Annual Report 2018
Table of Contents
Corporate Directory .............................................................................................................................. ii
Review of Operations .......................................................................................................................... iii
Mineral Resource Statement .............................................................................................................. xx
Directors’ Report ................................................................................................................................. 4
Auditor’s Independence Declaration ...................................................................................................17
Consolidated Statement of Profit or Loss and Other Comprehensive Income ....................................18
Consolidated Statement of Financial Position ....................................................................................19
Consolidated Statement of Changes in Equity ...................................................................................20
Consolidated Statement of Cashflows ................................................................................................22
Notes to the Financial Statements ......................................................................................................23
Directors’ Declaration .........................................................................................................................63
Independent Auditor’s Report .............................................................................................................64
Corporate Governance Statement ......................................................................................................71
Additional Information ........................................................................................................................81
i
Corporate Directory
Directors
Mr Evan Cranston (Executive Chairman)
Mr Patrick Walta (Managing Director)
Mr Tolga Kumova (Executive Director)
Mr Tom Eadie (Non-Executive Director)
Mr Bryn Hardcastle (Non-Executive Director)
Mr Peter Watson (Non-Executive Director)
Company Secretary
Ms Oonagh Malone
Principal Place of Business and Registered Office
Level 4, 360 Collins Street
Melbourne VIC 3000
Australia
Contact Details
Telephone: +61 3 9070 3300
Email: info@newcenturyresources.com
Web: www.newcenturyresources.com
Stock Exchange
ASX Code: NCZ
Home Office: Perth
Country of Incorporation and Domicile
Australia
Share Registry
Automic
Level 5, 126 Philip Street
Sydney NSW
Telephone: 1300 288 664 (Australia)
+61 2 9698 5414 (international)
ii
Key Achievements
• Century Tailings Deposit infill drilling program completed with major September 2017
Resource increase achieved:
Resource upgrade to 78.9Mt at 3.02% zinc, 0.47% lead & 12.4g/t silver for a total
contained metal of 2,380,000t Zn, 370,000t Pb & 31,500,000oz Ag
• 98% conversion of September 2017 Tailings Resource to Proven Ore Reserve of 77.3Mt at
3.1% ZnEq in November 2017
• Upgrade of in-situ Mineral Resource base for the Century Mine:
South Block Indicated Mineral Resource 6.1Mt at 6.8% Zn+Pb (5.3% Zn, 1.5% Pb, 43g/t Ag);
containing 322,000t zinc, 90,000t lead and 8.5Moz silver.
Total Indicated and Inferred Mineral Resources (including South Block) now 9.3Mt at 10.8%
Zn+Pb (6.1% Zn, 4.7% Pb, 66g/t Ag); containing 568,000t zinc, 433,000t lead and 19.9Moz
silver.
• Outstanding feasibility results for the Century Mine restart
• Execution of long term offtake concentrate agreements totalling ~80% of production
• Key contracts for power, gas supply, hydraulic mining, operations and maintenance
successfully executed
• Start-up of operations achieved with load commissioning and operational ramp up underway
• Successful operation of concentrate slurry pipeline and stockpiling of zinc concentrate at
Karumba Port facility
• Refurbishment of MV Wunma and first shipment of zinc concentrate made from Karumba Port
• Expansion Pre-Feasibility Study underway to assess potential for near term development of
in-situ Mineral Resources
• Exploration program commenced with IP survey underway and drill program targeted for early
2019
• 100% ownership of Century Zinc Mine following acquisition of Century Bull Pty Ltd
• Landmark Indigenous Training Contract awarded to Waanyi Downer Joint Venture
• Significant Cultural Heritage Agreement signed to allow potential development of South Block
Mineral Resource
iii
Review of Operations
Following Shareholder approval on 31 May 2017 of the acquisition of the Century Zinc Mine and all
associated infrastructure, including the Karumba Port Facility, New Century Resources Limited
recommenced trading on the ASX on 20 July 2017 under the new ASX code NCZ.
In just over a year since the acquisition of the mothballed Century Zinc Mine, New Century Resources
has undertaken a restart feasibility study, engaged with key business partners, built up a strong team
of dedicated individuals and successfully re-commissioned the Century Zinc Mine, with the loading of
the first shipment of zinc concentrate achieved on 29 October 2018.
The Directors of New Century Resources are pleased to present a summary of the operations to
Shareholders.
