED
CONSOLIDATED
2019
2019
$
417,407
3,126,325
3,543,732
20182018
$
353,797
4,876,325
5,230,122
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, and other
short-term, highly liquid investments with maturities of three months or less.
The weighted average interest rate for the year was 2.18% (2018: 2.05%).
The Group’s exposure to interest rate risk is set out in Note 22. The maximum exposure to credit risk at the
end of the reporting period is the carrying amount of each class of cash and cash equivalents mentioned
above.
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
7
TRADE AND OTHER RECEIVABLES
Current
GST receivable
Other
CONSOLIDATED
CONSOLIDATED
2019
2019
$
65,989
67,769
133,758
20182018
$
86,329
28,321
114,650
Trade and other receivables are generally due for settlement within 30 days. They are presented as current
assets unless collection is not expected for more than 12 months after the reporting date.
Trade and other receivables are recognised at amortised cost using the effective interest rate method, less
any allowance for expected credit losses.
The Group assesses at each balance date whether there is objective evidence that a financial asset or
group of financial assets is impaired. For trade and other receivables, the Group applies the simplified
approach permitted by AASB 9 to determine any allowances for expected credit losses, which requires
expected lifetime losses to be recognised from initial recognition of the receivables. The expected credit
losses on these financial assets are estimated using a provision matrix based on the Group’s historical
credit loss experience. The amounts held in trade and other receivables do not contain impaired assets and
are not past due. Based on the credit history of these trade and other receivables, it is expected that the
amounts will be received when due.
The Group’s financial risk management objectives and policies are set out in Note 22.
Due to the short-term nature of these receivables their carrying value is assumed to approximate their fair
value.
8 OTHER CURRENT ASSETS
Accrued interest
9
FINANCIAL ASSETS
a) Derivative financial instruments
Current
Opening balance
Change in fair value
Closing balance
CONSOLIDATED
CONSOLIDATED
2019
2019
$
21,211
21,211
20182018
$
14,611
14,611
CONSOLIDATED
CONSOLIDATED
2019
2019
$
455,000
(324,000)
131,000
20182018
$
37,000
418,000
455,000
PAGE 36
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
9
FINANCIAL ASSETS (CONTINUED)
b)
Financial assets at fair value through other comprehensive income
Non-Current
Opening balance
Acquisition (Note 3(a))
Change in fair value
Closing balance
CONSOLIDATED
CONSOLIDATED
2019
2019
$
610,000
250,000
(354,425)
505,575
20182018
$
140,000
–
470,000
610,000
Financial assets are recognised and derecognised on settlement date where the purchase or sale of an
investment is under a contract whose terms require delivery of the investment within the time-frame
established by the market concerned. They are initially measured at fair value, net of transaction costs,
except for those financial assets classified as fair value through profit or loss, which are initially measured
at fair value. Transaction costs of financial assets carried at fair value through profit or loss are expensed in
profit or loss.
The Group classifies its financial assets as either financial assets at fair value though profit or loss
(“FVPL”), fair value though other comprehensive income (“FVOCI”) or at amortised cost. The classification
depends on the entity’s business model for managing the financial assets and the contractual terms of the
cash flows.
For investments in equity instruments, the classification depends on whether the Group has made an
irrevocable election at the time of initial recognition to account for the equity investment at FVPL or FVOCI.
Financial assets at FVPL
For assets measured at FVPL, gains and losses will be recorded in profit or loss. The Group’s derivative
financial instruments are recognised at FVPL. Assets in this category are subsequently measured at fair
value. The fair values of financial assets in this category are determined by reference to active market
transactions or using a valuation technique where no active market exists. Refer to Note 22 for additional
details.
Financial assets at OCI
For assets measured at FVOCI, gains and losses will be recorded in other comprehensive income. There is
no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition
of the investment. Dividends from such investments continue to be recognised in profit or loss as other
income when the Group’s right to receive payments is established. Impairment losses (and reversal of
impairment losses) on equity investments measured at FVOCI are not reported separately from other
changes in fair value. The Group has elected to measure its listed equities at FVOCI.
Assets in this category are subsequently measured at fair value. The fair values of quoted investments are
based on current bid prices in an active market. Refer to Note 22 for additional details.
10 EXPLORATION AND EVALUATION
Opening balance
Exploration expenditure incurred during the year
Acquisition of remaining Cue joint venture interest (i)
Mainland option fee (ii)
Impairment expense (iii)
Closing balance
CONSOLIDATED
CONSOLIDATED
2019
2019
$
10,256,138
5,932,245
–
125,000
(336,589)
20182018
$
5,022,031
3,775,215
1,500,000
–
(41,108)
15,976,794
10,256,138
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
10 EXPLORATION AND EVALUATION (CONTINUED)
i)
ii)
In August 2017, the Company completed the acquisition of Silver Lake Resources Limited’s remaining
interest in the Cue Project JV by exercising its pre-emptive right. The consideration for the JV interest
was $1.5 million in cash.
