NAVARRE MINERALS LIMITED
ABN 66 125 140 105
Annual Report 2015
Navarre Minerals Limited
ABN 66 125 140 105
Corporate Directory
Contents
Company
Navarre Minerals Limited
ABN 66 125 140 105
and subsidiary:
Black Range Metals Pty Ltd
ABN 31 158 123 687
Directors
Kevin Wilson (Chairman)
Geoff McDermott (Managing Director)
John Dorward
Colin Naylor
Company Secretary
Jane Nosworthy
Registered Office & Principal Operations Office
40-44 Wimmera Street
PO Box 385
Stawell Victoria 3380 Australia
Telephone +61 (3) 5358 8625
Email
info@navarre.com.au
Website www.navarre.com.au
Share Registrar
Boardroom Pty Limited
Level 7, 207 Kent Street
Sydney NSW 2000 Australia
Telephone +61 (2) 9290 9600
+61 (3) 9279 0664
Facsimile
Auditor
RSM Bird Cameron Partners
Level 21
55 Collins Street
Melbourne Victoria 3000 Australia
Stock Exchange Listing
ASX Limited
Level 4, North Tower, Rialto
525 Collins Street
Melbourne Victoria 3000 Australia
ASX Code: NML
Incorporated 30 April 2007
Victoria, Australia
Chairman’s Report
Managing Director’s Review of Operations
Directors’ Report
Auditor’s Independence Declaration
Remuneration Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Review Report
Additional Shareholder Information
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9
17
18
29
30
31
32
33
53
54
56
FORWARD LOOKING STATEMENTS
about
that have been based on
This Financial Report includes certain forward-looking
current
statements
expectations
and
future
circumstances. These forward-looking statements are,
however, subject to risks, uncertainties and assumptions
that could cause those acts, events and circumstances to
differ materially from the expectations described in such
forward-looking statements.
events
acts,
These factors include, among other things, commercial
and other risks associated with the meeting of objectives
and other investment considerations, as well as other
matters not yet known to the Company or not currently
considered material by the Company.
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Navarre Minerals Limited
ABN 66 125 140 105
CHAIRMAN’S REPORT
Dear Fellow Shareholder,
On behalf of the Directors, it is my pleasure to present Navarre Minerals Limited’s Annual Report for the year ending 30
June 2015.
It has been a year which has again seen many challenges for the resources sector on the back of a slowdown of economic
activity in China. Financial conditions have been particularly tough for Australian junior exploration companies like
Navarre. However, in spite of the difficult market conditions, your Company maintained an active field exploration
program at its 100% owned Stawell Corridor Gold and Miga Arc Copper Projects, in Victoria.
The review of operations, which follows my report, highlights the important achievements and milestones attained over
the previous twelve months. These include two drilling programmes and the discovery of two new promising gold
prospects near Ararat which form part of our Stawell Corridor Gold Project.
The discovery of new prospects demonstrates your board’s pursuit for new exploration targets in Victoria, while the
drilling programmes undertaken during the financial year demonstrate your board’s resolve to keep testing the existing
prospects.
The new prospects at Ararat have certain attributes that make them significantly less costly to explore: firstly they are
near surface and secondly they are located only 15 kilometres from a fully permitted gold plant, owned and operated by
Navarre’s largest shareholder, Newmarket Gold Inc.
The Board believes that focusing on the Ararat gold prospects during 2015/16 has the potential to deliver significant
shareholder value. The Directors will consider all possible means to fund the 2015/16 program including but not limited
to a further injection of capital and/or securing a suitable farm-in partner.
While activity on our other projects has been reduced, these remain valuable assets of the Company. Your Board’s view is
that these projects remain a prospective ground holding that can best serve shareholder interests through third party
involvement or monetisation.
In recognition of the tough market conditions the Company joint ventured its north Bendigo Interests to Catalyst Metals
Limited who are earning a 51% interest and we will continue to look at ways of advancing the other project tenements.
Joint venturing more assets in the future may be necessary to maintain exploration activity unless market sentiment
changes.
Finally we continue to examine corporate level transactions that could elevate the Company’s ability to raise capital.
On behalf of the Board I would like to thank our small management team for their strong performance during the year.
Finally, I would like to thank all of you, our shareholders, for your support and encouragement over the past year, and in
particular thank those who participated in the financing in the third quarter. We will do our utmost to reward this
support in the year ahead.
Kind regards
Kevin Wilson
Chairman
15 September 2015
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Navarre Minerals Limited
ABN 66 125 140 105
MANAGING DIRECTOR’S REVIEW OF OPERATIONS 2015
During the 2015 financial year, the Company advanced its strategy of maintaining a gold and copper commodity focus.
The external economic conditions and the prevailing market sentiment towards resource companies has led Navarre to
respond with a considered and methodical program of cost control while continuing to explore and advance its premier
exploration assets.
During the year the Company’s main activities were centred on (see Figure 1):
1. Gold – on the recently granted Stawell Corridor Gold project; and
2. Copper – the Eclipse, Lexington and Glenlyle prospects.
Figure 1: Location of Navarre’s Victorian mineral projects.
STAWELL CORRIDOR GOLD PROJECT (EL 5480 & EL 5476)
The Stawell Corridor Gold Project, incorporating the Ararat and Tatyoon exploration licences and the historic Ararat
Goldfield, is located between 10 and 70 kilometres south-east of the Stawell Gold Mine which is owned by Navarre’s
largest shareholder and leading Victorian gold producer, Newmarket Gold Inc. (formerly Crocodile Gold Corp.) (see
Figures 1 & 2). Approximately 6 million ounces of historic and modern gold production has occurred from Ararat and
Stawell.
The historic Ararat Goldfield is estimated to have produced approximately one million ounces of gold mainly from alluvial
and deep lead production during the period 1854 to 1925. Production of primary hard-rock gold from the Ararat
Goldfield was low given the richness of the alluvial deposits, and offers a compelling reason to search for economic
primary gold mineralisation in the vicinity of the richest alluvial gold deposits.
The largest gold mine along the Stawell Corridor is Stawell’s Magdala Gold Mine that is producing gold from a large multi-
million ounce gold deposit that has been mined to depths in excess of 1,600m below surface (Figure 2). Modern gold
mining of the Magdala deposit has been continuous since 1982 and has contributed more than 2.3 million ounces of the
total 5 million ounces of gold production from the Stawell Goldfield.
Gold mineralisation of the Stawell-type is located on the flanks of large basalt dome structures. The style of the gold
mineralisation is much finer grained, more continuous and more predictable than the gold deposits typically found at
Victoria’s largest two goldfields at Bendigo and Ballarat.
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Navarre Minerals Limited
ABN 66 125 140 105
Figure 2: Tilted satellite image looking north-west showing the location of the Irvine and Benno prospects relative to Stawell’s
Magdala Gold Mine. Navarre believes the rocks of the Irvine and Benno prospects are the southern continuation of the
Stawell mine rock package which hosts the multi-million ounce Magdala gold deposit. After the primary gold
mineralisation event, the younger Devonian aged Stawell Granite has intruded (melted) its way through the Stawell mine
sequence that now separates Magdala from Irvine and Benno.
Ararat (EL 5476)
New gold prospects on Ararat licence – Irvine and Benno
Reconnaissance mapping and sampling on the recently granted Ararat exploration licence has delivered early success with
the discovery of two significant gold prospects called Irvine and Benno only 15km south of Stawell’s Magdala Gold Mine.
Rock chip samples from surface float and outcropping basalt-contact and quartz stockwork mineralisation are regularly
grading at double-digit grams-per-tonne gold and have confirmed the existence of Stawell-style gold mineralisation
occurring along at least 6 mineralised surfaces.
Results to date show:
Surface rock chip samples containing moderate to high-grade gold mineralisation with gold tenor ranging from
0.1 to over 22 grams per tonne. New high-grade gold results from Irvine and Benno include 22.8 g/t, 19.3 g/t,
16.9 g/t, 14.8 g/t, 13.5 g/t and 11.0g/t (see ASX release 10 August 2015).
Gold occurs along six main mineralised geological surfaces, ranging from approximately 300 metres to 1.6
kilometres in strike length (Figure 3).
Evidence of primary gold mineralisation outcropping on the hill slopes in the headwaters to lines of drainage
containing historic alluvial gold workings.
The most productive mineralised surfaces mined at Stawell’s Magdala Mine (see Figure 2) are the rich gold lodes that
occur along the basalt margins (“basalt contact zones”). Basalt contact zones have been identified during the recent
mapping and sampling program at Irvine. A review of past exploration activity also revealed a single historic diamond drill
hole that penetrated the basalt contact zone at the Irvine prospect.
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Navarre Minerals Limited
ABN 66 125 140 105
A 1994 drill hole, DD94AA254 (see Figure 3), passes through the western side of the Irvine basalt dome and is described
by the previous explorer as intersecting a “classic” Magdala Mine footwall sequence containing zones of high pyrrhotite
and arsenopyrite before ending in basalt. The drill hole results include an intercept of 0.5m @ 7.2 grams per tonne of
gold on the basalt contact at 86.5 metres downhole (see ASX release 12 June 2015).
The next steps are to undertake shallow sampling along each of the mineralised surfaces to identify potential shoots or
zones of economic gold concentrations for drill testing.
Figure 3: Prospect plan showing new rock chip sample locations, assay results and the 6 main mineralised surfaces.
Tatyoon (EL 5480)
Initial drill program completed at Grange gold prospect
On 12 June 2015, the Company announced the results of its first pass drill program into the Grange basalt dome target
(Figure 1).
The drill program, comprising 6 RC and 3 diamond drill holes for a total of 1,500 metres, tested the main chargeability
targets defined from induced polarisation (“IP”) geophysical surveys. These targets were detected in basement rocks
hidden beneath cover rocks comprising recent volcanics, quartz gravels and sands.
The drilling intersected broad zones of disseminated sulphide (pyrite and/or pyrrhotite) alteration and associated quartz
veining within meta-sediments adjacent to the Grange basalt dome. This is interpreted to be of sufficient intensity and
distribution to explain the IP chargeability response.
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Navarre Minerals Limited
ABN 66 125 140 105
The sulphide alteration located on the west flank of the dome appears to lack the intensity required to form economic
mineralisation, where tested. The west flank basalt contact was also revealed to be complexly mixed with surrounding
meta-sediments. In line with these observations, assay results returned from all holes which achieved target depths
report minor gold mineralisation. The best result was 1m @ 1.18 g/t gold from 94m down-hole in RCT005 (see ASX
release 12 June 2015). The results down-graded the prospectivity of the western side of the Grange basalt dome.
Following completion of first pass drilling at Grange, the Company is appraising the Hermitage and Shiraz basalt domes as
well as the east flank of the Grange dome. In conjunction with Monash University researchers, additional gravity
surveying has been acquired and is being processed to refine the geometry and position of these basalt dome structures
beneath the cover sequences.
WESTERN VICTORIA COPPER PROJECT (ELs 4590, 5425, 5426 & 5497)
Navarre’s 100%-owned Western Victoria Copper Project captures multiple, largely untested targets in 130km of Miga Arc
volcanics (Figure 1), including the Eclipse, Lexington, Glenlyle and Pollockdale prospects. The Miga Arc is recognised as a
continental margin arc setting similar to the Andes, host to the world’s largest known copper porphyry deposits.
Navarre believes there is opportunity for large-scale porphyry copper, volcanic massive sulphide (VMS) and gold
discoveries from within the Western Victoria Copper Project area, which includes drill-confirmed prospects from within
our current list of more than 50 targets.
Most areas across the Miga Arc are presently being geologically re-interpreted at a regional scale by the Geological Survey
of Victoria, including EL 4590, using Navarre’s high resolution aeromagnetics and new gravity data obtained by Navarre
sponsored Monash University researchers.
Eclipse Prospect (EL 4590)
Several broad intervals of copper and gold mineralisation intersected in shallow RC drilling beneath a supergene enriched
copper blanket at Eclipse, believed to be associated with a VMS target, were compiled with geology, geophysics and
alteration mineralogy into a new 3D model. The model is providing vectors towards a deeper target zone to be tested
with subsequent drilling.
Analysis of data from a trial gravity survey at Eclipse, undertaken in collaboration with Monash University, indicates the
mineralisation discovered at Eclipse coincides with a significant density contrast boundary believed to be reflecting an
ancient exhalative seafloor position, an ideal position for the formation of VMS deposits. Targets such as VMS generally
occur in clusters within a single stratigraphic layer often referred to as the “favourable horizon”. The Company believes
the favourable horizon detected at Eclipse can be tracked under cover for several tens of kilometres using geophysics and
offers an exciting regional exploration target.
Lexington Prospect (EL 5425)
At Lexington, the search continues for porphyry copper-style mineralisation. A gravity survey to assist interpretation of
the geology and structure of the prospect is underway to assist with advancing key exploration targets towards drill ready
status.
Glenlyle project (EL5 497)
The Glenlyle exploration licence, granted in September 2014, covers 61 square kilometres of the Miga Arc copper belt in
an area considered prospective for the discovery of VMS and porphyry-style copper-gold deposits.
The Company has completed an initial review of previous exploration data and has identified several key exploration
targets containing encouraging signs for porphyry and VMS prospectivity for follow-up activity.
TANDARRA GOLD PROJECT (EL 4897)
The Tandarra Gold Project is a greenfields gold discovery under shallow cover, 40km north of the 22 million ounce
Bendigo Goldfield (Figure 1). Under a 2014 Heads of Agreement, project manager Catalyst Metals Limited (“Catalyst”) has
the right to earn a 51% equity interest in the Tandarra Gold Project by incurring exploration expenditure of $3 million
over four years to September 2018.
On 29 July 2015 Catalyst reported that it had completed its first reconnaissance air-core drilling program at Tandarra,
which comprised 3,853 metres of reconnaissance air-core drilling in 31 holes on 3 drill traverses (refer Catalyst ASX
release 29 July 2015).
The highlight of the drilling was an intersection of high-grade gold and another significant zone of mineralisation,
approximately 500 metres apart:
2.0m @ 33.1 g/t Au including 1.0 m @ 65.6g/t Au from 129 metres (ACT221)
5.0m @ 0.5 g/t Au from 78 metres (ACT202)
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Navarre Minerals Limited
ABN 66 125 140 105
These intersections are located about seven kilometres north on strike of the main zone of high grade gold mineralisation
at the Tomorrow Prospect and approximately seven kilometres south of Catalyst’s Four Eagles Gold Project (Figure 4).
This new zone of mineralisation is virtually untested over a 14 kilometre strike and will require considerably more air-core
drilling to evaluate the potential.
Catalyst also reported it had commenced an evaluation of drill results at the Tomorrow Prospect in preparation for
completing a mineralisation report by December 2015.
Figure 4: Tandarra Gold Project showing interpreted gold zones and air core drilling (map reproduced courtesy of Catalyst Metals
Limited; see Catalyst Metals ASX release 29 July 2015).
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Navarre Minerals Limited
ABN 66 125 140 105
LANDSBOROUGH FAULT GOLD PROJECT (EL 5280)
No exploration activity was undertaken during the year.
