Annual Report 2016
ABN: 89 099 116 631
PROCESS STOCK EXCHANGE LISTING
Neometals Ltd are listed on the
Australian Stock Exchange
(Home Branch - Perth)
ASX Code: NMT
ACN: 099 116 631
ABN: 89 099 116 631
North American OTC Market
(DR Symbol: RDRUY)
ANNUAL GENERAL MEETING
3pm Thursday 24 November 2016
The Celtic Club
48 Ord Street
West Perth WA
DIRECTORS
Steven Cole, Non-Executive Chairman
David Reed, Non-Executive Deputy Chairman
Christopher Reed, Managing Director
Dr Natalia Streltsova, Non-Executive Director
Douglas Ritchie, Non-Executive Director
COMPANY SECRETARY
Jason Carone
REGISTERED OFFICE
Level 1, 672 Murray Street
West Perth WA 6005
CONTACT DETAILS
Telephone (+618) 9322 1182
Facsimile (+618) 9321 0556
www.neometals.com.au
AUDITORS
Deloitte Touche Tohmatsu
Level 14, Woodside Plaza
240 St Georges Terrace
Perth WA 6000
BANKERS
National Australia Bank Ltd
SHARE REGISTRY
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth WA 6000
Australia:
World’s biggest producer
of mined lithium
In 2015, the three
biggest producers of
lithium were:
1. Australia 13,000t
2. Chile 12,900t
3. China 5,000t.
2
Neometals Annual Report 2016
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
Contents
Letter from the Chairman
Vision, Strategy and Execution
Review of Operations
Directors’ Report
Audit Report
Auditor’s Independence Declaration
Independence Declaration
Directors’ Declaration
Financial Statements 2016 Contents
Consolidated Statement of Profit and Loss &
Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes In Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Additional Stock Exchange Information
02
04
06
17
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35
37
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40
41
42
86
Annual Report 2016 Neometals
1
Letter from the Chairman
Dear Shareholders,
The year under review has been a seminal
year for Neometals. It is a year in which
your board and executive team have drawn
confidence of being a new dawn for your
company.
After several years of consolidation of its asset
base to its core, the Company has emerged
from a financial position that could reasonably
be described as “challenged”, to one in which
as at 30 September 2016 reflected:
net cash of around $66 million with the
Company having already declared and paid
two special dividends, each of 2 cents, in
April and August 2016;
a 13.8% share of a globally significant
operating lithium project with many
future decades of production left and
with assured life of mine offtake
arrangements;
a diverse range of technology initiatives
with prospects of Neometals becoming
instrumental in driving low quartile
production outcomes across a range of
mineral processing applications;
a globally significant titanium/vanadium/
iron resource at Barrambie WA at a
mature stage of resource validation
and proof;
a 42% (approx) share in ASX listed Hannans
Ltd with exciting prospective nickel, lithium
and gold exploration interests;
a market capitalisation of approximately
$183 million (at 32.5 cents per share) as
at 30 September 2016 compared with its
market capitalisation of approximately
$46 million (at 9 cents per share)
as at 1 July 2015.
•
•
•
•
•
•
2
Over this period your Company has also
materially strengthened its board and
executive ranks with Natalia Streltsova and
Doug Ritchie being welcomed to the board,
and Mike Tamlin formally joining the executive
team as COO. The relevant experience and
skills of each of Natalia, Doug and Mike are
demonstrable, as is evident from their short
bio’s in this Annual Report. Their support
to the existing Neometals’ team and their
commitment to delivering shareholder value
has been apparent from their contributions
to date.
Your Company and its board are committed to
an organisational outlook that champions:
• strong governance;
• disciplined strategic planning;
• measured risk mitigation;
•
innovation in its business approach;
• respectful stakeholder engagement;
• shareholder value and returns.
In particular, I wish to acknowledge the
personal financial support to the Company
over 2013-2015 of David Reed, your former
Chairman, without which support I doubt if
your Company would exist today. Fortunately,
we continue to enjoy David’s services and
insights on the board in a non executive
director capacity.
I also acknowledge the outstanding
contributions of your CEO Chris Reed and
CFO/Company Secretary Jason Carone who
have so ably steered your Company to its
present enviable position in Australia’s
capital markets.
As for the future, with a wealth of resources:
minerals; projects; technologies; people; and
Neometals Annual Report 2016 financial, and with the Company’s disciplined
strategic and business planning approach,
your board is confident that your continued
investment in the Company is well founded.
I know your board looks forward to continuing
to serve its loyal shareholder base, and both
support and hold accountable the executive
team in the delivery of Neometals’ strategic
objectives.
Steven Cole
CHAIRMAN, NEOMETALS LTD
21 October 2016
In particular,
I wish to acknowledge
the personal financial
support to the Company
over 2013-2015 of David
Reed, your former
Chairman, without which
support I doubt if your
Company would exist
today.
Annual Report 2016 Neometals
3
Vision, Strategy & Execution
1-5 years
Grow market cap from maximising returns from
existing operations, increasing margins via higher value
(downstream) products and developing growth options.
Mine, process, sell globally
relevant minerals with strong
market fundamentals
Commercialise proprietary
processing Technologies
Build strong Human and
Financial Capability
Leverage Project Acquisition
and Development Capacity
4
Neometals Annual Report 2016 5+ years
Combining innovative cost
advantages and strong partners
to develop a portfolio of globally
significant mineral resources
into lower-risk, long-life,
high-margin operations to
optimise stakeholder returns
5
Annual Report 2016 Neometals Review of operations
The directors of Neometals Ltd (“Company” and “Neometals”) present the annual financial report for the
Company and its controlled entities (“Consolidated Entity” and “Group”).
Neometals primary focus during the year centred on advancing its advanced minerals projects, Mt Marion
(Lithium) and Barrambie (Titanium).
MT MARION LITHIUM PROJECT
(Neometals Ltd 13.8%, Mineral Resources Limited (MRL) 43.1%, Ganfeng Lithium Co., Ltd (Ganfeng) 43.1% through
Reed Industrial Minerals Pty Ltd (RIM))
During the year RIM continued to advance the Mt Marion Lithium concentrate operation (Mt Marion) with
the commencement of construction following the positive final investment decision and financial completion
of offtake and equity investment of Ganfeng Lithium Co., Ltd, China’s leading lithium producer.
As at 30 June 2016 RIM was owned 13.8% by Neometals, 43.1% MRL and 43.1% by Ganfeng. PMI
commenced the construction phase of Mt Marion in the December 2015 quarter. Construction progressed
on schedule in all material respects, with first production from the Project expected in the December 2016
quarter. The plant is designed to produce more than 200,000tpa of chemical grade spodumene concentrate
at 6% Li2O content and 200,000tpa of between 4% and 6% content.
Commence
Crushing
Commence
First Shipment
Commence
Coarse Circuit
Fines Circuit
Q2 CY16
Q3 CY16
Q4 CY16
Q4 CY16
Kalgoorlie
Coolgardie
Mt Marion
6
Kambalda
Neometals Annual Report 2016 Mt Marion is a globally significant lithium deposit, containing total Indicated and Inferred Mineral Resources
60.5Mt at 1.36% Li2O and 1.09% Fe, at a cut-off grade of 0.3% Li2O (refer to table 1 below and Mineral and
Ore Reserve Statement). The 0.3% cut-off grade reflects the strategy of mining to the lithium-bearing
pegmatite contacts. Activities during the year included an extensive exploration and resource development
drilling program that resulted in significant improvements in knowledge of the mineralogy of the deposit,
improved planning of the exploitation of the deposit and a significantly larger resource.
Table 1 Mt Marion Resource Table for 0.3% Li2O cut-off
Category (JORC, 2012)
Tonnage (Mt)
Indicated
Inferred
Total
26.4
34.1
60.5
Li2O (%)
1.33
1.39
1.36
Fe (%)
1.09
1.08
1.09
Figure may not sum due to rounding. Significant figures do not imply an added level of precision
LITHIUM HYDROXIDE
PROJECT (ELi Process)
(Neometals 70%, Mineral Resources Limited 30%)
All downstream lithium processing technology
and patents are owned by Reed Advanced Materials
Pty Ltd (“RAM”). RAM is beneficially owned 70:30
by the Company and MRL. During the year the
Engineering Cost Study was completed by the
subsidiary of the German-owned EPC contractor
M+W Group, M+W Group (Singapore), in support of
a Feasibility Study (“FS”) for the commercialisation
of RAM’s ELi downstream processing technology in
a 15,000 – 20,000tpa LCE lithium hydroxide plant.
The FS was completed and announced to
the market 11 July 2016.
FEASIBILITY STUDY
The FS confirmed the technical feasibility and
economic viability of the proposed operation to
produce 20,000tpa of lithium carbonate equivalent
(‘LCE’) as battery quality lithium hydroxide and
lithium carbonate by conversion of spodumene
concentrates at a proposed plant in Malaysia.
The FS incorporates an Engineering Cost Study
(‘ECS’) with technical, engineering and economic
assessments carried out by to provide capital and
operating cost estimates to an accuracy of ±15%.
PROJECT DEVELOPMENT
AND CORPORATE STRATEGY
Based on the robust FS results, RAM supports the
project progressing to a full, integrated pilot plant
study to refine the process design and confirm the
operating parameters to sufficient accuracy for the
detailed design phase for a full scale plant.
RAM plans to undertake this pilot plant evaluation
of the patented ELi Process in the FY2016-17,
subject to Board approval. A decision to progress
to the construction phase of a full scale plant would
be subject to successful execution of the full pilot
scale test work and completion of detailed design
of the full scale plant.
Neometals and MRL have rights to deploy the ELi
Process and to purchase spodumene concentrates
from Mt Marion to secure the supply chain for an
ELi processing plant.
The key highlights of the FS are summarised in
the table below:
Feasibility Study Highlights
Average Annual Production
Life of Plant (LOP)
Life of Plant Revenue
Pre-tax Net Cash flow (per
annum)
14,000t LiOH.H2O
5,600t Li2CO3
20 years
US$ 4,042 million
US$ 82.39 million
Pre-tax NPV (12% discount rate)
US$481.7 million
Pre-tax Internal Rate of Return
51%
Cash Operating Cost per tonne
of LiOH.H2O
Cash Operating Cost per tonne
of Li2CO3
Pre-production Capital cost (in-
cluding EPCM and Contingency)
US$ 4,630
US$ 5,345
US$ 158 million
Payback of capital costs
2.6 years
7
Annual Report 2016 Neometals Review of operations (continued)
KEY ASSUMPTIONS
Operating and capital costs are presented as at end of the 4th Quarter of FY2015-16 with an indicative
accuracy of ±15%. All analysis is in US dollars and assumes real long-term prices of US$11,000/t for high
purity ‘battery quality’ LiOH.H2O and US$ 10,000/ t of high purity ‘battery quality’ Li2CO3.
Lithium Industry Competitive Cost Position 2016 Cash Costs
for Lithium Hydroxide (US$ per tonne)
E
N
N
O
T
/
$
S
U
11,000
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
CURRENT PRICE US$10,000/TONNE
ROCKWOOD
SQM
NEOMETALS
M+W FS 2016
FMC
CHINA
SPODUMENE
Source: Global Lithium LLC (costs), Industrial Minerals (price), Neometals Management (ELi cost)
Figure 1. Benchmarking Feasibility Study with 2015 Industry Cash Costs
LITHIUM MARKET
The current market for battery grade lithium hydroxide and lithium carbonate is in tight supply due to
high demand growth and constrained supply resulting from low installed base of production capacity in the
high purity product sector. The market demand is forecast to grow significantly for the next 4 years through
to 2020 (the timeframe in which Neometals and MIN are aiming to commence production at the project).
It is the view of some market analysts that whilst the market remains tight in the short term there would
appear to be no supply constraint in the long term. The supply response from existing major producers to
the increased demand is now reasonably clear. Increased production from the major producing brine and
spodumene deposits is anticipated within 1-3 years and in capacity increments of approx 20,000tpa.
Addition of capacity from these sources will supplement existing supply and moderate the tight supply
conditions that exist in 2016.
The current median prices for battery-grade lithium hydroxide are steady at approx US$10,000 per tonne, on
a CIF basis to Europe and US, with anecdotal evidence of prices for small volume transactions in excess of
US$20,000 per tonne (source: Industrial Minerals 24 August 2016).
The price of chemical grade lithium concentrates (6% Li2O) are estimated at US$572 per tonne on a CIF
China basis. (source: Ganfeng). Supply of this grade of concentrate is tight due to the marketing policy of
the only significant current supplier.
8
Neometals Annual Report 2016 Review of operations (continued)
BARRAMBIE TITANIUM PROJECT
(Neometals 100% through Australian Titanium Pty Ltd)
During the year the Company completed the legal agreements for a global (excluding Russia and China)
exclusive licence of the proprietary technology that is currently being evaluated for its Barrambie
Titanium Project.
Barrambie is one of the world’s highest grade titanium deposits, containing total Indicated and Inferred
Mineral Resources of 47.2Mt at 22.2% TiO2, 0.63% V2O5 and 46.7% Fe2O3, at a cut-off grade of 15% TiO2
(refer to Barrambie Mineral Resource Estimate estimate below).
PROJECT DEVELOPMENT AND CORPORATE STRATEGY
Neometals plans to undertake a full pilot plant evaluation of the proprietary hydrometallurgical
technology. The work plan is to complete mini-pilot plant optimisation testwork (which has been approved
by the Neometals Board and scheduled to start in the September Quarter 2016), then to commence the full
pilot plant evaluation in the first half of 2017. Subject to the success of the full pilot scale test work it
is Neometals’ intention to complete a Feasibility Study (FS) in 2017.
The current preferred project development strategy is to advance the project to a sufficient stage of
evaluation that facilitates Neometals obtaining a titanium industry partner which would fund and operate
the development of the Barrambie project on a shared equity or joint-venture basis.
TITANIUM MARKET
The majority of titanium feedstocks (an annual market of US$17 Billion or 85% by value) are used to
produce titanium dioxide pigment which is then used as an additive in paints, plastics, paper and ink with
the balance (15%) used to produce titanium metal products.
The current median price for high quality titanium dioxide pigment is US$2,275 per tonne on a CIF basis to
USA (source: Industrial Minerals 21 July 2016).
Meekatharra
Cue
Barrambie
Mt.Magnet
9
Annual Report 2016 Neometals Review of operations (continued)
NEOMET PROCESSING TECHNOLOGY
(25% Net Profit Interest through Alphamet Management Pty Ltd 100% Neometals)
Alphamet will be responsible for managing the commercialisation and development of the technology
(‘Neomet Process’). All revenue received from the commercialisation of the technology will be split 25:75
between Alphamet and the owners of the technology. Alphamet has entered a strategic alliance with the
prominent EPC contractor company Sedgman Limited. Sedgman will market the technology, coordinate
customer evaluation testwork and design process plant for clients which will operate the Neomet Process
plant under licence from Alphamet. The Neomet Process is expected to have wide application in the low
cost regeneration of process acids and recovery of metals.
Typical process Blocks
HCL RECYCLE
Upstream
Process
Infrastructure
Disolution of
Metals in HCL
Solution
Metal
Recovery/
Extraction
Acid
Regeneration
OEM Package
Further Product
Recovery
Extraction
PRODUCT(S)
PRODUCT(S)
Figure 2. Neomet Proprietary Acid Regeneration Technology Process Model
10
10
Neometals Annual Report 2016
Neometals Annual Report 2016 Review of operations (continued)
Typical Project Organisational Stucture
Client
LICENCE & ROYALTY
RELATIONSHIP
Note 1
Alphamet
Principal EPC/M
Contractor Engineering
Note 2
Engineering
Design
Procurement
Construction
Commisioning
Operation
Note 1: The Licence and royalty relationship may be managed through the EPC Contractor pending project and Client requirements
Note 2: The Principal Contractor will interface with the client directly and manage all delivery functions relating to the project (eg
enginering, procurement and construction)
Acid regeneration OEM package
design & supply
Figure 3. Structure of Strategic Alliance with Sedgman Limited
Annual Report 2016 Neometals
11
11
Annual Report 2016 Neometals Review of operations (continued)
1212
Neometals Annual Report 2016
Neometals Annual Report 2016 Review of operations (continued)
Project Development Phasing
Initial
Sample
Concept
Study
Laboratory
Evaluation
Indicative
Sample
Quality
10-50kg
Alphamet has entered into a long term lease for
the commercial laboratory facilities from one of the
owners of the technology for use by the Strategic
Alliance partners to test third party materials and
operate pilot plant facilities.
Pre Feasability
Study
Mini Plant
200-500kg
Feasability
Study
Pilot Plant
300t -1000t kg
Semi Commercial
or Final Feasability
Study
Demo Plant
EPC/M
Delivery
Commercial
Plant
Figure 4. Structure of Testing/Evaluation Stages for
Third Party testing
13
Annual Report 2016 Neometals Review of operations (continued)
FORRESTANIA NICKEL PROJECT
(Neometals 80%, Hannans 20% free carried to DTM)
With Neometals focus being on the Mt Marion Lithium and Barrambie Titanium Projects, the Company
has committed to divesting non-core assets from its portfolio. In line with this strategy, during the year
the Company entered into a binding termsheet with with Hannans Limited (“Hannans” or “HNR”) under
which Neometals will divest its Forrestania nickel assets via the sale of the Company’s subsidiary company,
Reed Exploration Pty Ltd (“REX”). As part of the divestment, Neometals took a placement of $250,000 worth
of HNR shares at 0.4c per share (approximately 8% of HNR’s issued capital) and as part of the placement
received 1 for 2 free attaching option (exercisable at 0.4c within 2 years). As at 30 June 2016 the mark
to market book profit on Neometal’s holding in HNR is $1.1M and the current value of the shares to be
received by Neometals for REX upon completion is $8.7M (as at 21 September 2016).
Under the terms of the transaction for the sale of REX:
1. Hannans to undertake a capital raising of $1.25 million, which was completed in May 2016;
2. Neometals is contributing a maximum of $1.25 million cash, through the placement, underwriting
and the cash assets of REX at completion;
3. Neometals will hold approximately 40% of the issued capital in Hannans at completion, on an
undiluted basis;
4. Hannans will divest its Swedish projects via an in specie distribution of the shares in its subsidiary
company (Scandinavian Co) to shareholders of which Neometals will receive at least 13.5%;
5. Neometals will assist Scandinavian Co to realise lithium, cobalt and carbon opportunities in
Scandinavia through a technical assistance arrangement; and
6.
the Hannans board will be re-constituted to comprise of two existing Hannans directors and one
director nominated by Neometals.
Completion of the sale of REX is subject to a number of conditions precedent and expected to be finalised
late September 2016.
In the later part of the year REX completed a ground geophysical survey (IP) survey to identify any coincident
geochemical and geophysical anomalies in the southern part of the Project tenure, some 7km north of the
Flying Fox nickel sulphide mine in the Yilgarn region of Western Australia. The Company received approval
for a POW for diamond drilling to test the centres of with closely spaced IP lines. Drilling commenced on
27 July 2016.
14
14
Neometals Annual Report 2016
Neometals Annual Report 2016 Review of operations (continued)
ANNUAL MINERAL RESOURCE AND ORE RESERVE
STATEMENT
As at 11 October 2016
MT MARION RESOURCE TABLE FOR 0.3% LI2O CUT-OFF
Category
(JORC, 2012)
Indicated
Inferred
Total
Barrambie
Barrambie
Total
ORE RESERVES
Tonnes
(Mt)
26.4
34.1
60.5
Li2O
(%)
1.33
1.39
1.36
Category
Indicated
Inferred
Tonnes
(Mt)
34.7
12.5
47.2
TiO2
(%)
22.25
21.99
22.2
Barrambie
Category
(JORC, 2012)
Tonnage (MT)
Barrambie
Probable
10.762
TiO2
(%)
25.18
V2O5
(%)
0.6
Mineral Resources are inclusive of Ore Reserves
Fe
(%)
1.09
1.08
1.09
V2O5
(%)
0.64
0.58
0.63
Fe2O3
(%)
42.5
The mineral resources for the following projects have changed from the Company’s Mineral Resource
Statement as at 26 October 2015 (announced 15 December 2015) as follows:
• A revised resource estimate for the Mt Marion Project prepared by Snowden Mining Industry Consultants
was announced to ASX on 6 July 2016. This re-estimated the former 23.2 Mt @ 1.39% resource (across
measured, indicated and inferred categories) at a cut-off grade of 0% Li2O, as a 60.5 Mt @ 1.36%
resource estimate at a cut-off grade of 0.3% Li2O. This change occurred subsequent to 30 June 2016.