In March 2019 the Company entered into an Option Agreement (“Agreement”) to acquire the non-
alluvial gold rights to the Mainland Project for an initial payment of $125,000.
iii) The impairment expense for the year relates primarily to the write down of capitalised exploration
expenditure for the Company’s Corunna Project.
Exploration and evaluation expenditure, including the costs of acquiring licences and permits, are
capitalised as exploration and evaluation assets on an area of interest basis. Costs incurred before the
Company has obtained the legal rights to explore an area are recognised in the Statement of Profit or Loss
and Other Comprehensive Income.
Exploration and evaluation assets are only recognised if the rights to the area of interest are current and
either:
a)
b)
the expenditures are expected to be recouped through successful development and exploitation or
from sale of the area of interest; or
activities in the area of interest have not at the reporting date reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves, and active
and significant operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine
technical feasibility and commercial viability, and facts and circumstances suggest that the carrying
amount exceeds the recoverable amount. For the purposes of impairment testing, exploration and
evaluation assets are allocated to cash-generating units to which the exploration activity relates. The cash
generating unit shall not be larger than the area of interest.
Once the technical feasibility and commercial viability of the extraction of minerals in an area of interest
are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for
impairment and then reclassified to mineral property and development assets within property, plant and
equipment.
When an area of interest is abandoned or the Directors decide that it is not commercial, any accumulated
costs in respect of that area are written off in the financial period the decision is made.
Significant estimate and judgement
There is some subjectivity involved in the carry forward of capitalised exploration and evaluation
expenditure or, where appropriate, the write off to the Statement of Profit or Loss and Other
Comprehensive Income, however management give due consideration to areas of interest on a regular
basis and are confident that decisions to either write off or carry forward such expenditure fairly reflect the
prevailing situation.
11 SUBSIDIARIES
Details of the Company’s subsidiary are as follows:
Subsidiary
Principal
activity
Country of
incorporation
Musgrave Exploration Pty Ltd
Exploration
Australia
Proportion of ownership
2019
100%
2018
100%
PAGE 38
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
12 TRADE AND OTHER PAYABLES
Trade creditors
Other payables
CONSOLIDATED
CONSOLIDATED
2019
2019
$
63,508
114,106
177,614
20182018
$
455,422
75,447
530,869
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
financial year and which are unpaid. Trade creditors are unsecured, non-interest bearing and are normally
settled on 30-day terms. The Group’s financial risk management objectives and policies are set out in Note
22. Due to the short-term nature of these payables their carrying value is assumed to approximate their fair
value.
13 PROVISIONS
Short-term
Annual leave
Long service leave
Short–term obligations
CONSOLIDATED
CONSOLIDATED
2019
2019
$
36,240
80,720
116,960
20182018
$
46,530
62,420
108,950
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled
within 12 months, are recognised in respect of employees’ services up to the end of the reporting period
and are measured at the amounts expected to be paid when the liabilities are settled. The liability for
annual leave is recognised in the provision for employee benefits. All other short-term employee benefit
obligations are presented as payables.
The obligations are presented as current liabilities in the Statement of Financial Position of the Group.
Other long-term obligations
The liability for long service leave and annual leave which is not expected to be settled within 12 months
after the end of the period in which the employees render the related service is recognised as a non-current
provision for employee benefits and measured as the present value of expected future payments to be
made in respect of services provided by employees up to the end of the reporting period.
14 CONTRIBUTED EQUITY
a) Share capital
Ordinary shares fully paid
44,592,770
39,436,729
CONSOLIDATED
CONSOLIDATED
2019
2019
$
20182018
$
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
14 CONTRIBUTED EQUITY (CONTINUED)
b) Movements in ordinary shares on issue
Balance at 1 July 2017
Placement – 17 October 2017
Share Purchase Plan – 31 October 2016
Shares issued in lieu of services – 14 December 2017
Exercise of options – 29 December 2017
Placement – 28 May 2018
Share issue costs
Balance at 30 June 2018
Placement – 19 December 2018
Share issue costs
Balance at 30 June 2019
CONSOLIDATED
CONSOLIDATED
Number
Number
$
220,045,782
32,646,322
46,000,000
12,338,675
215,000
400,000
48,000,000
–
326,999,457
59,782,609
–
2,852,000
765,000
15,050
18,000
3,360,000
(219,643)
39,436,729
5,500,000
(343,959)
386,782,066
44,592,770
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax, from the proceeds. Ordinary shares
have the right to receive dividends as declared, and in the event of winding up the Company, to
participate in the proceeds from the sale of all surplus assets in proportion to the number of and
amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or
by proxy, at a meeting of the Company.