Century Tailings Deposit Resource Upgrade
In July 2017, the Company commenced an infill drilling program over the Century Tailings Deposit
targeting an upgrade in the confidence level of the existing resource base to an Indicated Resource
level at a minimum.
The previously reported estimate for the Century Tailings Deposit was an Indicated Resource of
12.8Mt at 2.97% zinc and an Inferred Resource of 58.2Mt at 2.68% zinc for a total 71Mt at 2.73% zinc
(1,940,000t of contained zinc metal).
The results of the drilling program are shown in Figure 1, which also includes previous drilling
programs over the Deposit. Cross sections through the drilling (see Figures 2 to 5) demonstrate the
vertical and lateral consistency of zinc grades across the tailings dam, in addition to the continued
observation of higher grades compared with the previously reported Mineral Resource. These cross
sections also demonstrate strong consistency between the results of the 2015 and 2017 drilling
programs. A vertical exaggeration of 20:1 has been applied to all cross sections for the purpose of
grade interpretation at the metre scale. All holes drilled in 2017 were at 125m grid spacing.
Based on the drilling program, on 12 September 2017, New Century announced the results of the new
independently estimated Mineral Resource for the Century Tailings Deposit. The upgraded Mineral
Resource was estimated by Optiro Pty Ltd which had also been responsible for the previous estimate
for the Deposit.
Table 1: September 2017 JORC Code 2012 compliant Mineral Resource estimate for the
Century Tailings Deposit
Resource Category
Tonnes
(Mt)
Zinc
(%)
Lead
(%)
Silver
(g/t)
Metal Content
Measured
78.9
3.02
0.47
12.4
2,380,000t zinc
370,000t lead
31,500,000oz silver
iv
Figure 1: Plan view of the Century Tailings Deposit showing drilling programs
The Mineral Resource has been classified as Measured in accordance with the JORC Code (2012) due
to the low variability and high confidence in all of the variables estimated. Furthermore, the
comparison of the new Century Tailings Deposit block model grades (per year and per estimation
domain) against the tailings stream grades from historical operations, representing many thousands
of individual shift composite assays taken over the life of the mine, shows an overall difference of
only 6%, well within the margin of error normally expected for a Measured Resource.
As shown in Figure 1, the entire Century Tailings Deposit is consistently mineralised, with a notable
higher grade weighting toward the south-eastern corner of the Deposit. This is also the thickest part
of the Deposit, with holes averaging ~20m depth, compared to a 13m Deposit average.
v
Figure 2: Cross section B-B’ of the Century Tailings Deposit
Figure 3: Cross section C-C’ of the Century Tailings Deposit
Figure 4: Cross section A-A’ of the Century Tailings Deposit (see Figure 5 for zoom in of the 2015 Century
Tailings Deposit drilling program)
vi
Figure 5: Zoom in of the 2015 Century Tailings Deposit drilling program (from Figure 4)
vii
Restart Feasibility Study
On 2 August 2017, the Company announced the award of the Century Tailings Restart Feasibility Study
(RFS) to Sedgman, a member of the CIMIC Group (ASX:CIM). The RFS focused on the rapid restart of
operations at the Century Zinc Mine via the initial reprocessing of substantial tailings resources at
the site.
Outstanding results for the RFS were announced on 28 November 2017 and included detailed
economic analysis on a large scale tailings reprocessing operation utilising the significant existing
infrastructure located on site at the Century Zinc Mine.
Based on the proposed production profile, New Century estimates Century will be one of the top 10
zinc operations in the world, with steady state production forecasted at 507,000tpa of zinc
concentrate at 52% zinc (264,000tpa zinc metal) over an initial 6.3 year mine life from the Century
Tailings Deposit only.
The Company considers the restart of Century to have excellent commercial fundamentals,
generating over A$1,760 million in free cashflow over the initial tailings operations of 6.3 years. The
projected NPV8 of the project (post tax) is A$1,308 million with an IRR of 270%.
All base case financial analyses were performed at a long term zinc price assumption of US$1.25/lb
(US$2,755/t), which was based on the Bloomberg consensus median forecasts from independent
analysts for 2018.
Sensitivity and scenario analysis have also been performed on the most influential variables for the
proposed operations. The results of these analyses demonstrate the operations will be most sensitive
to fluctuations in the zinc price, foreign exchange rate and metallurgical recovery.