• The resource estimate for the Barrambie Project is unchanged from the Company’s Mineral Resource
Statement as at 26 October 2015.
COMPETENT PERSONS STATEMENT
The Mineral Resource and Ore Reserves Statement above is based on, and fairly represents, information and supporting documentation prepared by Competent
Persons.
The Mineral Resource and Ore Reserves Statement as a whole has been approved by Mr Christopher Reed, a full time employee of Neometals Ltd and Member
of the Australian Institute of Mining And Metallurgy (210541). Mr Reed has sufficient experience relevant to the style of mineralisation and type of deposits under
consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the JORC Code 2012. Mr Reed consents to the inclusion in this
report of the Mineral Resource and Ore Reserves Statement in the form and context in which it appears.
In relation to these mineral resource and ore reserve estimates, the Company confirms that it is not aware of any new information or data that materially affects
the information included in the following ASX announcements in which the information was first presented and that all material assumptions and technical
parameters underpinning the mineral resource and ore reserve estimates in the following ASX announcements continue to apply and have not materially changed.
06/12/2013
Barrambie - Amended JORC 2012 Mineral Resource Estimate
25/08/2015
Barrambie – Pre-feasibility Study Results
6/07/2016
160% increase in Mt Marion Resource Estimate
15
Annual Report 2016 Neometals Review of operations (continued)
CORPORATE
FINANCES
Cash and term deposits on hand as of 30 June 2016 totalled $79.25 million, including $5 million in
restricted use term deposits supporting performance bonds and other contractual obligations.
The 2 million convertible notes held by the former Chairman David Reed were converted into 50,000,000
fully paid ordinary shares in the company on 18 November 2015. Refer to note 17 of the accounts for
further details.
DIRECTOR CHANGES
At the Company’s AGM held on 27 November 2015 the Company confirmed the appointment of
Mr Steven Cole as Chairman as part of a broader plan to strengthen the Board as the company commenced
the next phase of its evolution. Mr Cole, who joined the Board in 2008, succeeded long-serving Chairman
Mr David Reed, who remains fully engaged on the board in a Non-Executive Director position.
In addition, the Company expanded its Board to drive strategic objectives by appointing Mr Doug Ritchie
and Dr Natalia Streltsova to the Board on 14 April 2016. Mr Ritchie is a senior resources industry executive
with over 35 years experience, including over 28 years working with Rio Tinto in various senior management
roles including CEO Rio Tinto Energy Australia and most recently the Group Executive of Strategy based in
the UK. Dr Streltsova is a PhD qualified chemical engineer with over 25 years experience in the minerals
industry and an extensive background in mineral processing and hydrometallurgy across a range of
commodities relevant to Neometals.
CAPITAL MANAGEMENT
On 8 April 2016 the Company initiated an on-market buy-back of ordinary shares to acquire a maximum
of 5% of the Company’s current issued ordinary shares, and will not buy-back more than A$5m worth of
shares over 12 months. In addition, the Company had announced an intention to undertake an unmarketable
sale facility, enabling shareholders with a valued at less than A$500, to sell their full holding with no broking
or administration fees. To date the Company has not acquired any shares through the on-market share buy-
back that is currently open or initiated the unmarketable parcel sale facility as previously foreshadowed.
A special dividend of 2 cents per share unfranked was paid to the holders of fully paid ordinary shares on
7 April 2016.
16
16
Neometals Annual Report 2016
Neometals Annual Report 2016 Directors’ Report
The directors of Neometals Ltd submit their report for the financial year ended 30 June 2016.
The names and particulars of the directors of the Company during or since the end of the financial year are:
CURRENT DIRECTORS
Name
Steven Cole
David J. Reed OAM
Particulars
Non-executive Chairman
Steven Cole has over 40 years of professional, corporate and business
experience through senior legal consultancy, as well as a range of executive
management and non-executive appointments.
His extensive boardroom and board sub-committee experience includes
ASX listed, statutory, proprietary and NFP organisations covering the industrial,
financial, educational, professional services, agribusiness, health and
resources sectors.
Steven’s professional qualifications include:
• Llb (hons)– University of Western Australia
• AICD Company Directors Diploma and Fellow;
• Wharton Business School – University of Pennsylvania – Corporate
Governance Program 2010
• Harvard – Corporate Governance Program 2015
Appointed: 24 July 2008
Special responsibilities: Chairman of each of the Nomination and
Remuneration Committee and Member of the Audit Committee.
Directorships of other listed companies: Non-executive Director Matrix
Composites and Engineering Ltd
Non-executive Director
David Reed is a Fellow of CPA Australia with over 43 years’ experience in stock
broking and corporate management. From 1985 to 1997 Mr. Reed was chairman
of stock-broking firm Eyres Reed Ltd until its sale to CIBC World Markets in
1997 at which time he became Chairman of CIBC Australia, a position he held
until 2003. Mr. Reed has served as chairman of several ASX listed mineral
exploration companies and served as Chairman of Neometals Ltd since
inception in 2001 to 27 November 2015 when he was succeeded by Steven Cole.
Mr. Reed is a former chairman of the fund raising committee for the Australian
Prospectors and Miners Hall of Fame and secretary of the Amalgamated
Prospectors and Leaseholders Association and was a co-founder of the Diggers
and Dealers Forum in Kalgoorlie. Mr. Reed received an Order of Australia Medal
in 2002 for his service to the community.
Appointed: 20 December 2001
Special responsibilities: Deputy Chairman and Member of the Risk,
Nomination and Remuneration Committees
Directorships of other listed companies: Nil
17
Annual Report 2016 Neometals Directors’ Report (continued)
Christopher J. Reed
Dr. Natalia Streltsova
Mr Douglas Ritchie
Managing Director
Chris Reed is an accountant with over 24 years’ experience in the resource
industry including more than 10 years in corporate administration and
management. Chris served as Managing Director of Reed Resources Ltd (now
Neometals Ltd) from September 2007 until May 2012 at which time he assumed
the role executive director. Chris resumed the role as Managing Director from
1 October 2013. Mr. Reed is the current serving Vice-president of the
Association of Mining and Exploration Companies.
Mr. Reed holds a Bachelor of Commerce from the University of Notre Dame
and a Graduate Certificate in Mineral Economics from the WA School of Mines.
He is a member of the AusIMM.
Appointed: 20 December 2001
Special responsibilities: CEO
Directorships of other listed companies: Nil
Non-Executive Director
Dr. Natalia Streltsova is a PhD qualified chemical engineer with over 25 years
experience in the minerals industry and an extensive background in mineral
processing and hydrometallurgy across a range of commodities relevant to
Neometals. Her previous roles have included Director of Technical Development
at Vale (formerly CVRD), Development Manager at GRD Minproc and senior
technical roles at BHP Billiton and WMC Resources that involved considerable
interaction with operations to identify and implement innovative projects
to increase production and reduce costs. Dr Streltsova has considerable
international experience in technical and business development capacities,
in South America, Africa and the Former Soviet Union and is currently a
Non-Executive Director of Potash West NL.
Appointed: 14 April 2016
Special responsibilities: Chairman of the Risk Committee and Member of
each of the Remuneration and Audit Committees.
Directorships of other listed companies: Potash West NL
Non-Executive Director
Doug Ritchie is a senior resources industry executive with over 35 years
experience, including over 28 years working with Rio Tinto in various senior
management roles including CEO Rio Tinto Energy Australia and most
recently the Group Executive of Strategy based in the UK. Mr Ritchie has
considerable international corporate experience, including in China, and is
currently a Non-Executive Director of diversified mining company Arrium
Limited and former Chairman of Uniquest, the University of Queensland’s
commercialisation company.
Appointed: 14 April 2016
Special responsibilities: Chairman of the Audit Committee and Member
of each of the Nomination and Risk Committees.
Directorships of other listed companies: Arrium Limited
18
Neometals Annual Report 2016 Directors’ Report (continued)
COMPANY SECRETARY
Jason Carone
Chief Financial Officer and Company Secretary
Mr. Carone is a Chartered Accountant with over 18 years’ experience in
accounting and company administration in Australia and South East Asia.
Mr. Carone holds a Bachelor of Commerce in Accounting and Business
Law from Curtin University and is a member of the Institute of Chartered
Accountants, and Chartered Secretaries Australia.
Appointed: 4 March 2009
FUTURE DEVELOPMENTS
The Consolidated Entity intends to continue its
focus on disciplined evaluation and development of
its two core assets, the Mt Marion Lithium Project
and Barrambie Titanium project, and to finalise
divestment of its remaining non-core assets. These
core advanced minerals projects have large JORC-
compliant Resource bases, which when combined
with their respective process flow sheets hold the
potential to develop into large, low-cost, long life
advanced mineral operations.
NEOMETALS VISION, STRATEGY & EXECUTION
Vision
Neometals’ vision is to combine innovative cost
advantages and strong partners to develop a
portfolio of globally significant mineral resources
into lower-risk, long-life, high-margin operations
to optimise stakeholder returns.
Strategy
Grow market cap from maximising returns from
existing operations, increasing margins via higher
value (downstream) products and developing
growth options.
Execution
The Company has established individual business
plan objectives addressing the building blocks for
delivering on the strategic objectives.
REVIEW OF OPERATIONS
The consolidated profit after income tax for the
year attributable to members of Neometals Ltd was
$84.6 million (2015: $10.3 million loss) including
an impairment loss of $13,831 (2015: $1.3 million).
A detailed review of the Company’s operations
during the financial year can be found on pages
6 to 16 of this Annual Financial Report.
CHANGES IN STATE OF AFFAIRS
During the financial year the Consolidated
Entity’s primary focus centered on advancing its
advanced minerals projects. There have not been
any other significant changes in the affairs of the
Consolidated Entity from the previous year other
than as disclosed in the Director’s Report.
PRINCIPAL ACTIVITIES
The Consolidated Entity’s principal activities
during the year centred on advancing its advanced
minerals projects Mt Marion and Barrambie,
through exploration and evaluation of mineral
processing initiatives.
EVENTS AFTER THE REPORTING PERIOD
On 11 August 2016 the Company declared an
unfranked dividend of 2 cents per share, to holders
of ordinary shares registered at 5.00pm WST on
17 August 2016. The dividend was paid on
26 August 2016.
In March 2016 the Company agreed to divest its
Reed Exploration Pty Ltd Nickel Projects by way of
a sale of the subsidiary that owns the project, Reed
Exploration Pty Ltd, to Hannans Limited. A binding
share sale agreement was executed on 10 August
2016 and completion, which is subject to conditions
precedent, is expected to occur late September 2016.
19
Annual Report 2016 Neometals Directors’ Report (continued)
ENVIRONMENTAL REGULATIONS
As required by section 299(1)(f) of the Corporations
Act the Company confirms that it has performed all
of its environmental obligations in accordance with
applicable environmental regulations.
DIVIDENDS
In respect of the financial year ended 30 June 2016,
a special dividend of 2 cents per share unfranked
was paid to the holders of fully paid ordinary shares
on 7 April 2016.
INDEMNIFICATION OF OFFICERS AND AUDITORS
During the financial year the Company paid a
premium in respect of a contract insuring the
directors and officers of the Company and of any
related body corporate against a liability incurred
as a director or officer, to the extent permitted
by the Corporations Act 2001. The contract of
insurance prohibits disclosure of the nature of the
liability and the amount of the premium.
The Company has not otherwise, during or since
the financial year, except to the extent permitted by
law, indemnified or agreed to indemnify an officer
or auditor of the Group or of any related body
corporate against a liability incurred as such an
officer or auditor.
UNISSUED SHARES UNDER OPTION
There were no unissued ordinary shares of the
company, Neometals Ltd, under option at the date
of this report.
No shares of the Company were issued during or
since the end of the financial year as a result of the
exercise of an option over the unissued shares of
the Company.
Please refer to the Remuneration Report at page 22
below for details of Performance rights issued as
part of KMP remuneration.
DIRECTORS’ SECURITY HOLDINGS
The following table sets out each director’s
relevant interest in shares, debentures, and
rights or options in shares or debentures of the
Company or a related body corporate as at the
date of this report:
Directors
S. Cole
C. Reed
D. Reed
Fully paid Ordinary
Shares
Share Options
Performance rights
Number
1,120,083
10,548,980
65,221,259
Number
-
-
-
Number
-
1,595,092
-
DIRECTORS’ MEETINGS
The following table sets out the number of directors’ meetings (including meetings of committees of
directors) held during the financial year and the number of meetings attended by each director (while
they were a director or committee member). During the financial year, 13 board meetings, 3 nomination
committee meetings, 1 remuneration committee meeting and 2 audit committee meetings were held.
Board of
Directors
Nomination
Committee
Remuneration
Committee
Risk
Committee
Audit
Committee
Directors
S. Cole
C. Reed
D. Reed
N. Streltsova
D.Ritchie
Held
Attended
Held(1)
Attended
Held(1)
Attended
Held(2)
Attended
Held
Attended
13
13
13
4
4
13
12
13
3
3
3
n/a
3
n/a
0
3
n/a
3
n/a
0
1
n/a
1
0
1
n/a
1
0
n/a
n/a
0
n/a
0
0
0
0
n/a
0
0
0
2
n/a
2
0
0
2
n/a
2
0
0
20
Neometals Annual Report 2016 Directors’ Report (continued)
Meeting numbers in the “Held” column are the number of meetings held whilst the relevant director was a
member of the board or committee.
1.
2.
Excludes several informal meetings of the members of the Nomination and Remuneration Committee to discuss
matters including the establishment of executive KPIs for incentive based remuneration and the TSR comparator
group, board evaluation and board succession planning.
Excludes several informal meetings of the members of the Risk Committee to discuss matters including and the
Company’s strategic direction resultant risk exposure following completion of the Mt Marion Project transaction
and the change in Chair with the expanded Board.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of the court to bring proceedings on behalf of the Company or intervene in
any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the
Company for all or part of those proceedings. The Company was not a party to any such proceedings during
the year.
CORPORATE GOVERNANCE STATEMENT
The Company is committed to high standards of corporate governance designed to enable the Company to
meet its performance objectives and better manage its risks.
The Company has adopted a comprehensive governance framework in the form of a formal corporate
governance charter together with associated policies, protocols and related instruments (together
“Charter”).
The Company’s Charter is based on a template which has been professionally verified to be complementary
to and in alignment with the ASX Corporate Governance Council Principles and Recommendations 3rd
Edition 2014 (“ASX CGC P&R”) in all material respects. The Charter also substantially addresses the
suggestions of good corporate governance mentioned in the “Commentary” sections of the ASX CGC P&R.
The Charter was formally adopted by the board on 28 November 2014. Prior to that date the Company’s
corporate governance charter was substantially reflective of the ASX Corporate Governance Council
Principles and Recommendations 2nd Edition.
The Board of Neometals is responsible for the corporate governance of the company and its subsidiaries.
The Board has governance oversight of all matters relating to the strategic direction, corporate governance,
policies, practices, management and operations of Neometals with the aim of delivering value to its
Shareholders and respecting the legitimate interest of its other valued stakeholders, including employees,
suppliers and joint venture partners.
Under ASX Listing Rule 4.10.3, Neometals is required to provide in its annual report details of where
shareholders can obtain a copy of its corporate governance statement, disclosing the extent to which the
Company has followed the ASX Corporate Governance Council Principles and Recommendations in the
reporting period. Neometals has published its corporate governance statement on the Corporate section
of its website:
www.neometals.com.au/reports/corporate-governance-statement.pdf
GOVERNANCE AND INTERNAL CONTROLS
The Company has put in place governance arrangements and internal controls with respect to its estimates
of reserves and resources and the estimation process including:
• The Company used third party consultants to estimate its mineral resources and ore reserves in
accordance with the 2012 JORC Code for the Barrambie and Mt Marion projects (see ASX releases dated
6 December 2013, 25 August 2015 and 6 July 2016).
• Oversight and approval of each annual statement by employees that are Competent Persons as defined
by the 2012 JORC Code.
21
Annual Report 2016 Neometals Directors’ Report (continued)
Remuneration Report (audited)
KEY MANAGEMENT PERSONNEL
The following persons were deemed to be Key Management Personnel (“KMP”) during or since the end of
the financial year for the purpose of Section 300A of the Corporations Act 2001 and unless otherwise stated
were KMP for the entire reporting period.
Non-Executive Directors
• Steven Cole
Non-executive Director/Chairman
• David Reed
Non-executive Director/Deputy Chairman
• Natalia Streltsova
Non-executive Director (Appointed 14 April 2016)
• Doug Ritchie
Non-executive Director (Appointed 14 April 2016)
Executive Directors
• Christopher Reed
Managing Director and CEO
Other Executives
• Jason Carone
Chief Financial Officer and Company Secretary
• Michael Tamlin
Chief Operating Officer
22
22
Neometals Annual Report 2016
Neometals Annual Report 2016
Directors’ Report (continued)
REMUNERATION POLICY FOR KEY MANAGEMENT PERSONNEL
Non-Executive directors
The board’s policy is to remunerate Non-executive Directors at market rates for comparable companies
for time, commitment and responsibilities. The remuneration committee on behalf of the board determines
payments to the Non-executive Directors and reviews their remuneration annually, based on market
practice, shareholder sentiment, board work load, company cashflow capacity and corporate performance
generally. Independent external advice and/or benchmark comparisons are sought when required.
The maximum aggregate amount of fees that can be paid to Non-executive Directors is $600,000 as
approved by shareholders at the Annual General Meeting on 27 November 2015. Fees for Non-executive
Directors are not linked to the performance of the economic entity. However, to align Directors’ interests
with shareholder interests, the Directors are encouraged to hold shares in the Company.
General
The remuneration policy for employees is developed by the Remuneration Committee taking into
account market conditions and comparable salary levels for companies of a similar size and operating in
similar sectors.
The Company adopted a Performance Rights Plan (“PRP”) for its staff, including the executive KMP, in
July 2011 and shareholders reapproved the issue of securities under the plan in November 2014. The board
believes that the PRP will assist the Consolidated Entity in remunerating and providing ongoing incentives
to employees of the Group.
The rules of the PRP enable the Company to issue performance rights to eligible personnel subject to
performance and vesting conditions determined by the Company. Each performance right entitles the
holder, for nil cash consideration, to one fully paid ordinary share in the Company for every performance
right offered, if the applicable performance and vesting conditions set for that holder are satisfied.
23
Annual Report 2016 Neometals Directors’ Report (continued)
During the financial year a total of 3,363,638 (2015: 9,394,155) performance rights were offered to and
accepted by KMP. Of this amount 3,363,638 performance rights are subject to a Total Shareholder
Return (“TSR”) hurdle, details of which can be found in the “Service agreements - performance based
remuneration” section below. Testing undertaken for the period ended 30 June 2015 and 31 December 2015
resulted in 6,876,500 performance rights subject to the TSR criteria vesting.
The Group’s remuneration policy for executive KMP seeks to balance its desire to attract, retain
and motivate high quality personnel with the need to ensure that remuneration incentivises them to
pursue growth and success of the Company without taking undue risks and without it being excessive
remuneration.
To align the interests of the executive with that of the company remuneration packages for executive
KMPs contain the following key elements:
a. Fixed Base Salary – salary, superannuation and non-monetary benefits;
b. Short Term Incentives – cash bonus incentives applied to a maximum percentage of Fixed Base Salary
and structured against relative satisfaction (at the reasonable discretion of the board) of certain
corporate and personally related key performance indicators of the executive.
c. Long Term Incentives – the grant of performance rights in the Company, with value capped to a
maximum percentage of Fixed Base Salary, vesting progressively while the executive remains employed,
with the degree of vesting structured against the Company’s relative TSR performance against a
comparator group of companies.
The Company’s remuneration is specifically designed to encourage loyalty and longevity of employment as
well as aligning the employee’s interests with those of the Company and the creation of genuine long term
sustainable value for security holders.