c) Movements in options on issue
Balance at beginning of the financial year
Options granted
Options exercised
Options expired/lapsed
Balance at end of the financial year
15 RESERVES
Share option reserve
Opening balance
Issue of director and employee options (Note 23)
Exercise of employee options
Expiry of options
Balance at the end of the financial year
CONSOLIDATED
CONSOLIDATED
2019
2019
$
9,900,000
10,550,000
–
(650,000)
19,800,000
20182018
$
5,375,000
5,500,000
(400,000)
(575,000)
9,900,000
CONSOLIDATED
CONSOLIDATED
2019
2019
$
484,487
533,673
–
(21,872)
996,288
20182018
$
303,494
239,558
(36,938)
(21,627)
484,487
The options reserve is used to recognise the fair value of options issued to Directors, employees and
contractors.
PAGE 40
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
15 RESERVES (CONTINUED)
Financial asset reserve
Opening balance
Financial assets at fair value through other comprehensive income
(Note 9(b))
Balance at the end of the financial year
Total Reserves
CONSOLIDATED
CONSOLIDATED
2019
2019
$
20182018
$
486,789
16,789
(354,425)
132,364
1,128,652
470,000
486,789
971,276
The financial asset reserve is used to recognise the fair value movement on financial assets at fair value
through other comprehensive income.
16 ACCUMULATED LOSSES
Balance at the beginning of the financial year
Net loss attributable to members
Transfer from share option reserve
Balance at the end of the financial year
17 EARNINGS PER SHARE
Basic loss per share
Diluted loss per share
CONSOLIDATED
CONSOLIDATED
2019
2019
$
20182018
$
(24,321,810)
(24,190,900)
(1,329,040)
21,872
(189,475)
58,565
(25,628,978)
(24,321,810)
2019
2019
Cents
Cents
0.37
0.37
20182018
Cents
Cents
0.07
0.07
The following reflects the income and share data used in the calculations of basic and diluted loss per
share:
Profits/(losses) used in calculating basic and diluted earnings per
share
Weighted average number of ordinary shares used in calculating
basic and diluted loss per share
2019
2019
$
20182018
$
(1,329,040)
(189,475)
2019
2019
Number
Number
20182018
Number
Number
358,610,535
265,146,411
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the Group, excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during
the year and excluding treasury shares.
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
17 EARNINGS PER SHARE (CONTINUED)
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to
take into account the after income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares and the weighted average number of additional ordinary shares that would have
been outstanding assuming the conversion of all dilutive potential ordinary shares.
18 AUDITOR’S REMUNERATION
CONSOLIDATED
CONSOLIDATED
2019
2019
$
15,000
11,670
26,670
20182018
$
–
32,300
32,300
Audit services
BDO Audit (WA) Pty Ltd
- Audit of the financial reports
Grant Thornton Audit Pty Ltd
- Audit and review of the financial reports
Total remuneration
19 CONTINGENT ASSETS AND LIABILITIES
Contingent liabilities
The Group had contingent liabilities in respect of:
Future royalty payments
Musgrave holds a 100% interest in the key tenure at Cue including the Break of Day and Lena deposits and
other prospects. Some of the Cue tenements are subject to third party royalty payments on future gold
production including the mining licence hosting the Break of Day and Lena gold deposits.
Future consideration and royalty payments
In March 2019, the Company entered into an Option Agreement (“Agreement”) to acquire the non-alluvial
gold rights to the Mainland Project which is located within the boundaries of the Company’s Cue Gold
Project. Musgrave paid $125,000 to execute the option to acquire 100% interest in the tenements (excluding
the vendors’ interest in alluvial gold). A further $100,000 is due within 18 months and an additional
$300,000 is to be paid as milestone payments in Musgrave shares or cash (at the Company’s discretion)
before the fourth anniversary of the Agreement. The vendor will be entitled to a 1% gross royalty on any
gold produced by the Company from the tenements (excluding any alluvial gold).
Contingent assets
The Group had contingent assets in respect of:
Future royalty payments
In January 2014, the Group entered into a Mining Farm-in and Joint Venture Agreement (“Agreement”)
with Menninnie Metals Pty Ltd. In August 2015, the parties agreed to terminate the Agreement
(“Termination Agreement”). As part of the Termination Agreement the Group retains a 1% Net Smelter
Return Royalty on all ores, concentrates or other primary, intermediate or final product of any minerals
produced from two of the tenements.
Deferred consideration
In May 2019, Cyprium Australia Pty Ltd (“Cyprium”) exercised an option to earn an 80% interest in the non-
gold rights over the northern tenements (“Tenements”) of the Company’s Cue Project. Cyprium is required
to spend $2 million on exploration within two years to acquire the 80% interest upon which the Company
will retain 20% and be free carried to a definitive feasibility study. Should Cyprium delineate 80,000 tonnes
of contained copper over the Tenements, $200,000 in cash or the equivalent value of Cyprium shares
(at Cyprium’s election) will be due to the Company. Upon a Decision to Mine, $300,000 in cash or the
equivalent value of Cyprium shares (at Cyprium’s election) will be due to the Company.