Table 2: Restart Feasibility Study summary
Technical Parameters
Financial Parameters2
Design Production
(dry metric tonnes)1
507,000tpa zinc concentrate
(264,000tpa zinc metal)
Proven Ore Reserve
77.3Mt at 3.1% ZnEq5
Conc. Grade1
(LOM average)
52% zinc & 187g/t silver
NPV8
(Post-tax)
IRR
(Post-tax)
EBITDA
(LOM avg p.a.)
Base Case Zinc
US$1.25/lb
Optimistic Zinc
US$1.50/lb
A$1,308M
A$1,729M
270%
350%
A$449M
A$579M
Design Throughput1
15Mtpa
Total Free Cashflow
A$1,764M
A$2,325M
Mine Life
(Tailings Only)
6.3 years
Capital Costs
First Production
Q3 2018
Operating Costs
(LOM average)
Start Up Capital: A$50M
Ramp Up Capital: A$63M
C1: US$0.38/lb payable3
C3: US$0.50/lb payable4
Table 2 Notes:
1.
2.
3.
4.
Throughput, Design Production and Concentrate Grade represent the average steady state values following initial operational ramp up period
(approximately 15 months).
Long term Base Case exchange rate and commodity pricing assumptions are based on Bloomberg consensus median forecasts from independent
analysts for the year 2018. Long term AUD/USD FX 0.75, and long term commodity prices of US$2,755/t zinc, US$17.8/oz silver.
C1 is defined as direct cash operating costs produced, net of by-product credits, divided by the amount of payable zinc produced. Direct cash
operating costs include all mining, processing, transport, treatment & refining costs and smelter recovery deductions through to refined metal.
C3 cost includes C1 costs, plus depreciation, indirect costs and royalties.
viii
5.
ZnEq was calculated for each block of the Century Tailings Deposit from the estimated block grades. The ZnEq calculation takes into account,
recoveries, payability (including transport and refining charges) and metal prices in generating a zinc equivalent value for each block grade for
Ag and Zn. ZnEq = Zn%+ + Ag troy oz/t*0.002573. Metal prices used in the calculation are: Zn US$3,000/t, and Ag US$17.50/troy oz.
The forecast start-up capital was estimated at A$50 million (including A$2.8 million contingency) to
first production at an initial throughput rate of 8Mpta. Once in production, further ramp up capital
of A$63 million is planned to be invested over a 15 month period (for a total capital requirement of
A$113 million) to bring the operation into full production at 15Mtpa.
Based on the operating cost estimates, New Century has also forecast operations from the Century
Tailings Deposit to be the one of the lowest cost primary zinc operations in the world, with Life-of-
Mine C1 costs at US$0.38/lb and C3 costs at US$0.50/lb.
As a key outcome of the RFS, the Company declared a Proved Ore Reserve of 77.3Mt at 3.1% ZnEq
(3.0% zinc and 12g/t silver) for the Century Tailings Deposit, representing a 98% conversion from the
previous Measured Resource.
Based on these results, the New Century Board approved the immediate progression to the
construction, refurbishment and re-commissioning phase.
Upgrade of In-situ Mineral Resource Base for the Century Mine with inclusion of South
Block Resource
On 15 January 2018, the Company announced the completion of resource estimation over the South
Block mineralisation at the Century Zinc Mine.
Table 3: January 2018 JORC Compliant Mineral Resources including new estimate for South Block
(excluding Ore Reserves, rounding errors apply)
Deposit
South Block
(Indicated)
Silver King
(Inferred)
East Fault Block
(Inferred)
Tonnes
(Mt)
Zn (%)
Pb (%)
Ag (g/t)
Zn (t)
Pb (t)
Ag (Oz)
6.1
5.3
1.5
43
322,000
90,000
8,550,000
2.7
6.9
12.5
120
186,000
337,500
10,500,000
0.5
11.6
1.1
48
60,000
5,500
800,000
TOTAL
9.3
6.1
4.7
66
568,000
433,000
19,850,000
The South Block Indicated Mineral Resource complements previously estimated in-situ Inferred
Mineral Resources at Silver King and East Fault Block, demonstrating the significant upside for
operations beyond the Proven Ore Reserve of the Century Tailings Deposit.