All remuneration provided to KMP in the form of share based payments are valued pursuant to AASB 2
Share-based Payment at fair value on grant date and are expensed on a pro rata basis over the vesting
period of the relevant security.
RELATIONSHIP BETWEEN THE REMUNERATION POLICY AND COMPANY PERFORMANCE
The table below sets out summary information about the Consolidated Entity’s earnings and movements in
shareholder wealth for the five years to June 2016:
30 June 2016
$
30 June 2015
$
30 June 2014
$
30 June 2013
$
30 June 2012
$
Revenue
-
419,526
7,800,372
32,551,507
-
Net profit / (loss) before
tax
83,832,380
(10,314,405)
(14,573,782)
(64,933,864)
(30,983,345)
Net profit / (loss) after tax
84,606,280
(10,314,405)
(16,666,425)
(75,581,860)
(30,983,345)
Share price at start of year
Share price at end of year
0.091
0.450
0.018
0.091
0.032
0.018
0.205
0.032
0.50
0.205
Market capitalisation at
year end (undiluted)
Basic profit / (loss) per
share
Diluted profit / (loss) per
share
251,590,166
45,701,361
9,422,170
16,665,906
94,853,822
0.1568
(0.0203)
(0.0279)
(0.1442)
(0.1061)
0.1562
(0.0203)
(0.0293)
(0.1508)
(0.1061)
Dividends Paid
11,181,785
Nil
Nil
Nil
Nil
24
Neometals Annual Report 2016
Directors’ Report (continued)
Annual Report 2016 Neometals
Annual Report 2016 Neometals
25
25
Directors’ Report (continued)
KEY MANAGEMENT PERSONNEL REMUNERATION
The KMP received the following amounts during the year as compensation for their services as directors and
executives of the Company and/or the Group.
Short-term employee benefits
Post-em-
ployment
benefits
Share
based payments
Salary &
fees
$
Bonus FY
15’16
$
2016
Non-
Mone-
tary(2)
$
Other
$
Super-
annuation
$
Non-Executive Directors
S. Cole
D. Reed
98,174
84,475
N. Streltsova(1)
15,627
D. Ritchie(1)
15,627
213,903
Executive Directors
-
-
-
-
-
-
-
-
-
-
C. Reed
370,000
104,500
370,000
104,500
4,199
4,199
Other Executives:
M. Tamlin
J. Carone
192,500
69,000
-
219,178
60,000
20,362
411,678
129,000
20,362
Total
995,581
233,500
24,561
-
-
-
-
-
-
-
-
-
-
-
9,327
8,025
1,485
1,485
20,322
30,000
30,000
17,500
20,822
38,322
88,644
Shares
$
-
-
-
-
-
-
-
-
-
-
-
Options
and rights
$
Total
$
-
-
-
-
-
107,501
92,500
17,112
17,112
234,225
77,516
586,215
77,516
586,215
38,897
54,239
317,897
374,601
93,136
692,498
170,652
1,512,938
% remu-
neration
linked to
perfor-
mance
-
-
-
-
-
31
-
34
30
-
-
1. Appointed 14 April 2016
2. Relates to fringe benefits received by key management personnel
Short-term employee benefits
Salary &
fees
$
Bonus FY
13’14
$
Bonus FY
14’15
$
Non-
Monetary
$
Other
$
2015
Non-Executive Directors
S. Cole
D. Reed
77,626
95,890
173,516
-
-
-
-
-
-
Executive Directors
C. Reed
365,000
80,000
80,000
365,000
80,000
80,000
Other Executives:
J. Carone
210,000
45,000
57,488
210,000
45,000
57,488
Total
748,516
125,000
137,488
-
-
-
7,761
7,761
24,210
24,210
31,971
-
-
-
-
-
-
-
-
Post-em-
ployment
benefits
Super-
annua-
tion
$
7,374
9,110
16,484
25,000
25,000
24,225
24,225
65,709
Share
based payments
Shares
$
-
-
-
-
-
-
-
-
Options
and
rights
$
-
-
-
Total
$
85,000
105,000
190,000
101,312
659,073
101,312
659,073
39,513
400,436
39,513
400,436
140,825
1,249,509
% remu-
neration
linked to
perfor-
mance
-
-
-
31
-
27
-
-
26
Neometals Annual Report 2016
Directors’ Report (continued)
SERVICE AGREEMENTS -
PERFORMANCE BASED REMUNERATION
The KMP of the Company, other than non-executive
directors, are employed under service agreements.
A summary of performance conditions for relevant
KMP are detailed below:
Name:
Position:
Mr. J. Carone
Chief Financial Officer / Company
Secretary
Term:
No defined term
Incentive based remuneration
SHORT TERM INCENTIVE
Each financial year during the term of his service
agreement the board, at its sole discretion, may
award the KMP a discretionary cash bonus upon
100% achievement of KPIs. Salary during the
financial year was set at $240,000 inclusive of
superannuation. The basis for calculating the STI
will be a range of criteria including both the KMP’s
personal performance and the Company’s financial
performance/position and share price.
LONG TERM INCENTIVE
Each financial year during the term of his
service agreement the KMP is entitled to receive
performance rights granted under the Company’s
Performance Rights Plan. The number of
performance rights to which the KMP may be
granted is based on the following calculation and
vesting of the performance rights are subject to
further criteria which are also set out below.
Calculation of potential entitlement to
performance rights
P =
25
100
S
VWAP
WHERE:
P is the potential performance rights entitlement
S is the KMP’s annual salary package for the
applicable period
VWAP is the 30 day volume weighted average price
of ordinary shares in Neometals Ltd for the period
ended 30 June of the preceding financial year.
CRITERIA
The KMP’s entitlement to the performance rights
under the incentive scheme is based on TSR over
the vesting period (2 years) and will be calculated
as follows:
1. If the Company’s TSR is at/or below the
45th percentile of the Comparator Group of
companies no performance rights will vest.
2. If the Company’s TSR ranks between the
46th and 50th percentile, for each percentile
over the 45th percentile 10% of the Performance
Rights will vest.
3. For each 1% ranking at/or above the 51st
percentile an additional 2% of the Performance
rights will vest, with 100% vesting at/or above
the 75th percentile.
Performance rights granted to the KMP have a
vesting period of 2 years from grant date and will
lapse on the KMP ceasing to be an employee of
the Group prior to the vesting date.
Name:
Mr. C. Reed
Position:
Managing Director
Term:
Expiry date of 30 June 2017
Incentive based remuneration
SHORT TERM INCENTIVE
Each financial year during the term of his service
agreement the board, at its sole discretion,
may award the KMP a cash bonus of up to 33%
of the KMP’s annual salary package ($400,000
inclusive of superannuation for 2015-16). The STI
for 2015-16 was set at a maximum of $110,000
representing approximately 27% of the annual
base salary package of which 95% or $104,500
was acknowledged and agreed by the board and
Mr C Reed. The basis for calculating the STI will
be a range of criteria including both the KMP’s
personal performance and the Company’s financial
performance/position and share price.
LONG TERM INCENTIVE
Each financial year during the term of his
service agreement the KMP is entitled to receive
performance rights granted under the Company’s
Performance Rights Plan. The maximum number
of performance rights to which the KMP may be
granted is based on the following calculation and
vesting of the performance rights are subject to
further criteria which are also set out below, as
approved by shareholders.
Calculation of potential entitlement to
performance rights
50
100
S
VWAP
P =
27
Annual Report 2016 Neometals
Directors’ Report (continued)
WHERE:
P is the potential performance rights entitlement
S is the KMP’s annual salary package for the
applicable period
VWAP is the 60 day volume weighted average price
of ordinary shares in Neometals Ltd for the period
ended 30 June of the preceding financial year.
The LTI for 2015-16 was set at a maximum of
$156,000 representing approximately 39% of the
annual base salary package which was acknowledged
and agreed by the Board and Mr C Reed.
CRITERIA
The KMP’s entitlement to the performance rights
under the incentive scheme is based on TSR over
the calculation period (1 year) and will be calculated
as follows:
1. If the Company’s TSR is at/or below the
45th percentile of the Comparator Group of
companies no performance rights will vest.
2. If the Company’s TSR ranks between the 46th
and 50th percentile, for each percentile over the
45th percentile 10% of the Performance Rights
will vest.
3. For each 1% ranking at/or above the 51st
percentile an additional 2% of the performance
rights will vest, with 100% vesting at/or above
the 75th percentile.
Performance rights granted to the KMP vest on
the grant date and lapse on the KMP ceasing to be
an employee of the Group prior to the vesting date.
The calculation period and vesting date was
previously a 1 year period. Following feedback
and approval from shareholders at the AGM in
November 2014 the calculation and vesting period
was varied from 1 year to 2 years for performance
rights issued for financial years commencing 1 July
2015, 2016 and 2017.
Name:
Position:
Term:
Mr. M. Tamlin
Chief Operating Officer
No defined term
Incentive based remuneration
SHORT TERM INCENTIVE
Each financial year during the term of his service
agreement the board, at its sole discretion, may
award the KMP a cash bonus of up to 33% of the
KMP’s annual salary package ($360,000 inclusive
of superannuation for 2015-16). The STI for
2015-16 was set at 33% of the annual salary
package on a pro rata basis since commencement
which was acknowledged and agreed by the board
and Mr M Tamlin. The basis for calculating the STI
will be a range of criteria including both the KMP’s
personal performance and the Company’s financial
performance/position and share price.
LONG TERM INCENTIVE
Each financial year during the term of his
service agreement the KMP is entitled to receive
performance rights granted under the Company’s
Performance Rights Plan. The maximum number
of performance rights to which the KMP may be
granted is based on the following calculation and
vesting of the performance rights are subject to
further criteria which are also set out below, as
approved by shareholders.
Calculation of potential entitlement to
performance rights
P =
33
100
S
VWAP
WHERE:
P is the potential performance rights entitlement
S is the KMP’s annual salary package for the
applicable period
VWAP is the 30 day volume weighted average price
of ordinary shares in Neometals Ltd for the period
ended 30 June of the preceding financial year.
CRITERIA
The KMP’s entitlement to the performance rights
under the incentive scheme is based on TSR over
the calculation period (1 year) and will be calculated
as follows:
1. If the Company’s TSR is at/or below the
45th percentile of the Comparator Group of
companies no performance rights will vest.
2. If the Company’s TSR ranks between the 46th
and 50th percentile, for each percentile over the
45th percentile 10% of the Performance Rights
will vest.
3. For each 1% ranking at/or above the 51st
percentile an additional 2% of the performance
rights will vest, with 100% vesting at/or above
the 75th percentile.
Performance rights granted to the KMP have a
vesting period of 2 years from grant date and will
lapse on the KMP ceasing to be an employee of the
Group prior to the vesting date.
28
Neometals Annual Report 2016
Directors’ Report (continued)
The Company provides the KMP with
performance based incentives in order to
incentivise KMP to pursue strategies that are
aligned with the overall business strategy and
the interests of the shareholders. Where deemed
appropriate the Company has set specific Key
Performance Indicators as performance criteria
for staff that have a direct role/responsibility
in achieving a specific outcome. To ensure that
KMP are also incentivised to pursue longer term
strategies that increase shareholder wealth a
portion of the KMP’s remuneration is linked to a
“comparative TSR model” which links the level of
the KMP remuneration to the Company’s
performance against a group of comparable ASX
listed entities, using Total Shareholder Return
as the basis of comparison. KMP are also issued
with performance rights with service conditions
as vesting criteria which assist the company retain
staff as well as aligning the interests of the KMP
with shareholders. The Company has deemed
the issue of service based performance rights as
an appropriate form of remuneration due to the
uncertain nature of the Group’s business, that is,
mineral exploration, mining and developing new
mineral processing technologies.
For the purpose of determining the KMP’s
entitlement to performance rights under the
comparative TSR model detailed above, and given
the change in the Company’s primary undertaking
with the cessation of the gold business, the Company
has amended the previously adopted comparator
group. The list of comparator group of companies
was previously based on gold exploration and
production companies as set out below:
• Doray Minerals Ltd (ASX: DRM)
• Silver Lake (ASX: SLR)
• Evolution Mining (ASX: EVN)
• Tanami Gold Ltd (ASX: TAM)
• Focus Minerals Ltd (ASX: FML)
• Unity Mining Ltd (ASX: UML)
• Gold Road Resources Ltd (ASX: GOR)
• St Barbara Ltd (ASX: SBM)
• Northern Star Resources Ltd (ASX: NST)
• Millennium Minerals Ltd (ASX: MOY)
• Regis Resources Ltd (ASX: RRL)
• Ramelius Resources (ASX: RMS)
The performance rights issued in 2012 to J.Carone
totalling 295,584 with a vesting date of 30 June
2015 were subject to testing to the above
comparator group.
The comparator group adopted by the company for
LTI granted in 2013-14 and 2014-15 is as follows:
• Atlantic Ltd (ASX: ATI)
• Ramelius Resources (ASX: RMS)
• Galaxy Resources Limited (ASX: GXY)
• Rutila Resources Limited (ASX: RTA)
• Nemaska Lithium Inc. (TSX: NMX)
• Southern Cross Goldfields Limited (ASX: SXG)
• Radar Iron Ltd (ASX: RAD)
• TNG Ltd (ASX: TNG)
• Argex Titanium Inc. (TSX: RGX)
The comparator group adopted by the company
for LTI granted in 2015-2016 is as follows:
• Galaxy Resources Limited (ASX: GXY)
• Pilbara Minerals Limited (ASX: PLS)
• TNG Ltd (ASX: TNG)
• Global X Lithium ETF (NYSE Arca: LIT)
• Nemaska Lithium Inc. (TSX: NMX)
• Market Vectors Rare Earth Strat Met
(NYSE Arca: REMX)
• Iluka Resources Limited (ASX: ILU)
• S&P ASX Small Resources Index (ASX: ASXR)
• Argex Titanium Inc. (TSX: RGX)
The Company has selected the above group of
companies as the comparator group for the
following reasons:
1. It represents a reasonable cross section of
resource companies with reasonably comparable
market capitalisation, resource base and stage
of development to that of the Company
2. The group is primarily focused on developing
industrial minerals projects.
29
Annual Report 2016 Neometals Directors’ Report (continued)
PERFORMANCE RIGHTS ISSUED AS PART OF KMP REMUNERATION
Performance Rights granted to key management personnel
The following tables summarises information relevant to the current financial year in relation to the grant of
performance rights to KMP as part of their remuneration. Performance rights are issued by Neometals Ltd.
During the Financial Year
Grant date
No.
granted
No.
vested
Fair value at
grant date(2)
Earliest exer-
cise date
Consideration
payable on
exercise
Name
KMP:
J. Carone(1)
09/10/2015
593,472
C. Reed(1)
09/10/2015
1,595,092
M.Tamlin(1)
21/01/2016
1,175,074
Total
3,363,638
49,644
133,429
127,081
310,154
30/06/2017
30/06/2017
30/06/2017
1. The number of performance rights that will actually vest, if any, is determined by the Company’s performance based on Neometals
TSR compared to the comparative group of companies over a 2 year period. Accordingly, at the date of this report no performance
rights had vested.
2. These values have been calculated using the monte carlo valuation method
Details of performance rights held by KMP and of shares issued during the financial year as a result of the
vesting of performance rights:
Balance at
01/07/15 Grant date
Granted
Fair
value of
rights
at grant
date
Vested
during the
financial
year
Forfeited/
lapsed
during the
financial
year
Ordinary
shares
issued on
exercise
of rights
Balance at
30/6/2016
No.
No.
$
No.
No.
No.
No.
2016
KMP:
J. Carone(1)
3,960,882
09/10/2015
593,472
49,644
3,960,882
C. Reed(1)
M.Tamlin(1)
-
-
09/10/2015
1,595,092
133,429
21/01/2016
1,175,074
127,081
-
-
Total
3,960,882
3,363,638
310,154
3,960,882
-
-
-
-
593,472
295,584
1,595,092
6,580,916
1,175,074
-
3,363,638
6,876,500
1. The number of performance rights that will actually vest, if any, is determined by the Company’s performance based on Neometals
TSR compared to the comparative group of companies over the relevant 2 year period as set out in the section above.
30
Neometals Annual Report 2016 Directors’ Report (continued)
Balance at
01/07/14 Grant date Granted
Fair
value of
rights
at grant
date
Vested
during the
financial
year
Forfeited/
lapsed
during
the finan-
cial year
Balance at
30/6/2015
Ordinary
shares
issued on
exercise
of rights
No.
No.
$
No.
No.
No.
No.
2015
KMP:
J. Carone(1)
1,393,953
01/08/2014
2,813,239
42,008
246,310
-
3,960,882
246,310
C. Reed(1)
4,464,554
01/08/2014
6,580,916
101,312
9,339,778
1,705,692
-
9,339,778
Total
5,858,507
9,394,155
143,320
9,586,088
1,705,692
3,960,882
9,586,088
1. The number of performance rights that will actually vest, if any, is determined by the Company’s performance based on Neometals
TSR compared to the comparative group of companies over the relevant 1 - 3 year period (as applicable) as set out in the section above.
The performance rights granted entitle the grantee to one fully paid ordinary share in Neometals Ltd for nil
cash consideration on satisfaction of the vesting criteria.
NON-AUDIT SERVICES
Details of the amounts paid or payable to the auditor for the audit and non-audit services during the year
are as follows:
Auditor (Deloitte Touche Tohmatsu)
Audit fees
Non-audit fees
The directors are satisfied that the provision of
non-audit services, during the year, by the auditor
(or by another person or firm on the auditor’s
behalf) is compatible with the general standard
of independence for auditors imposed by the
Corporations Act 2001.
The directors are satisfied that the non-audit
services provided did not compromise the external
auditor’s independence for the following reasons:
• all non-audit services are reviewed and approved
by the directors prior to commencement to
ensure they do not adversely affect the integrity
and objectivity of the auditor; and
• the nature of the services provided do not
compromise the general principles relating to
auditor independence as set out in the Institute
of Chartered Accountants in Australia and
CPA Australia’s Professional Statement F1:
Professional Independence.
2016
$
67,620
52,550
120,170
2015
$
66,150
28,080
94,230
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration is included
on page 34 of the Annual Financial Report.
Signed in accordance with a resolution of
directors made pursuant to s.298(2) of the
Corporations Act 2001.
On behalf of the directors of Neometals Ltd,
Mr. Chris Reed
Managing Director
West Perth, WA
21 October 2016
31
Annual Report 2016 Neometals Audit Report
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Brookfield Place, Tower 2
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
Independent Auditor’s Report to the Members of
Neometals Ltd
Report on the Financial Report
We have audited the accompanying financial report of Neometals Ltd, which comprises the
statement of financial position as at 30 June 2016, the statement of profit or loss and other
comprehensive income, the statement of cash flows and the statement of changes in equity
for the year ended on that date, 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 as set out on pages 35 to 85.
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 gives a true and fair view and 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 consolidated
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. Those standards
require that we comply with relevant ethical requirements relating to audit engagements and
plan and perform the audit to obtain reasonable assurance 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 company’s preparation of the financial report that
gives a true and fair view, 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
company’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.
Member of Deloitte Touche Tohmatsu Limited
32
Neometals Annual Report 2016 Audit Report
Auditor’s Independence Declaration
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 Neometals Ltd, 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 Neometals Ltd 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
2016 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 consolidated financial statements also comply with International Financial Reporting
Standards as disclosed in Note 2
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 22 to 31 of the directors’
report for the year ended 30 June 2016. 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 Neometals Ltd for the year ended 30 June
2016, complies with section 300A of the Corporations Act 2001.
DELOITTE TOUCHE TOHMATSU
Mark Gover
Partner
Chartered Accountants
Perth, 22 September 2016
33
Annual Report 2016 Neometals Independence Declaration
34
Neometals Annual Report 2016 Directors’ Declaration
The directors declare that:
a. in the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its
debts as and when they become due and payable;
b. the attached financial statements are in compliance with International Financial Reporting Standards as
stated in Note 2 to the financial statements;
c. in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the
Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of
the financial position and performance of the consolidated entity; and
d. the directors have been given the declarations required by s.295A of the Corporations Act 2001.
Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the
Corporations Act 2001.
On behalf of the directors of Neometals Ltd,
Mr. Chris Reed
Managing Director
West Perth, WA
21 October 2016
35
Annual Report 2016 Neometals 36
Neometals Annual Report 2016 Financial Statements 2016 Contents
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
INDEX TO NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note Contents
38
39
40
41
Page
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
General information
Significant accounting policies
Critical accounting judgments and key sources of estimation uncertainty
Parent entity disclosure
Profit / loss for the year continuing operations
Income taxes
Key management personnel compensation
Share based payments
Dividends
Assets classified as held for sale
Trade and other receivables
Other financial assets
Exploration, evaluation and development expenditure
Property, plant and equipment
Trade and other payables
Provisions
Borrowings
Issued capital
Reserves
Accumulated losses
Earnings per share
Commitments for expenditure
Leases
Deconsolidation of subsidiary
Joint arrangements
Subsidiaries
Segment information
Related party disclosures
Notes to the statement of cash flows
Financial instruments
Contingent liabilities
Events after the reporting period
Additional stock exchange information
42
42
55
58
59
60
61
61
63
63
64
64
65
66
67
67
68
69
69
70
70
71
72
72
73
75
76
78
81
82
85
85
86
37
Annual Report 2016 Neometals
Consolidated statement of profit or loss
and other comprehensive income
FOR THE YEAR ENDED 30 JUNE 2016
Note
2016
$
Continuing operations
Revenue from sale of goods
Cost of sales
Gross Profit / (Loss)
Other income
Employee expenses
Occupancy expenses
Administration expenses
Finance costs
Other expenses
Foreign exchange gain
Gain recognised on disposal of interest in joint venture
Profit on deconsolidation of subsidiary
Share of loss of Joint Venture
Impairment of non-current assets
Profit/(loss) before income tax
Income tax (expense) / benefit
Profit/(loss) for the year from continuing operations
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
5
5
5
5
5
25
24
25
13
6
20
2015
$
419,526
(159,872)
259,654
759,427
(1,388,204)
(312,717)
(1,224,524)
(488,398)
(6,534,479)
-
-
-
(398,240)
(1,252,915)
-
-
-
691,399
(2,021,455)
(254,098)
(2,673,733)
(266,833)
(168,064)
101,078
88,282,429
188,806
(33,318)
(13,831)
83,832,380
(10,580,396)
773,900
265,991
84,606,280
(10,314,405)
Net fair value gain on available-for-sale financial assets during the year
19
801,937
-
Total comprehensive income/(loss) for the year
85,408,217
(10,314,405)
Earnings per share
From continuing and discontinued operations:
Basic (cents per share)
Diluted (cents per share)
21
21
15.68
15.62
(2.05)
(2.05)
The consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
38
Neometals Annual Report 2016
Consolidated statement
of financial position
AS AT 30 JUNE 2016
Current assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Assets classified as held for sale
Total current assets
Non-current assets
Loans to joint ventures
Exploration, evaluation and development expenditure
Intangibles
Investments in joint ventures
Other financial assets
Other assets
Property, plant and equipment
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Provisions
Borrowings
Liabilities directly associated with assets classified as held for sale
Total current liabilities
Non-current liabilities
Provisions
Borrowings
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
29 (a)
11
12
10
25
13
25
12
14
15
16
17
10
16
17
18
19
20
2016
$
73,223,833
643,751
-
73,867,584
1,625,705
75,493,289
1,384,580
11,607,131
85,560
204,258
6,435,625
345,018
144,859
20,207,031
95,700,320
482,266
1,057,596
11,939
1,551,801
96,607
1,648,408
4,414,456
27,804
4,442,260
6,090,668
2015
$
1,442,648
630,205
1,000,000
3,072,853
-
3,072,853
1,681,952
11,362,044
-
1,099,159
5,095,000
-
250,906
19,489,061
22,561,914
894,708
1,164,587
1,931,204
3,990,499
-
3,990,499
5,311,608
40,067
5,351,675
9,342,174
89,609,652
13,219,740
160,047,735
157,910,617
6,398,200
5,569,901
(76,836,283)
(150,260,778)
89,609,652
13,219,740
This consolidated statement of financial position should be read in conjunction with the accompanying notes.
Annual Report 2016 Neometals
39
Consolidated statement
of changes in equity
FOR THE YEAR ENDED 30 JUNE 2016
Issued
Capital
$
Investment
revaluation
reserve
$
Other
equity
reserve
$
Share
based
payments
reserve
$
Accumulated
losses
$
Total
$
Balance as at 1/07/14
158,292,130
Loss for the period
Other comprehensive
income, net of tax
Total comprehensive income
for the period
Recognition of share-based
payments (see note 18)
Recognition of convertible note
equity (see Note 18)
-
-
-
50,487
-
Recognition of share buy back
(432,000)
Issue of share capital
Share issue costs, net of tax
-
-
Balance at 30/06/15
157,910,617
Profit for the period
Other comprehensive
income, net of tax
Total comprehensive
income for the period
Recognition of share-based
payments (see note 18)
Recognition of convertible
note equity (see Note 18)
Recognition of shares issued
under performance rights plan
Recognition of share buy back
Issue of dividends
-
-
-
-
2,000,000
144,290
-
-
Share issue costs, net of tax
(7,172)
-
-
-
-
-
-
-
-
-
-
-
801,937
801,937
-
-
-
-
-
-
158,629
5,179,214
(139,946,373)
23,683,600
-
-
-
-
158,629
-
-
-
-
-
(10,314,405)
(10,314,405)
-
-
-
(10,314,405)
(10,314,405)
90,338
-
-
-
-
-
-
-
-
-
140,825
158,629
(432,000)
-
-
300,349
5,269,552
(150,260,778)
13,219,740
-
-
-
-
-
-
-
-
-
-
-
-
84,606,280
84,606,280
-
801,937
84,606,280
85,408,217
170,652
-
(144,290)
-
-
-
-
-
-
-
170,652
2,000,000
-
-
(11,181,785)
(11,181,785)
-
(7,172)
Balance at 30/06/16
160,047,735
801,937
300,349
5,295,914
(76,836,283)
89,609,652
The consolidated statement of changes in equity should be read in conjunction with the
accompanying notes.
40
Neometals Annual Report 2016
Consolidated statement
of cash flows
FOR THE YEAR ENDED 30 JUNE 2016
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Net cash used in operating activities
Cash flows from investing activities
Payments for property, plant & equipment
Payments for intellectual property
Payments for exploration and evaluation costs
Prepayment for Neomet technology
Interest received
Investment in equity instruments
Loans repaid from joint venture parties
Loans paid to joint venture parties
Note
2016
$
2015
$
737,094
(6,318,514)
(5,581,420)
878,814
(3,794,651)
(2,915,837)
29 (c)
(10,136)
(45,308)
(47,881)
-
(997,056)
(2,676,997)
(345,018)
-
572,386
297,196
(265,000)
-
1,609,952
-
(1,251,670)
(62,732)
Net proceeds from joint venture entity sell down
25
89,144,014
-
Net cash generated by / (used in) investing activities
88,409,591
(2,487,841)
Cash flows from financing activities
Share issue costs
Repayment of borrowings
Amounts received from related parties
Amounts received from secured deposits
Dividends paid
Interest and other finance costs paid
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effect of exchange rates on cash balances
(7,171)
-
(10,268)
(12,073)
26,095
-
1,070,000
-
(11,181,785)
-
(40,047)
(206,401)
(10,143,176)
72,684,995
1,442,648
101,078
(218,474)
(5,622,152)
7,064,800
-
Cash and cash equivalents at the end of the financial year
29 (a)
74,228,721
1,442,648
This consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Annual Report 2016 Neometals
41
Notes to the consolidated financial statements
FOR THE YEAR ENDED 30 JUNE 2016
1. General information
Neometals Ltd is a limited public company incorporated in Australia and listed on the Australian
Securities Exchange. The principal activities of the Consolidated Entity are mineral exploration.
Neometals Ltd is the ultimate parent.
Registered office and principal place of business
Level 1, 672 Murray St, West Perth WA 6005
2. Significant accounting policies
Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with the
Corporations Act 2001, Accounting Standards and Interpretations, and complies with other requirements
of the law. The financial statements comprise the consolidated financial statements of the Consolidated
Entity, comprising Neometals Ltd and its controlled entities. For the purpose of preparing the financial
statements the consolidated entity is a for-profit entity.
Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting
Standards ensures that the financial statements and notes of the Company and the Group comply with
International Financial Reporting Standards (“IFRS”).
The financial statements were authorised for issue by the directors of Neometals Ltd on 22 September 2016.
Basis of preparation
The accounting policies adopted are consistent with those adopted and disclosed in the Consolidated
Entity’s 2015 Annual Financial Report for the financial year ended 30 June 2016, except for the impact
of the Standards and Interpretations described below. These accounting policies are consistent with
Australian Accounting Standards and with IRFS.
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian
Accounting Standards Boards (“AASB”) that are relevant to its operations and effective for the current
reporting period beginning 1 July 2015.
The financial report has been prepared on the basis of historical cost except for the revaluation of certain
non-financial assets and financial instruments. Cost is based on the fair values of the consideration
given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.
Standards and interpretations adopted in the current year
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian
Accounting Standards Board that are relevant to their operations and are effective for the current
financial reporting period beginning 1 July 2015.
The following new and revised Standards and Interpretations have been adopted in the current period:
AASB 2015-3 ‘Amendments to Australian Accounting Standards arising from the Withdrawal of AASB
1031 Materiality’
The impact of the adoption of these Standards and Interpretations did not have a material impact on
the Group.
Standards and interpretations issued not yet effective
At the date of authorisation of the financial statements, the following Australian Accounting Standards
and Interpretations have been issued or amended but are not yet effective and have not been adopted by
the Group for the year ended 30 June 2016:
42
Neometals Annual Report 2016
Notes to the consolidated financial statements (continued)
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
FOR THE YEAR ENDED 30 JUNE 2016
2. Significant accounting policies (continued)
Standard
•
•
AASB 9 ‘Financial Instruments’, and the relevant
amending standards (1)
AASB 15 ‘Revenue from Contracts with Customers’, AASB
2014-5 ‘Amendments to Australian Accounting Standards
arising from AASB 15’, AASB 2015-8 ‘Amendments to
Australian Accounting Standards – Effective date of AASB 15’
Effective for annual
reporting periods
beginning on or after
Expected to be
initially applied in the
financial year ending
1 January 2018
30 June 2019
1 January 2018
30 June 2019
•
AASB 16 ‘Leases’
1 January 2019
30 June 2020
•
•
•
•
•
•
•
•
•
•
AASB 2014-3 ‘Amendments to Australian Accounting
Standards – Accounting for Acquisitions of Interests
in Joint Operations’
AASB 2014-4 ‘Amendments to Australian Accounting
Standards – Clarification of Acceptable Methods of
Depreciation and Amortisation’
1 January 2016
30 June 2017
1 January 2016
30 June 2017
AASB 2014-6 ‘Amendments to Australian Accounting
Standards – Agriculture: Bearer Plants’
1 January 2016
30 June 2017
AASB 2014-9 ‘Amendments to Australian Accounting
Standards – Equity Method in Separate Financial Statements’
1 January 2016
30 June 2017
AASB 2014-10 ‘Amendments to Australian Accounting
Standards – Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture’
AASB 2015-1 ‘Amendments to Australian Accounting
Standards – Annual Improvements to Australian
Accounting Standards 2012-2014 Cycle’
1 January 2016
30 June 2017
1 January 2016
30 June 2017
AASB 2015-2 ‘Amendments to Australian Accounting
Standards – Disclosure Initiative: Amendments to AASB 101’
1 January 2016
30 June 2017
AASB 2015-5 ‘Amendments to Australian Accounting
Standards – Investment Entities: Applying the
Consolidation Exception’
AASB 2016-1 ‘Amendments to Australian Accounting
Standards – Recognition of Deferred Tax Assets for
Unrealised Losses’
1 January 2016
30 June 2017
1 January 2017
30 June 2018
AASB 2016-2 ‘Amendments to Australian Accounting
Standards – Disclosure Initiative: Amendments to AASB 107’
1 January 2017
30 June 2018
Annual Report 2016 Neometals
43
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
2. Significant accounting policies (continued)
At the date of authorisation of the financial statements, the following IASB Standards and IFRIC
Interpretations were in issue but not yet effective, although Australian equivalent Standards and
Interpretations have not yet been issued.
Standard
•
Clarifications to IFRS 15 ‘Revenue from Contracts
with Customers’
Effective for annual
reporting periods
beginning on or after
Expected to be
initially applied in the
financial year ending
1 January 2018
30 June 2019
A detailed assessment of the impact of the implementation of the aforementioned Standards and
Interpretations has not been undertaken by the Consolidated Entity at the date of this report.
Critical accounting judgments and key sources of estimation uncertainty
In the application of the Group’s accounting policies, management is required to make judgments,
estimates and assumptions about carrying values of assets and liabilities that are not readily apparent
from other sources. The estimates and associated assumptions are based on historical experience and
other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period or in the period of the revision and future periods if the revision affects both current and future
periods. Refer to Note 3 for a discussion of critical judgments in applying the entity’s accounting policies,
and key sources of estimation uncertainty.
Significant accounting policies
The following significant accounting policies have been adopted in the preparation and presentation of the
financial report:
a.
Cash and cash equivalents
Cash comprises cash on hand and on demand deposits. Cash equivalents are short-term, highly
liquid investments that are readily convertible to known amounts of cash and which are subject to
an insignificant risk of changes in value.
b.
Employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual
leave, long service leave, and sick leave when it is probable that settlement will be required and
they are capable of being measured reliably.
Liabilities recognised in respect of short-term employee benefits, are measured at their nominal
values using the remuneration rate expected to apply at the time of settlement.
Liabilities recognised in respect of long term employee benefits are measured as the present value
of the estimated future cash outflows to be made by the Group in respect of services provided by
employees up to reporting date.
c.
Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of the group’s entities are measured using
the currency of the primary economic environment in which the entity operates (‘the functional
currency’). The consolidated financial statements are presented in Australian dollar ($), which is
Neometals Ltd’s functional and presentation currency.
44
Neometals Annual Report 2016
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
2. Significant accounting policies (continued)
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement
of such transactions and from the translation of monetary assets and liabilities denominated in
foreign currencies at year end exchange rates are generally recognised in profit or loss. They are
deferred in equity if they relate to qualifying cash flow hedges and qualifying net investment hedges
or are attributable to part of the net investment in a foreign operation.
All other foreign exchange gains and losses are presented in the statement of profit or loss on a net
basis within other income or other expenses.
d.
Financial instruments issued by the company
Debt and equity instruments
Debt and equity instruments are classified as either liabilities or as equity in accordance with the
substance of the contractual arrangement.
Financial liabilities
Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or
other financial liabilities.
Financial liabilities at fair value through profit or loss
Financial liabilities are classified as at fair value through profit or loss where the financial liability is
either held for trading or it is designated as at fair value through profit or loss.
A financial liability is held for trading if:
• It has been incurred principally for the purpose of repurchasing in the near future; or
• It is a part of an identified portfolio of financial instruments that the Group manages together and
has a recent actual pattern of short-term profit-taking; or
• It is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading is designated as at fair value
through profit or loss upon initial recognition if:
• such designation eliminates or significantly reduces a measurement or recognition inconsistency
that would otherwise arise; or
• the financial liability forms part of a group of financial assets or financial liabilities or both, which
is managed and its performance evaluated on a fair value basis, in accordance with the Group’s
documented risk management or investment strategy, and information about the grouping is
provided internally on that basis; or
• it forms part of a contract containing one or more embedded derivatives, and AASB 139
‘Financial Instruments: Recognition and Measurement’ permits the entire combined contract
(asset or liability) to be designated as at fair value through profit or loss.
• Financial liabilities at fair value through profit or loss are stated at fair value, with any resultant
gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss
incorporates any interest paid on the financial liability. Fair value is determined in the manner
described in Note 2 (r).
Annual Report 2016 Neometals
45
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
2. Significant accounting policies (continued)
Other financial liabilities
Other financial liabilities, including borrowings, are initially measured at fair value, net of
transaction costs. Other financial liabilities are subsequently measured at amortised cost using
the effective interest method, with interest expense recognised on an effective yield basis. The
effective interest method is a method of calculating the amortised cost of a financial liability and
of allocating interest expense over the relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash payments through the expected life of the financial liability,
or, where appropriate, a shorter period.
Transaction costs on the issue of equity instruments
Transaction costs arising on the issue of equity instruments are recognised directly in equity as a
reduction of the proceeds of the equity instruments to which the costs relate. Transaction costs
are the costs that are incurred directly in connection with the issue of those equity instruments and
which would not have been incurred had those instruments not been issued.
Interest and dividends
Interest and dividends are classified as expenses or as distributions of profit consistent with
the balance sheet classification of the related debt or equity instruments or component parts of
compound instruments.
e.
Goods and service tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”),
except:
i. where the amount of GST incurred is not recoverable from the taxation authority, it is
recognised as part of the cost of acquisition of an asset or as part of an item of expense; or
ii.
for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables.
Cash flows are included in the cash flow statement on a gross basis. 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.
f.
Non-current assets held for sale
Non-current assets and their disposal groups are classified as held for sale if their carrying amount
will be recovered principally through a sale transaction rather than continuing use. This condition is
regarded as met only when the sale is highly probable and the non-current asset (or disposal group)
is available for immediate sale in its present condition. Management must be committed to the sale
which should be expected to qualify for recognition as a completed sale within one year from the
date of classification.
When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets
and liabilities of that subsidiary are classified as held for sale when the criteria described above are
met, regardless of whether the Group will retain a non-controlling interest in its former subsidiary
after the sale. Non-current assets (and disposal groups) classified as held for sale are measured at
the lower of their previous carrying amount and fair value less cost to sell.
46
Neometals Annual Report 2016
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
2. Significant accounting policies (continued)
g.
Impairment of assets
At each reporting date, the consolidated entity reviews the varying amounts of its tangible and
intangible assets to determine whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable amount of the asset is estimated
in order to determine the extent of the impairment loss (if any). Where the asset does not
generate cash flows that are independent from other assets, the consolidated entity estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than
its carrying amount, the varying amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised in profit or loss immediately.
Where an impairment loss subsequently reverses, the varying amount of the asset (cash-
generating unit) is increased to the revised estimate of its recoverable amount, but only to the
extent that the increased varying amount does not exceed the varying amount that would have been
determined had no impairment loss been recognised for the asset (cash-generating unit) in prior
years. A reversal of an impairment loss is recognised in profit or loss immediately.
h.
Income tax
Current tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in
respect of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws
that have been enacted or substantively enacted by reporting date. Current tax for current and prior
periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).
Deferred tax
Deferred tax is accounted for using the comprehensive balance sheet liability method in respect of
temporary differences arising from differences between the varying amount of assets and liabilities
in the financial statements and the corresponding tax base of those items.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred
tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be
available against which deductible temporary differences or unused tax losses and tax offsets
can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary
differences giving rise to them arise from the initial recognition of assets and liabilities (other than
as a result of a business combination) which affects neither taxable income nor accounting profit.
Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences
arising from goodwill.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in
subsidiaries, branches, associates and joint ventures except where the consolidated entity is able to
control the reversal of the temporary differences and it is probable that the temporary differences
will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary
differences associated with these investments and interests are only recognised to the extent that
it is probable that there will be sufficient taxable profits against which to utilise the benefits of the
temporary differences and they are expected to reverse in the foreseeable future.
Annual Report 2016 Neometals
47
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
2. Significant accounting policies (continued)
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the
period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates
(and tax laws) that have been enacted or substantively enacted by reporting date. The measurement
of deferred tax liabilities and assets reflects the tax consequences that would follow from the
manner in which the consolidated entity expects, at the reporting date, to recover or settle the
carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same
taxation authority and the Company/Consolidated Entity intends to settle its current tax assets and
liabilities on a net basis.
Current and deferred tax for the period
Current and deferred tax is recognised as an expense or income in the profit and loss statement,
except when it relates to items credited or debited directly to equity, in which case the deferred tax
is also recognised directly in equity, or where it arises from the initial accounting for a business
combination, in which case it is taken into account in the determination of goodwill or excess.