There are no other material contingent assets or liabilities as at 30 June 2019.
PAGE 42
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
20 EVENTS OCCURRING AFTER THE REPORTING PERIOD
On 17 September 2019 Musgrave announced that it had entered into an Earn-In and Joint Venture
Exploration Agreement with Evolution Mining Limited over a select area of Lake Austin and surrounds
(JV Area) of the Cue Project in the Murchison District of Western Australia. The JV Area excludes all the
known resources including Lena and Break of Day and the Mainland option area. Evolution can earn a 75%
interest in the JV Area by sole funding A$18 million on exploration over a five year term with a minimum
commitment of A$4 million in the first two years. Musgrave will manage the JV during the initial period.
As part of the Agreement, Evolution has agreed to subscribe for 18,587,361 ordinary shares in Musgrave
through a share placement (“Placement”) at a price of $0.0807 per share. The placement was set at the 30-
day VWAP for Musgrave shares and represents a holding of 4.59% (undiluted) in the Company.
There have been no other events subsequent to reporting date which are sufficiently material to warrant
disclosure.
21 COMMITMENTS
In order to maintain an interest in the exploration tenements in which the Group is involved, the Group is
committed to meeting the conditions under which the tenements were granted. The timing and amount
of exploration expenditure commitments and obligations of the Group are subject to the minimum
expenditure commitments required as per the Mining Act 1978 (Western Australia) and the Mining Act
1971 (South Australia), and may vary significantly from the forecast based upon the results of the work
performed which will determine the prospectivity of the relevant area of interest. Currently, the minimum
expenditure commitments for the granted tenements is $992,300 (2018: $901,940) per annum. Of this
amount $488,000 will be met by the Group’s joint venture partners as part of their earn-in obligations.
Commitments in relation to the lease of office premises are payable as follows:
Within one year
Later than one year but not later than five years
Later than five years
CONSOLIDATED
CONSOLIDATED
2019
2019
$
64,736
38,523
–
103,259
20182018
$
62,547
103,259
–
165,806
22 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Financial risk management
Overview
The Group has exposure to the following risks from their use of financial instruments:
Interest rate risk
Credit risk
Foreign currency risk
Commodity risk
Liquidity risk
Market risk
This note presents information about the Group’s exposure to each of the above risks, their objectives,
policies and processes for measuring and managing risk, and the management of capital. The Board of
Directors has overall responsibility for the establishment and oversight of the risk management framework.
Risk management policies are established to identify and analyse the risks faced by the Group, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management
policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s
activities.
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
22 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
The Audit Committee oversees how management monitors compliance with the Group’s risk management
policies and procedures and reviews the adequacy of the risk management framework in relation to the
risks faced by the Group.
The Group’s principal financial instruments are tabled below.
Financial assets
Current
Cash and cash equivalents
Trade and other receivables
Derivative financial instruments
Non-Current
Financial assets at fair value through other comprehensive income
(“FVOCI”)
Financial liabilities
Current
Trade and other payables
Interest rate risk
CONSOLIDATED
CONSOLIDATED
2019
2019
$
2018
2018
$
3,543,732
5,230,122
133,758
131,000
114,650
455,000
3,808,490
5,799,772
505,575
505,575
177,614
177,614
610,000
610,000
530,869
530,869
Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the
instrument will fluctuate due to changes in market interest rates. Interest rate risk arises from fluctuations
in interest bearing financial assets and liabilities that the Group uses.
Interest bearing assets comprise cash and cash equivalents which are considered to be short-term liquid
assets. It is the Group’s policy to settle trade payables within the credit terms allowed and therefore not
incur interest on overdue balances.