South Block is located on the southernmost portion of the original Century ore body and directly
adjacent to the existing Century Processing Plant (Figures 6 and 7). The remaining Century-style Zn-
Pb-Ag mineralisation in South Block is tabular in geometry and measures approximately 1,000m in
ix
length, 115m in width and is up to 30m thick. Mineralisation is encountered 21m below surface at
the western extent, and is exposed in the southern pit wall.
Figure 6: Location of the South Block Mineral Resource
Figure 7: View facing West of the South Block Mineral Resource
As part of the South Block Mineral Resource estimation, diamond drilling was completed to obtain
representative samples to support quality assurance and quality control checks of historic drilling.
The program consisted of two diamond drill holes through the central region of the deposit. The
samples were used to locally validate the Indicated Mineral Resource estimate, and provide
representative sample for metallurgical test work and metal recovery assumptions.
x
The results of the program confirmed the presence of a continuation of the original Century style
‘Big Zinc’ mineralisation in the South Block area. The results also compared well with historical
drilling assays, and model estimates, in those areas of the mineralisation.
Drill hole spacing across the deposit is approximately 45m which is considered sufficient to give high
confidence in the geological model in defining both the mode, and extents, of mineralisation.
The South Block Indicated Mineral Resource was reported at a 3.0% zinc equivalence (ZnEq) Cut-off
grade. This value is considered to represent contiguous mineralisation above which grade there is
reasonable potential for economic recovery.
While South Block represents a continuation of the historical Big Zinc ore body, which was successfully
mined and processed for over 16 years, New Century elected to complete metallurgical testwork on
the drilling samples for confirmation of historical performance and potential areas of recovery
optimistation.
Preliminary testwork completed has been positive, with the New Century metallurgical team
confirming South Block will be suitable for processing via the existing plant configuration at the Mine.
This includes the requirement for utilistion of the existing carbon pre-float circuit of the plant, which
allows for the initial removal of carbon prior to lead then zinc flotation, ensuring target concentrate
grades are maintained.
Figure 8: Progressive flotation of the South Block ore samples, with upfront carbon pre-float (left) followed by lead
concentrate flotation (middle) and final zinc concentrate flotation (right)
South Block Agreements with Waanyi People
On 6 September 2017, the Company announced a Collaboration Agreement with the Waanyi Downer
Joint Venture (WDJV) to assess the feasibility of open cut mining operations at the Century Zinc
Mine, centred around the South Block Indicated Mineral Resource.
The WDJV is a 50:50 joint venture between Waanyi Enterprises Pty Ltd and Downer EDI Mining Pty
Ltd, representing the interests of both the Waanyi People (Traditional Owners of the Century Mining
Lease area) and Downer Group’s Mining Services Division. The WDJV is Chaired by Mr Warren Mundine,
former Head of the Prime Minister’s Indigenous Advisory Council.
As part of the Collaboration Agreement, New Century engaged the WDJV to carry out an initial
assessment of mine design, engineering and costings for the development of South Block.
xi
This initial assessment has demonstrated the potential for inclusion of South Block into the planned
operations of the Mine. The results of this mining assessment will be utilised as the basis for New
Century's Expansion Pre-Feasibility Study.
The Collaboration Agreement also provides for the potential future mining operations to be
conducted by the WDJV, pending the outcome of the feasibility work and commercial discussions.
The Company executed a Cultural Heritage Management Plan (CHMP) with the Waanyi Registered
Native Title Body Corporate (Waanyi PBC) in May 2018, providing Traditional Owner consent required
for potential development of the South Block Mineral Resource.
The CHMP is an instrument under Queensland’s Aboriginal Cultural Heritage Act (2003). The
compensation arrangements associated with the CHMP provide ongoing direct benefits to the Waanyi
People, with the parties also signing a Mining Services Agreement (MSA) with the WDJV to undertake
works associated the mining of South Block.
The WDJV has already been actively engaged at the Century Mine through ongoing care and
maintenance works and delivery of training and development programs for local Indigenous Peoples.
The incorporation of the MSA within the compensation arrangements for a CHMP is a first for the
mining industry and provides a viable mechanism to properly recognise the significant value of
Indigenous Cultural Heritage, while also empowering Traditional Owner communities with mining
developments occurring within their traditional lands.
Offtake Agreements Totalling 80% of Initial Production
The Company has executed long term offtake agreements for zinc concentrate with Mercuria Energy
Trading SA, Transamine Trading SA, Nyrstar Sales & Marketing AG, MRI Trading AG and Concord
Resources Limited.