Tax consolidation
The Company and all its wholly-owned Australian resident entities are part of a tax-consolidated
group under Australian taxation law. Neometals Ltd is the head entity in the tax-consolidated
group. Income tax expense/benefit, deferred tax liabilities and deferred tax assets arising from
temporary differences of the members of the tax consolidated group are recognised in the separate
financial statements of the members of the tax consolidated group using a ‘group allocation’
approach based on the allocation specified in the tax funding arrangement.
The tax funding arrangement requires a notional current and deferred tax calculation for each
entity as if it were a taxpayer in its own right, except that unrealised profits, distributions made
and received and capital gains and losses and similar items arising on transactions within the
tax consolidated group are treated as having no consequence. Current tax liabilities and assets
and deferred tax assets arising from unused tax losses and tax credits of the members of the tax
consolidated group are recognised by the Company (as head entity in the tax consolidated group).
Due to the existence of a tax funding arrangement between the entities in the tax consolidated
group, amounts are recognised as payable to or receivable by the Company and each member of the
group in relation to the tax contribution amounts paid or payable between the parent and the other
members of the tax consolidated group in accordance with the arrangement.
Where the tax contribution amount recognised by each member of the tax consolidated group for a
particular period is different to the aggregate of the current tax liability or asset and any deferred
tax asset arising from the unused tax losses and tax credits in respect of that period, the difference
is recognised as a contribution from, or distribution to, equity participants.
Research & Development Tax offset
In respect of Research and Development tax offsets, the Income tax approach (AASB 112) of
accounting has been utilised, where the tax benefit is presented within the tax line in the Statement
of Comprehensive Income.
48
Neometals Annual Report 2016
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
2. Significant accounting policies (continued)
i.
Exploration and evaluation expenditure
Exploration and evaluation expenditures in relation to separate areas of interest are capitalised in
the year in which they are incurred and are carried at cost less accumulated impairment losses
where the following conditions are satisfied;
i.
the rights to tenure of the area of interest are current; and
ii. at least one of the following conditions is also met:
• the exploration and evaluation expenditures are expected to be recouped through successful
development and exploration of the area of interest, or alternatively, by its sale; or
• exploration and evaluation activities in the area of interest have not at the reporting date
reached a stage which permits a reasonable assessment of the existence or otherwise of
economically recoverable reserves, and active and significant operations in, or in relation to,
the area of interest are continuing.
Capitalised exploration costs for each area of interest (considered to be the cash generating
unit) are reviewed each reporting date to test whether an indication of impairment exists. If any
such indication exists, the recoverable amount of the capitalised exploration costs is estimated
to determine the extent of the impairment loss (if any). The recoverable amount for capitalised
exploration costs has been determined as the fair value less costs to sell by reference to an active
market. Where an impairment loss subsequently reverses, the carrying amount of the asset
is increased to the revised estimate of its recoverable amount, but only to the extent that the
increased carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognised for the asset in previous years.
Where a decision is made to proceed with development, accumulated expenditure is tested for
impairment and transferred to capitalised development and then amortised over the life of the
reserves associated with the area of interest once mining operations have commenced.
Development expenditure
Development expenditure is recognised at cost less any impairment losses. Where commercial
production in an area of interest has commenced, the associated costs are amortised over the life of
the reserves associated with the area of interest. Changes in factors such as estimates of proved and
probable reserves that effect unit-of-production calculations are dealt with on a prospective basis.
j.
Payables
Trade payables and other accounts payable are recognised when the Consolidated Entity becomes
obliged to make future payments resulting from the purchase of goods and services.
k.
Principles of consolidation
The consolidated financial statements are prepared by combining the financial statements of all
the entities that comprise the Consolidated Entity, being the Company (the parent entity) and its
subsidiaries as defined in Accounting Standard AASB 10 ‘Consolidated Financial Statements’. A list
of subsidiaries appears in Note 26 to the financial statements. Consistent accounting policies are
employed in the preparation and presentation of the consolidated financial statements.
On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at their
fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the
identifiable net assets acquired is recognised as goodwill. If, after reassessment, the fair value of
the identifiable net assets acquired exceeds the cost of acquisition, the excess is credited to profit
and loss in the period of acquisition. The consolidated financial statements include the information
and results of each subsidiary from the date on which the Company obtains control and until
such time as the Company ceases to control such entity. In preparing the consolidated financial
statements, all inter-company balances and transactions, and unrealised profits arising within the
consolidated entity are eliminated in full.
Annual Report 2016 Neometals
49
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
2. Significant accounting policies (continued)
l.
Property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and impairment. Cost
includes expenditure that is directly attributable to the acquisition of the item. In the event that
settlement of all or part of the purchase consideration is deferred, costs are determined by
discounting the amounts payable in the future to their present value as at the date of acquisition.
Depreciation is calculated on a diminishing value basis so as to write off the net cost or other
re-valued amount of each asset over its expected useful life to its estimated residual value. The
estimated useful lives, residual values and depreciation method are reviewed at the end of each
annual reporting period with the effect of any changes recognised on a prospective basis.
The following estimated useful lives are used in the calculation of depreciation:
Furniture & Fittings
Plant and Equipment
Buildings
5-20 years
2-10 years
10-20 years
An item of property, plant and equipment is derecognised upon disposal when no future economic
benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the
disposal or retirement of an item of property, plant and equipment is determined as the difference
between the sales proceeds and the carrying amount of the asset and is recognised in profit and loss.
m.
Intangibles
Trademarks, licences and customer contracts
Separately acquired trademarks and licences are shown at historical cost. Trademarks, licenses
and customer contracts acquired in a business combination are recognised at fair value at the
acquisition date. They have a finite useful life and are subsequently carried at cost less accumulated
amortisation and impairment losses.
Research and development
Research expenditure is recognised as an expense as incurred. Development expenditure is
recognised as an asset as incurred. Research and development costs previously recognised as an
expense are not recognised as an asset in a subsequent period.
n.
Provisions
Provisions are recognised when the consolidated entity has a present obligation, the future sacrifice
of economic benefits is probable, and the amount of the provision can be measured reliably.
The amount recognised as a provision is the best estimate of the consideration required to settle
the present obligation at reporting date, taking into account the risks and uncertainties surrounding
the obligation. Where a provision is measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those cash flows. When some or all of the
economic benefits required to settle a provision are expected to be recovered from a third party, the
receivable is recognised as an asset if it is virtually certain that recovery will be received and the
amount of the receivable can be measured reliably.
Provision for restoration and rehabilitation
A provision for restoration and rehabilitation is recognised when there is a present obligation as a
result of development, production, transportation or storage activities undertaken, it is probable
that an outflow of economic benefits will be required to settle the obligation, and the amount of the
provision can be measured reliably. The estimated future obligations include the costs of restoring
the affected areas.
50
Neometals Annual Report 2016
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
2. Significant accounting policies (continued)
The provision for future restoration costs is the best estimate of the present value of the
expenditure required to settle the restoration obligation at the reporting date. Future restoration
costs are reviewed annually and any changes in the estimate are reflected in the present value of
the restoration provision at each reporting date.
The initial estimate of the restoration and rehabilitation provision relating to development is
capitalised into the cost of the related asset and depreciated over the estimated remaining life of
the asset on a units of production basis. Changes in the estimate of the provision for restoration
and rehabilitation are treated in the same manner, except that the unwinding of the effect of
discounting on the provision is recognised as a finance cost rather than being capitalised into the
cost of the related asset.
Provision for onerous contract
Present obligations arising under onerous contracts are recognised and measured as provisions.
An onerous contract is considered to exist where the Group has a contract under which the
unavoidable costs of meeting the obligations under the contract exceed the economic benefits
expected to be received from the contract.
o.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable.
Sale of goods
Revenue from the sale of goods is recognised when the consolidated entity has transferred to the
buyer the significant risks and rewards of ownership of the goods.
Dividend and interest revenue
Dividend revenue from investments is recognised when the shareholder’s right to receive the
payment has been established. Interest revenue is recognised on a time proportionate basis that
takes into account the effective yield on the financial asset.
p.
Interests in joint operations
A joint operation is a joint arrangement whereby the parties that have joint control of the
arrangement have rights to the assets, and obligations for the liabilities, relating to the
arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which
exists only when decisions about the relevant activities require unanimous consent of the parties
sharing control.
When a group entity undertakes its activities under joint operations, the Group as a joint operator
recognises in relation to its interest in a joint operation:
• its assets, including its share of any assets held jointly;
• its liabilities, including its share of any liabilities incurred jointly;
• its revenue from the sale of its share of the output arising from the joint operation;
• its share of the revenue from the sale of the output by the joint operation; and
• its expenses, including its share of any expenses incurred jointly.
The Group accounts for the assets, liabilities, revenues and expenses relating to its interest in
a joint operation in accordance with the AASBs applicable to the particular assets, liabilities,
revenues and expenses.
When a group entity transacts with a joint operation in which a group entity is a joint operator (such
as a sale or contribution of assets), the Group is considered to be conducting the transaction with
the other parties to the joint operation, and gains and losses resulting from the transactions are
recognised in the Group’s consolidated financial statements only to the extent of other parties’
interests in the joint operation.
Annual Report 2016 Neometals
51
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
2. Significant accounting policies (continued)
When a group entity transacts with a joint operation in which a group entity is a joint operator (such
as a purchase of assets), the Group does not recognise its share of the gains and losses until it
resells those assets to a third party.
q.
Share-based payments
Equity-settled share-based payments to employees and others providing services to the Group are
measured at fair value at the date of grant.
The fair value determined at the grant date of the equity-settled share-based payments is expensed
on a straight-line basis over the vesting period, based on the Consolidated Entity’s estimate of
shares that will eventually vest, with a corresponding increase in equity.
Equity-settled share-based payments transactions with parties other than employees are
measured at the fair value of the goods or services received, except where the fair value cannot
be estimated reliably, in which case they are measured at the fair value of the equity instruments
granted, measured at the date the entity obtains the goods or the counter party renders the service.
The fair value of performance rights are measured using a Monte Carlo Simulation.
r.
Financial assets
Subsequent to initial recognition, investments in subsidiaries are measured at cost in the
Company’s financial statements. Other financial assets are classified into the following specified
categories: financial assets ‘at fair value through profit or loss’, ‘held-to-maturity investments’,
‘available-for-sale’ financial assets, and ‘loans and receivables’. The classification depends on the
nature and purpose of the financial assets and is determined at the time of initial recognition.
Available-for-sale financial assets
Listed shares held by the Group that are traded in an active market are classified as available-for-
sale (AFS) and are stated at fair value. The Group also has investments in unlisted shares that are
not traded in an active market but that are also classified as AFS financial assets and stated at fair
value (because the directors consider that fair value can be reliably measured). Gains and losses
arising from changes in fair value are recognised in other comprehensive income and accumulated
in the investments revaluation reserve. Where the investment is disposed of or is determined to
be impaired, the cumulative gain or loss previously accumulated in the investments revaluation
reserve is reclassified to profit or loss.
Trade and other receivables
Trade receivables, loans, and other receivables that have fixed or determinable payments that are
not quoted in an active market are classified as ‘trade and other receivables’. Trade and other
receivables are measured at amortised cost using the effective interest method less impairment.
Interest income is recognised by applying the effective interest rate. The effective interest rate
is the rate that exactly discounts estimated future cash receipts through the expected life of the
debt instrument, or (where appropriate) a shorter period, to the net carrying amount on initial
recognition.
Impairment of financial assets
Financial assets, other than those at fair value through profit or loss, are assessed for indicators of
impairment at each reporting date. Financial assets are impaired where there is objective evidence
that as a result of one or more events that occurred after the initial recognition of the financial asset
the estimated future cash flows of the investment have been impacted. For financial assets carried
at amortised cost, the amount of the impairment is the difference between the asset’s carrying
amount and the present value of estimated future cash flows, discounted at the original effective
interest rate.
52
Neometals Annual Report 2016
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
2. Significant accounting policies (continued)
The carrying amount of the financial asset is reduced by the impairment loss directly for all
financial assets with the exception of trade receivables where the carrying amount is reduced
through the use of an allowance account. When a trade receivable is uncollectible, it is written off
to profit and loss. Subsequent recoveries of amounts previously written off are credited as income
in the calculation of profit and loss. Changes in the carrying amount of the allowance account are
recognised in profit or loss.
With the exception of available-for-sale equity instruments, if, in a subsequent period, the
amount of the impairment loss decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised, the previously recognised impairment loss is
reversed through profit or loss to the extent the carrying amount of the investment at the date
the impairment is reversed does not exceed what the amortised cost would have been had the
impairment not been recognised. In the case of available-for-sale equity instruments, the reversal
is recognised directly in equity.
s.
Leased assets
Leases are classified as finance leases when the terms of the lease transfer substantially all the
risks and rewards incidental to ownership of the leased asset to the lessee. All other leases are
classified as operating leases.
Assets held under finance leases are initially recognised at their fair value or, if lower, at amounts
equal to the present value of the minimum lease payments, each determined at the inception of the
lease. The corresponding liability to the Lessor is included in the balance sheet as a finance lease
obligation.
Lease payments are apportioned between finance charges and reduction of the lease obligation so
as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges
are charged directly to profit and loss, unless they are directly attributable to qualifying assets, in
which case they are capitalised in accordance with the Group’s general policy on borrowing costs.
Contingent rentals are recognised as expenses in the periods in which they are incurred. Finance
leased assets are amortised on a straight line basis over the estimated useful life of the asset.
Operating lease payments are recognised as an expense on a straight-line basis over the least
term, except where another systematic basis is more representative of the time pattern in which
economic benefits from the leased asset are consumed. Contingent rentals arising under operating
leases are recognised as an expense in the period in which they incurred.
t.
Inventories
Work in progress and finished goods inventories are measured at the lower of cost and net
realisable value. Costs are assigned on a weighted average basis and comprise all costs of
purchase, costs of conversion and any other costs incurred in bringing inventories to their present
location and condition. Costs of conversion include costs relating directly to production in addition
to an apportionment of fixed and variable production overhead expenses, and include costs such as
depreciation and amortisation. Net realisable value is the estimated selling price in the ordinary
course of business less estimated costs of completion and any estimated selling costs. Consumable
stores inventory are measured at the cost of acquisition.
u.
Investments in associates and joint ventures
An associate is an entity over which the Group has significant influence. Significant influence is the
power to participate in the financial and operating policy decisions of the investee but is not control
or joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement
have rights to the net assets of the joint arrangement. Joint control is the contractually agreed
sharing of control of an arrangement, which exists only when decisions about the relevant activities
require unanimous consent of the parties sharing control.
Annual Report 2016 Neometals
53
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
2. Significant accounting policies (continued)
The results and assets and liabilities of associates or joint ventures are incorporated in these
consolidated financial statements using the equity method of accounting, except when the
investment, or a portion thereof, is classified as held for sale, in which case it is accounted for
in accordance with AASB 5. Under the equity method, an investment in an associate or a joint
venture is initially recognised in the consolidated statement of financial position at cost and
adjusted thereafter to recognise the Group’s share of the profit or loss and other comprehensive
income of the associate or joint venture. When the Group’s share of losses of an associate or a
joint venture exceeds the Group’s interest in that associate or joint venture (which includes any
long-term interests that, in substance, form part of the Group’s net investment in the associate or
joint venture), the Group discontinues recognising its share of further losses. Additional losses are
recognised only to the extent that the Group has incurred legal or constructive obligations or made
payments on behalf of the associate or joint venture.
An investment in an associate or a joint venture is accounted for using the equity method from the
date on which the investee becomes an associate or a joint venture. On acquisition of the investment
in an associate or a joint venture, any excess of the cost of the investment over the Group’s share of
the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill,
which is included within the carrying amount of the investment. Any excess of the Group’s share
of the net fair value of the identifiable assets and liabilities over the cost of the investment, after
reassessment, is recognised immediately in profit or loss in the period in which the investment is
acquired.
The requirements of AASB 139 are applied to determine whether it is necessary to recognise
any impairment loss with respect to the Group’s investment in an associate or a joint venture.
When necessary, the entire carrying amount of the investment (including goodwill) is tested for
impairment in accordance with AASB 136 Impairment of Assets as a single asset by comparing
its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying
amount, Any impairment loss recognised forms part of the carrying amount of the investment. Any
reversal of that impairment loss is recognised in accordance with AASB 136 to the extent that the
recoverable amount of the investment subsequently increases.
The Group discontinues the use of the equity method from the date when the investment ceases
to be an associate or a joint venture, or when the investment is classified as held for sale. When
the Group retains an interest in the former associate or joint venture and the retained interest is
a financial asset, the Group measures the retained interest at fair value at that date and the fair
value is regarded as its fair value on initial recognition in accordance with AASB 139. The difference
between the carrying amount of the associate or joint venture at the date the equity method was
discontinued, and the fair value of any retained interest and any proceeds from disposing of a part
interest in the associate or joint venture is included in the determination of the gain or loss on
disposal of the associate or joint venture. In addition, the Group accounts for all amounts previously
recognised in other comprehensive income in relation to that associate or joint venture on the same
basis as would be required if that associate or joint venture had directly disposed of the related
assets or liabilities. Therefore, if a gain or loss previously recognised in other comprehensive
income by that associate or joint venture would be reclassified to profit or loss on the disposal of the
related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss (as a
reclassification adjustment) when the equity method is discontinued.
The Group continues to use the equity method when an investment in an associate becomes an
investment in a joint venture or an investment in a joint venture becomes an investment in an
associate. There is no re-measurement to fair value upon such changes in ownership interests.
When the Group reduces its ownership interest in an associate or a joint venture but the Group
continues to use the equity method, the Group reclassifies to profit or loss the proportion of the
gain or loss that had previously been recognised in other comprehensive income relating to that
reduction in ownership interest if that gain or loss would be reclassified to profit or loss on the
disposal of the related assets or liabilities.
54
Neometals Annual Report 2016
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
2. Significant accounting policies (continued)
When a group entity transacts with an associate or a joint venture of the Group, profits and losses
resulting from the transactions with the associate or joint venture are recognised in the Group’s
consolidated financial statements only to the extent of interests in the associate or joint venture that
are not related to the Group.
3. Critical accounting judgments and key sources of estimation uncertainty
In the application of the Group’s accounting policies, which are described in Note 2, management
is required to make judgments, estimates and assumptions about carrying values of assets
and liabilities that are not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and various other factors that are believed to be
reasonable under the circumstance, the results of which form the basis of making the judgments.
Actual results may differ from these estimates. The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in
which the estimate is revised if the revision affects only that period, or in the period of the revision
and future periods if the revision affects both current and future periods.
3.1 Critical judgments in applying the entity’s accounting policies
The following are the critical judgments that management has made in the process of applying the
Group’s accounting policies and that have the most significant effect on the amounts recognised in
the financial statements.
a.
Recovery of capitalised exploration evaluation and development expenditure
The Group capitalises exploration, evaluation and development expenditure incurred on ongoing
projects. The recoverability of this capitalised exploration expenditure is entirely dependent upon
returns from the successful development of mining operations or from surpluses from the sale of
the projects or the subsidiary companies that control the projects. At the point that it is determined
that any capitalised exploration expenditure is definitely not recoverable, it is written off.
b.
Share-based payments
Equity-settled share-based payments granted are measured at fair value at the date of grant.
The fair value of share options is measured by use of the Monte Carlo model and requires
substantial judgement. Management has made its best estimate for the effects of non-
transferability, exercise restrictions (including the probability of meeting market conditions
attached to the option), and behavioural considerations.
The fair value of performance rights issued during the period was made with reference to the
parent entity’s closing share price on the date of grant. Management has been required to estimate
the probability that the employee will meet the performance criteria determined by the board and
that the employee employed by the Group.
c.
Joint arrangements
When determining the accounting treatment to apply to joint ventures and joint operations
management considers the factors which govern the relationship between itself and the other party
or parties involved in the joint commitment. Based on information such as legal agreements and
the structure of the vehicle under which the joint arrangement is executed management determine
whether it is a joint venture or a joint operation. With respect to terms of agreements between two
or more parties there is a risk that the parties may interpret the terms of the agreement differently.