CORPORATE
Share Placement and Entitlement Offer
In March 2015, the Company completed a pro-rata, non-renounceable, 1 for 4 entitlement offer to existing shareholders
(“Entitlement Offer”) and a placement of approximately 5.8 million shares (“Placement”) to Navarre’s largest
shareholder, Crocodile Gold Corp. (now Newmarket Gold Inc.), in each case at an issue price of $0.03 per new share.
Total proceeds of the capital raising were approximately $450,000 before costs, comprising $175,000 from the Placement
and approximately $274,000 from the Entitlement Offer (representing approximately 50% take-up, by value, from eligible
shareholders).
The Company issued 9,139,286 new shares under the Entitlement Offer.
As announced on 24 April 2015, the Company completed a placement of 5,000,000 shortfall shares (Shortfall Shares)
from its Entitlement Offer, which closed on 13 March 2015, to raise an additional $150,000.
The Shortfall Shares were issued at the Entitlement Offer price of $0.03 per share to professional and sophisticated
investors, including major shareholder Newmarket Gold Inc., which subscribed for 2,000,000 Shortfall Shares.
Review of registration for Research & Development Tax Incentive Program
During the year, AusIndustry completed its review of the Company’s registration for the Federal Government’s Research
& Development (“R&D”) Tax Incentive program (“Program”) in respect of R&D activities conducted by the Company in the
2011/12 financial year and, in December 2014, notified the Company that its registration was considered to have a high-
risk of non-compliance with the eligibility requirements of the Program. The Company submitted to AusIndustry
additional information and evidence in support of its claimed R&D activities. In September 2015, AusIndustry notified the
Company of its intention to commence an examination of the Company’s registration for the Program in respect of
activities conducted during the 2011/12 and 2012/13 financial years, which involves an assessment of the eligibility of the
claimed R&D activities and will lead to a finding being made about the eligibility of those activities under the
requirements of the Program. The Company intends to respond to the outstanding issues identified by AusIndustry and
make further submissions for consideration during the examination of the registration.
Geoff McDermott
Managing Director
15 September 2015
Competent Person Declaration
The information in this Annual Report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore
Reserves is based on information compiled by Wessley Edgar, who is a Member of The Australasian Institute of Mining and
Metallurgy and who is Exploration Manager of Navarre Minerals Limited. Mr Edgar has sufficient experience which is
relevant to the styles of mineralisation and types of deposits under consideration, and to the activity which he is
undertaking, 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 Edgar consents to the inclusion in the release of the matters
based on his information in the form and context in which it appears.
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Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
The directors present their report together with the consolidated financial statements of the group comprising Navarre
Minerals Limited (variously the “Company”, “Navarre” and “Navarre Minerals”) and its subsidiary (together, the “Group”)
for the financial year ended 30 June 2015. Navarre Minerals is a company limited by shares, incorporated and domiciled
in Australia. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:
1.
DIRECTORS
The names and details of the Company’s directors in office during the financial year and until the date of this report are as
follows. The directors were in office during the entire period unless otherwise stated.
Director
Designation &
independence
status
Qualifications, experience & expertise
Directorships of
other listed
companies
Special
responsibilities
during the year
Kevin Wilson
Chairman
BSc (Hons), ARSM, MBA
Appointed
30 April 2007
Non-executive
Non-
independent
Mr Wilson has over 30 years’ experience in the minerals and finance
industries. He was the Managing Director of Leviathan Resources
Limited, a Victorian gold mining company, from its initial public offering
in 2005 through to its sale in 2006. His previous experience includes 8
years as a geologist with the Anglo American Group in Africa and North
America and 14 years as a stockbroking analyst and investment banker
with CS First Boston and Merrill Lynch in Australia and USA.
Mr Wilson is currently Managing Director of Rey Resources Limited, an
energy exploration company listed on the ASX.
Rey Resources
Limited
(ongoing)
Geoff
McDermott
Appointed
19 May 2008
Managing
Director
Executive
BSc (Hons), MAIG
None
Mr McDermott is a geologist with 30 years’ industry experience working
in surface and underground metalliferous mining operations, in mineral
exploration and as a consultant to the minerals industry.
Mr McDermott has a broad range of international experience having
worked as a geologist in Canada, Fiji and Australia for companies such as
WMC and Rio Tinto and with the Government of the Northwest
Territories, Canada. From 2002 until 2007, Mr McDermott was Chief
Geologist and Group Geologist with MPI Mines Limited and Leviathan
Resources Limited.
Chairman of the
Board
Chairman of the
Remuneration &
Nomination
Committee
Member of the
Audit Committee
Member of the
Remuneration &
Nomination
Committee
John Dorward
Director
BComm (Hons), GradDipAppFin, CFA
Appointed
15 August 2008
Non-executive
Non-
independent
Mr Dorward is currently President, Chief Executive Officer and Director
of Roxgold Inc., a TSX listed gold explorer. Mr Dorward was previously
the Vice President Business Development of Fronteer Gold Inc., a TSX
listed gold and uranium developer. Prior to joining Fronteer, he was CFO
of Mineral Deposits Limited where he was responsible for financing the
Sabodala Gold Project in Senegal, West Africa. Preceding this he was
CFO and Company Secretary of Leviathan Resources Limited and
Commercial Executive and Company Secretary of MPI Mines Limited.
Before joining MPI Mines Limited, Mr Dorward had 8 years’ experience
in the banking sector with a number of years spent in a senior resource
project finance role with BankWest.
Roxgold Inc.
(ongoing)
Member of the
Audit Committee
Member of the
Remuneration &
Nomination
Committee
Colin Naylor
Director
B.Bus (Acc), FCPA
None
Appointed
5 November 2010
Non-executive
Independent
Mr Naylor is currently Chief Financial Officer and Company Secretary of
oil and gas explorer, MEO Australia Limited. Before joining MEO, Mr
Naylor held a number of senior roles in major resource companies,
including Woodside Petroleum, BHP Petroleum and Newcrest Mining.
Mr Naylor also worked at MPI Mines Limited and Leviathan Resources
Limited as Financial Controller.
Mr Naylor was previously a member of the Victorian Divisional Council
of the CPA and a previous member of the Group of 100 National
Executive and Victorian State Chapter.
Chairman of the
Audit Committee
Member of the
Remuneration &
Nomination
Committee
9
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
1.
DIRECTORS (cont.)
Interests in the shares and options of the company
As at the date of this report, the relevant beneficial and non-beneficial interests of each of the directors in the shares and
share options in the Company were:
K Wilson
G McDermott
J Dorward
C H Naylor
Ordinary
Shares
5,872,431
6,409,180
4,229,713
2,450,963
NED Options
MD Options
300,000
-
250,000
250,000
-
350,000
-
-
The terms of these options are set out in Note 21 to the consolidated financial statements and further details, including
fair value at date of grant, are set out in the Remuneration Report.
2.
COMPANY SECRETARY
Ms Jane Nosworthy was appointed as Company Secretary on 16 January 2012. Ms Nosworthy has previously held legal,
commercial and company secretarial roles at Oceana Gold Corporation, Leviathan Resources Limited and MPI Mines
Limited, prior to which she was a Senior Associate in the Melbourne Office of law firm Allens Arthur Robinson. She holds
a Bachelor of Arts and a Bachelor of Laws from the University of Adelaide, and a Certificate in Governance Practice from
Chartered Secretaries Australia.
3.
DIVIDENDS
No dividend has been paid, provided or recommended during the financial year and to the date of this report (2014: nil).
4.
OPERATING AND FINANCIAL REVIEW
4.1
Principal activities
The principal activities during the year were mineral exploration in Victoria, Australia.
The Company had 7 employees at 30 June 2015 including directors (2014: 10).
4.2
Environment, health and safety
The Group conducts exploration activities in Victoria. No mining activity has been conducted by the Group on its
exploration licences.
The Group’s exploration operations are subject to environmental and health and safety regulations under the various
laws of Victoria and the Commonwealth.
While exploration activities to date have had a low level of environmental impact, the Group has adopted a best practice
approach in satisfaction of the regulations of relevant government authorities.
4.3
Review of operations
The Group maintained an active exploration program during the year with the objectives of identifying economic copper
and gold mineral deposits.
Direct exploration expenditure during the 2015 financial year was $853,053.
The following summary of the Company’s exploration activities during the year should be read in conjunction with the
Managing Director’s Review of Operations 2015, which forms part of and is included earlier in this Annual Report.
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Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
4.
OPERATING AND FINANCIAL REVIEW (cont.)
4.3
Review of operations (cont.)
(a)
Bendigo North Gold Project (Tandarra) (EL 4897)
Under a 2014 Heads of Agreement, project manager Catalyst Metals Limited (“Catalyst”) has the right to earn a 51%
equity interest in the Tandarra Gold Project by incurring exploration expenditure of $3 million over four years to
September 2018.
On 29 July 2015 Catalyst reported that it had completed its first reconnaissance air-core drilling program at Tandarra,
resulting in the intersection of high-grade gold and the discovery of a new significant zone of mineralisation,
approximately 500 metres apart (refer Catalyst ASX release 29 July 2015):
2.0m @ 33.1 g/t Au including 1.0 m @ 65.6g/t Au from 129 metres (ACT221)
5.0m @ 0.5 g/t Au from 78 metres (ACT202)
(b)
Landsborough Fault Gold Project (Kingston) (EL 5280)
No exploration activity was undertaken on the Kingston licence during the year.
(c) Western Victoria Copper Project (EL 4590, EL 5425, EL 5426 & EL 5497)
Eclipse Prospect (EL 4590)
Following the completion of a shallow RC drilling program, intersecting several broad intervals of copper and gold
mineralisation believed to be associated with a VMS target, the Company completed a trial gravity survey at Eclipse, in
collaboration with Monash University.
Lexington Prospect (EL 5425)
A gravity survey to assist interpretation of the geology and structure of the prospect is underway to assist with advancing
key exploration targets towards drill ready status.
Glenlyle Project (EL5 497)
Following grant of the Glenlyle exploration licence in September 2014, the Company completed a review of previous
exploration data and has identified several key exploration targets for follow-up activity.
(d)
Stawell Corridor Gold Project (Ararat (EL 5476) & Tatyoon (EL 5480))
Ararat (EL 5476)
New gold prospects on Ararat licence – Irvine and Benno
Reconnaissance mapping and sampling on the recently granted Ararat exploration licence resulted in the discovery of two
significant gold prospects called Irvine and Benno only 15km south of Stawell’s Magdala Gold Mine. Mapping and surface
rock chip sampling has confirmed the existence of Stawell-style gold mineralisation occurring along at least 6 mineralised
surfaces. Best rock chip results include 22.8 g/t, 19.3 g/t, 16.9 g/t, 14.8 g/t, 13.5 g/t and 11.0g/t (see ASX release 10
August 2015).
Tatyoon (EL 5480)
The Company completed a drill program testing several induced polarisation (“IP”) geophysical anomalies detected in
buried basement rocks at the Grange prospect. The drilling intersected broad zones of disseminated sulphide alteration
interpreted to be of sufficient intensity and distribution to explain the IP chargeability response.
The sulphide alteration lacked the intensity required to form economic mineralisation resulting in a down-grade of the
prospectivity of the western side of the Grange basalt dome.
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Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
4.
OPERATING AND FINANCIAL REVIEW (cont.)
4.4
Review of financial position
(a)
Results for the year
The net loss for the financial year, after provision for income tax, was $505,344 (2014: loss after tax of $602,682).
(b)
Review of financial condition at the balance date
At balance date the Group held cash and cash equivalents of $498,039. During the year the Group decreased the cash
balance by $709,137 following net proceeds from share issues of $574,832 and interest received of $22,803 which was
used to partially meet exploration and capital cash outflows of $845,814 and corporate costs of $460,958.
(c)
Share issues
During the year the Company raised a total of $599,178 (before transaction costs) from the placement of 5,833,333
ordinary shares at $0.03 per share to Crocodile Gold Australia Pty Ltd and 14,139,286 ordinary shares at $0.03 per share
from the Company’s 2015 Entitlement Offer (and subsequent shortfall placement).
(d)
Significant changes in the state of affairs of the Group during the financial year
(i)
On 12 June 2014, the Company signed a formal Heads of Agreement with Catalyst Metals Ltd (“Catalyst”) for
Catalyst to earn a 51% interest in the Company’s wholly-owned Bendigo North Gold Project (Tandarra) (EL 4897)
and to acquire the Company’s interests in the Raydarra and Sebastian Gold Projects, which were subject to farm-in
and joint venture arrangements with Castlemaine Goldfields Ltd (“Castlemaine”), a subsidiary of LionGold Corp.
The transaction involved the following:
In order to earn a 51% equity interest in Tandarra, Catalyst agreed to spend $3 million on exploration during a
four-year period commencing on satisfaction of a condition precedent whereby Catalyst assumed a
proportionate share of Navarre’s existing royalty obligations to Leviathan Resources Ltd in respect of
Tandarra. Catalyst’s expenditure must be sufficient to maintain the tenement in good standing and be not
less than $200,000 per annum and not less than $800,000 within two years. Catalyst must also generate a
mineralisation report sufficient for the requirements of the Mineral Resources (Sustainable Development) Act
1990 (Vic) by 14 November 2015. Catalyst agreed that, on satisfaction of the condition precedent, it would
pay Navarre $50,000 cash and issue to Navarre 250,000 fully paid ordinary shares in Catalyst, with a further
250,000 Catalyst shares to be issued twelve months later.
Navarre also agreed to transfer to Catalyst its interests in two gold projects owned by Castlemaine Goldfields
Limited, which are subject to farm-in and joint venture arrangements between Navarre and Castlemaine.
Navarre had earned a 51% interest in the Sebastian Project (EL 4536 and EL 4974) and was in the process of
earning a 51% interest in the Raydarra Project (EL 5266). In exchange, Navarre will receive a 1% net smelter
royalty on Catalyst’s entitlement to proceeds from future production from the area covered by the
tenements that comprised the Sebastian and Raydarra Projects at the time of executing the agreement with
Navarre.
On completion of the transaction with Catalyst as described above, Navarre received from Catalyst $50,000 cash
and 250,000 fully paid ordinary shares in Catalyst, which were issued on 12 September 2014.
(ii)
In December 2014, the Company was notified by AusIndustry that its registration for the Federal Government’s
Research & Development (“R&D”) Tax Incentive program (“Program”) in respect of R&D activities conducted in the
2011/12 financial year remained under review and was considered to have a high-risk of non-compliance with the
eligibility requirements of the Program. See paragraphs 4.4(e)(ii) and 4.5(b)(i) below for more information.
12
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
4.
OPERATING AND FINANCIAL REVIEW (cont.)
4.4
Review of financial position (cont.)
(e)
Significant events after the balance date
In accordance with the terms of Navarre’s agreement with Catalyst as described in paragraph 4.4(d) above, Catalyst is
required to issue a further 250,000 Catalyst shares to Navarre. It has been agreed between Navarre and Catalyst that
those shares will be issued on 21 September 2015.