The execution of these offtake results from New Century’s concentrate tender process, which was
initiated in Q4 2017. The tender process received strong participation from both zinc smelters and
commodity traders alike, with 11 interested parties submitting indicative offers.
The total tender offering was for up to 1.5Mt of zinc concentrate from the Century Zinc Mine,
representing production from approximately the first 3.5 years of operations. The five offtakes have
resulted in New Century contracting approximately 80% of its scheduled initial production for the
first 3.5 years of operations.
In addition to the offtake agreements, the Company has successfully sold 30,000t of commissioning
grade concentrate.
Operations Underway at Century
On 9 August 2018, the Company announced the successful initiation of mining at the Century Zinc
Mine, with the operations moving into the load commissioning phase following successful completion
of refurbishment and dry commissioning. A summary of progress is provided below.
xii
Hydraulic Mining Operational Ramp-up Progress
• Hydraulic mining operations began in early August 2018 with progressive load commissioning.
• Good progress has been made to date, with material improvements made to mechanical and
electrical availability, operator competence and overall mining rate.
• Ramp up activities for hydraulic mining are nearing nameplate for Phase 1 operations.
• Several material downtime events restricted mining operations for the first half of October;
however record daily hydraulic mining rates were achieved during the second half of the month.
• Hydraulic mining activities have now moved from the ‘main launder trench’ into the first ‘mining
block’ at full face heights.
During October 2018, the hydraulic mining operations achieved another milestone by moving into the
first ‘mining block’ of the Century Tailings Deposit. Operations to date had focused on creation of
the first part of the ‘main launder trench’ down to a full face height, which feeds the slurry winning
pontoon and delivers tailings ore to the processing plant. Mining block operations reduce the number
of pipe movements required during operations, allow for larger cuts to be taken and will allow for
further mining rate optimisation via improved consistency of high slurry density being delivered to
the plant.
October has also seen a continued focus by New Century’s hydraulic mining partners, NPE & Paragon
Tailings, on improving pumping facility and associated infrastructure reliability, introducing several
areas of automation and rectifying commissioning issues identified during initial operations.
Focus for the hydraulic mining operations remains on maintaining consistent uptime, steady state
feed density and a feed rate of 8.0Mtpa+ into the processing plant.
Mining
Main Launder
Trench
Figure 9: Century Tailings Deposit mining plan through to the end of 2019
xiii
Processing Plant Highlights
• Processing plant operations have progressed in line with supply from hydraulic mining, with the
majority of activities being initiated in early September 2018.
• Production of 7,000t of concentrate was achieved for the September quarter 2018.
• The plant commissioning process, only in its second month, has made good progress with:
o Primary grinding performing to expectations, with a closed circuit implemented, reduced
spigot size on the cyclones and achieving reduced downtime associated with mill trips
compared to September;
o Rougher/scavenger circuit performing well with flotation performance in excess of 80% of
nameplate metal recovery for the circuit (i.e. 55% - 60% recovery of total zinc into the
rougher concentrate reporting to the cleaning circuit);
o Concentrate regrind mills performing to expectations with excess capacity; and
o Cleaner circuit becoming the focus of the progressive load commissioning process, with the
Company having a clear plan of commissioning activities required to remove cleaner circuit
bottlenecks throughout the remainder of 2018.
• The plant commissioning process is anticipated to bring the strong flotation performance of the
rougher/scavenger circuit through the cleaning circuit over the remainder of Q4 2018.
• Continued steady state production of saleable concentrate with grades ranging 47-51% Zn, 6.0-
8.0% Pb and 3.0-6.5% SiO2.
• While all concentrate produced to date has been sold, the Company anticipates continued
improvement of concentrate product quality toward its long-term steady state specification in
line with recovery improvements throughout the circuit.
Figure 10: Flowsheet of operations at the Century Zinc Mine annotated for the performance of each unit process
during the course of the load commissioning process
xiv
Pipeline, Port, MV Wunma & Concentrate Sales Highlights
• Successful dredging program undertaken at Karumba.
• Refurbishment of the MV Wunma.
• Business milestone achieved via loading of the first concentrate parcel onto the MV Wunma as
part of the scheduled 10,000t of export shipment for October.