Management continually review the facts and circumstances under which these judgements are
made and reassess whether the type of joint arrangement in which it is involved has changed.
Annual Report 2016 Neometals
55
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
3. Critical accounting judgments and key sources of estimation uncertainty
(continued)
With respect to Neometals investment in Reed Industrial Materials Pty Ltd (“RIM”) and Reed
Advanced Materials (“RAM”), management have considered the terms of the Shareholder’s
Agreement between itself, Mineral Resources Ltd and its subsidiary Process Minerals International
Pty Ltd and determined that the agreement constitutes a joint venture under the accounting
standards, and that it is a joint venture with respect to the jointly controlled entity. Accordingly,
Neometals accounts for its investment in RIM and RAM using the equity method of accounting.
3.2 Key areas of estimation uncertainty
The following are key assumptions concerning the future, or other key sources of estimation
uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year.
a.
Capitalised development and evaluation assets
Certain assumptions are required to be made in order to assess the recoverability of long-lived
assets. Key assumptions include future commodity prices, future cash flows, estimated discount
rate and estimates of Ore Reserves. Estimates of Ore Reserves are dependent on various
assumptions. Changes in these estimates could materially impact on actual ore recovered,
and could therefore affect estimates of future cash flows used in the assessment of recoverable
amounts. The carrying amount of exploration, evaluation and development assets which is
included in the consolidated statement of financial position at 30 June 2016 is $11.6 million
(2015: $11.4million) after an impairment of $14 thousand for continuing operations was recognised
during the current financial year (2015: $1.3 million). Details of the impairment are included in Note 12.
The Group estimates its Mineral Resources and Reserves based on information assessed by
Competent Persons (as defined in the JORC code). In estimating the remaining life of the mine
for the purpose of amortisation and depreciation calculations, due regard is given, not only to the
amount of remaining Ore Reserves, but also to limitations which could arise from the potential for
changes in technology, demand, and other issues which are inherently difficult to estimate over an
extended timeframe.
Where a change to Ore Reserves is made, changes to depreciation and amortisation rates are
accounted for prospectively.
The determination of Ore Reserves and remaining mine life affects the carrying of value of a
number of the Consolidated Entity’s assets and liabilities including deferred mining costs and
the rehabilitation asset.
b.
Value of deferred tax assets
Deferred income tax assets, including those arising from un-utilised tax losses, require
management to assess the likelihood that the Group will generate sufficient taxable earnings in
future periods, in order to utilise recognised deferred income tax assets. Assumptions about the
generation of future taxable profits depend on management’s estimates of future cash flows.
These estimates of future taxable income are based on forecast cash flows from operations
(which are impacted by production and sales volumes, commodity prices, reserves, operating
costs, closure and rehabilitation costs, capital expenditure, dividends and other capital
management transactions) and judgement about the application of existing tax laws in Australia.
To the extent that future cash flows and taxable income differ significantly from estimates, the
ability of the Group to realise the net deferred income tax assets recorded at the reporting date
could be impacted.
In addition, future changes in tax laws in Australia could limit the ability of the Group to obtain tax
deductions in future periods. The carrying amount of deferred taxes included in the consolidated
statement of financial position at 30 June 2016 is Nil (2015: Nil).
56
Neometals Annual Report 2016
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
3. Critical accounting judgments and key sources of estimation uncertainty
(continued)
c.
Onerous Contract
The Company has an onerous contract which relates to a contract entered into by Barrambie Gas
Pty Ltd, a wholly owned subsidiary of the Company, for the Company’s Barrambie Project. The
contract with DBNGP (WA) Transmission Pty Ltd for gas transmission, commenced on 1 July 2010.
The provision in the accounts represents the present value of the gas transmission obligations
under the contract for gas transmission not expected to be utilised or on sold.
The estimates for the remaining term is subject to Management’s judgement and could change in
future periods.
Annual Report 2016 Neometals
57
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
4. Parent entity disclosure
Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
Equity
Issued capital
Retained earnings
Reserves
Share based payments
Total equity
Financial Performance
Profit / (loss) for the year
Other comprehensive income
Total comprehensive income
2016
$
2015
$
73,761,516
16,597,323
90,358,839
1,479,255
21,362,478
22,841,733
649,193
99,994
749,187
2,379,974
40,067
2,420,041
89,609,652
20,421,692
160,047,735
157,910,617
(76,034,346)
(143,058,825)
5,596,263
5,569,900
89,609,652
20,421,692
81,902,341
(3,096,586)
-
-
81,902,341
(3,096,586)
Guarantees entered into on behalf of subsidiaries(i)
5,000,000
6,000,000
(i)
Barrambie Gas Pty Ltd, a wholly owned subsidiary of the Company, is party to a gas transmission agreement
with DBNGP (WA) Transmission Pty Ltd for the Barrambie Project. The parent entity has provided security for
a bank guarantee required under the contract for $5.0 million. Refer to Note 12 for details.
58
Neometals Annual Report 2016
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
5. Profit/(loss) for the year continuing operations
a.
Income
Income from operations consisted of the following items:
Revenue from the sale of goods
Other income:
Interest revenue
Statutory refunds and grants
Other
b.
Profit / (loss) before income tax
Profit / (loss) before income tax has been arrived
at after charging the following expenses:
2016
$
2015
$
-
419,526
671,240
-
20,159
691,399
296,366
75,545
387,516
759,427
Cost of goods sold
-
(159,872)
Employee benefits expense:
Equity settled share-based payments
Defined contribution superannuation plans
Other employee benefits
Finance costs:
Borrowing costs
Facility fees
Interest expense
Other
Impairment of non-current assets (i)
Depreciation of non-current assets
Provision for onerous gas transmission contract
Exploration and evaluation expenditure written off
(170,652)
(117,020)
(1,733,783)
(2,021,455)
(41,660)
(48,916)
(176,257)
-
(266,833)
(13,831)
(41,739)
-
-
(140,825)
(101,539)
(1,145,840)
(1,388,204)
(31,632)
(92,666)
(363,556)
(544)
(488,398)
(1,252,915)
(43,747)
(5,929,126)
(539,187)
(i)
Impairment expense of $13,831 (2015:$ 1,252,915) relates to non-current assets of continuing operations.
Refer to Notes 13 and 14 for further details of the impairment of these non-current assets.
Annual Report 2016 Neometals
59
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
6.
Income taxes
a.
Income tax benefit recognised in profit or loss
Tax benefit comprises:
Current tax expense
Research and development claim
Deferred tax benefit relating to the origination
and reversal of temporary differences
Total tax benefit
The prima facie income tax expense on pre-tax accounting profit
from continuing operations reconciles to the income tax benefit
in the financial statements as follows:
Profit / (Loss) from continuing operations
Income tax calculated at 30%
Effect of income and expenses that are not deductible
in determining taxable profit
Utilisation of previously unrecognised tax losses
Current tax benefit not recognised during the period
2016
$
2015
$
-
-
(430,212)
(265,991)
(343,688)
(773,900)
-
(265,991)
83,832,380
25,149,714
(10,580,396)
(3,174,119)
42,111
(20,998,735)
8,399
-
-
3,165,720
Deductible temporary differences now recognised as deferred tax assets
(4,045,347)
Refund of prior year R&D claim
Deferred tax expense recognised directly in other comprehensive income
Other items
Income tax expense / (benefit) recognised
Deferred tax assets recognised in other comprehensive income
Relating to available-for-sale financial assets
(430,212)
(343,688)
(147,743)
(773,900)
343,688
343,688
-
(265,991)
-
-
(265,991)
The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian
corporate entities on taxable income under Australian tax law. There has been no change in the
corporate tax rate during the reporting period.
b.
Deferred tax balances
Deferred tax balances are presented in the statement of financial position as follows:
Deferred tax liabilities
Deferred tax assets
Net deferred tax balance
2015
$
2016
$
(4,045,347)
4,045,347
-
c.
Deferred tax assets not brought to account
At 30 June 2016 the amount of unrecognised tax losses was (gross) $102,683,389
(June 2015: $191,952,836).
60
Neometals Annual Report 2016
-
-
-
-
-
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
6.
Income taxes (continued)
Tax Consolidation
Relevance of tax consolidation to the consolidated entity
The Company and its wholly-owned Australian resident entities have formed a tax-consolidated group
and are therefore taxed as a single entity. The head entity within the tax-consolidated group is Neometals
Ltd. The members of the tax-consolidated group are identified at note 26.
Nature of tax funding arrangements and tax sharing agreements
Entities within the tax-consolidated group have entered into a tax funding arrangement and a tax sharing
agreement with the head entity. Under the terms of the tax funding arrangement, Neometals Ltd and
each of the entities in the tax consolidation group has agreed to pay a tax equivalent payment to or from
the head entity, based on the current tax liability or current tax assets of the entity. Such amounts are
reflected in amounts receivable from or payable to each entity in the tax consolidated group, and are
eliminated on consolidation. The tax sharing agreement entered into between the members of the tax-
consolidated group provides for the determination of the allocation of income tax liabilities between the
entities should the head entity default on its payment obligations or if an entity should leave the tax-
consolidated group. The effect of the tax sharing agreement is that each member’s tax liability for tax
payable by the tax-consolidated group is limited to the amount payable to the head entity under the tax
funding arrangement.
7. Key management personnel compensation
Details of key management personnel compensation are provided on pages 22-31 of the Directors’ Report.
The aggregate compensation made to key management personnel of the Group is set out below:
Short-term employee benefits (i)
Post-employment benefits
Termination benefits
Share-based payments
2016
$
1,253,642
88,644
-
170,652
1,512,938
2015
$
1,042,975
65,709
-
140,825
1,249,509
(i)
2015 balance inclusive of $125,000 in STI that relates to the year 2013-14.
8. Share based payments
Neometals Ltd has an ownership based remuneration scheme for executives and employees.
Performance Rights Plan (“PRP”)
In accordance with the provisions of the PRP, as approved by shareholders at the Company’s AGM on 28
November 2014, employees may be offered performance rights at such times and on such terms as the
board considers appropriate.
General terms of performance rights granted under the PRP:
• The performance rights will not be quoted on the ASX.
• Performance rights can only be granted to employees of the Company.
• Performance rights are transferable to eligible nominees.
• Performance rights not exercised on or before the vesting date will lapse.
Annual Report 2016 Neometals
61
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
8. Share based payments (continued)
• All shares allotted upon of the vesting of performance rights rank equally in all respects to all
previously issued shares.
• Performance rights confer no right to vote, attend meetings, participate in a distribution of profit or
a return of capital or another participating rights or entitlements on the grantee unless and until the
performance rights vest.
The following share-based payment arrangements in relation to performance rights were in existence
during the period:
2016
J. Carone
J. Carone
J. Carone
J. Carone
C. Reed
M. Tamlin
Total
Grant date
Number
Vesting date/
Expiry date
Grant date
share price
Probability
factor
Fair value at
grant date
01/08/2012
07/10/2013
01/08/2014
09/10/2015
09/10/2015
21/01/2016
49,274
30/06/2015
1,098,369
30/06/2016
2,813,239
30/06/2016
593,472
30/06/2017
1,595,092
30/06/2017
1,175,074
30/06/2017
7,324,520
0.18
0.025
0.036
0.115
0.115
0.145
n/a
n/a
n/a
n/a
n/a
n/a
7,164
12,851
42,007
49,644
133,429
127,081
372,176
The fair value of performance rights issued have been independently valued by a third party using a
Monte Carlo simulation to determine fair value. The total expense recognised for the period arising
from share-based payment transactions and accounted for as equity-settled share-based payment
transactions is $170,653 (2015: $140,825).
The following reconciles the outstanding performance rights granted at the beginning and end of the
financial year:
Balance at beginning of the financial year
Granted during the financial year as compensation
Vested during the financial year (i)
Lapsed during the financial year (ii)
2016
2015
Performance
Rights No.
Performance
Rights No.
10,788,108
3,363,638
(6,876,500)
-
4,704,323
9,394,155
(2,758,862)
(551,508)
Balance at the end of the financial year (iii)
7,275,246
10,788,108
6,876,500 shares in the Company were issued on vesting of performance rights (2015: 2,758,862).
(i)
(ii) No performance rights were cancelled or lapsed during the financial year (2015: 551,508).
(iii) 3,911,608 performance rights are exercisable at the end of the year (2015: 6,876,500)
62
Neometals Annual Report 2016
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
9. Dividends on equity instruments
2016
$
2015
$
Declared and paid during the year:
Dividends paid on ordinary shares:
Special dividend for 2016: 2.0 cents per share paid on 7 April 2016 (2015: nil)
11,181,785
-
The dividend franking account has a nil balance as at 30 June 2016 (2015: nil).
On 11 August 2016, the directors declared an unfranked dividend of 2 cents per share to the holders of
fully paid ordinary shares, paid to shareholders on 26 August 2016.
10. Assets classified as held for sale
Assets classified as held for sale (i)
Liabilities directly associated with assets classified as held for sale (i)
2016
$
1,625,705
(96,607)
2015
$
-
-
(i)
In March 2016 the Company agreed to divest its Reed Exploration Pty Ltd Nickel Projects (included in other
operating segment) by way of a sale of the subsidiary that owns the project, Reed Exploration Pty Ltd, to Hannans
Limited. A binding share sale agreement was executed on 10 August 2016 and completion, which is subject to a
number of conditions precedent, is expected to occur late September 2016.
Amounts recognised in this note relate to Reed Exploration Pty Ltd, owner of the Reed Exploration Pty
Ltd Nickel Projects.
Classified as held for sale
Cash and cash equivalents
Exploration and evaluation expenditure
Other receivables
Assets classified as held for sale
Trade and other payables
Liabilities directly associated with assets classified as held for sale
Net assets classified as held for sale
2016
$
1,004,888
617,009
3,808
1,625,705
(96,607)
(96,607)
1,529,098
2015
$
-
-
-
-
-
-
-
Annual Report 2016 Neometals
63
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
11. Trade and other receivables
Current
Other receivables (i)
Prepayments
Goods and services tax
Total
2016
$
363,132
280,619
-
643,751
2015
$
430,777
152,514
46,914
630,205
(i)
Other receivables balance includes an amount of $90,000 (2014: $113,285) receivable from Mr. C Reed (Executive
Director). In the 2012 financial year the Company provided a loan to Mr. Reed of $150,000 at a commercial rate of
interest that is adjusted in line with the official interest rate set by the Reserve Bank of Australia. Refer to Note
28 for further information.
12. Other financial assets
Current
Barrambie Gas term deposit (i)
Total Current
Non-current
Available-for-sale investments carried at fair value(ii)
Barrambie Gas term deposit (i)
Rental bond term deposit
Total Non-current
Total
2016
$
-
-
1,410,625
5,000,000
25,000
6,435,625
6,435,625
2015
$
1,000,000
1,000,000
-
5,000,000
95,000
5,095,000
6,095,000
(i)
(ii)
Barrambie Gas Pty Ltd, a wholly owned subsidiary of the Company, is a party to a gas transmission agreement
with DBNGP (WA) Transmission Pty Ltd (DBP) in relation to the Barrambie Project. As part of the agreement the
Group was required to provide security by way of a $5.0 million bank guarantee.
The Group currently holds 63,750,000 ordinary shares (6.61% voting power) and 31,250,000 unlisted options
(exercisable at 0.4 cents) in Hannans Limited. The directors of the Company do not consider that the Group is
able to exercise significant influence over Hannans Limited at 30 June 2016.
64
Neometals Annual Report 2016
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
13. Exploration, evaluation and development expenditure
Gross carrying amount
Balance at 1 July 2014
Transfer on deconsolidation of subsidiary
Reclassified as development
Additions
Expenditure written off
Balance at 1 July 2015
Transfer on deconsolidation of subsidiary
Additions
Reclassified as held for sale
Expenditure written off
Balance at 30 June 2016
Accumulated amortisation and impairment
Balance at 1 July 2014
Amortisation expense
Impairment (i)
Depreciation of rehabilitation asset
Balance at 1 July 2015
Amortisation expense
Reclassified as held for sale
Impairment (i)
Depreciation of rehabilitation asset
Balance at 30 June 2016
Net book value
As at 30 June 2015
As at 30 June 2016
Consolidated
Capitalised
exploration and
evaluation
expenditure
$
31,600,967
-
-
2,392,735
(539,187)
33,454,515
-
875,927
(2,269,036)
-
32,061,406
20,839,556
-
1,252,915
-
22,092,471
-
(1,652,027)
13,831
-
20,454,275
11,362,044
11,607,131
The recovery of exploration expenditure carried forward is dependent upon the discovery of commercially
viable mineral and other natural resource deposits, their development and exploration, or alternatively
their sale.
(i)
The Group performed a review of the recoverable amount of all projects. Total impairment charges of $14
thousand (2015: $1.3 million) were recognised in respect of exploration, evaluation and development assets for
continuing operations.
Annual Report 2016 Neometals
65
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
14. Property, plant and equipment
Gross carrying amount
Balance at 1 July 2014
Additions
Disposals
Transfers from WIP
Impairment
Balance at 1 July 2015
Additions
Disposals
Disposal on de-consolidation (i)
Transfers to PP&E
Transfers to intangibles
Impairment
Balance at 30 June 2016
Accumulated depreciation
Balance at 1 July 2014
Disposals
Depreciation expense
Balance at 1 July 2015
Disposals
Depreciation expense
Balance at 30 June 2016
Net book value
As at 30 June 2015
As at 30 June 2016
Plant and
equipment
at cost
$
Consolidated
Capital work
in progress
$
436,283
55,353
(6,917)
-
-
484,719
10,136
(134,785)
-
-
-
-
360,070
252,300
(2,559)
43,747
293,488
(119,119)
40,842
215,211
21,261
40,182
-
(1,768)
-
59,675
125,825
-
(104,814)
(10,136)
(70,550)
-
-
-
-
-
-
-
-
-
Total
$
457,544
95,535
(6,917)
(1,768)
-
544,394
135,961
(134,785)
(104,814)
(10,136)
(70,550)
-
360,070
252,300
(2,559)
43,747
293,488
(119,119)
40,842
215,211
191,231
144,859
59,675
-
250,906
144,859
(i)
The disposal on de-consolidation relates to the patents owned by Reed Advanced Materials Pty Ltd, a wholly
owned subsidiary of Neometals in connection with the Eli process and producing Lithium Hydroxide. This
subsidiary was de-consolidated at the date of “loss of control”, being 6 October 2015.
66
Neometals Annual Report 2016
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
15. Trade and other payables
Trade payables
Accrued expenses
Other
2016
$
171,045
304,718
6,503
482,266
2015
$
674,642
218,505
1,561
894,708
The average credit period on purchases is 30 days. No interest is charged on the trade payables. The
Group has financial risk management policies in place to help ensure that all payables are paid within the
settlement terms.
16. Provisions
Current
Annual leave
Long service leave
Other (a)
Non-current
Other (a)
(a) Detail of movement in other provisions
2016
Balance at 1 July 2015
Additional provisions recognised
Reductions arising from payments/other sacrifices of future economic benefits
Additions/(reductions) resulting from re-measurement or settlement without cost
Unwinding of discount and effect of changes in the discount rate
Balance at 30 June 2016
Comprised of:
Current provision
Non-current provision
2016
$
156,605
72,191
828,800
2015
$
118,418
59,022
987,147
1,057,596
1,164,587
4,414,456
4,414,456
5,472,052
5,311,608
5,311,608
6,476,195
Onerous Contracts (i)
$
6,298,755
-
(898,927)
(156,572)
-
5,243,256
828,800
4,414,456
5,243,256
(i)
The onerous contract relates to a contract entered into by Barrambie Gas Pty Ltd, a wholly owned subsidiary of
the Company, for the Company’s Barrambie Project. The contract with DBNGP (WA) Transmission Pty Ltd for gas
transmission, commenced on 1 July 2010. The provision in the accounts represents the present value of the remaining
gas transmission obligations under the contract for gas transmission not expected to be utilised or on sold.