In September 2015, AusIndustry notified the Company of its intention to commence an examination under section 27F of
the Industry Research and Development Act 1986 (Cth) of the Company’s registration for the Federal Government’s
Research & Development (“R&D”) Tax Incentive program (“Program”). The examination will involve an assessment of the
eligibility of the R&D activities registered by the Company and will lead to a finding being made about the eligibility of
those activities under the requirements of the Program. More information about the AusIndustry review is set out in
paragraph 4.5(b)(i) below.
Other than the above, there has not arisen in the interval between the end of the financial year and the date of this
report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the
Company, to affect significantly the operations of the Group, the results of those operations, or state of affairs of the
Group, in future financial years.
(f)
Likely developments and expected results
During the course of the next financial year, the Group will continue its mineral exploration activities and will investigate
additional opportunities in which the Group may wish to participate.
The Group is mindful of the external economic conditions currently affecting the resource industry and is responding with
a considered and methodical program of cost reductions. The Group is working to strike a balance between conserving
cash resources and maintaining exploration activities at reduced expenditure levels. Strategies implemented to date
include staff reductions, reduced hours of work, reductions in overheads and cessation of work programs not linked to
advancing the Group’s key prospects.
In June/July 2015, the Company implemented a new program of cost reduction measures including reductions in staffing
levels, notably, termination of the Exploration Manager due to redundancy. All staff have agreed to reductions in salary
or hours of work, including a 40% salary reduction for the Managing Director, and the Company’s non-executive directors
have agreed to defer payment of directors’ fees.
Together, these measures are expected to deliver a significant reduction in corporate overheads and the measures will
remain in place until such time as the Company’s cash position improves significantly as the result of improved economic
conditions, exploration success and/or better access to equity markets.
In accordance with the Company’s remuneration philosophy, the Company is considering issuing equity incentives, such
as shares or share options, in lieu of salary forgone by senior management or directors. Shareholder approval will be
required for any equity incentives to be granted to directors.
4.5
Business strategy and prospects for future financial years
(a)
Business strategy
The Group’s mission is to reward shareholders by creating value through mineral discovery.
The Group’s goal is to define a maiden mineral resource and to become a low cost Victorian copper and gold producer
through exploration success. The Group undertakes an active exploration program within emerging and proven mineral
corridors, with the objective of identifying economic copper and gold mineral deposits. The Group’s strategy for the next
twelve months for its existing portfolio of exploration assets is to focus its financial and managerial resources on
development of its most prospective mineral opportunities at or on the Group’s Ararat Exploration Licence (EL 5476).
13
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
4.
OPERATING AND FINANCIAL REVIEW (cont.)
4.5
Business strategy and prospects for future financial years (cont.)
(b)
Future prospects of the Group
The key driver of the Group’s future prospects will be the success of its exploration programs. The discovery of an
economic mineral deposit has the potential to significantly increase shareholder wealth.
The key material risks faced by the Group that are likely to have an effect on its future financial prospects include:
(i)
(ii)
(iii)
the outcome of an examination of the Company’s registration for the Federal Government’s Research and
Development (“R&D”) Tax Incentive Program (“Program”) in respect of activities conducted by the Company in the
2011/12 and 2012/13 financial years as part of its work programs. The examination will be conducted by
AusIndustry, a government agency responsible for administering the Program, and follows on from a review by
AusIndustry of the activities registered by the Company under the Program. The Company received a tax refund of
$1.4 million (“Refund”) in respect of R&D activities conducted by the Company in the 2011/12 financial year. In
2014, AusIndustry undertook a Compliance Activity Review of the Company’s registration under the program. An
Activity Review Meeting was conducted by AusIndustry in July 2014 and the Company responded to a request for
additional information. In December 2014, AusIndustry notified the Company that the registration remained
under review and was considered to have a high-risk of non-compliance with the eligibility requirements of the
Program. The Company submitted to AusIndustry additional information and evidence in support of its claimed
R&D activities. In September 2015, AusIndustry notified the Company of its intention to commence an
examination of the Company’s registration for the Program under section 27F of the Industry Research and
Development Act 1986 (Cth). The examination involves an assessment of the eligibility of the claimed R&D
activities and will lead to a finding being made about the eligibility of those activities under the requirements of
the Program. The Company intends to respond to the outstanding issues identified by AusIndustry and make
further submissions for consideration by AusIndustry during the examination of the registration. Taking into
account advice from the Company’s R&D tax consultant and the views of management, the Directors and the
Company’s R&D tax consultant believe the Company’s R&D registration is in compliance with the requirements of
the Program. However, there is a risk that AusIndustry may disagree with the Company’s assessment of the
eligibility of its R&D activities and make a finding that some or all registered activities are ineligible under the
Program. In the event of an adverse finding, the Company would pursue all available avenues for appeal. Even if
the Company pursues avenues of appeal, there remains a risk that the Company may be required to repay to the
Australian Taxation Office (“ATO”) some or all of the Refund, in which case the Company may be required to draw
on its cash reserves and/or may require additional capital in order to meet that liability to the ATO.
exploration risk – the Group’s mineral tenements are in the early stages of exploration, and there can be no
assurance that exploration of the tenements currently held by the Group, or any other tenements that may be
acquired in the future, will result in the discovery of an economic mineral deposit. Until the Group is able to
realise value from its mineral tenements, it is likely to incur ongoing operating losses. If exploration is successful,
there will be additional costs and processes involved in moving to the development phase. By its nature,
exploration risk can never be fully mitigated, but the Group has the benefit of significant exploration expertise
through its management team and of operational and business expertise at both board and management level;
requirements for capital – as exploration costs reduce the Group’s cash reserves, the Group will require additional
capital to support the long term exploration and evaluation of its projects. The past twelve months have been
characterised by equity market volatility and poor market sentiment towards the mineral exploration sector, which
has limited the Group’s access to capital. The Group has responded to the external economic conditions affecting
the resources industry with a considered and methodical program of cost reductions, including significant
reductions in executive salaries or hours of work and reductions in staffing levels. The Group continues to work to
strike a balance between conserving cash and maintaining exploration activities at reduced levels. If the Group is
unable to obtain additional financing as needed, through equity, debt or joint venture financing, it may be required
to further scale back its exploration programs. The Group will continue to consider capital raising initiatives, as
required, including possible corporate opportunities; and
14
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
4.
OPERATING AND FINANCIAL REVIEW (cont.)
4.5
Business strategy and prospects for future financial years (cont.)
(b)
Future prospects of the Group (cont.)
(iv)
tenement title – the Group could lose title to its mineral tenements if insufficient funds are available to meet the
relevant annual expenditure commitments, as and when they arise. The Group closely monitors its compliance
with licence conditions, including expenditure commitments, and maintains a dialogue with the relevant State
government representatives who are responsible for enforcing licence conditions.
This is not intended to be an exhaustive list of the risk factors to which the Company is exposed.
Navarre Minerals is also exposed to a range of market, financial and governance risks. The Company has risk
management and internal control systems to manage material business risks which include insurance coverage over
major operational activities and regular review of material business risks by the Board.
5.
SHARE OPTIONS
Options issued during the financial year
During the financial year, the Company issued a total of 350,000 share options to senior employees of the Company
under the Navarre Minerals Limited Option Plan. No other options were issued by the Company during the financial year.
Options expired during the financial year
1,500,000 share options held by the Managing Director and 650,000 share options held by non-executive directors
expired on 31 December 2014. 165,000 share options held by a senior employee of the Company expired on 5 March
2015.
Unissued shares under option
At the date of this report, there were 2,250,000 unissued ordinary shares of the Company under option. The terms of
these options are as follows:
Expiry Date
31 December 2015
31 December 2015
31 December 2015
31 December 2016
31 December 2017
31 December 2018
31 December 2019
Exercise Price
$0.25
$0.30
$0.35
$0.30
$0.15
$0.10
$0.04
Number
250,000
400,000
400,000
300,000
400,000
350,000
150,000
These options do not entitle the holder to participate in any share issue of the Company.
Shares issued on the exercise of Options
During or since the end of the financial year, there has been no issue of ordinary shares as a result of the exercise of
options.
6.
INDEMNIFICATION AND INSURANCE OF DIRECTORS
The Company paid a premium in respect of a contract insuring all directors of the Company against legal costs incurred in
defending proceedings as permitted by Section 199B of the Corporations Act 2001.
15
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
7.
BOARD AND COMMITTEE MEETINGS
The following table sets out the members of the Board of Directors and the members of the Committees of the Board, the
number of meetings of the Board and of the Committees held during the year and the number of meetings attended
during each director’s period of office.
Board of Directors
Audit Committee
Remuneration &
Nomination Committee
K Wilson
G McDermott
J Dorward
C H Naylor
A – Number of meetings attended
B – Number of meetings held during the time the director held office during the year
A
4
-
4
4
B
4
-
4
4
A
3
3
3
3
A
8
8
8
7
B
8
8
8
8
B
3
3
3
3
8.
AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
The directors have received the independence declaration from the auditor, RSM Bird Cameron Partners, set out on page
17.
Non Audit Services
There were no non-audit services provided during the year by Auditor RSM Bird Cameron Partners.
16
RSM Bird Cameron Partners
Level 21, 55 Collins Street Melbourne VIC 3000
GPO Box 248 Collins Street West VIC 8007
T +61 3 9286 8000 F +61 3 9286 8299
www.rsmi.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Navarre Minerals Limited for the year ended 30 June 2015,
I declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM BIRD CAMERON PARTNERS
J S CROALL
Partner
Dated: 15 September 2015
Melbourne, Victoria
Liability limited by a
scheme approved
under Professional
Standards Legislation
Major Offices in:
Perth, Sydney, Melbourne,
Adelaide and Canberra
ABN 36 965 185 036
RSM Bird Cameron Partners is a member of the RSM network. Each member
of the RSM network is an independent accounting and advisory firm which
practises in its own right. The RSM network is not itself a separate legal entity
in any jurisdiction.
17
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
9.
REMUNERATION REPORT (Audited)
The Remuneration Report for the year ended 30 June 2015 outlines the remuneration arrangements of the Company, in
accordance with Section 300A of the Corporations Act 2001 and its regulations.
The information provided in this Remuneration Report has been audited as required by Section 308(3C) of the
Corporations Act 2001. This Remuneration Report forms part of the Directors’ Report.
The Remuneration Report details the remuneration arrangements for Key Management Personnel (“KMP”), who are
defined as those persons having authority and responsibility for planning, directing and controlling the activities of the
Company, directly or indirectly, including any director (whether executive or otherwise) of the Company.
9.1
Key Management Personnel for the year ended 30 June 2015
Directors
K Wilson
G McDermott
J Dorward
C H Naylor
Executives
Chairman (non-executive)
Managing Director
Director (non-executive)
Director (independent non-executive)
W Edgar
J Nosworthy
Exploration Manager
Company Secretary
9.2
Board oversight of remuneration
The policy for determining the nature and amount of remuneration for directors and executives is set by the Board of
Directors as a whole. The Board established a Remuneration and Nomination (“R&N”) Committee to provide the Board
with a regular, structured opportunity to focus on remuneration and nomination issues. All directors of the Company,
including the Managing Director, are members of the R&N Committee. Any potential for, or perception of, conflict of
interest resulting from the Managing Director’s membership of the R&N Committee is addressed by ensuring that the
Managing Director withdraws from committee meetings during any discussion of his remuneration arrangements or
performance, and takes no part in the discussion or decision-making process in relation to such matters.
The Board may obtain professional advice when appropriate to ensure that the Company attracts and retains talented
and motivated directors and employees who can enhance Company performance through their contributions and
leadership.
9.3
Non-executive director remuneration arrangements
The Board seeks to set non-executive director remuneration at a level that provides the Company with the ability to
attract and retain directors of high calibre, at a cost acceptable to shareholders.
The amount of aggregate remuneration approved by shareholders and the fee structure for non-executive directors is
reviewed annually by the Board against fees paid to non-executive directors of comparable companies.
The Company’s Constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive directors
must be determined from time to time by members in a general meeting. An amount not exceeding the amount
determined is then divided between the directors as agreed. The maximum aggregate annual remuneration for non-
executive directors is currently set at $300,000 per annum. Any increase in this amount will require shareholder approval
at a general meeting.
18
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
9.
REMUNERATION REPORT (Audited) (cont.)
9.3
Non-executive director remuneration arrangements (cont.)
Non-executive directors are remunerated at marketplace levels by way of fixed fees, in the form of cash and statutory
superannuation contributions, and (from time to time, as appropriate) options issued through the Navarre Minerals
Limited Option Plan (“NMLOP”). The Chairman, Mr Wilson, receives a base fee of $40,000 per annum (excluding
statutory superannuation) and the other non-executive directors receive $30,000 per annum (excluding statutory
superannuation). As part of the Company’s recent implementation of a range of cost reduction measures, the non-
executive directors have agreed to defer payment of directors’ fees until such time as the Company’s cash position
improves significantly as the result of improved economic conditions, exploration success and/or better access to equity
markets. In accordance with the Company’s remuneration philosophy, the Company may consider issuing equity
incentives, such as shares or share options, in lieu of salary forgone by non-executive directors. Shareholder approval will
be required for any equity incentives to be granted to directors.
In addition to directors’ fees, the directors are entitled to be paid all travelling and other expenses they incur in attending
to the Company’s affairs, including attending and returning from general meetings of the Company or meetings of the
Board or of committees of the Board. No additional remuneration is paid to directors for service on board committees or
on the board of the wholly owned subsidiary, but additional remuneration may be paid to directors if they are called upon
to perform extra services or make any special exertion for the purposes of the Company.
The non-executive directors have no leave entitlements and do not receive any retirement benefits, other than statutory
superannuation and salary sacrifice superannuation (if directors wish to exercise their discretion to make additional
superannuation contributions by way of salary sacrifice).
The remuneration of the Company’s non-executive directors for the year ended 30 June 2015 and 30 June 2014 is
detailed in Table 1 and Table 2 of this Remuneration Report.
9.4
Executive remuneration arrangements
The Company aims to reward executives with a level and mix of remuneration commensurate with their position and
responsibilities within the Company and so as to:
ensure total remuneration is competitive by market standards;
reward executives for exceptional individual performance; and
align the interests of executives with those of shareholders.
Executive remuneration consists of fixed remuneration and, where appropriate, variable (at risk) remuneration.
Fixed remuneration
The base salaries of the Managing Director and other executives are fixed. Fixed remuneration is set at a market
competitive level, taking into account an individual’s responsibilities, performance, qualifications and experience, and
current market conditions in the mining industry. Base salaries are reviewed annually, but executive contracts do not
guarantee any increases in fixed remuneration. In light of the financial environment in which the Company is operating,
there were no increases to base salaries for executives for calendar year 2015 and the Company subsequently agreed
with all staff to reduce salaries or hours of work, as part of a range of cost reduction measures designed to ensure that
the Company manages its cash position while retaining the ability to undertake further exploration. These measures
included salary reductions of 40% for each of the Managing Director and Exploration Manager, effective 1 July 2015. It is
expected that these reductions will be in place until such time as the Company’s cash position improves significantly as
the result of improved economic conditions, exploration success and/or better access to equity markets. In accordance
with the Company’s remuneration philosophy, the Company may consider issuing equity incentives, such as shares or
share options, in lieu of salary forgone by senior management. Shareholder approval will be required for any equity
incentives to be granted to the Managing Director.