PAGE 44
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
22 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
The following table set out the carrying amount, by maturity, of the financial instruments that are exposed
to interest rate risk:
Floating
interest
rate
$
Fixed interest rate maturing in
1 year or
less
$
Over 1 to 5
years
$
More than
5 years
$
Non-
interest
bearing
$
Total
$
Consolidated – 2019
Financial assets
Cash and cash equivalents
417,107
3,126,325
Trade and other receivables
–
–
417,107
3,126,325
–
–
–
–
–
–
300
3,543,732
133,758
133,758
134,058
3,677,490
Weighted average interest
rate
Financial liabilities
Trade and other payables
Weighted average interest
rate
Consolidated – 2018
Financial assets
1.25%
2.32%
N/A
N/A
N/A
N/A
–
–
–
–
–
–
–
–
177,614
177,614
177,614
177,614
N/A
N/A
N/A
N/A
N/A
N/A
Cash and cash equivalents
353,497
4,876,325
Trade and other receivables
–
–
Weighted average interest
rate
Financial liabilities
Trade and other payables
Weighted average interest
rate
353,497
4,876,325
1.32%
2.36%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
300
5,230,122
114,650
114,650
114,950
5,344,772
–
–
530,869
530,869
–
530,869
530,869
–
Sensitivity analysis for interest rate exposure
A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity
and profit or loss by the amounts shown below:
Impact on profit/(loss) and equity
Increase of 100 basis points
Decrease of 100 basis points
Credit risk
2019
2019
$
50,055
(50,055)
20182018
$
32,186
(32,186)
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers
and investment securities. The Group trades only with recognised, creditworthy third parties. It is the
Group policy that all customers who wish to trade on credit terms are subject to credit verification
procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the
Group’s exposure to bad debts is not significant. The maximum exposure to credit risk is the carrying value
of the receivable, net of any provision for expected credit loss.
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
22 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
With respect to credit risk arising from the other financial assets of the Group, which comprise cash
and cash equivalents, the Group’s exposure to credit risk arises from default of the counter party, with a
maximum exposure equal to the carrying amount of these instruments. This risk is minimised by reviewing
term deposit accounts from time to time with approved banks of a sufficient credit rating which is -AA and
above.
Exposure to credit risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s
maximum exposure to credit risk is tabled below.
Cash and cash equivalents
Trade and other receivables
Foreign currency risk
CONSOLIDATED
CONSOLIDATED
2019
2019
$
3,543,732
133,758
3,677,490
20182018
$
5,230,122
114,650
5,344,772
The Group’s exposure to foreign currency risk is minimal at this stage of its operations.
Commodity price risk
The Group’s exposure to commodity price risk is minimal at this stage of its operations.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Group’s reputation.
The Group’s objective is to maintain a balance between continuity of funding and flexibility. The following
are the contractual maturities of financial liabilities:
Less than
6 months
$
177,614
177,614
530,869
530,869
Total
Contractual cash
flows
$
177,614
177,614
530,869
530,869
Carrying
amount
$
177,614
177,614
530,869
530,869
Consolidated – 2019
Trade and other payables
Consolidated – 2018
Trade and other payables
Market risk
Price risk
The Group’s exposure to equity securities price risk arises from investments held by the Group and
classified in the Statement of Financial Position as either derivative financial instruments, or financial
assets at FVOCI.
Sensitivity analysis for price risk
A change of 10% in the price of securities held at reporting date on the Group’s equity and/or profit or loss
by is shown below:
PAGE 46
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
22 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Impact on profit/(loss) and equity
Increase of 10%
Decrease of 10%
Fair value of financial assets and liabilities
2019
2019
$
63,657
(63,657)
20182018
$
106,500
(106,500)
The fair value of cash and cash equivalents and non-interest bearing financial assets and financial liabilities
of the Group is equal to their carrying value.
Fair value measurement of financial instruments
Financial assets and financial liabilities measured at fair value in the Consolidated Statement of Financial
Position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the
observability of significant inputs to the measurement, as follows:
(cid:129)
(cid:129)
(cid:129)
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly; and
Level 3: unobservable inputs for the asset or liability.
The following table shows the levels within the hierarchy of financial assets and liabilities measured at fair
value on a recurring basis at 30 June 2019 and 30 June 2018:
30 June 2019
Derivative financial
instruments
Financial assets at FVOCI
30 June 2018
Derivative financial
instruments
Financial assets at FVOCI
Capital risk management
Level 1
$
Level 2
$
Level 3
$
–
131,000
505,575
505,575
–
131,000
–
455,000
610,000
610,000
–
455,000
–
–
–
–
–
–
Total
$
131,000
505,575
636,575
455,000
610,000
1,065,000
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an
optimal capital structure to reduce the cost of capital. The management of the Group’s capital is performed
by the Board.
The capital structure of the Group consists of net debt (trade and other payables and provisions detailed in
Notes 12 and 13 offset by cash and bank balances) and equity of the Group (comprising contributed equity
and reserves, offset by accumulated losses detailed in Notes 14, 15 and 16).
The Group is not subject to any externally imposed capital requirements. None of the Group’s entities are
subject to externally imposed capital requirements.
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
23 SHARE-BASED PAYMENTS
Employee Share Option Plan
The Group has an Employee Share Option Plan (“ESOP”) for executives and employees of the Group. In
accordance with the provisions of the ESOP, as approved by shareholders at a previous Annual General
Meeting, executives and employees may be granted options at the discretion of the Directors.
Each share option converts into one ordinary share of Musgrave Minerals Limited on exercise. No amounts
are paid or are payable by the recipient on receipt of the option. The options carry neither rights of
dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of
their expiry.