• Successful continuous operation of the slurry pipeline and only minor load commissioning works
ongoing within the port facility.
Figure 11: Reclaiming of stockpiled concentrate in the Karumba storage shed for loading onto the MV Wunma
Figure 12: MV Wunma loading its first concentrate parcel prior to transhipment onto the export vessel waiting in
the Gulf of Carpentaria. 10,000t of zinc concentrate is scheduled for first shipment.
xv
Expansion Pre-Feasibility Study
In April 2018, the Company commenced the Expansion Pre-Feasibility Study (PFS) to investigate the
incorporation of the existing in-situ Mineral Resources into the current tailings only mine plan.
New Century is currently executing Phase 1 of the recommencement of operations at Century. Phase
1 involves refurbishment of approximately half the existing Century Processing Plant, allowing for an
8Mtpa tailings reprocessing operation to occur.
As outlined in the Restart Feasibility Study, once operational at 8Mtpa, the operations are scheduled
to ramp-up in Phase 2 to 15Mtpa on tailings via refurbishment of the remainder of the Plant.
Figure 13: A proposed PFS flowsheet to be assessed (Blue Area: 8Mtpa capacity tailings reprocessing circuit,
Orange Area: Expansion to either 15Mtpa capacity tailings OR in-situ Resource processing circuit)
The Company is assessing the potential for an improved project value proposition via replacing the
Phase 2 expansion on tailings to instead utilise the Company’s current in-situ Mineral Resource base
located within the South Block, East Fault Block and Silver King Deposits.
New Century considers that the PFS has the potential to increase the tailings only 6.3 year mine life
and 264,000tpa full scale zinc metal production. Different blending strategies, as well as plant
configurations will be investigated to determine the optimum pathway for zinc and lead production
from the expanded operations.
The PFS is expected to be finalised by the end of Q4 2018. Once completed and released, the selected
mine plan and plant configuration from the PFS will form the basis of detailed design work. Pending
the successful outcome of this work, the selected flow sheet will then be progressively incorporated
into site operations.
xvi
Key Contracts Negotiated
During the year, the Company was pleased to announce the successful negotiation and execution of
a number of key contracts, including:
• Engineering, Procurement and Construction contracts with Sedgman Pty Ltd and Ausenco
Management Pty Ltd for the complete refurbishment and commissioning of operations associated
with the Processing Plant, Slurry Pipeline and Karumba Port Facility;
• Long term gas supply contract secured with Santos, with gas to be converted to electricity in Mt
Isa;
• Paragon Tailings Pty Ltd and National Pump & Energy Ltd appointed as joint bidder contractors
for the supply, operation and maintenance of Century’s hydraulic mining operations; and
• Operations & maintenance contract awarded to Sedgman Pty Ltd for the processing plant, slurry
pipeline and Karumba port facility for an initial period of 5 years.
Official Reopening of the Century Zinc Mine
On 14 September 2018, the official reopening of the Century Mine was marked with a formal event
on site, with the New Century team welcoming guests from state and federal government, the local
community, the investment community and the media.
The Company was particularly pleased to welcome Federal Minister for Resources and Northern
Australia, Senator the Honourable Matt Canavan, the Honourable Bob Katter MP, Robbie Katter MP,
local Mayors and representatives of the Waanyi community.
Figure 14: Century Mine opening ribbon cutting ceremony with (left to right) New Century Resources MD Patrick
Walta, the Honourable Bob Katter MP, Senator the Honourable Matt Canavan, Waanyi PBC Director Claudette
Albert, Burke Shire Council Mayor Ernie Camp and Waanyi Elder Barry Dick.
xvii
2018 Exploration IP Program Continuing
The Company has commenced its 2018 Exploration Program, with the focus being an Induced
Polarisation (IP) survey over a section of the Mining Lease considered prospective for further Century
style mineralisation.
Work completed to date will form the basis of target drilling in early 2019 on completion of the wet
season. New Century will provide an announcement on any material developments associated with
this IP program or drilling program when they becomes available.
Since acquiring the Project in March 2017, the New Century Exploration Team has reviewed
substantial historical data in order to assess the potential for further targeted exploration and
discovery of large scale sediment hosted ore bodies across the existing tenements.
As part of the historical review, New Century reviewed work completed by CRA/Rio Tinto, the
company responsible for the discovery of the original Century deposit. Of particular note was a case
study by CRA/Rio Tinto which demonstrated that the mineralisation associated with the Century ore
body responded to IP and this geophysical technique was the best method for identifying the host
rocks associated with the Century deposit.