Executives receive statutory superannuation from the Company and may, in their discretion, make additional
superannuation contributions by way of salary sacrifice.
The fixed component of executives’ remuneration is detailed in Table 1 and Table 2 of this Report.
19
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
9.
REMUNERATION REPORT (Audited) (cont.)
9.4
Executive remuneration arrangements (cont.)
Variable/at risk remuneration
The performance of executives is measured against criteria agreed annually with each executive and is based
predominantly on the overall success of the Company in achieving its broader corporate goals. Variable remuneration is
linked to predetermined performance criteria.
Short term incentives
Managing Director
The Managing Director’s remuneration package for calendar year 2014 included a short term incentive in the form
of a cash payment of up to $60,000, subject to achievement of agreed KPIs. Those KPIs comprised performance
measures in relation to:
health and safety, because the Company regards the safety of its people as a major priority;
delivery of operating programs and exploration success, because these are key drivers of shareholder value;
and
delivery of finance at reasonable cost that enables the Company to execute its business plans.
In February 2015, the R&N Committee (excluding the Managing Director) assessed the Managing Director’s
performance against his 2014 short term incentive KPIs and determined that two of five KPIs had been met.
Accordingly, the Board (excluding the Managing Director) approved a cash payment of $18,000 to the Managing
Director by way of short term incentive for calendar year 2014.
In light of the Company’s cash position, the Managing Director’s remuneration package for calendar year 2015
does not include any short term incentive in the form of a cash payment.
Exploration Manager
The Exploration Manager’s remuneration package for calendar year 2014 included a short term incentive in the
form of a cash payment of up to $30,000, subject to achievement of agreed KPIs. Those KPIs comprise
performance measures in relation to:
health and safety, because the Company regards the safety of its people as a major priority; and
delivery of drill programs and exploration success, because these are key drivers of shareholder value.
In February 2015, the R&N Committee assessed the Exploration Manager’s performance against his 2014 short
term incentive KPIs and determined that two of three KPIs had been met. Accordingly, a cash payment of $12,000
was made to the Exploration Manager.
In light of the Company’s cash position, the Executive Manager’s remuneration package for calendar year 2015
does not include any short term incentive in the form of a cash payment.
20
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
9.
REMUNERATION REPORT (Audited) (cont.)
9.4
Executive remuneration arrangements (cont.)
Long term incentives
The Company considers the retention of high calibre staff to be essential to the growth and success of the Company.
Executives are eligible to participate in the NMLOP, which is used to provide long term performance and retention
incentives, as appropriate, in the form of the grant of share options over unissued shares in the Company.
Managing Director
The Managing Director’s remuneration package for calendar year 2014 included a long term incentive in the form
of a grant of up to 800,000 share options, to be granted subject to achievement of agreed KPIs. The Managing
Director was eligible to receive 100,000 options if he was employed by the Company at 31 December 2014. The
remaining 700,000 options were subject to agreed KPIs related to improvement in the Company’s share price
during the 2014 calendar year, relative to the prevailing share price when the KPIs were set by the Board
(excluding the Managing Director) in January 2014. The Managing Director was eligible to receive 350,000 options
if the volume weighted average price (VWAP) of the Company’s shares in December 2014 was 15 cents or higher,
and a further 350,000 options if the VWAP was 15 cents or higher. The Company obtained shareholder approval
for the grant of these options (subject to achievement of the applicable KPIs) at the Company’s 2014 AGM. In
February 2015, the R&N Committee (excluding the Managing Director) determined that the Managing Director
was employed by the Company at 31 December 2014 and was therefore entitled to receive 100,000 options. The
R&N Committee also determined that none of the other KPIs applicable to the Managing Director’s long term
incentive options had been met and therefore, no other options were granted to the Managing Director in respect
of calendar year 2014.
The Managing Director’s remuneration package for calendar year 2015 includes a long term incentive in the form
of a grant of up to 500,000 share options. The KPIs relate to improvement in the Company’s share price, relative
to the prevailing share price when the KPIs were set by the Board (excluding the Managing Director) in February
2015. The Managing Director will be eligible to receive 250,000 options if the volume weighted average price
(VWAP) of the Company’s shares in December 2015 is 4 cents or higher, and a further 250,000 options if the VWAP
is 6 cents or higher. Shareholder approval for the grant of these options will be sought at the Company’s 2015
AGM. The Managing Director’s performance against his 2015 long term incentive KPIs will be assessed by the R&N
Committee (excluding the Managing Director) at its first meeting in 2016. No options will be granted to the
Managing Director unless shareholder approval has been obtained and the applicable KPIs have been met.
Exploration Manager
The Exploration Manager’s remuneration package for calendar year 2014 included a long term incentive in the
form of a grant of up to 600,000 share options. The Exploration Manager was eligible to receive 100,000 options if
he was employed by the Company at 31 December 2014. The remaining 500,000 options were subject to
achievement of agreed KPIs, which mirrored the Managing Director’s long term incentive KPIs and related to
improvement in the Company’s share price during the 2014 calendar year. The Exploration Manager was eligible
to receive 250,000 options if the VWAP of the Company’s shares in December 2014 was 10 cents or higher, and a
further 250,000 options if the VWAP was 15 cents or higher. In February 2015, the R&N Committee determined
that the Exploration Manager was employed by the Company at 31 December 2014 and was therefore entitled to
receive 100,000 options. The R&N Committee also determined that none of the other KPIs applicable to the
Exploration Manager’s long term incentive had been met and therefore, no other options were granted to the
Exploration Manager in respect of calendar year 2014.
The Exploration Manager’s remuneration package for calendar year 2015 includes a long term incentive in the
form of a grant of up to 500,000 share options, to be granted subject to achievement of agreed KPIs. As the
Exploration Manager’s employment has been terminated, none of the 500,000 share options comprising the long-
term incentive for the Exploration Manager will be granted.
21
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
9.
REMUNERATION REPORT (Audited) (cont.)
9.4
Executive remuneration arrangements (cont.)
Other executives and senior employees
During the financial year, other executives and senior employees have been granted options which have time-based
vesting conditions, therefore requiring them to remain employed with the Company through to the vesting date of the
options.
See page 26 for details of all options granted to the Managing Director and other key management personnel during the
financial year.
The Company prohibits executives from entering into arrangements to protect the value of unvested share options. The
prohibition includes entering into contracts to hedge their exposure to options awarded as part of their remuneration
package.
Subject to the exception noted below, the Managing Director approves the terms and conditions of consultants’
contracts, including fees, taking into account market conditions for the services that are provided. Consulting contracts do
not include any guaranteed fee increases.
9.5
Executive Contractual Arrangements
Remuneration arrangements for Key Management Personnel are formalised in service agreements. Details of these
contracts are provided below.
Managing Director
-
-
-
-
-
Mr Geoff McDermott entered into an executive service agreement dated 10 December 2010 which contains the
following major terms (including amendments made in March 2013 and July 2015):-
Term: From 31 March 2011 until either the Company or Mr McDermott terminates the agreement.
Notice: The Company may terminate the agreement at any time by giving six months’ notice in writing. Mr
McDermott may terminate the agreement at any time by giving six months’ written notice to the Company or on
one month’s written notice to the Company if a ‘fundamental change’ to his employment occurs or the Company
has failed to remedy a notified breach of its obligations under the agreement. The Company may immediately
terminate the agreement by giving written notice in certain circumstances, including if serious misconduct has
occurred. The Company may elect to pay Mr McDermott in lieu of part or all of any notice period.
Base salary: Mr McDermott’s total fixed remuneration comprises a base salary plus statutory superannuation.
This is reviewed by the R&N Committee (excluding the Managing Director) on an annual basis. For the 2014
financial year, Mr McDermott’s total fixed remuneration comprised base salary of $245,936 per annum plus
superannuation of $17,775. In line with the Company’s emphasis on cost management in a difficult external
economic environment, it was agreed, on review in January 2015, to maintain his base salary at the level set in
April 2012. It was subsequently agreed with Mr McDermott to reduce his base salary, effective 1 July 2015, to
$147,562 per annum (plus superannuation of $12,296) as part of a broader program of cost reduction measures.
Mr McDermott’s base salary will revert to its previous level once the Company’s cash balance returns to $1.5
million, or sooner if the Board (excluding Mr McDermott) determines that circumstances are appropriate to do so;
Short-term incentive: Mr McDermott is eligible to receive an annual short-term incentive payment on terms
decided by the Board (excluding the Managing Director). However, in light of the Company’s limited cash
resources, no short-term incentive payment was included in Mr McDermott’s remuneration package for calendar
year 2015.
Long-term incentive: Subject to receiving any required or appropriate shareholder approval, Mr McDermott is
eligible to participate in the Company’s long-term incentive arrangements (as amended or replaced) on terms
decided by the Board. For calendar year 2015, the maximum number of options that may be granted to Mr
McDermott by way of long-term incentives is 500,000, subject to the achievement of KPIs as approved by the
Board, and approval of shareholders at the Company’s 2015 Annual General Meeting.
22
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
9.
REMUNERATION REPORT (Audited) (cont.)
9.5
Executive Contractual Arrangements (cont.)
Termination payments: If Mr McDermott’s employment is terminated by the Company for any reason (other than
in circumstances warranting summary dismissal), Mr McDermott is entitled to a retirement benefit calculated as
one month’s total fixed remuneration, plus two weeks’ total fixed remuneration for each completed or part-
completed year of continuous service with the Company. If Mr McDermott resigns within six months of a
‘fundamental change’, Mr McDermott is entitled to a lump sum payment equivalent to six months’ total fixed
remuneration (to be calculated by reference to Mr McDermott’s total fixed remuneration prior to the reduction
effected from 1 July 2015).
Exploration Manager
-
-
-
-
-
-
Mr Wessley Edgar entered into an executive service agreement dated 13 August 2012 (as amended in March 2013
and July 2015). The Company has given notice to Mr Edgar of the termination of his employment due to
redundancy, in light of the Company’s cash position, and his employment will conclude on 18 September 2015.
The major terms of Mr Edgar’s executive service agreement during the 2014 financial year were as follows:-
Term: From 13 August 2012 until either the Company or Mr Edgar terminates the agreement. As noted above,
notice of termination has been given by the Company and Mr Edgar’s employment will conclude on 18 September
2015.
Notice: The Company may terminate the agreement at any time by giving three months’ notice in writing. Mr
Edgar may terminate the agreement at any time by giving three months’ written notice to the Company or on one
month’s written notice to the Company if a ‘fundamental change’ to his employment occurs or the Company has
failed to remedy a notified breach of its obligations under the agreement. The Company may immediately
terminate the agreement by giving written notice in certain circumstances, including where serious misconduct
has occurred. The Company may elect to pay Mr Edgar in lieu of part or all of any notice period.
Base salary: Mr Edgar’s total fixed remuneration comprises a base salary plus statutory superannuation. Total
fixed remuneration is reviewed by the R&N Committee on an annual basis. In the 2014 financial year, Mr Edgar’s
base salary initially remained unchanged from the level of base salary he received on commencing employment
with the Company in August 2012. In March 2015, Mr Edgar’s base salary was reduced by 15% to $194,463 per
annum. It was subsequently reduced by a further 25% to $137,268 per annum, with effect from 1 July 2015, as
part of a program of cost reduction measures.
Short-term incentive: Mr Edgar is eligible to receive an annual short-term incentive payment on terms decided by
the Board. However, in light of the Company’s limited cash resources, no short-term incentive payment was
included in Mr Edgar’s remuneration package for calendar year 2015.
Long-term incentive: Mr Edgar is eligible to participate in the Company’s long-term incentive arrangements (as
amended or replaced) on terms decided by the Board, but he will not receive any options in respect of calendar
year 2015 in light of the termination of his employment.
Termination payments: If Mr Edgar’s employment is terminated by the Company for any reason (other than in
circumstances warranting summary dismissal), or if Mr Edgar resigns due to a ‘fundamental change’ or a failure by
the Company to remedy a notified breach of its obligations, Mr Edgar is entitled to a retirement benefit calculated
as one month’s total fixed remuneration, plus two weeks’ total fixed remuneration for each completed or part-
completed year of continuous service with the Company. At the conclusion of Mr Edgar’s employment on 18
September 2015, Mr Edgar will receive a retirement benefit of $46,122, calculated on the basis that he will have
completed three full years, and commenced a fourth year, of employment with the Company. By agreement with
Mr Edgar, the retirement benefit has been calculated by reference to his base salary at the time notice of
termination of employment was given in June 2015.
23
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
9.
REMUNERATION REPORT (Audited) (cont.)
9.5
Executive Contractual Arrangements (cont.)
Other Executives
All executives have standard employment agreements. The Company may terminate the executive’s employment
agreement by written notice (ranging from four weeks to three months’ notice) or providing payment in lieu of the
notice period (based on the fixed component of the executive’s remuneration). The Company may terminate the
agreement at any time without notice if serious misconduct has occurred. The executive may terminate the
agreement by written notice to the Company (ranging from four weeks to three months’ notice). The Company
Secretary is entitled to a retirement benefit calculated as one month’s total fixed remuneration, plus two weeks’
total fixed remuneration for each completed or part-completed year of continuous service with the Company, if
employment is terminated by the Company for any reason (other than in circumstances warranting summary
dismissal), or if the Company Secretary resigns due to a ‘fundamental change’ or a failure by the Company to
remedy a notified breach of its obligations. For all employees, on cessation of employment, any options that have
not vested will be forfeited and any options that have vested must be exercised within 90 days or will be forfeited.
9.6
Remuneration of Key Management Personnel of the Company
Table 1: Remuneration for the year ended 30 June 2015
Short term
Post Employment
Share-
based
Payment
Long term
Total
Performance
Related
Directors
fees
$
Salary
$
STI cash
bonus
$
Superannuation
benefits
$
Option
plan1
$
Long service
leave
$
$
43,800
32,850
32,850
109,500
282,719
243,386
62,126
588,231
697,731
%
-
-
-
-
6.4
5.8
10.7
6.6
5.7
-
-
-
-
-
-
-
-
-
Non– executive directors
K Wilson
J Dorward
C H Naylor
Sub-total
non-executive
directors
Executive director
G McDermott
40,000
30,000
30,000
100,000
-
-
-
-
-
-
-
-
3,800
2,850
2,850
9,500
-
229,719
18,000
35,000
-
-
-
-
-
Other key management personnel
W Edgar
J Nosworthy
Sub-total executive
KMP
-
-
-
202,742
12,000
50,636
-
483,097
30,000
30,000
26,545
4,811
66,356
75,856
2,099
6,679
8,778
8,778
TOTAL
100,000
483,097
1Refer Note 21 to the consolidated financial statements for fair value calculation of options.