Options issued to Directors are subject to approval by shareholders.
The following share-based payment arrangements were in existence during the reporting period:
Option
series
Number
Issue
date
Expiry
date
Vesting
date
Exercise
price
Fair value at
grant date
H (1)
J (1)
M
O
P
Q
R
S
300,000
11 Mar 2014
10 Mar 2019
Immediate
250,000
16 Sep 2015
10 Mar 2019
Immediate
500,000
22 Apr 2016
22 Apr 2021
Immediate
2,550,000
4 Nov 2016
3 Nov 2019
Immediate
800,000
4 Nov 2016
3 Nov 2021
Immediate
3,250,000
29 Nov 2017
29 Nov 2020
Immediate
2,250,000
29 Nov 2017
29 Nov 2020
Immediate
7,500,000
21 Nov 2018
16 Nov 2021
Immediate
T (2)
3,050,000
30 Nov 2018
16 Nov 2021
Immediate
(1) These options expired during the financial year.
$0.12
$0.120
$0.045
$0.167
$0.195
$0.097
$0.097
$0.1275
$0.1275
$0.0522
$0.0046
$0.0194
$0.0659
$0.0628
$0.0436
$0.0436
$0.0506
$0.0506
(2) During the financial year 100,000 of these options lapsed under the terms of the Company’s ESOP.
Fair value of share options granted during the year
The fair value of share options at grant date is determined using a Black-Scholes option pricing model that
takes into account the exercise price, the term of the option, the share price at grant date, the expected
price volatility of the underlying share and the risk-free rate for the term of the option. The fair value of
share options issued during the year was $533,673 of which $328,803 relate to key management personnel
(2018: $239,558 and $141,570 respectively).
The model inputs for options granted during the year ended 30 June 2019 are as follows:
Inputs
Number
Exercise price
Issue date
Expiry date
Share price at grant date
Expected price volatility
Risk-free interest rate
Expected dividend yield
Issue S
7,500,000
$0.1275
21 Nov 2018
16 Nov 2021
$0.090
101%
2.16%
0%
Issue T
3,050,000
$0.1275
30 Nov 2018
16 Nov 2021
$0.092
101%
2.16%
0%
PAGE 48
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
23 SHARE-BASED PAYMENTS (CONTINUED)
Movements in share options during the year
Movement in the number of share options held by Directors, employees and consultants:
2019
2018
Number of
options
Number of
options
Weighted
average
exercise price
$
Weighted
average
exercise price
$
9,900,000
0.122
5,375,000
0.155
Outstanding at the beginning of the
year
Granted and vested during the year
10,550,000
Exercised during the year
Expired/lapsed during the year
Outstanding at the end of the year
Exercisable at the end of the year
–
(650,000)
19,800,000
19,800,000
0.128
–
0.121
0.125
0.125
5,500,000
(400,000)
(575,000)
9,900,000
9,900,000
0.097
0.045
0.250
0.122
0.122
The weighted average remaining contractual life of share options outstanding at the end of the year was
1.84 years (2018: 2.14 years).
Share options outstanding at the end of the year
Share options issued and outstanding at the end of the year have the following exercise prices:
Expiry date
10 March 2019
22 April 2021
3 November 2019
3 November 2021
16 November 2021
16 November 2021
Totals
Exercise price
$
0.12
0.045
0.1671
0.195
0.097
0.1275
2019
Number
–
500,000
2,550,000
800,000
5,500,000
10,450,000
19,800,000
2018
Number
550,000
500,000
2,550,000
800,000
5,500,000
–
9,900,000
Significant estimates and judgement
The Group measures the cost of equity-settled transactions with employees by reference to the fair value
of the equity instruments at the date at which they are granted. The fair value is determined using a Black-
Scholes option pricing model.
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
24 RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
Cash flows from operating activities
Loss for the period
Non-cash flows in profit/(loss):
- Other income – Cyprium shares (Note 3)
- Depreciation
- Impairment expense
- Share based remuneration
- Change in fair value of derivative financial instruments
- Research and development tax concession
Changes in assets and liabilities
- Decrease/(Increase) in trade and other receivables
- Decrease/(Increase) in other current assets
- Increase/(Decrease) in trade and other payables
- Increase/(Decrease) in employee entitlements
Net cash used in operating activities
Non-cash investing and financing activities
CONSOLIDATED
CONSOLIDATED
2019
2019
$
20182018
$
(1,329,040)
(189,475)
(250,000)
25,747
336,589
533,673
324,000
–
(7,251)
(6,600)
(276,613)
8,010
(641,485)
–
13,080
41,108
239,558
(418,000)
236,366
(30,070)
(4,304)
(23,288)
19,719
(115,306)
There were no non-cash investing and financing activities during the year.