Annual Report 2016 Neometals
67
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
16. Provisions (continued)
2015
Balance at 1 July 2014
Additional provisions recognised
Reductions arising from payments/other sacrifices of future economic benefits
Additions/(reductions) resulting from re-measurement or settlement without cost
Unwinding of discount and effect of changes in the discount rate
Balance at 30 June 2015
Comprised of:
Current provision
Non-current provision
Onerous Contracts (i)
$
1,573,340
5,929,126
(1,203,711)
-
-
6,298,755
987,147
5,311,608
6,298,755
(i)
The onerous contract relates to a contract entered into by Barrambie Gas Pty Ltd, a wholly owned subsidiary of
the Company, for the Company’s Barrambie Project. The contract with DBNGP (WA) Transmission Pty Ltd for gas
transmission, commenced on 1 July 2010. The provision in the accounts represents the present value of the remaining
gas transmission obligations under the contract for gas transmission not expected to be utilised or on sold.
17. Borrowings
Current - at amortised cost
Motor Vehicle Lease
Working Capital / Convertible Note Facility – secured (i)
Non-current - at amortised cost
Motor Vehicle Lease
2016
$
11,939
-
11,939
27,804
27,804
2015
$
12,564
1,918,640
1,931,204
40,067
40,067
(i)
In August 2013 through interests associated with the Deputy Chairman, David Reed, he committed to provide a standby
facility to support the Company’s working capital position, with definitive agreements executed and announced on the
27th September 2013. As at 30 June 2014 the Company had drawn down $2M on the standby facility.
Following shareholder approval at the AGM held on 28 November 2014, the terms of 2 million convertible notes issued
to the Deputy Chairman Mr David Reed on 21 November 2013 were varied. The terms of the varied convertible notes
are as follows:
Term:
Number of notes:
Face value:
Coupon rate:
Conversion price:
Conversion date:
22 November 2015
2,000,000
$1
11% per annum (previously floating rate that is 3% above the rate paid by noteholder under
the noteholder’s external financing arrangements). Interest is payable monthly in arrears.
$0.04 (previously $0.03)
Any time prior to the redemption date, being 22 November 2015.
In accordance with Accounting Standards the equity portion of the convertible note has been recognised.
On 18 November 2015 Mr David Reed elected to convert the 2 million convertible notes into 50 million ordinary shares
in the company. The remaining borrowings relate to a motor vehicle hire purchase agreement.
68
Neometals Annual Report 2016
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
18. Issued capital
559,089,257 fully paid ordinary shares (2015: 502,212,757)
160,047,735
157,910,617
2016
$
2015
$
Changes to the then Corporations Law abolished the authorised capital and par value concept in relation
to share capital from 1 July 1998. Therefore, the Company does not have a limited amount of authorised
capital and issued shares do not have a par value.
Fully paid ordinary shares
Balance at beginning of financial year
502,212,757
157,910,617
523,453,895
158,292,130
2016
2015
No.
$
No.
$
Issue of shares on conversion of convertible note
50,000,000
2,000,000
Share issue costs
Shares cancelled through share buy back
-
-
(7,172)
-
-
-
-
-
(24,000,000)
(432,000)
Other share based payments
6,876,500
144,290
2,758,862
50,487
Balance at the end of the financial year
559,089,257
160,047,735
502,212,757
157,910,617
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Share options
At balance date there were no share options in existence over ordinary shares (2015: nil).
Convertible Notes
As outlined in Note 17 above, 2 million convertible notes were held by David Reed and converted into
50,000,000 fully paid ordinary shares on 18 November 2015.
19. Reserves
The share-benefits reserve arises on the grant of share options and performance rights for the
provision of services by consultants and to executives and employees under the employee share option
plan, performance rights plan, employment contracts or as approved by shareholders. Amounts are
transferred out of the reserve and into issued capital when the options are exercised or when shares
are issued pursuant to the terms of the performance rights. Further information about share-based
payments to employees is provided in Note 8 to the financial statements.
Annual Report 2016 Neometals
69
19. Reserves (continued)
Share based payments reserve:
Balance at the beginning of the financial year
Increase/ (Decrease) in share based payments
Amounts transferred to share capital on exercise
Balance at the end of the financial year
Other reserve(i):
Balance at the beginning of the financial year
Increase for convertible note issued / varied
Balance at the end of the financial year
Investment revaluation reserve(ii):
Balance at the beginning of the financial year
Investment revaluation reserve
Balance at the end of the financial year
Total Reserves
2016
$
2015
$
5,269,552
5,179,214
170,652
(144,290)
140,825
(50,487)
5,295,914
5,269,552
300,349
-
300,349
-
801,937
801,937
158,629
141,720
300,349
-
-
-
6,398,200
5,569,901
(i)
(ii)
Other reserve represents the cumulative revaluation that has been recognised in equity in relation to
convertible notes.
The investments revaluation reserve represents the cumulative gains and losses arising on the revaluation of
available-for-sale financial assets that have been recognised in other comprehensive income.
20. Accumulated losses
Accumulated losses:
Balance at the beginning of the financial year
Net profit / (loss) attributable to members of the Company
Payment of dividends
Balance at the end of the financial year
21. Earnings per share
Basic earnings per share:
Continuing and discontinued operations
Diluted earnings per share:
Continuing and discontinued operations
70
Neometals Annual Report 2016
2016
$
2015
$
(150,260,778)
(139,946,373)
84,606,280
(10,314,405)
(11,181,785)
-
(76,836,283)
(150,260,778)
2016
Cents per share
2015
Cents per share
15.68
15.62
(2.05)
(2.05)
Notes to the consolidated financial statements (continued)FOR THE YEAR ENDED 30 JUNE 2016 21. Earnings per share (continued)
Basic and diluted profit / (loss) per share
The profit / (loss) and weighted average number of ordinary shares used in the calculation of basic and
diluted profit / (loss) per share are as follows:
Profit / (loss) (a)
Continuing operations
Continuing and discontinued operations
2016
$
2015
$
84,606,280
84,606,280
(10,314,405)
(10,314,405)
2016
No.
2015
No.
Weighted average number of ordinary shares for the purpose of basic profit /
(loss) per share
Weighted average number of ordinary shares for the purpose of diluted profit
/ (loss) per share
539,637,444
502,212,757
541,744,722
502,212,757
(a)
Profit / (loss) used in the calculation of profit / (loss) per share reconciles to net loss in the consolidated
statement of comprehensive income.
22. Commitments for expenditure
a.
Exploration and evaluation expenditure commitments
The Consolidated Entity holds mineral exploration licences in order for it to undertake its
exploration, evaluation activities. To continue to hold tenure over these areas the Group is required
to undertake a minimum level of expenditure on or in relation to the leases. Minimum expenditure
commitments for the exploration and mining leases for the 2016 financial year are $567,380 (2015:
$599,130). Due to the nature of this expenditure, in that the expenditure commitments may be
reduced by the relinquishment of tenements, estimates for the commitment have not been forecast
beyond June 2017. However, should the Group continue to hold the tenements beyond this date
additional expenditure commitments would arise.
b.
Lease commitments
Non-cancellable operating lease commitments are disclosed in Note 23 to the financial statements.
Finance lease commitments at reporting date total $39,742 (2015: Nil).
c.
Other
As referred to in Note 16 (i) to the accounts, Barrambie Gas Pty Ltd, a wholly owned subsidiary
of the Company, previously entered into a gas transmission agreement with DBNGP (WA)
Transmission Pty Ltd for the Barrambie Project. As part of the agreement the Group was required
to procure a “blocked” term deposit for $5.0 million (30 June 2015: $6.0 million) as security a bank
guarantee, which represented the present value of the Group’s commitment under the agreement.
The obligations under the gas transmission agreement commenced on 1 July 2010.
Annual Report 2016 Neometals
71
Notes to the consolidated financial statements (continued)FOR THE YEAR ENDED 30 JUNE 2016 Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
23. Leases
Finance leases:
Leasing arrangements
The lease of a motor vehicle is for a period of 60 months expiring in July 2019. The commitments are
based on the fixed monthly lease payment.
Operating leases:
Leasing arrangements
Operating leases relate to the lease of commercial premises in West Perth and Canada and a
photocopier. The lease agreement for the Company’s registered head office expired on 30 June 2016.
A new agreement was entered into for the 12 month period to 30 June 2017. The lease agreement for
the Company’s Canadian branch premises was entered into on 1 May 2016 for a 60 month period expiring
on 30 April 2021. The lease of a photocopier is for a period of 48 months expiring in February 2019.
The commitments are based on the fixed monthly lease payment and a monthly estimate for copying
charges. The lease of a vehicle is for a period of 60 months expiring in July 2019. The commitments are
based on the fixed monthly lease payment.
Payments recognised as an expense
Minimum lease payments
Contingent rentals
Non-cancellable operating lease commitments
Not longer than 1 year
Longer than 1 year and not longer than 5 years
24. Deconsolidation of subsidiary
2016
$
2015
$
128,206
16,089
144,295
328,168
645,917
974,085
180,542
105,096
285,638
204,237
72,747
276,984
Deconsolidation of Reed Advanced Materials Pty Ltd (RAM)
On 6 October 2015 the Company entered into a shareholders agreement with PMI for the purposes
of establishing and operating a joint venture arrangement through RAM to operate a business of
researching, designing and developing the capabilities and technology relating to the processing of
lithium hydroxide. Following the execution of the shareholders agreement RAM was held 70:30 between
Neometals and PMI when previously RAM was a wholly owned subsidiary of the Neometals.
72
Neometals Annual Report 2016
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
24. Deconsolidation of subsidiary (continued)
The table below details the profit recognised on the deconsolidation of RAM:
Net liabilities of RAM de-recognised on deconsolidation
Investment in subsidiary entity recognised on deconsolidation
Profit on disposal
Reconciliation of RAM net liabilities de-recognised on deconsolidation:
Current Assets
Non-current assets
Total Assets
Current liabilities
Total Liabilities
Net liabilities
25. Joint arrangements
6 October 2015
$
188,805
1
188,806
$
9,638
40,700
50,338
(239,143)
(239,143)
(188,805)
Name of operation
Principal activity
Interest
Reed Industrial Minerals Pty Ltd(i)
Evaluation of lithium production
Reed Advanced Materials Pty Ltd(ii)
Evaluation of lithium hydroxide process
2016
$
13.8
70
2015
$
70
100
The Consolidated Entity’s interest in assets employed in the above joint ventures is detailed below.
i.
Reed Industrial Minerals Pty Ltd
On 16 July 2015 Neometals and MRL (through its subsidiary PMI) announced that RIM has entered
into a conditional Memorandum of Understanding (“MoU”) with China’s second largest lithium
producer Ganfeng. The key commercial terms of the MoU were as follows:
i. Ganfeng to acquire an up-front 25% shareholding in RIM by way of share sale and equity
subscription leaving Neometals with 45% of RIM and MIN with 30% of RIM;
ii. PMI and Ganfeng to be granted options by Neometals pursuant to which they can elect to
increase their respective shareholdings in RIM to 43.1% by way of share purchase from
Neometals which took place in the second half of FY15/16;
iii. MIN building, owning and operating the Mount Marion mining, crushing and beneficiation
infrastructure and equipment pursuant to a fixed price mining services contract;
iv. Ganfeng entering into a long-term offtake for 100% of the spodumene produced from the
Mt Marion Lithium Project at benchmarked market prices subject to an agreed price floor.
Under the agreement, from year 4 onwards Neometals and PMI reserve the right to take their
percentage shareholding in RIM entitlements of production should they so elect; and
v. prudential corporate governance arrangements for RIM between Ganfeng and RIM’s existing
shareholders with equal board representation for all shareholders.
The parties entered into formal agreements during the period. Subsequent to completion both
Ganfeng and MRL exercised their respective options to increase their shareholdings in RIM,
resulting in Neometals selling down a further 31.2% for a total sell down during the year of 56.2%.
This transaction has resulted in the recognition of a gain in profit or loss, calculated as follows:
Annual Report 2016 Neometals
73
25. Joint arrangements (continued)
Proceeds of disposal to Ganfeng
Less: carrying amount of investment
Proceeds of disposal to Ganfeng
Less: carrying amount of investment
Proceeds of disposal to PMI
Less: carrying amount of investment
Profit on disposal
30 June 2016
$
26,287,498
(324,461)
36,445,226
(311,601)
26,411,290
(225,523)
88,282,429
Summarised financial information for the joint venture:
Carrying value of investment in the joint venture
Loan to joint venture(i)
2016
$
204,258
72,000
2015
$
1,099,159
1,681,952
Share of loss of joint venture recognised in profit or loss(ii)
33,318
398,240
Current assets
Non-current assets
Current liabilities
Non-current liabilities
237,763
32,244,234
(14,225,964)
434,924
12,891,878
(550,778)
(5,158,564)
(12,021,036)
(i)
(ii)
The loan to the joint venture owing as at 30 June 2015 has since been repaid from Ganfeng’s investment in RIM
during the period.
The equity accounted share of the joint venture’s loss is credited to the carrying value of the investment in the
joint venture.
The Group’s share of the capital commitments made jointly with other joint venture partners relating to
its joint venture, RIM, is as follows:
Exploration expenditure commitments – not longer than 1 year
Development expenditure commitments – not longer than 1 year
ii.
Reed Advanced Materials Pty Ltd
2016
$
2,217,000
1,794,000
2015
$
-
-
In September 2015 all downstream lithium processing technology and patents were transferred
from RIM to a dedicated vehicle, Reed Advanced Materials Pty Ltd (“RAM”). On 6 October 2015
Neometals and PMI entered into a shareholders agreement for the purposes of establishing
and operating a joint venture arrangement through RAM to operate a business of researching,
designing and developing the capabilities and technology relating to the processing of lithium
hydroxide. Following the execution of the shareholders agreement RAM was held 70:30 between
Neometals and PMI. The technology will use the brand name ELi. During the later part of 2015 a
Definitive Feasibility Study (“DFS”) commenced for the commercialisation of RAM’s ELi downstream
processing technology in a 15,000 – 20,000tpa LCE lithium hydroxide plant.
74
Neometals Annual Report 2016
Notes to the consolidated financial statements (continued)FOR THE YEAR ENDED 30 JUNE 2016
25. Joint arrangements (continued)
Summarised financial information for the joint venture:
Carrying value of investment in the joint venture
Loan to joint venture
Share of loss of joint venture not recognised in profit or loss
Current assets
Non-current assets
Current liabilities
Non-current liabilities
26. Subsidiaries
2016
$
-
1,312,580
161,013
330,785
978,496
(351,412)
(1,312,580)
2015
$
-
-
-
13,547
33,520
(16,500)
(187,718)
Name of entity
Country of incorporation
Ownership interest
Parent entity
Neometals Ltd
Subsidiaries
Australian Titanium Pty Ltd (formerly Australian
Vanadium Corporation (Holdings) Pty Ltd)
Alphamet Management Pty Ltd (formerly Australian
Vanadium Corporation (Investments) Pty Ltd)
Inneovation Pty Ltd (formerly Australian Vanadium
Exploration Pty Ltd)
Barrambie Gas Pty Ltd
GMK Exploration Pty Ltd (i)
GMK Administration Pty Ltd
Gold Mines of Kalgoorlie Ltd
Urban Mining Pty Ltd (formerly Mount Finnerty Pty Ltd)
Reed Exploration Pty Ltd
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
2016
%
2015
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
(i) GMKE was placed in Administration on 16 August 2013 and deconsolidated at this time.
All of these companies are members of a tax consolidated group. Neometals Ltd is the head entity of the
tax consolidated group.
Annual Report 2016 Neometals
75
Notes to the consolidated financial statements (continued)FOR THE YEAR ENDED 30 JUNE 2016
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
27. Segment information
Basis for segmentation
AASB 8 Operating Segments requires the presentation of information based on the components of the
entity that management regularly reviews for its operational decision making. This review process is
carried out by the Chief Operating Decision Maker (“CODM”) for the purpose of allocating resources
and assessing the performance of each segment. The amounts reported for each operating segment is
the same measure reviewed by the CODM in allocating resources and assessing performance of that
segment.
For management purposes the Group operates under three operating segments comprised of the Group’s
lithium, titanium/vanadium and ‘other segments’ which comprises other minor exploration projects
and mineral process technology businesses. The titanium/vanadium operating segment is separately
identified given it possess different competitive and operating risks and meets the quantitative criteria
as set out in the AASB 8. Previously the Group operated under two reportable operating segments
comprised of the Group’s titanium/vanadium and ‘other segments’ which comprises the Mount Marion
lithium project and other minor exploration projects. The ‘other segments’ category is the aggregation of
all remaining operating segments given sufficient reportable operating segments have been identified.
Geographical information
The Group operates in a single geographical area being Australia (country of domicile).
For the year ended 30 June 2016
Reportable operating segments
Lithium
$
Titanium
$
Other
$
Unallocated
$
Total
$
Revenue from external customers
Cost of sales
Gross profit/(loss)
Other income
Impairment
Depreciation and amortisation
Total revenue
Total expense
Profit/(loss) before tax
Discontinued operations
Total revenue
Total expenses
Loss before tax
-
-
-
88,471,234
-
-
88,471,234
(31,656)
88,439,578
-
-
-
-
-
-
-
-
-
-
-
(13,831)
-
-
-
-
-
-
-
-
792,479
89,263,713
-
(41,739)
(13,831)
(41,739)
792,479
89,263,713
(365,009)
(365,009)
(17,605)
(5,017,063)
(5,431,333)
(17,605)
(4,224,584)
83,832,380
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Consolidated profit/(loss) before tax
88,439,578
(365,009)
(17,606)
(4,224,584)
83,832,380
76
Neometals Annual Report 2016
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
27. Segment information (continued)
As at 30 June 2016
Reportable operating segments
Lithium
$
Titanium
$
Other
$
Unallocated
$
Total
$
Increase/(decrease) in
non-current assets
(1,239,341)
(13,782)
2,895,805
71,495,724
73,138,406
Decrease in classified as held for sale
-
-
-
-
-
Consolidated increase/(decrease)
in non-current assets
(1,239,341)
(13,782)
2,895,805
71,495,724
73,138,406
Total segment assets
1,588,837
11,786,768
1,414,856
79,284,154
94,074,615
Assets classified as held for sale
-
-
1,625,705
-
1,625,705
Consolidated total assets
1,588,837
11,786,768
3,040,561
79,284,154
95,700,320
For the year ended 30 June 2015
Reportable operating segments
Lithium
$
Titanium
$
Other
$
Unallocated
$
419,526
(159,872)
259,654
-
-
-
-
-
-
Total
$
419,526
(159,872)
259,654
-
-
-
-
-
-
-
Revenue from external customers
Cost of sales
Gross profit/(loss)
Other income
Impairment
Depreciation and amortisation
Total revenue
Total expense
Loss before tax
Discontinued operations
Total revenue
Total expenses
Loss before tax
-
200,006
825,412
1,025,418
119,214
(1,372,129)
-
(1,252,915)
-
-
(43,747)
(43,747)
419,526
200,006
825,412
1,444,943
(444,018)
(6,515,064)
(1,591,231)
(3,209,035)
(11,759,348)
(444,018)
(6,095,538)
(1,391,225)
(2,383,623)
(10,314,405)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Consolidated loss before tax
(444,018)
(6,095,538)
(1,835,244)
(2,383,623)
(10,314,405)
As at 30 June 2015
Reportable operating segments
Lithium
$
Titanium
$
Other
$
Unallocated
$
Total
$
Increase/(decrease) in
non-current assets
276,615
1,052,470
(491,838)
(419,857)
417,390
Decrease in classified as held for sale
-
-
-
-
-
Consolidated increase/(decrease) in
non-current assets
276,615
1,052,470
(491,838)
(419,857)
417,390
Total segment assets
2,828,178
11,800,550
144,756
7,788,430
22,561,914
Assets classified as held for sale
-
-
-
-
-
Consolidated total assets
2,828,178
11,800,550
144,756
7,788,430
22,561,914
Annual Report 2016 Neometals
77
28. Related party disclosures
a.
Equity interests in related parties
Equity interests in subsidiaries
Details of the percentage of ordinary shares held in subsidiaries are disclosed in Note 26 to the
financial statements.
b.
Key management personnel remuneration
Details of Key Management Personnel remuneration are disclosed on pages 22-31 of the
Directors’ Report.
c.