24
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
9.
REMUNERATION REPORT (Audited) (cont.)
9.6
Remuneration of Key Management Personnel of the Company (cont.)
Table 2: Remuneration for the year ended 30 June 2014
Short term
Post Employment
Share-
based
Payment
Long term
Total
Performance
Related
Directors
fees
$
Salary
$
STI cash
bonus
$
Superannuation
benefits
$
Option
plan1
$
Long service
leave
$
Non– executive directors
K Wilson
J Dorward
C H Naylor
Sub-total
non-executive
directors
Executive director
G McDermott
40,000
7,850
30,000
77,850
-
-
-
-
-
-
-
-
3,700
25,000
2,775
2,437
2,031
2,031
31,475
6,499
-
238,711
18,000
25,000
9,231
Other key management personnel
W Edgar
J Nosworthy
Sub-total executive
KMP
-
-
-
TOTAL
77,850
520,175
9.7
Remuneration Mix
228,780
12,000
52,684
-
520,175
30,000
30,000
17,775
4,881
47,656
79,131
4,453
11,439
25,123
31,622
-
-
-
-
-
-
-
-
-
$
46,137
34,881
34,806
115,824
290,942
263,008
69,004
622,954
738,778
%
5.3
5.8
5.8
5.6
9.4
6.3
16.6
8.8
8.3
The Company’s executive remuneration is structured as a mix of fixed annual remuneration and variable ‘at risk’
remuneration. The mix of these components varies for different management levels.
Table 3: Relative proportion and components of total remuneration packages for the year ended 30 June 2015
Executives
G McDermott
W Edgar
J Nosworthy
% of Total Remuneration
Performance-based remuneration
Fixed remuneration
%
Short Term Incentive
%
Long Term Incentive
%
93.6
95.0
100.0
6.4
5.0
-
-
-
-
25
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
9.
REMUNERATION REPORT (Audited) (cont.)
9.8
Equity instruments
Table 4: Options granted, vested and lapsed during the year
Number of
options
granted
during 2015
Grant date
Fair value
per option
at grant
date ($)
Exercise
price per
option ($)
Expiry Date
Vest Date
Number of
options
vested
during 2015
Number of
options
lapsed
during 2015
Directors
G McDermott
G McDermott
G McDermott
K Wilson
G McDermott
J Dorward
C H Naylor
Executives
W Edgar
W Edgar
W Edgar
J Nosworthy
J Nosworthy
33,333
33,333
33,334
-
-
-
-
16 Feb 15
16 Feb 15
16 Feb 15
25 Nov 11
21 Mar 11
25 Nov 11
25 Nov 11
33,333
33,333
33,334
100,000
-
16 Feb 15
16 Feb 15
16 Feb 15
23 Jun 15
19 Mar 12
0.0075
0.0055
0.0029
-
-
-
-
-
-
-
0.0087
-
0.10
0.10
0.10
-
-
-
-
0.10
0.10
0.10
0.04
-
31 Dec 18
31 Dec 18
31 Dec 18
31 Dec 14
31 Dec 14
31 Dec 14
31 Dec 14
31 Dec 18
31 Dec 18
31 Dec 12
31 Dec 19
31 Dec 16
1
1
16 Feb 15
1 Jan 16
1
1 Jan 17
-
-
-
-
1
1
1
1
16 Feb 15
1 Jan 16
1 Jan 17
1 Jan 16
1 Jan 15
-
-
-
-
-
-
-
-
-
-
250,000
1,500,000
200,000
200,000
-
-
-
-
33,334
-
-
-
-
-
1 Closing share price must exceed exercise price for 10 consecutive trading days after the vesting date.
All options expire on the earlier of their expiry date or termination of the employee’s employment. These options do not
entitle the holder to participate in any share issue of the Company. As none of the options held by Mr Edgar (as shown in
the above table) have vested, all of those options will expire on cessation of his employment on 18 September 2015.
Table 5: Shares issued on exercise of options
There was no exercise of compensation options during the reporting period.
Table 6: Value of options granted, exercised and lapsed during the year
Value of options granted
during the year
$
Value of options exercised
during the year
$
Value of options lapsed
during the year
$
Directors
K Wilson
G McDermott
J Dorward
C H Naylor
Executives
W Edgar
J Nosworthy
-
-
-
-
-
-
-
-
-
-
-
-
34,686
120,450
27,749
27,749
-
-
For details on the valuation of options, including models and assumptions used, please refer to Note 21 to the
consolidated financial statements.
26
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
9.
REMUNERATION REPORT (Audited) (cont.)
9.9
Additional disclosures relating to shares and options
Movement in shares
The movement during the reporting period in the number of ordinary shares in Navarre Minerals Limited held directly,
indirectly or beneficially, by key management personnel, including their related parties, is as follows:
30 June 2015
Held at 1
July 2014
Purchases
Received on
Exercise of
Options
Sales
Held at 30
June 2015
Shares held in Navarre Minerals Limited (number)
Directors
K Wilson
G McDermott
J Dorward
C H Naylor
Executives
W Edgar
J Nosworthy
4,697,944
5,055,013
3,585,770
1,960,770
1,174,487
1,363,333
643,943
490,193
319,105
100,000
280,895
25,000
Options over equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
5,872,431
6,418,346
4,229,713
2,450,963
600,000
125,000
The movement during the reporting period in the number of options over ordinary shares in Navarre Minerals Limited
held, directly, indirectly and beneficially by key management personnel, including their related parties is as follows:
Held at 1 July
2014
Granted as
Remuneration
Options
Exercised
Options
Lapsed
Held at 30
June 2015
Vested in
2015
Vested and
exercisable
at 30 June
2015
Options held in Navarre Minerals Limited (number)
Directors
K Wilson
G McDermott
J Dorward
C H Naylor
Executives
W Edgar
J Nosworthy
550,000
1,750,000
450,000
450,000
-
100,000
-
-
250,000
425,000
100,000
100,000
9.10
Company performance
-
-
-
-
-
-
250,000
1,500,000
200,000
200,000
300,000
350,000
250,000
250,000
-
-
-
-
-
-
-
-
-
-
350,000
525,000
-
33,334
-
100,000
The remuneration of executives and consultants is not linked to financial performance measures of the Company, with
the exception of the Managing Director and the Exploration Manager who have long-term incentives linked to
improvements in the Company’s share price over the course of the calendar year.
27
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2015
9.
REMUNERATION REPORT (Audited) (cont.)
9.10
Company performance (cont.)
In accordance with Section 300A of the Corporations Act 2001, the following table summarises Navarre’s performance
over a two year period:
Net profit/(loss) - $000
Basic earnings/(loss) per share – cents per share
Share price at the beginning of year - $
Share price at end of year - $
Dividends per share – cents
2015
(505)
(0.65)
0.069
0.024
Nil
2014
(603)
(0.94)
0.045
0.069
Nil
2013
(611)
(0.79)
0.15
0.045
Nil
2012
(843)
(1.57)
0.26
0.15
Nil
10.
CORPORATE GOVERNANCE STATEMENT
*** End of Remuneration Report ***
The Company’s Corporate Governance Statement for the year ended 31 July 2015, ASX Appendix 4G (Key to Disclosure of
Corporate Governance Principles and Recommendations) and other ancillary corporate governance related documents
may be accessed from the Company’s website at http://www.navarre.com.au/corporate-governance.
Signed in accordance with a resolution of the Directors made pursuant to s298(2) of the Corporations Act 2001.
On behalf of the Directors
G McDermott
Managing Director
Stawell, 15 September 2015
28
Navarre Minerals Limited
ABN 66 125 140 105
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2015
Interest income
Income
Net administration expenses
Exploration expenditure written-off
Loss before income tax
Income tax expense
Net loss for the period
Other comprehensive income
Net fair value gain on available-for-sale financial assets
Other comprehensive income for the period, net of tax
Total comprehensive loss for the period
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
Note
4
5
6
6
2015
$
20,961
20,961
2014
$
43,353
43,353
(523,300)
(3,005)
(539,633)
(106,402)
(505,344)
(602,682)
-
-
(505,344)
(602,682)
40,000
40,000
-
-
(465,344)
(602,682)
(0.65)
(0.65)
(0.94)
(0.94)
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
29
Navarre Minerals Limited
ABN 66 125 140 105
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other financial assets
Available-for-sale financial assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Other financial assets
Property, plant and equipment
Leasehold improvements
Exploration and evaluation costs
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Share based payments reserve
Net unrealised gains reserve
Accumulated losses
TOTAL EQUITY
Note
7
8
9
10
9
11
12
13
14
15
16
16
16
16
2015
$
498,039
62,721
-
105,000
665,760
2014
$
1,207,176
49,406
10,000
-
1,266,582
40,000
56,025
1,308
5,957,382
6,054,715
30,000
116,845
2,829
5,222,334
5,372,008
6,720,475
6,638,590
179,908
26,051
205,959
195,894
45,345
241,239
205,959
241,239
6,514,516
6,397,351
9,707,084
97,109
40,000
(3,329,677)
9,129,833
302,485
-
(3,034,967)
6,514,516
6,397,351
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
30
Navarre Minerals Limited
ABN 66 125 140 105
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2015
Issued
Capital
Share Based
Payments
Reserve
$
$
Net
Unrealised
Gains
Reserve
$
Accumulated
Losses
Total Equity
$
$
Balance at 1 July 2014
9,129,833
302,485
Net loss for the period
Other comprehensive income
Total comprehensive loss for the year
Transactions with owners in their capacity as owners:
Cost of share based payments
Share issues
Costs of issues
-
-
599,178
(21,927)
-
-
(3,034,967)
6,397,351
(505,344)
(505,344)
-
40,000
-
40,000
40,000
(505,344)
(465,344)
5,258
-
-
-
-
-
-
-
-
-
5,258
599,178
(21,927)
210,634
-
Transfer of equity instruments lapsed
-
(210,634)
At 30 June 2015
9,707,084
97,109
40,000
(3,329,677)
6,514,516
Issued
Capital
Share Based
Payments
Reserve
$
$
Net
Unrealised
Gains
Reserve
$
Balance at 1 July 2013
8,303,049
265,501
Net loss for the period
Total comprehensive loss for the year
Transactions with owners in their capacity
as owners:
Cost of share based payments
-
40,684
Share issues
Costs of issues
844,000
(17,216)
-
-
Transfer of equity instruments lapsed
-
(3,700)
At 30 June 2014
9,129,833
302,485
-
-
-
-
-
-
-
-
Accumulated
Losses
Total Equity
$
$
(2,435,985)
6,132,565
(602,682)
(602,682)
(602,682)
(602,682)
-
-
-
40,684
844,000
(17,216)
3,700
-
(3,034,967)
6,397,351
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
31
Navarre Minerals Limited
ABN 66 125 140 105
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
2015
$
2014
$
(460,958)
22,803
(617,462)
42,624
Net cash (used in) operating activities (Note 17)
(438,155)
(574,838)
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditure on plant and equipment
Proceeds from sale of plant and equipment
Expenditure on exploration tenements
Research and development tax incentive
Expenditure associated with research and development tax incentive
-
-
(845,814)
-
-
(43,569)
25,546
(818,458)
1,432,954
(214,943)
Net cash (used in) / from investing activities
(845,814)
381,530
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from share issues
Transaction costs on issue of shares
Net cash from financing activities
599,178
(24,346)
844,000
(14,797)
574,832
829,203
Net (decrease) / increase in cash and cash equivalents
(709,137)
635,895
Cash and cash equivalents at beginning of period
1,207,176
571,281
Cash and cash equivalents at end of period (Note 7)
498,039
1,207,176
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
32
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1:
CORPORATE INFORMATION
The financial report of Navarre Minerals Limited (“Navarre Minerals”, or the “Company”) for the year ended 30 June 2015
was authorised for issue in accordance with a resolution of the directors on 15 September 2015.
Navarre Minerals Limited is a company limited by shares incorporated in Australia. The Company’s shares are publicly
traded on Australian Stock Exchange.
The nature of operations and principal activities of the Group are described in Note 3.
NOTE 2:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Basis of Preparation
The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements
of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian
Accounting Standards Board, and is presented in Australian dollars. The financial report has also been prepared on a
historical cost basis.
(i)
Compliance with IFRS
The financial report complies with Australian Accounting Standards issued by the Australian Accounting Standards Board
and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.
(ii)
Early adoption of new Accounting Standards
The Group has not elected to early adopt any of the standards set out under (c) New Accounting Standards for
Application in Future Periods.
(iii) Historical cost convention
The financial statements have been prepared under a historical cost convention.
(b)
New Accounting Standards and Interpretations
The Group has adopted the following amended Australian Accounting Standard and AASB Interpretation as of 1 July 2014.
Adoption of these standards did not have a material effect on the financial position or performance of the Group.
Standard
Summary
136
AASB 2013-3 Amendments to
AASB
Recoverable
–
Amount Disclosures for Non-
Financial Assets
This Standard amends the disclosure requirements in AASB 136 to include
additional disclosures about the fair value measurement and discount rates when
the recoverable amount of impaired assets is based on fair value less costs of
disposal.
AASB 2013-9B Amendments to
Accounting
Australian
Standards
Conceptual
–
Framework, Materiality and
Financial Instruments
Part B of 2013-9 makes amendments to particular Australian Accounting
Standards to delete references to AASB 1031, and makes various editorial
corrections to Australian Accounting Standards.
AASB 1031 Materiality
Re-issuance of AASB 1031
33
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
(c)
New Accounting Standards for Application in Future Periods
The following standards and interpretations have been issued by the AASB but are not yet effective for the period ending
30 June 2015. Adoption of these standards is not expected to have a material effect on the financial position or
performance of the Group however the position will be further reviewed during FY2015 – 2016.
Reference
Title
Summary
AASB
2015-3
AASB
2014-3
AASB
2014-4
Amendments
to Australian
Accounting Standards arising
from the withdrawal of AASB
1031 Materiality
This Standard completes the AASB’s project to
remove Australian guidance on materiality from
Australian Accounting Standards.
to Australian
Amendments
Accounting
–
Standards
Accounting for Acquisitions of
Interests in Joint Operations
This Standard amends AASB 11 to provide
guidance on the accounting for acquisitions of
interests in joint operations in which the activity
constitutes a business.
to Australian
Amendments
Standards
–
Accounting
Clarification
of Acceptable
Methods of Depreciation and
Amortisation
AASB
2014-10
to Australian
Amendments
Accounting Standards – Sale or
Contribution of Assets between
an Investor and its Associate or
Joint Venture
AASB
2015-2
Amendments
Accounting
Disclosure
Amendments to AASB 101
to Australian
–
Standards
Initiative:
This Standard amends AASB 116 and AASB 138
to establish the principle for the basis of
depreciation and amortisation as being the
expected pattern of consumption of the future
economic benefits of an asset, and to clarify
that revenue is generally presumed to be an
inappropriate basis for that purpose.
This amending Standard requires a full gain or
loss to be recognised when a transaction
involves a business (even if the business is not
housed in a subsidiary), and a partial gain or loss
to be recognised when a transaction involves
assets that do not constitute a business (even if
those assets are housed in a subsidiary).