25 RELATED PARTY DISCLOSURE
a) Parent entity
Class
Country of
incorporation
Musgrave Minerals Limited
Ordinary
Australia
b) Subsidiaries
Musgrave Exploration Pty Ltd
Ordinary
Australia
Class
Country of
incorporation
c) Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Bonus payments
Share-based payments
Investment at cost
2019
$
–
2018
$
–
Investment at cost
2019
$
100
2018
$
100
2019
2019
$
430,433
39,886
54,415
328,803
853,537
20182018
$
423,716
34,078
–
141,570
599,364
Detailed remuneration disclosures are provided in the Remuneration Report.
PAGE 50
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
26 PARENT ENTITY DISCLOSURE
Financial Performance
Profit/(loss) for the year
Other comprehensive income
Total comprehensive profit/(loss)
Financial Position
ASSETS
Current assets
Non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
2019
2019
$
2018
2018
$
(1,329,040)
(354,425)
(1,683,465)
(189,475)
470,000
280,525
3,829,701
16,557,317
5,814,383
10,911,631
20,387,018
16,726,014
294,574
639,819
294,574
639,819
20,092,444
16,086,195
44,592,770
1,128,652
39,436,729
971,276
(25,628,978)
(24,321,810)
20,092,444
16,086,195
No guarantees have been entered into by Musgrave Minerals Limited in relation to the debts of its
subsidiary.
Musgrave Minerals Limited had no expenditure commitments as at 30 June 2019 other than the
commitment in relation to the lease of office premises as disclosed in Note 21.
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 51
DIRECTORS’ DECLARATION
The Directors of Musgrave Minerals Limited declare that:
1)
in the Directors’ opinion, the financial statements and notes set out on pages 25 to 51 and the
Remuneration Report in the Director’s Report are in accordance with the Corporations Act 2001, including:
a) giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its performance,
for the financial year ended on that date; and
b)
complying with Australian Accounting Standards (including the Australian Accounting
Interpretations), Corporations Regulations 2001 and mandatory professional reporting requirements.
the financial statements also comply with International Financial Reporting Standards as disclosed in Note
2; and
there are reasonable grounds to believe that the consolidated entity will be able to pay its debts as and
when they become due and payable.
2)
3)
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 by the
Managing Director and Chief Financial Officer for the financial year ended 30 June 2019.
Signed in accordance with a resolution of the Directors.
Mr Graham Ascough
Chairman
Perth, Western Australia
19 September 2019
PAGE 52
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
INDEPENDENT AUDITOR’S REPORT
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Musgrave Minerals Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Musgrave Minerals Limited (the Company) and its subsidiary
(the Group), which comprises the consolidated statement of financial position as at 30 June 2019, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 53
INDEPENDENT AUDITOR’S REPORT
Recoverability of exploration and evaluation expenditure
Key audit matter
How the matter was addressed in our audit
As disclosed in Note 10 to the Financial
Report, the carrying value of capitalised
exploration and evaluation expenditure
represents a significant asset of the Group.
Refer to Note 10 of the Financial Report for a
description of the accounting policy and
significant judgements applied to capitalised
exploration and evaluation expenditure.
In accordance with AASB 6 Exploration for
and Evaluation of Mineral Resources (AASB 6),
the recoverability of exploration and
evaluation expenditure requires significant
judgment by management in determining
whether there are any facts or circumstances
that exist to suggest that the carrying amount
of this asset may exceed its recoverable
amount. As a result, this is considered a key
audit matter.
Our procedures included, but were not limited
to:
(cid:120) Obtaining a schedule of the areas of interest
held by the Group and assessing whether the
rights to tenure of those areas of interest
remained current at balance date;
(cid:120)
(cid:120)
(cid:120)
(cid:120)
Considering the status of the ongoing
exploration programmes in the respective
areas of interest by holding discussions with
management, and reviewing the Group’s
exploration budgets, ASX announcements and
directors’ minutes;
Considering whether any such areas of
interest had reached a stage where a
reasonable assessment of economically
recoverable reserves existed;
Considering whether any facts or
circumstances existed to suggest impairment
testing was required; and
Assessing the adequacy of the related
disclosures in Note 10 to the Financial Report.
PAGE 54
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
INDEPENDENT AUDITOR’S REPORT
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2019, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Other matter
The financial report of Musgrave Minerals Limited, for the year ended 30 June 2018 was audited by
another auditor who expressed an unmodified opinion on that report on 19 September 2018.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 55
INDEPENDENT AUDITOR’S REPORT
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages (cid:20)(cid:27) to (cid:21)(cid:21) of the directors’ report for
the(cid:3)year ended 30 June 2019.
In our opinion, the Remuneration Report of Musgrave Minerals Limited, for the year ended 30 June
2019, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001.
Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Glyn O’Brien
Director
Perth, 19 September 2019
PAGE 56
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
ADDITIONAL INFORMATION
The following additional information not shown elsewhere in this report is required by the ASX Listing Rules
and is current as at 19 September 2019.
Securities
Quotation has been granted for 386,782,066 ordinary shares of the Company on the Australian Securities
Exchange.
Quoted Securities
ASX Code
MGV
Unquoted Securities
ASX Code
MGVAB
MGVAB
MGVAB
MGVAB
MGVAB
Number of
Holders
1,501
Number of
Holders
2
4
1
11
11
Security
Description
Ordinary Fully Paid
Security
Description
Options expiring 24/04/2021
Exercisable at $0.045
Total
Securities
386,782,066
Total
Securities
500,000
Options expiring 03/11/2019
2,550,000
Exercisable at $0.1671
Options expiring 03/11/2021
800,000
Exercisable at $0.195
Options expiring 29/11/2020
5,500,000
Exercisable at $0.195
Options expiring 16/11/2021
10,450,000
Exercisable at $0.1275
One holder Mr Robert Waugh and Mrs Sara Waugh hold 6,100,000 unlisted options
(equivalent to 30.8% of total unlisted options)
Voting Rights
The voting rights attached to each class of security are as follows:
(cid:129)
(cid:129)
Ordinary Fully Paid shares – one vote per share held.
Options – no voting rights are attached to unexercised options.
Distribution schedule
Spread of Holdings - Ordinary Shares (ASX Code: MGV)
1
1,001
5,001
10,001
-
-
-
-
1,000
5,000
10,000
100,000
100,001 -
and over
TOTAL
Holders
102
29
199
736
435
1,501
Units
7,812
112,681
1,701,697
34,815,764
350,144,112
326,999,457
Percentage
0.00
0.03
0.44
9.00
90.53
100%
Substantial Shareholding
The Company has received the following notices of substantial holding:
(cid:129)
Westgold Resources Limited in relation to 64,887,779 ordinary shares
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
PAGE 57
ADDITIONAL INFORMATION
Unmarketable Parcel
There are 147 Shareholders holding less than a marketable parcel of fully paid ordinary shares (a minimum
parcel $500 shares, being 6,250 shares using a market value of $0.08).
Buyback
No on-market share buy-back is current.
Top Holders
The names of the twenty largest shareholders (ASX Code: MGV) are listed below:
Rank Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Westgold Resources Limited
HSBC Custody Nominees (Australia) Limited
Jetosea Pty Ltd
Riggy & Boo Pty Limited
Equity Trustees Limited
Mr Stacey Radford
Independence Group NL
BNP Paribas Nominees Pty Ltd
Thirty Sixth Vilmar Pty Ltd
Sacrosanct Pty Ltd
Cue Petroleum
Allise Pty Ltd
Soudure S/F Pty Ltd
Citicorp Nominees Pty Ltd
Great Australia Corporation Pty Ltd
Scintilla Strategic Investments Limited
Mr Peter Piotr Mackow
RAM Platinum Pty Ltd
Cape Bouvard Equities Pty Ltd
Mrs Marisa Mackow
Units held
64,887,779
% of
Units
16.78
19,702,225
5.09
16,106,292
4.16
14,000,000
3.62
9,358,559
9,309,139
9,027,000
7,193,465
6,564,481
6,250,000
4,500,000
4,096,172
4,000,000
3,508,953
3,000,000
3,000,000
2,809,647
2,405,000
2,197,765
2,145,000
2.42
2.41
2.33
1.86
1.70
1.62
1.16
1.06
1.03
0.91
0.78
0.78
0.73
0.62
0.57
0.55
PAGE 58
MUSGRAVE MINERALS LTD ANNUAL REPORT 2019
CORPORATE DIRECTORY
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
Ground Floor, 5 Ord Street
West Perth, WA 6005
Telephone:
+61 (8) 9324 1061
Facsimile:
+61 (8) 9324 1014
Email: info@musgraveminerals.com.au
Web: www.musgraveminerals.com.au
AUDITOR
BDO Audit (WA) PTY LTD
38 Station Street
Subiaco, WA 6008
LEGAL ADVISORS
O’Loughlins Lawyers
Level 2, 99 Frome Street
Adelaide, SA 5000
SHARE REGISTRY
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth, WA 6000
Telephone:
+61 (8) 9323 2000
Facsimile:
+61 (8) 9323 2033
SECURITIES EXCHANGE LISTING
The Company is listed on the Australian Securities Exchange Ltd (“ASX”)
Home Exchange: Perth, Western Australia
ASX Code: MGV
ABN 12 143 890 671
Gound Floor,
5 Ord Street
West Perth WA 6005
Telephone: +61 (8) 9324 1061
Facsimile: +61 (8) 9324 1014
Email:
Web:
info@musgraveminerals.com.au
www.musgraveminerals.com.au
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