Key management personnel equity holdings
Fully paid ordinary shares of Neometals Ltd
Balance at
01/07/15
No.
Balance on
appoint-
ment
No.
Received on
exercise of
performance
rights
No.
Net other
change
No.
Balance at
30/06/16
No.
Balance
held
nominally
No.
1,120,083
28,121,259
6,968,064
400,000
36,609,406
-
-
-
-
-
-
-
-
1,120,083
35,100,000
63,221,259
6,580,916
(3,000,000)
10,548,980
295,584
-
695,584
6,876,500
32,100,000
75,585,906
-
-
-
-
-
2016
Non-executive directors
S. Cole
D. Reed
Executive directors
C. Reed
Other executives
J. Carone (i)
Total
(i) Excludes shares issued subsequent to year end for performance rights that vested 30 June 2016.
Balance at
01/07/14
No.
Balance on
appoint-
ment
No.
Received on
exercise of
performance
rights
No.
Net other
change
No.
Balance at
30/06/15
No.
Balance
held
nominally
No.
1,120,083
28,121,259
4,209,202
400,000
33,850,544
-
-
-
-
-
-
-
-
-
-
-
-
1,120,083
28,121,259
2,758,862
6,968,064
-
400,000
2,758,862
36,609,406
-
-
-
-
-
2015
Non-executive directors
S. Cole
D. Reed
Executive directors
C. Reed (i)
Other executives
J. Carone (i)
Total
(i) Excludes shares issued subsequent to year end for performance rights that vested 30 June 2015.
78
Neometals Annual Report 2016
Notes to the consolidated financial statements (continued)FOR THE YEAR ENDED 30 JUNE 2016 28. Related party disclosures (continued)
Share options of Neometals Ltd
No options were issued to related parties during the current period (2015: nil).
Performance rights of Neometals Ltd
In the current reporting period the Company granted 3,363,638 (2015: 9,394,155) performance rights to
executives and KMP pursuant to the Company’s Performance Rights Plan.
Further details of the employee share option plan and of share options and performance rights granted
are contained in Note 8 to the financial statements.
Performance Rights granted to related parties
The following tables summarises information relevant to the current financial year in relation to the
grant of performance rights to KMP as part of their remuneration. Performance rights are issued by
Neometals Ltd.
Name
Grant date
No. granted
No. vested
Fair value at
grant date
Earliest
exercise date
Consideration
payable on
exercise
During the Financial Year
KMP:
J. Carone(1)
C. Reed(1)
M. Tamlin(1)
Total
09/10/2015
09/10/2015
21/01/2016
593,472
1,595,092
1,175,074
3,363,638
-
-
-
-
49,644
30/06/2017
133,429
127,081
310,154
30/06/2017
30/06/2017
-
-
-
-
(1)
The number of performance rights that will actually vest, if any, is determined by the Company’s performance
based on Neometals TSR compared to the comparative group of companies over the 2 year period as set out in
the relevant employee’s employment contract. At 30 June 2016 no employee had become entitled to securities
whose vesting conditions were the subject of the TSR criteria.
Details of performance rights held by KMP and of shares issued during the financial year as a result of
the vesting of performance rights:
Vested during
the financial
year
%
Forfeited/
lapsed during
the financial
year
%
Ordinary
shares issued
on exercise of
rights
$
Fair value
of rights at
grant date
$
53,205
12,851
42,007
101,312
49,644
133,429
127,081
Grant date
01/08/2012
07/10/2013
01/08/2014
01/08/2014
09/10/2015
09/10/2015
21/01/2016
No.
granted
295,584
1,098,369
2,813,239
6,580,916
593,472
1,595,092
1,175,074
49,274
1,098,369
2,813,239
-
-
-
-
519,529
14,151,746
3,960,882
KMP:
J. Carone(1)
J. Carone(2)
J. Carone(2)
C. Reed(1)
J. Carone(3)
C. Reed(3)
M. Tamlin(3)
Total
-
-
-
-
-
-
-
-
295,584
-
-
6,580,916
-
-
-
6,876,500
Annual Report 2016 Neometals
79
Notes to the consolidated financial statements (continued)FOR THE YEAR ENDED 30 JUNE 2016 Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
28. Related party disclosures (continued)
(1)
(2)
(3)
The number of performance rights that will actually vest, if any, is determined by the Company’s performance
based on Neometals TSR compared to the comparative group of companies over the 1 or 3 year period as set out
in the employee’s employment contract. As a result of the testing of the Company’s performance over this period
49,274 rights vested and 49,274 shares were issued on 21 January 2016.
The number of performance rights that will actually vest, if any, is determined by the Company’s performance
based on Neometals TSR compared to the comparative group of companies over the 2 or 3 year period as set out
in the employee’s employment contract. As a result of the testing of the Company’s performance over this period
3,911,608 rights vested and shares were issued on 13 July 2016.
The number of performance rights that will actually vest, if any, is determined by the Company’s performance
based on Neometals TSR compared to the comparative group of companies over the 2 year period as set out in
the relevant employee’s employment contract. At 30 June 2016 no employee had become entitled to securities
whose vesting conditions were the subject of the TSR criteria.
The performance rights granted entitle the grantee to one fully paid ordinary share in Neometals Ltd for
nil cash consideration on satisfaction of the vesting criteria.
d.
Other transactions with key management personnel
2016
$
2015
$
4,159
4,159
(42,721)
(42,721)
5,449
5,449
(272,055)
(272,055)
The loss from operations includes the following items of revenue and expense
that resulted from transactions other than compensation or equity holdings,
with Key Management Personnel or their related parties:
Interest income
Total recognised as income
Interest and fees expense
Total recognised as expenses
e.
Transactions with other related parties
Other related parties include:
• The parent entity;
• Associates;
• Joint ventures in which the entity is a venturer;
• Subsidiaries;
• Key Management Personnel of the Group;
• Former Key Management Personnel; and
• Other related parties.
Transactions involving the parent entity
The directors elected for wholly-owned Australian entities within the Group to be taxed as a single
entity from 1 July 2003.
The parent entity has loaned funds to subsidiaries. The loans totalled $1.1 million at 30 June 2016
(2015: $0.2 million) after recognising an impairment of $3.7 million (2015: $2.9 million) in the
current financial year. These loans are repayable on demand and are interest free.
No other transactions occurred during the financial year between entities in the wholly
owned Group.
80
Neometals Annual Report 2016
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
28. Related party disclosures (continued)
Transactions involving other related parties
In the 2012 financial year the Company provided a loan to Mr. C Reed of $150,000 at a commercial
interest rate of 7.2%. The interest rate is subsequently adjusted in line with changes to the official
cash rate announced by the Reserve Bank of Australia (“RBA”) from time to time. The facility was an
interest only loan until March 2013 at which time repayments of principal and interest commenced.
During the year, the remaining balance of the loan has been repaid to $90,000. Post balance sheet
date the remaining balance of the loan has been repaid to $45,000 with an extended repayment date
to 31 December 2016. Loan interest charged for the period totalled $4,159 (2015: 5,449).
On 18 November 2015 Mr David Reed elected to convert the 2 million convertible notes into
50 million ordinary shares in the company. Refer to note 17 for further details.
f.
Controlling entities
The ultimate parent entity of the Group is Neometals Ltd, a company incorporated and domiciled
in Australia.
29. Notes to the statement of cash flows
a.
Reconciliation of cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents
includes cash on hand and in banks and investments in money market
instruments, net of outstanding bank overdrafts. Cash and cash equivalents
at the end of the financial year as shown in the Cash Flow Statement is
reconciled to the related items in the statement of financial position as
follows:
Cash and cash equivalents
Cash and cash equivalents included in a disposal group
2016
$
2015
$
73,223,833
1,004,888
74,228,721
1,442,648
-
1,442,648
b.
Funds not available for use
Restrictions exist on bank deposits with a total value of $5,025,000. Deposits are classified as
financial assets (see Note 12).
Of the $5,025,000 held in restricted bank deposits $5,000,000 is held as security in relation to an
unconditional performance bond issued by the National Australia Bank in favour of the Minister for
State Development and DBNGP (WA) Transmission Pty Ltd. In addition, the Group has $25,000 on
deposit as security for a rental bond relating to its leased business premises.
Annual Report 2016 Neometals
81
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
29. Notes to the statement of cash flows (continued)
c.
Reconciliation of profit / (loss) for the period to net cash flows from operating activities
Profit / (loss) for the period
Profit on deconsolidation of subsidiary
Loss on disposal/lapse of financial assets
Share of equity accounted entity’s loss
Gain on sale of subsidiary presented as investing in cashflow
Fair value gains on available-for-sale investments
Interest received on investments
Costs of borrowing
Depreciation and amortisation of non-current assets
Equity settled share-based payment
Net foreign exchange (gain) / loss
Exploration and evaluation expenditure write off
Loss on assets scrapped
Impairment of non-current assets
(Increase) / decrease in assets:
Current receivables
Other
Increase / (decrease) in liabilities:
Current payables
Current borrowings
Provisions
2016
$
2015
$
85,408,217
(10,314,405)
(188,806)
-
33,318
(88,282,429)
(1,145,625)
(671,240)
229,464
41,739
170,652
(101,078)
-
14,274
13,831
930,505
297,372
(297,957)
(1,918,640)
(115,017)
-
40,000
398,240
-
-
(296,366)
337,898
43,747
140,824
-
392,221
-
1,252,915
(202,503)
-
520,848
-
4,770,744
Net Cash generated from / (used) in operating activities
(5,581,420)
(2,915,837)
30. Financial instruments
a.
Financial risk management objectives
The Consolidated Entity does not enter into or trade financial instruments, including derivative
financial instruments, for speculative purposes.
b.
Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria
for recognition, the basis of measurement and the basis on which income and expenses are
recognised, in respect of each class of financial asset, financial liability and equity instrument
are disclosed in Note 2 to the financial statements.
82
Neometals Annual Report 2016
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
30. Financial instruments (continued)
c.
Interest rate risk
The following tables detail the Group’s exposure to interest rate risk:
Weighted
average
effective
interest rate
%
Variable
interest
rate
%
Maturity dates
Less than
1 year
$
1-5
years
$
More than
5 years
$
Non interest
bearing
$
Total
$
2.30
0.03
3.01
2.95
4.45
-
-
- 71,588,409
2,640,160
5,000,000
25,000
-
-
-
-
-
-
-
90,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
152
71,588,561
-
-
-
2,640,160
5,000,000
25,000
553,751
643,751
578,873
578,873
-
-
2016
Financial assets:
Cash and cash
equivalents AUD
Cash and cash
equivalents USD
Barrambie Gas
term deposit (i)
Bond term deposits (i)
Trade and other
receivables
Financial liabilities:
Trade payables
Convertible note
(i)
The balances represent two term deposits that are restricted in their use and are classified in the current
reporting period other financial assets. Additional information on all other term deposits is provided at Notes
12 and 29(b). The financial assets have contractual maturities of less than one year, however they are classified
as non-current in the statement of financial position as they are not accessible to the Group due to restrictions
placed on accessing the funds.
Weighted
average
effective
interest rate
%
Variable
interest
rate
%
Maturity dates
Less than
1 year
$
1-5
years
$
More than
5 years
$
Non interest
bearing
$
Total
$
2.60
3.19
3.14
-
-
11.34
-
-
-
-
-
-
1,442,496
6,000,000
95,000
-
-
1,918,640
-
-
-
-
-
-
-
-
-
-
-
-
152
1,442,648
-
-
-
6,000,000
95,000
-
894,708
894,708
-
-
2015
Financial assets:
Cash and cash
equivalents
Barrambie Gas
term deposit (i)
Bond term deposits (i)
Trade and other
receivables
Financial liabilities:
Trade payables
Convertible note
Annual Report 2016 Neometals
83
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
30. Financial instruments (continued)
(i)
The balances represent two term deposits that are restricted in their use and are classified in the current
reporting period other financial assets. Additional information on all other term deposits is provided at Notes
12 and 29(b). The financial assets have contractual maturities of less than one year, however they are classified
as non-current in the statement of financial position as they are not accessible to the Group due to restrictions
placed on accessing the funds.
d.
Credit risk management
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in
financial loss to the consolidated entity. The consolidated entity has adopted a policy of only dealing
with credit-worthy counterparties and obtaining sufficient collateral where appropriate as a means
of mitigating the risk of financial loss from defaults. The consolidated entity exposure and the credit
ratings of its counterparties are continuously monitored and the aggregate value of transactions
concluded is spread amongst approved counterparties.
The consolidated entity does not have any significant credit risk exposure to any single counterparty
or any group of counterparties having similar characteristics. The credit risk on liquid funds is
limited because the counterparties are banks with high credit-ratings assigned by international
credit-rating agencies.
e.
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the board of directors, who have
built an appropriate liquidity risk management framework for the management of the Group’s
short, medium and long-term funding and liquidity management requirements. The Group
manages liquidity risk by maintaining adequate reserves and banking facilities, and by continuously
monitoring forecast and actual cash flows and matching the maturity profiles of financial assets
and liabilities.
In addition to financial liabilities in note 15, the Company is required to meet minimum spend
commitments to maintain the tenure over the Company’s mineral exploration areas as described in
note 22.
f.
Fair value
The carrying amount of financial assets and financial liabilities recorded in the financial statements
approximates their respective net fair values.
g.
Commodity price risk
The Group is exposed commodity price risk. These commodity prices can be volatile and are
influenced by factors beyond the Group’s control. No hedging or derivative transactions have been
used to manage commodity price risk.
h.
Capital management
The board’s policy is to endeavour to maintain a strong capital base so as to maintain investor,
creditor and market confidence and to sustain future development of the business. The Group
sources any additional funding requirements from either debt or equity markets depending on the
market conditions at the time the funds are sourced and the purpose for which the funds are to be
used. The Group is not subject to externally imposed capital requirements.
84
Neometals Annual Report 2016
Notes to the consolidated financial statements (continued)
FOR THE YEAR ENDED 30 JUNE 2016
30. Financial instruments (continued)
i.
Interest rate risk management
The Group is exposed to interest rate risk as the Group has funds on deposit as security for the
head office lease and the Barrambie Gas Pty Ltd onerous contract outlined at Note 15. The Group’s
financial borrowings (motor vehicle hire purchase lease) are not subject to interest rate risk as the
rate is fixed at time of entering into the financing agreement.
The sensitivity analysis below has been calculated based on the exposure to interest rates at the
end of the reporting period. A 50 basis point increase and decrease has been used when reporting
the interest rate risk and represents management’s assessment of the potential change in interest
rates.
If interest rates had been 50 basis points higher/lower and all other variables were held constant,
the Group’s profit for the year ended 30 June 2016 would decrease/increase by $396,269 (2015:
decrease/increase $37,687). This is mainly attributable to the Group’s exposure to interest rates on
the maturity of its term deposits.
31. Contingent liabilities
At note 31 to the Annual Financial Report for the financial year ended 30 June 2015, the Company advised
that it had been named in an action in a foreign court for $480,000. This action has since been resolved at
no cost to the company and the action discontinued.
At note 11 to the Half Year Report for the six months ended 31 December 2015 the company advised that it
had received a claim for an introduction fee in relation to the Ganfeng transaction that took place during
the half year ended 31 December 2015. The claim was for $2.3M and an offtake commission of 2% of the
free on board price received from Ganfeng for the shipment of spodumene from the Mt Marion project.
As advised at the Half Year the Company absolutely denies liability and believes the claim to not have
merit. In April 2016 the Company responded to the claim accordingly and there has not been any further
correspondence since. Accordingly, the Directors have not raised a provision in the accounts.
32. Events after the reporting period
On 11 August 2016 the Company declared an unfranked dividend of 2 cents per share, to holders of
ordinary shares registered at 5.00pm WST on 17 August 2016. The dividend was paid on 26 August 2016.
In March 2016 the Company agreed to divest its Reed Exploration Pty Ltd Nickel Projects by way of a
sale of the subsidiary that owns the project, Reed Exploration Pty Ltd, to Hannans Limited. A binding
share sale agreement was executed on 10 August 2016 and completion, which is subject to a number of
conditions precedent, is expected to occur late September 2016.
Annual Report 2016 Neometals
85
Additional stock exchange information
AS OF 30 SEPTEMBER 2016
Ordinary fully paid shares
Top Holders Snapshot
Rank
Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
MELAID HOLDING INC
MR DAVID JOHN REED
TRUCKING NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
ZERO NOMINEES PTY LTD
TRUCKING NOMINEES PTY LTD (D J REED SUPER FUND A/C)
J P MORGAN NOMINEES AUSTRALIA LIMITED
MR KENNETH JOSEPH HALL (HALL PARK A/C)
BOND STREET CUSTODIANS LIMITED (HP0DHH - V04614 A/C)
WESTERN MINING CORPORATION PTY LIMITED (TWO BOYS A/C)
DYNAMIC SUPPLIES INVESTMENTS PTY LTD
MR ALEXANDER FAIRBAIRN RUSSELL
PENSKE HOLDINGS PTY LTD (CARONE FAMILY A/C)
TERAN NOMINEES PTY LTD
LINFOOT ONE SUPER PTY LTD (LINFOOT SUPER PLAN NO 1 A/C)
BNP PARIBAS NOMS PTY LTD (DRP)
ROBMOB PTY LTD (ROBINSON SUPER FUND A/C)
MS KERRY ANNE PURCELL
MR HUNG CHI DUONG
Units
36,684,200
31,801,674
21,272,310
17,994,662
17,873,245
15,295,959
10,610,049
10,603,392
10,000,000
6,929,711
6,758,862
5,000,000
4,210,796
4,207,192
4,154,325
4,073,000
3,648,986
3,500,000
3,361,442
3,000,000
% of
Units
6.52
5.65
3.78
3.20
3.17
2.72
1.88
1.88
1.78
1.23
1.20
0.89
0.75
0.75
0.74
0.72
0.65
0.62
0.60
0.53
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES
220,979,805
39.25
86
Neometals Annual Report 2016
Additional stock exchange information (continued)
AS OF 30 SEPTEMBER 2016
Distribution of Equity Securities
Analysis of number of equity security holders by size of holding:-
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 9,999,999,999
Rounding
Total
Unmarketable parcels*
Total holders
424
1,473
1,050
2,578
632
6,157
675
*Minimum $ 500.00 parcel at $ 0.325 per unit
Substantial Holders
Substantial holders in the Company are set out below:
Ordinary Shares
David Reed
Melaid Holding Inc
Voting Rights
Number Held
65,221,259
36,684,200
Percentage
11.67%
6.52%
The voting rights attaching to ordinary shares are set out below:
On a show of hands every member present at a meeting in person or by proxy shall have one vote and
upon a poll each share shall have one vote.
Other
Registers of Securities are held at the following addresses:
Level 1, 672 Murray Street, West Perth, Western Australia 6005.
Annual Report 2016 Neometals
87
Additional stock exchange information (continued)
AS OF 30 SEPTEMBER 2016
As at 30 September 2016 the Company has an interest in the following projects and tenements in
Western Australia.
Project Name
Licence name
Beneficial interest
Status
Barrambie
Barrambie
Barrambie
Barrambie
Barrambie
Barrambie
Mount Marion
Mount Marion
Mount Marion
Mount Marion
Mount Marion
Mount Marion
Mount Marion
Mount Marion
Mount Marion
Mount Marion
E57/769
E57/770
E57/1041
L57/30
L20/55
M57/173
L15/315
L15/316
L15/317
L15/321
L15/0220
M15/999
M15/1000
M15/717
E15/1496
E15/1504
100%
100%
100%
100%
100%
100%
13.8% (*)
13.8% (*)
13.8% (*)
13.8% (*)
13.8% (*)
13.8% (*)
13.8% (*)
13.8% (*)
13.8% (*)
13.8% (*)
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
* registered holder is Reed Industrial Minerals Pty Ltd (Neometals Ltd 13.8%, Mineral Resources Ltd 43.1%,
Jiangxi Ganfeng Lithium Co Ltd 43.1%).
88
Neometals Annual Report 2016
ACN: 099 116 631
ABN: 89 099 116 631
Registered Office
Level 1, 672 Murray Street
West Perth WA 6005
Contact Details
Telephone (+618) 9322 1182
Facsimile (+618) 9321 0556