This Standard makes amendments to AASB 101
Presentation of Financial Statements arising
from the IASB’s Disclosure Initiative project.
Application date
of standard
Application date
for Group
1 July 2015
1 July 2015
1 January 2016
1 July 2016
1 January 2016
1 July 2016
1 January 2016
1 July 2016
1 January 2016
1 July 2016
Other new Australian accounting standards and Interpretations issued by not yet effective are not relevant to the Group.
(d) Basis of consolidation
The consolidated financial statements comprise the financial statements of Navarre Minerals Limited and its subsidiaries
as at 30 June 2015 and the results of all the subsidiaries for the year then ended (“Group”).
Subsidiaries are all those entities over which the Group has the power to govern the financial and operating policies so as
to obtain benefits from their activities.
The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using
consistent accounting policies. In preparing the consolidated financial statements, all intercompany balances and
transactions, income, expenses and profit and losses from intra group transactions, have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be
consolidated from the date on which control is transferred out of the Group.
(e) Significant accounting judgements, estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on judgements, estimates and
assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:
34
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
(e) Significant accounting judgements, estimates and assumptions (cont.)
Share-based payment transactions
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 of share options is determined using either a Black
Scholes or binomial option pricing model, and using the assumptions detailed in Note 21.
Exploration and evaluation costs
Exploration and evaluation costs are accumulated separately for each area of interest and carried forward provided that
one of the following conditions is met:
such costs are expected to be recouped through successful development or sale; or
exploration activities have not yet reached a stage which permits a reasonable assessment of the existence or
otherwise of economically recoverable reserves, and active and significant operations in relation to the area are
continuing.
Significant judgement is required in determining whether it is likely that future economic benefits will be derived from the
capitalised exploration and evaluation expenditure. In the judgement of the Directors, at 30 June 2015, exploration
activities in each area of interest have not yet reached a stage which permits a reasonable assessment of the existence or
otherwise of ore reserves. Active and significant operations in relation to each area of interest are continuing and
nothing has come to the attention of the Directors to indicate future economic benefits will not be achieved. The
Directors are continually monitoring the areas of interest and are exploring alternatives for funding the development of
areas of interest when ore reserves are confirmed. If new information becomes available that suggests the recovery of
expenditure is unlikely, the amounts capitalised will need to be reassessed at that time.
R&D Tax Incentive Refund
The Group is awaiting the outcome of an examination of the Company’s registration for the Federal Government’s
Research and Development (“R&D”) Tax Incentive Program (“Program”) in respect of activities conducted by the
Company in the 2011/12 and 2012/13 financial years as part of its work programs. The examination will be conducted by
AusIndustry, a government agency responsible for administering the Program, and follows on from a review by
AusIndustry of the activities registered by the Company under the Program. The Company received a tax refund of $1.4
million (“Refund”) in respect of R&D activities conducted by the Company in the 2011/12 financial year. In 2014,
AusIndustry undertook a Compliance Activity Review of the Company’s registration under the program. An Activity
Review Meeting was conducted by AusIndustry in July 2014 and the Company responded to a request for additional
information. In December 2014, AusIndustry notified the Company that the registration remained under review and was
considered to have a high-risk of non-compliance with the eligibility requirements of the Program. The Company
submitted to AusIndustry additional information and evidence in support of its claimed R&D activities. In September
2015, AusIndustry notified the Company of its intention to commence an examination of the Company’s registration for
the Program under section 27F of the Industry Research and Development Act 1986 (Cth). The examination involves an
assessment of the eligibility of the claimed R&D activities and will lead to a finding being made about the eligibility of
those activities under the requirements of the Program. The Company intends to respond to the outstanding issues
identified by AusIndustry and make further submissions for consideration by AusIndustry during the examination of the
registration. Taking into account advice from the Company’s R&D tax consultant and the views of management, the
Directors and the Company’s R&D tax consultant believe the Company’s R&D registration is in compliance with the
requirements of the Program. However, there is a risk that AusIndustry may disagree with the Company’s assessment of
the eligibility of its R&D activities and make a finding that some or all registered activities are ineligible under the
Program. In the event of an adverse finding, the Company would pursue all available avenues for appeal. Even if the
Company pursues avenues of appeal, there remains a risk that the Company may be required to repay to the Australian
Taxation Office (“ATO”) some or all of the Refund, in which case the Company may be required to draw on its cash
reserves and/or may require additional capital in order to meet that liability to the ATO.
(f)
Cash and cash equivalents
Cash and cash equivalents in the consolidated statement of financial position comprise cash at bank and in hand and
short-term deposits with an original maturity of three months or less.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding bank overdrafts.
35
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
(g)
Investment and Other Financial Assets
Investments and financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are
categorised as either financial assets at fair value through profit and loss, loans and receivables, held-to-maturity
investments, or available-for-sale financial assets. The classification depends on the purpose for which the investments
were acquired or originated. Designation is re-evaluated at each reporting date, but there are restrictions on reclassifying
to other categories.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of assets not at fair value
through profit or loss, directly attributable transaction costs.
Available-for-sale (AFS) Financial Investments
AFS financial investments include equity investments and debt securities. Equity investments classified as AFS are those
that are neither classified as held for trading nor designated at fair value through profit or loss. Debt securities in this
category are those that are intended to be held for an indefinite period of time and that may be sold in response to needs
for liquidity or in response to changes in the market conditions.
After initial measurement, AFS financial investments are subsequently measured at fair value with unrealised gains or
losses recognised as Other Comprehensive Income (OCI) and credited in the net unrealised gains reserve until the
investment is de-recognised, at which time the cumulative gain or loss is recognised in other operating income, or the
investment is determined to be impaired, when the cumulative loss is reclassified from the net unrealised gains reserve to
the statement of profit or loss.
The Group evaluates whether the ability and intention to sell its AFS financial assets in the near term is still appropriate.
When, in rare circumstances, the Group is unable to trade these financial assets due to inactive markets, the Group may
elect to reclassify these financial assets if management has the ability and intention to hold the assets for the foreseeable
future or until maturity.
Impairment of Financial Assets
The Group assesses, at each reporting date, whether there is objective evidence that a financial asset or a group of
financial assets is impaired. An impairment exists if one or more events that has occurred since the initial recognition of
the asset (an incurred ‘loss event’) has an impact on the estimated future cash flows of the financial asset or the group of
financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a
group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments,
the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there
is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that
correlate with defaults.
(h)
Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any impairment losses. Depreciation is
calculated on a straight-line basis over the estimated useful lives of the assets which range from 3 to 5 years.
Impairment
The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances
indicate the carrying value may not be recoverable.
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-
generating unit to which the asset belongs. Impairment exists when the carrying value of an asset exceeds its estimated
recoverable amount. The asset is written down to its recoverable amount.
The recoverable amount of plant and equipment is the greater of fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset.
An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise
from the continued use of the asset. Any gain or loss arising on de-recognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the item) is included in the consolidated statement of
comprehensive income in the period the item is derecognised.
36
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
(i)
Exploration and evaluation costs
Exploration and evaluation expenditure is carried at cost. If indication of impairment arises, the recoverable amount is
estimated and an impairment loss is recognised to the extent that the recoverable amount is lower than the carrying
amount.
Exploration and evaluation costs are accumulated separately for each current area of interest and carried forward
provided that one of the following conditions is met:
such costs are expected to be recouped through successful development or sale; or
exploration activities have not yet reached a stage which permits a reasonable assessment of the existence or
otherwise of economically recoverable reserves, and active and significant operations in relation to the area are
continuing.
Impairment of exploration and evaluation costs
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future,
profits/ (losses) and net assets will be varied in the period in which this determination is made.
Farm-outs
The Group will account for farm-out arrangements as follows:
The Group will not record any expenditure made by the farminee on its behalf;
The Group will not recognise a gain or loss on the farm-out arrangement but rather will redesignate any costs
previously capitalised in relation to the whole interest as relating to the partial interest retained; and
Any cash consideration to be received will be credited against costs previously capitalised in relation to the whole
interest with any excess to be accounted for by the Group as gain on disposal.
(j)
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. They are included in current assets, except for those with maturities greater than 12 months after the
balance date which are classified as non-current assets. Loans and receivables are included in receivables in the
consolidated statement of financial position.
Recognition and derecognition
Regular purchases and sales of financial assets are recognised on trade date, the date on which the Group commits to
purchase or sell the asset.
Subsequent measurement
Loans and receivables are carried at amortised cost using the effective interest method.
Impairment
The Group assesses at each balance date whether there is objective evidence that a financial asset or group of financial
assets is impaired.
(k)
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and
requires an assessment of whether the fulfilment of the arrangement is dependent on the use a specific asset or assets
and the arrangement conveys a right to use the asset.
Leases under which the lessor retains substantially all of the risks and benefits of ownership of the asset are classified as
operating leases. Operating lease payments are recognised in the consolidated statement of comprehensive income on a
straight-line basis over the lease term.
(l)
Trade and other payables
Trade and other payables are carried at amortised cost and represent liabilities for goods and services provided to the
Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future
payments in respect of the purchase of the goods and services.
37
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
(m) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, and
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense
relating to any provision is presented in the consolidated statement of comprehensive income net of any reimbursement.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the
present obligation at the balance date. If the effect of the time value of money is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of
money and, where appropriate, the risks specific to the liability. The increase in the provision resulting from the passage
of time is recognised in finance costs.
Employee leave benefits
Wages, salaries, annual leave and sick leave
Liabilities for wage and salaries, including non-monetary benefits and annual leave entitlements expected to be settled
within 12 months of the reporting date are recognised in provisions in respect of employees’ service up to the reporting
date. They are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-
accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable.
Long service leave
The liability for long service leave is recognised in the 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 reporting date using the
projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee
departures, and periods of service. Expected future payments are discounted using market yields at the reporting date in
national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future
cash outflows.
(n)
Share-based payment transactions
The Group provides benefits to employees and directors of the Group in the form of share-based payment transactions,
whereby services are rendered in exchange for shares or rights over shares (‘equity-settled transactions’).
The cost of equity-settled transactions is measured by reference to the fair value at the date at which they are granted.
The fair value of options is determined using either a Black Scholes or binomial option pricing model. The fair value of
options with non-market performance criteria is determined by reference to the Company’s share price at date of grant.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in
which the performance conditions are fulfilled, ending on the date on which the recipient becomes fully entitled to the
award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the
extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the directors, based
on the best available information at balance date, will ultimately vest. No adjustment is made for the likelihood of market
conditions being met as the effect of these conditions is included in determination of fair value at grant date. The charge
or credit for the period represents the movement in cumulative expense recognised as at the beginning and end of the
period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a
market condition.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not
been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the
modification, as measured at the date of modification.
38
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
(n)
Share-based payment transactions (cont.)
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled
award, and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as
if they were a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings
per share.
(o) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
(p) Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue
can be reliably measured. Specific recognition criteria must also to be met:
Interest income
Revenue is recognised as the interest accrues using the effective interest method.
(q)
Income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are
enacted or substantially enacted by the reporting date.
Deferred income tax is provided on all temporary differences at balance date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences, except:
where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in
joint ventures, and the timing of the reversal of the temporary differences can be controlled and it is probable that
the temporary differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets
and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences, and the carry-forward of unused tax assets and unused tax losses can be used, except:
where the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; and
when the deductible temporary differences is associated with investments in subsidiaries, associates or interests in
joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and taxable profit will be available against which the
temporary differences can be applied.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be
utilised.
Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent that it is
has become probable that future taxable profit will allow the deferred tax asset to be recovered.
39
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
(q)
Income tax (cont.)
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the balance date.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right of set off exists to set off
current tax assets against current liabilities and the deferred tax assets and liabilities relate to the same taxable entity and
the same taxable authority.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the consolidated
statement of comprehensive income.
(r)
Goods and services tax
Revenues, expenses and assets are recognised net of GST, except receivables and payables which are stated with GST
included. Where GST incurred on a purchase of goods or services is not recoverable from the taxation authority, the GST
is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the consolidated statement of financial position.
Cash flows are included in the consolidated statement of cash flows on a gross basis and the GST component of cash
flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority is
classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
(s)
Earnings per share
Basic earnings per share is calculated as net profit/(loss) attributable to members divided by the weighted average
number of ordinary shares.
Diluted earnings per share is calculated as net profit/(loss) attributable to members divided by the weighted average
number of ordinary shares and dilutive potential ordinary shares.
(t) Going concern
The financial report has been prepared on the going concern basis, which contemplates the continuity of normal business
activity and the realisation and settlement of liabilities in the normal course of the business.
The Group incurred a loss of $505,344 and had net cash outflows from operating and investing activities of $438,155 and
$845,814, respectively, and net cash inflows from financing activities of $574,832, for the year ended 30 June 2015. The
Group’s cash reserves have decreased from $1,207,176 as at 30 June 2014 to $498,039 as at 30 June 2015. The Directors
believe that there are reasonable grounds to believe that the Group will be able to continue as a going concern and that it
is appropriate to adopt the going concern basis in the preparation of the financial report after consideration of the
following factors:
(i)
(ii)
The Group will seek to raise further capital, if required, as and when necessary to meet its projected operations.
The decision of how the Group will raise future capital will depend on market conditions existing at that time. It is
the Group’s plan that this capital will be raised by any one or a combination of the following: placement of shares,
pro-rata issue to shareholders, the exercise of outstanding options, and/or a further issue of shares to the public.
Should these methods not be considered to be viable, or in the best interests of shareholders, then it would be the
Group’s intention to meet its obligations by either sale of all or part of the Group’s interests or farm-out of the
Group’s exploration interests, the latter course of action being part of the Group’s current overall strategy.
Based on the above, the Directors are of the opinion that the Group will be able to continue as a going concern and the
use of the going concern basis of accounting is appropriate.
40
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
(u) Parent entity financial information
The financial information for the parent entity, Navarre Minerals Limited, disclosed in Note 23 has been prepared on the
same basis as the consolidated financial statements, except as set out below.
Investments in subsidiaries
Investments in subsidiaries are accounting for at cost less accumulated impairment losses in the financial statements of
Navarre Minerals Limited.
NOTE 3:
SEGMENT INFORMATION
The Group’s reportable segment is confined to mineral exploration only.
NOTE 4:
NET ADMINISTRATION EXPENSES
Consolidated
2015
$
2014
$
12,440
109,500
629,354
5,258
30,737
15,663
24,720
35,559
3,553
50,393
63,715
980,892
(457,592)
14,858
109,325
734,756
40,684
65,276
15,222
23,967
35,310
11,036
58,661
62,710
1,171,805
(632,172)
523,300
539,633
Consolidated
2015
$
2014
$
149,961
(149,961)
-
(198,509)
198,509
-
168,500
(168,500)
-
(287,359)
287,359
-
-
-
Net administration expenses
Consultants fees and expenses
Directors remuneration (non-executive)
Salaries and on-costs
Share based payments
Investor relations
Motor vehicle expenses
Audit costs
Stock exchange registry and reporting costs
Travel costs
Depreciation and amortisation
Other administration expenses
Gross administration expenses
Allocated to exploration licences
Net administration expenses
NOTE 5:
INCOME TAX
Statement of Comprehensive Income
Current income tax
Current income tax credit
Tax losses not recognised as probable
Deferred income tax
Relating to origination and reversal of temporary differences
Tax losses brought to account offsetting reversal of temporary differences
Income tax expense reported in the consolidated statement of comprehensive
income
41
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 5:
INCOME TAX (cont.)
Consolidated
2015
$
2014
$
Tax Reconciliation
A reconciliation between tax expense and the product of accounting loss before income tax multiplied by the
Group’s applicable income tax rate is as follows:
Accounting loss before tax
At the statutory 30% tax rate (2014: 30%)
Share based payment expense
Non-deductible expenses
Tax losses not brought to account
Income tax expense reported in the consolidated statement of comprehensive
income
(505,344)
(602,682)
151,603
(1,577)
(65)
(149,961)
180,805
(12,205)
(100)
(168,500)
-
-
Deferred Income Tax
Statement of Financial
Position
2015
$
2014
$
Income Statement
2015
$
2014
$
Deferred income tax at 30 June relates to the following:
CONSOLIDATED
Deferred tax liabilities
Interest receivable
Exploration and evaluation costs
Gross deferred income tax liabilities
Deferred tax assets
Accruals
Provisions
Share issue costs
Temporary differences not recognised as not
probable
Tax losses brought to account to offset net deferred
tax liability
Gross deferred income tax assets
Net Deferred Tax Asset
Deferred tax expense
Tax consolidation
(i)
Members of the tax consolidated group
(355)
(1,787,215)
(1,787,570)
(908)
(1,566,700)
(1,567,608)
553
(220,515)
(219)
(264,003)
39,856
7,815
6,578
12,615
13,604
5,165
27,241
(5,789)
-
(26,762)
3,625
-
(6,578)
(5,165)
-
-
1,739,899
1,787,570
-
1,541,389
1,567,608
-
198,510
287,359
-
-
Navarre Minerals Limited and its 100% owned Australian resident subsidiary formed a tax consolidated group with effect
from 2 May 2012. Navarre Minerals Limited is the head entity of the tax consolidated group.
(ii)
Tax effect accounting by members of the tax consolidated group
Measurement method adopted under UIG 1052 Tax Consolidated Accounting
The head entity and the controlled entities in the tax consolidated group continue to account for their own current and
deferred tax amounts. The Group has applied the group allocation approach in determining the appropriate amount of
current taxes and deferred taxes to allocate to members of the tax consolidated group. The current and deferred tax
amounts are measured in a systematic manner that is consistent with the principles in AASB 112 Income Taxes.
42
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 5:
INCOME TAX (cont.)
In addition to its own current and deferred tax amounts, the head entity also recognises current tax liabilities (or assets)
and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the
tax consolidated group.
Tax losses
At balance date, the Group has estimated unused gross tax losses of $10,847,000 (2014: $9,577,000) that are available to
offset against future taxable profits subject to continuing to meet relevant statutory tests. To the extent that it does not
offset a net deferred tax liability, a deferred tax asset has not been recognised in the accounts for these unused losses
because it is not probable that future taxable profit will be available to use against such losses.
NOTE 6:
EARNINGS/(LOSS) PER SHARE
Basic earnings/(loss) per share amounts are calculated by dividing net loss for the year attributable to ordinary equity
holders of the parent by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings/(loss) per share amounts are calculated by dividing the net loss attributable to ordinary equity holders of
the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average
number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into
ordinary shares.
For the year ended 30 June 2015 and for the comparative period, there are no dilutive potential ordinary shares as
conversion of share options and performance rights would decrease the loss per share and hence are non-dilutive.
The following data was used in the calculations of basic and diluted loss per share:
Net loss
Weighted average number of ordinary shares used in calculation of basic and
diluted loss per share
Consolidated
2015
$
(505,344)
2014
$
(602,682)
Shares
Shares
77,328,237
63,933,675
There have been no transactions involving ordinary shares or potential ordinary shares that would significantly change
the number of ordinary shares or potential ordinary shares outstanding between the reporting date and the date of
completion of these consolidated financial statements.
NOTE 7:
CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Cash at bank earns interest at floating rates based on daily bank rates.
NOTE 8:
TRADE AND OTHER RECEIVABLES
Goods and services tax refund
Interest receivable
Other
Consolidated
2015
$
498,039
2014
$
1,207,176
498,039
1,207,176
Consolidated
2015
$
40,571
1,184
20,966
2014
$
23,881
3,026
22,499
62,721
49,406
At balance date, there are no trade receivables that are past due but not impaired. Due to the short term nature of these
receivables, their carrying value approximates fair value. Trade receivables are non-interest bearing and are generally on
30-90 day terms. Details regarding the credit risk of current receivables are disclosed in Note 18.
43
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 9:
OTHER FINANCIAL ASSETS
Current
Term Deposit
Non-current
Bank Guarantees – Exploration Permits
NOTE 10:
AVAILABLE-FOR-SALE FINANCIAL ASSETS
At fair value
Shares – Australian listed
Consolidated
2015
$
-
2014
$
10,000
-
10,000
Consolidated
2015
$
40,000
2014
$
30,000
40,000
30,000
Consolidated
2015
$
105,000
105,000
2014
$
-
-
Available-for-sale financial assets consist of investment in ordinary shares, and therefore have no fixed maturity date or
coupon rate.
Listed Shares
The Available-for-sale financial asset is an investment of shares in a listed company. The fair value of the equity shares is
determined by reference to published price quotations in an active market.
NOTE 11:
PROPERTY, PLANT AND EQUIPMENT
At cost
Accumulated depreciation
Movement in Plant and Equipment
Net carrying amount at beginning of year
Additions
Disposals [net written down value]
Depreciation
Net carrying amount at end of year
The useful life of the plant and equipment is estimated for 2015 as 3 to 5 years.
Consolidated
2015
$
233,926
(177,901)
2014
$
259,153
(142,308)
56,025
116,845
116,845
-
(11,948)
(48,872)
154,147
43,568
(23,729)
(57,141)
56,025
116,845
44
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 12:
LEASEHOLD IMPROVEMENTS
At cost
Accumulated depreciation
Movement in Leasehold Improvements
Net carrying amount at beginning of year
Depreciation
Net carrying amount at end of year
The useful life of the Leasehold Improvements is estimated as 5 years.
NOTE 13:
EXPLORATION AND EVALUATION COSTS
Balance at beginning of year
Expenditure for the year
Expenditure written-off during the year
Cash consideration paid by Catalyst Metals Ltd as part of Bendigo North farm-out
Non-cash consideration paid by Catalyst Metals Ltd as part of Bendigo North farm-out
Consolidated
2015
$
7,602
(6,294)
2014
$
7,602
(4,773)
1,308
2,829
2,829
(1,521)
4,349
(1,520)
1,308
2,829
Consolidated
2015
$
5,222,334
853,053
(3,005)
(50,000)
(65,000)
2014
$
4,342,324
986,412
(106,402)
-
-
5,957,382
5,222,334
Capitalised exploration and evaluation costs at 30 June 2015 are $5,957,382 (2014: $5,222,334) which relate to Bendigo
North $3,332,215 (2014: $3,435,042), Western Victoria Copper Project $1,543,801 (2014: $1,358,649), Kingston $426,058
(2014: $423,687) and Stawell Corridor $655,308 (2014: $4,956).
NOTE 14:
TRADE AND OTHER PAYABLES
Trade Creditors
Trade payables are non-interest bearing and are normally settled on 30 day terms.
NOTE 15:
PROVISIONS
CURRENT
Annual leave entitlement
Consolidated
2015
$
179,908
2014
$
195,894
Consolidated
2015
$
26,051
2014
$
45,345
45
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 16:
CONTRIBUTED EQUITY AND RESERVES
ISSUED AND PAID UP CAPITAL
Ordinary shares
2015
Shares
Consolidated
2015
$
2014
Shares
2014
$
92,580,272
92,580,272
9,707,084
9,707,084
72,607,653
72,607,653
9,129,833
9,129,833
Movements in Ordinary Shares
Balance at beginning of year
Share Issues:
Share placement at $0.03
Entitlement offer and shortfall placement at $0.03
Transaction costs
72,607,653
9,129,833
59,622,973
8,303,049
5,833,333
14,139,286
-
175,000
424,178
(21,927)
4,615,384
8,369,296
-
300,000
544,000
(17,216)
Balance at end of year
92,580,272
9,707,084
72,607,653
9,129,833
(a)
Terms and Condition of Ordinary Shares
Ordinary shares entitle their holder to receive dividends as declared. In the event of winding up the Company, ordinary
shares entitle their holder to participate in the proceeds from the sale of all surplus assets in proportion to the number of
and amounts paid up or which should have been paid up on shares held. Each ordinary share entitles the holder to one
vote, either in person or by proxy, at a meeting of the Company. Ordinary shares issued during the year and since the end
of the year, from date of issue rank equally with the ordinary shares on issue.
(b)
Share Options
At 30 June 2015 2,250,000 options over unissued shares granted to non-executive directors and senior employees were
outstanding. The options are granted pursuant to the Navarre Minerals Limited Option Plan, details of which are set out
in Note 21.
(c)
Capital Management
Capital is defined as equity. When managing capital, management’s objective is to ensure the entity continues as a going
concern as well as to maintain optimal returns to shareholders and benefits of other stakeholders. All methods of
returning funds to shareholders outside of dividend payments or raising funds are considered within the context of the
Group’s objectives.
The Group will seek to raise further capital, if required, as and when necessary to meet its projected operations. The
decision of how the Group will raise future capital will depend on market conditions existing at that time. It is the Group’s
plan that this capital will be raised by any one or a combination of the following: placement of shares, pro-rata issue to
shareholders, the exercise of outstanding options, and/or a further issue of shares to the public. Should these methods
not be considered to be viable, or in the best interests of shareholders, then it would be the Group’s intention to meet its
obligations by either partial sale of the Group’s interests or farm-out, the latter course of action being part of the Group’s
overall strategy.
The Group is not subject to any externally imposed capital requirements.
OTHER RESERVES
Share Based Payments Reserve
The share based payments reserve records the value of benefits provided as equity instruments to directors, employees
and consultants under share-based payment plans (Note 21).
Balance at beginning of year
Cost of share based payments
Cost of expired equity instruments transferred to accumulated losses
Balance at end of year
46
Consolidated
2015
$
302,485
5,258
(210,634)
2014
$
265,501
40,684
(3,700)
97,109
302,485
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 16:
CONTRIBUTED EQUITY AND RESERVES (cont.)
Net unrealised gains reserve
Balance at beginning of year
Net fair value gain on available-for-sale financial assets
Balance at end of year
ACCUMULATED LOSSES
Balance at beginning of year
Net loss for the year
Cost of equity instruments expired
Balance at end of year
NOTE 17:
STATEMENT OF CASH FLOWS RECONCILIATION
Reconciliation of net loss after tax to net cash flows used in operating activities
Net loss
Adjustments for:
Gain on sale of property, plant and equipment
Loss on property, plant and equipment written-off
Exploration expenditure written-off
Depreciation and amortisation (net of allocation to
exploration licences)
Share based payments (net of allocation to
exploration licences)
Changes in assets and liabilities
(Increase) in trade and other receivables
(Decrease)/increase in trade and other payables
(Decrease)/Increase in provisions (net of allocation
to exploration licences)
Consolidated
2015
$
-
40,000
40,000
2014
$
-
-
-
Consolidated
2015
$
(3,034,967)
(505,344)
210,634
2014
$
(2,435,985)
(602,682)
3,700
3,329,677
(3,034,967)
Consolidated
2015
$
(505,344)
2014
$
(602,682)
-
11,948
3,005
4,529
(2,141)
324
106,403
5,668
5,975
24,212
(16,763)
68,572
(10,077)
(9,946)
(101,661)
4,985
Net cash flows used in operating activities
(438,155)
(574,838)
NOTE 18:
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments comprise cash and short term deposits, the main purpose of which is to
finance the Group’s operations. The Group has various other financial assets and liabilities such as trade receivables and
trade payables, which arise directly from its operations. The main risks arising from the Group’s financial instruments are
credit risk, interest rate risk and liquidity risk. The Board of Directors has reviewed each of those risks and has
determined that they are not significant in terms of the Group’s current activities.
Credit risk
The Group trades only with recognised, creditworthy third parties. Receivable balances are monitored on an ongoing
basis with the results being that the Group’s exposure to bad debts is not significant.
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents and trade and other
receivables. The Group's exposure to credit risk arises from potential default of the counter party, with a maximum
exposure equal to the carrying amount of these instruments. No collateral is held as security. Exposure at balance date is
the carrying value as disclosed in each applicable note.
47
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 18:
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont.)
Interest rate risk
The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s cash and cash
equivalents with a floating interest rate. The impact of a 1.0% change in the market interest rates will not have a material
impact on the Group’s financial position.
There is no impact on equity other than the above net profit sensitivities on retained earnings/accumulated losses.
Liquidity Risk
The Group’s exposure to financial obligations relating to corporate administration and projects expenditure, are subject
to budgeting and reporting controls, to ensure that such obligations do not exceed cash held and known cash inflows for
a period of at least 1 year.
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built in an appropriate
liquidity risk framework for the management of the Group’s short, medium and longer term funding and liquidity
management requirements. The Group manages liquidity risk by maintaining adequate equity funding through the
monitoring of future cash flow forecasts of its operations, which reflect management’s expectations of the settlement of
financial assets and liabilities.
The Group has limited financial resources and will need to raise additional capital from time to time as such fund raisings
will be subject to factors beyond the control of the Group and its directors. When Navarre requires further funding for its
programs, then it is the Group’s intention that the additional funds will be raised by any one or a combination of the
following: placement of shares, pro-rata issue to shareholders, the exercise of outstanding options, and/or a further issue
of shares to the public. Should these methods not be considered to be viable, or in the best interests of shareholders,
then it would be the Group’s intention to meet its obligations by either partial sale of the Group’s interests or farm-out,
the latter course of action being part of the Group’s overall strategy.
Maturity Analysis
At balance date, the Group holds $179,908 of financial liabilities consisting of trade and other payables. All financial
liabilities have a contractual maturity of 30 days.
Fair Values
The aggregate net fair values of the financial assets and liabilities are the same as the carrying values in the consolidated
statement of financial position.
NOTE 19:
COMMITMENTS AND CONTINGENCIES
(a)
Commitments
Operating Lease
Future minimum rentals payable under operating lease for office premises at
balance date:
Payable not later than one year
Exploration Commitments – Exploration Permits
Estimated cost of minimum work requirements contracted for under exploration
permit is estimated at balance date:
Payable not later than one year
Payable later than one year but not later than five years
2015
$
2014
$
2,390
2,390
2015
$
14,340
14,340
2014
$
455,000
986,800
1,441,800
387,550
884,900
1,272,450
Exploration commitments at 30 June 2015 relate to, Western Victoria Copper Project $803,100 (2014: $1,144,950),
Kingston $46,200 (2014: $127,500) and Stawell Corridor $592,500 (2014: $0).
48
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 19:
COMMITMENTS AND CONTINGENCIES (cont.)
(a)
Commitments (cont.)
Responsibility for exploration commitments for the Tandarra Gold Project (EL 4897) during the reporting period was
assumed by Catalyst Metals Limited under a farm-out agreement, pursuant to which Catalyst may earn a 51% interest in
the Tandarra Gold Project.
In order to maintain current rights of tenure to exploration tenements, the Group is required to perform minimum
exploration work to meet the minimum expenditure requirements. These obligations are expected to be fulfilled in the
normal course of operations. Exploration interests may be relinquished or joint ventured to reduce this amount (as has
been done in the case of the Tandarra Gold Project). The Victorian State Government has the authority to defer, waive or
amend the minimum expenditure requirements.
(b)
Contingent Liability
R&D Tax Incentive refund
The Company received a refund of $1.4 million (“Refund”) from the Federal Government following registration under the
government’s Research and Development (“R&D”) Tax Incentive program (“Program”) in respect of R&D activities
conducted by the Company in the 2011/12 year as part of its exploration work programs. In 2014, the government
agency responsible for administering the Program, AusIndustry, commenced a Compliance Activity Review of the
Company’s registration under the Program. An Activity Review Meeting was conducted by AusIndustry in July 2014 and
the Company responded to a request for additional information. In December 2014, AusIndustry notified the Company
that the Company’s registration remains under review and is considered to have a high risk of non-compliance with the
eligibility requirements of the Program. The Company has prepared and submitted to AusIndustry additional information
and evidence in support of its claimed R&D activities. In September 2015, AusIndustry notified the Company of its
intention to commence an examination of the Company’s registration for the Program under section 27F of the Industry
Research and Development Act 1986 (Cth), which involves an assessment of the eligibility of the claimed R&D activities
and will lead to a finding being made about the eligibility of those activities under the requirements of the Program. The
Company intends to respond to the outstanding issues identified by AusIndustry and make further submissions for
consideration by AusIndustry during the examination of the registration.
Taking into account advice from the Company’s R&D tax consultant and the views of management, the Directors and the
Company’s R&D tax consultant believe the Company’s R&D registration is in compliance with the requirements of the
Program. However, there is a risk that AusIndustry may disagree with the Company’s assessment of the eligibility of its
claimed R&D activities under the Program and make a finding that some or all activities are ineligible under the Program.
In the event of an adverse finding, the Company would pursue all available avenues for appeal. Even if the Company
pursues those avenues of appeal there remains a risk that the Company may be required to repay to the Australian
Taxation Office (ATO) some or all of the Refund, in which case the Company may be required to draw on its cash reserves
and/or may require additional capital in order to meet that liability to the ATO.
49
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 20:
RELATED PARTY DISCLOSURES
Subsidiaries
The consolidated financial statements include the financial statements of Navarre Minerals Limited and the following
subsidiary:
Black Range Metals Pty Ltd
Compensation of key management personnel by category:
Short term employee benefits
Post-employment benefits
Share-based payments
Country of
Incorporation
Australia
%
Entity Interest
2014
%
100
2015
%
100
Consolidated
2015
$
613,097
75,856
8,778
697,731
2014
$
628,025
79,131
31,622
738,778
Details of compensation of individual key management personnel are set out in the Remuneration Report.
During the year, no fees for consulting services were paid by the Group to entities controlled by directors.
NOTE 21:
SHARE BASED PAYMENT PLANS
Navarre Minerals Limited Option Plan
Share options may be granted to senior employees and non-executive directors under the Navarre Minerals Limited
Option Plan. There were 350,000 options granted to senior employees during the financial year (2014: 275,000 options).
Movements in share options on issue during the year:
Outstanding at the beginning of the year
Granted during the year
Lapsed during the year
Exercised during the year
2015
Options
4,215,000
350,000
(2,315,000)
-
2,250,000
2014
Options
4,190,000
275,000
(250,000)
-
4,215,000
On 16 February 2015, 200,000 share options were granted to senior employees of the Company. The options are
exercisable at a price of 10 cents per option on or before 31 December 2018. The options vest in three tranches,
when the Company’s closing share price exceeds the exercise price of the options for ten consecutive trading days
after the relevant vesting date (being 16 February 2015 for the first tranche, 1 January 2016 for the second tranche
and 1 January 2017 for the third tranche).
The fair value of the options at date of grant is estimated to be 0.29 cents for the first tranche, 0.55 cents for the
second tranche and 0.75 cents for the third tranche. The fair value was determined using a Binomial pricing model,
taking into account the terms and conditions upon which the options were granted, and using the following inputs
to the model:
Expected volatility
Risk-free interest rate
70% Contractual life
2.68% Dividend yield
4 years
0%
The total amount expensed in the year relating to these share options was $0.
The effects of early exercise have been incorporated into the calculations by using an expected life for the option
that is shorter than the contractual life based on historical exercise behaviour, which is not necessarily indicative of
exercise patterns that may occur in the future.
50
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 21:
SHARE BASED PAYMENT PLANS (cont.)
On 23 June 2015, 150,000 share options were granted to senior employees of the Company. The options are
exercisable at a price of 4 cents per option on or before 31 December 2019. The options vest when the Company’s
closing share price exceeds the exercise price of the options for ten consecutive trading days after vesting date
(being 1 January 2016).
The fair value of the options at date of grant is estimated to be 0.87 cents. The fair value was determined using a
Binomial pricing model, taking into account the terms and conditions upon which the options were granted, and
using the following inputs to the model:
Expected volatility
Risk-free interest rate
70% Contractual life
2.68% Dividend yield
5 years
0%
The total amount expensed in the year relating to these share options was $0.
The effects of early exercise have been incorporated into the calculations by using an expected life for the option
that is shorter than the contractual life based on historical exercise behaviour, which is not necessarily indicative of
exercise patterns that may occur in the future.
NOTE 22:
AUDITOR’S REMUNERATION
Amounts received or due and receivable by the auditor for:
Audit or review of the financial reports:
RSM Bird Cameron Partners
NOTE 23:
PARENT ENTITY INFORMATION
Information relating to Navarre Minerals Limited
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Share based payment reserve
Net unrealised gains reserve
Accumulated losses
Total shareholders’ equity
(Loss) of the parent entity
Total comprehensive (loss) of the parent entity
Details of any guarantees entered into by the parent entity in relation to the debts
of its subsidiaries
Details of any contingent liabilities of the parent entity
Details of any contractual commitments by the parent entity for the acquisition of
property, plant or equipment
Consolidated
2015
$
2014
$
24,720
24,720
23,967
23,967
2015
$
2014
$
971,710
6,730,309
205,959
205,959
9,707,084
97,109
40,000
(3,319,843)
6,524,350
(505,101)
(465,101)
1,495,576
6,648,180
241,238
241,238
9,129,833
302,485
-
(3,025,376)
6,406,942
(602,345)
(602,345)
n/a
n/a
n/a
n/a
n/a
n/a
51
Navarre Minerals Limited
ABN 66 125 140 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 24:
EVENTS SUBSEQUENT TO BALANCE DATE
In accordance with the terms of Navarre’s agreement with Catalyst as described in paragraph 4.4(d) above, Catalyst is
required to issue a further 250,000 Catalyst shares to Navarre. It has been agreed between Navarre and Catalyst that
those shares will be issued on 21 September 2015.
In September 2015, AusIndustry notified the Company of its intention to commence an examination under section 27F of
the Industry Research and Development Act 1986 (Cth) of the Company’s registration for the Federal Government’s
Research & Development (“R&D”) Tax Incentive program (“Program”). The examination will involve an assessment of the
eligibility of the R&D activities registered by the Company and will lead to a finding being made about the eligibility of
those activities under the requirements of the Program. The Company intends to respond to the outstanding issues
identified by AusIndustry and make further submissions for consideration by AusIndustry during the examination of the
registration.
Other than the above, there has not arisen in the interval between the end of the financial year and the date of this
report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the
Company, to affect significantly the operations of the Group, the results of those operations, or state of affairs of the
Group, in future financial years.
52
Navarre Minerals Limited
ABN 66 125 140 105
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Navarre Minerals Limited, I state that:
In the opinion of the Directors:
(a)
The financial statements and notes of Navarre Minerals Limited for the financial year ending 30 June 2015 are in
accordance with the Corporations Act 2001, including:
(i)
(ii)
Giving a true and fair view of the Company’s and the consolidated entity’s financial position as at 30 June
2015.
Complying with Accounting Standards (including the Australian Accounting
Corporations Regulations 2001.
Interpretations) and
The financial statements and notes also comply with International Financial Reporting Standards as disclosed in
Note 2(a)(i).
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
(b)
(c)
This declaration has been made after receiving the declarations required to be made to the Directors in accordance with
Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2015.
On behalf of the Board
G McDermott
Managing Director
Stawell, 15 September 2015
53
RSM Bird Cameron Partners
Level 21, 55 Collins Street Melbourne VIC 3000
GPO Box 248 Collins Street West VIC 8007
T +61 3 9286 8000 F +61 3 9286 8299
www.rsmi.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
NAVARRE MINERALS LIMITED
Report on the Financial Report
We have audited the accompanying financial report of Navarre Minerals Limited, which comprises the
consolidated statement of financial position as at 30 June 2015, and the consolidated statement of
comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for
the year then ended, notes comprising a summary of significant accounting policies and other explanatory
information, and the directors' declaration of the consolidated entity comprising the company and the entities it
controlled at the year’s end or from time to time during the financial year.
Directors’ Responsibility 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 is free from
material misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordance with
Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with
International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in
accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant
ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable
assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report. The procedures selected depend on the auditor's judgement, including the assessment of the
risks of material misstatement of the financial report, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the
financial report in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Liability limited by a
scheme approved
under Professional
Standards Legislation
Major Offices in:
Perth, Sydney, Melbourne,
Adelaide and Canberra
ABN 36 965 185 036
RSM Bird Cameron Partners is a member of the RSM network. Each member
of the RSM network is an independent accounting and advisory firm which
practises in its own right. The RSM network is not itself a separate legal entity
in any jurisdiction.
54
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We
confirm that the independence declaration required by the Corporations Act 2001, which has been given to the
directors of Navarre Minerals Limited, would be in the same terms if given to the directors as at the time of this
auditor's report.
Opinion
In our opinion:
(a) the financial report of Navarre Minerals Limited is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and of its
performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 2.
Report on the Remuneration Report
We have audited the Remuneration Report included at pages 18 to 28 of the directors’ report for the year ended
30 June 2015. 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.
Opinion
In our opinion the Remuneration Report of Navarre Minerals Limited for the year ended 30 June 2015 complies
with section 300A of the Corporations Act 2001.
RSM BIRD CAMERON PARTNERS
J S CROALL
Partner
Dated: 15 September 2015
Melbourne, Victoria
55
Navarre Minerals Limited
ABN 66 125 140 105
ADDITIONAL SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 8 September 2015.
1.
Listing Information
The Company is listed, and all of the Company’s issued shares are quoted on, the Australian Securities Exchange
(ASX).
2.
(i)
Distribution of Shareholders
Analysis of number of shareholders by size of holding:
Ranges
1 – 1000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
>100,001
Totals
Holders
16
74
146
400
127
783
Total Units
3,545
246,403
1,227,748
13,471,735
77,630,841
92,580,272
% IC
0.004
0.266
1.326
14.551
83.853
100.000
(ii)
The number of shareholders holding less than a marketable parcel of shares was 338, holding a total of 2,871,829
shares.
3.
20 Largest Shareholders
The following table sets out the top 20 holders of the Company’s shares (when multiple holdings are grouped together by
registered holder):
Shareholder
Crocodile Gold Australia Pty Ltd
Mr Kevin John Wilson
Mr John Darroch, Mrs Gloria Darroch, Mr Richard Darroch & Ms Helen Darroch
New Chum Holdings Pty Ltd
Kautag Pty Ltd
Mr Colin Henry Naylor & Mrs Anne Naylor
Mrs Catherine McDermott
Lujeta Pty Ltd
Rivermore Pty Ltd
Mad Fish Management Pty Ltd
Mambat Pty Ltd
Mr Trevor James Shard & Ms Lidia Lee Merzel
Mr Wayne Daryl King & Mr Craig Alan King
Ms Katherine Griffin
Mr Steven John O’Bree
Nutsville Pty Ltd
AWD Consultants Pty Ltd
Phillip Mcaulay Superannuation Fund Pty Ltd
Mrs Karrina Mitchell
Mr Kevin Philip Wilkie
Number of
shares
18,469,272
5,872,431
4,042,889
3,995,642
3,219,713
2,450,963
2,287,770
2,100,000
1,464,747
1,345,000
1,330,770
1,060,000
1,030,499
1,010,000
1,000,000
1,000,000
950,000
941,153
900,000
894,000
55,364,849
% Issued
capital
19.9
6.3
4.4
4.3
3.5
2.6
2.5
2.3
1.6
1.5
1.4
1.1
1.1
1.1
1.1
1.1
1.0
1.0
1.0
1.0
59.8
56
Navarre Minerals Limited
ABN 66 125 140 105
ADDITIONAL SHAREHOLDER INFORMATION
4.
Substantial Shareholders
The substantial holders were as follows:
Shareholder
Crocodile Gold Australia Pty Ltd
Mr Geoffrey McDermott (including New Chum Holdings Pty Ltd & others)
Mr Kevin John Wilson
No of shares
18,469,272
6,409,180
5,872,431
% Issued Capital
19.9
6.9
6.3
5.
Voting Rights
At a general meeting of shareholders:
(i)
(ii)
On a show of hands, each person who is a member or sole proxy has one vote.
On a poll, each shareholder is entitled to one vote for each fully paid share.
TENEMENT INFORMATION (as at 8 September 2015)
Project
Bendigo North
Tandarra2
Landsborough Fault
Kingston
Western Victoria Copper Project
Black Range
Stavely
Cherrypool
Glenlyle
Stawell Corridor
Ararat
Tatyoon
Tenement Details1
Group Interest
EL 4897
EL 5280
EL 4590
EL 5425
EL 5426
EL 5497
EL 5476
EL 5480
100%
100%
100%
100%
100%
100%
100%
100%
Notes
1 EL = Exploration Licence
2 Catalyst Metals Ltd is entitled to earn a 51% interest under a farm-out agreement with Navarre. In addition to
its ownership of the Tandarra licence in the Bendigo North area, Navarre is entitled to a 1% royalty on
Catalyst’s share of proceeds from future production from such area covered by exploration licences EL 5266
(Raydarra) and EL 5533 (Sebastian) as was formerly covered by the exploration licences that were subject to
Navarre’s farm-in agreements with Castlemaine Gold Ltd (current exploration licence EL 5266 and expired
exploration licences EL 4536 and EL 4974).
57