Despite this observation, the New Century Exploration Team consider that IP has been relatively
under-utilised during historical exploration programs, particularly in areas where the Century horizon
is buried to a depth of less than 300m.
In addition to the IP program on the Mining Lease, there are four other areas which have been
selected for an extensive program of IP located on EPM10544 and share the characteristics of having
interpreted Century host rocks present at less than 300m depth, major fault structures either known
or interpreted (faults are perceived as the conduits for ore-forming fluids), and also have a degree
of cover that has limited past exploration.
Figure 15: Overview of Century tenements with 2018 exploration drilling and IP survey areas
xviii
Other Projects: Kodiak Coal Project (NCZ 70%)
The Kodiak Coal Project is currently on care and maintenance.
The Company continues to consider options with regards to the future of the Kodiak Coking Coal
Project in Alabama, USA, and is assessing options in relation to financing, joint venture opportunities
or a disposal of the asset.
xix
Mineral Resource Statement
The following information is provided in accordance with Listing Rule 5.21 and as at 30 June 2018.
Mineral Resource Estimation Governance Statement
New Century Resources Ltd ensures that the Mineral Resource estimates are subject to appropriate levels of
governance and internal controls. The Mineral Resources have been generated by independent external
consultants and internal employees who are experienced in best practices in modelling and estimation methods.
Where applicable, the consultants have also undertaken review of the quality and suitability of the underlying
information used to generate the resource estimations. The Mineral Resource estimates follow standard
industry methodology using geological interpretation and assay results from samples won through drilling.
New Century Resources reports its Mineral Resources in accordance with the “Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves” (the JORC Code) (2004 Edition). Competent
Persons named by the Company qualify as Competent Persons as defined in the JORC Code.
The tables below set out the Mineral Resources and Reserves for 2017 and 2018 for the Century Zinc Project in
Queensland. The Company advises that the material increase in 2018 arises from drill programs across the
Century Tailings Deposit and the South Block Deposit and from a conversion of resources to ore reserves as a
result of work completed as part of the Company’s Restart Feasibility Study.
Century Mine Resources and Reserves 2018 (rounding errors apply)
Mineral Resources
Tonnes
(Mt)
Zn (%)
Pb (%) Ag (g/t)
Zn (t)
Pb (t)
Ag (Oz)
South Block
(Indicated)
Silver King
(Inferred)
East Fault Block
(Inferred)
TOTAL
Ore Reserves
Century Tails
(Proved)
6.1
5.3
1.5
43
322,000
90,000
8,550,000
2.7
6.9
12.5
120
186,000
337,500
10,500,000
0.5
9.3
11.6
1.1
6.1
4.7
48
66
60,000
5,500
800,000
568,000
433,000
19,850,000
Tonnes
(Mt)
ZnEq
(%)
Zn (%)
Ag (g/t)
Zn (t)
Pb (t)
Ag (Oz)
77.3
3.1
3.0
12
2,287,662
-
29,734,819
Century Mine Resources 2017 (rounding errors apply)
Mineral Resources
Tonnes
(Mt)
Zn (%)
Pb (%) Ag (g/t)
Zn (t)
Pb (t)
Ag (Oz)
Century Tailings
(Indicated)
Century Tailings
(Inferred)
Silver King
(Inferred)
East Fault Block
(Inferred)
12.8
2.97
58.2
2.68
-
-
-
-
380,000
1,560,000
-
-
-
-
2.7
6.9
12.5
120
186,000
337,500
10,500,000
0.5
11.6
1.1
TOTAL
74.2
2.9
-
60,000
5,500
800,000
2,186,000
343,000
11,300,000
48
-
xx
The table below sets out Mineral Resources for 2017 and 2018 for the Kodiak Coking Coal Project in Alabama,
USA. There was no change between the two periods.
Kodiak Project Resources as at 30 June 2017 and at 30 June 2018 (rounding errors apply)
Coal Seam
Coke Seam, Gurnee Property
Atkins Seam, Gurnee Property
TOTAL
Measured
Resource
Indicated
Resource
Inferred
Resource
Total Resource
34.0Mt
37.6Mt
71.6Mt
3.2Mt
1.6Mt
4.8Mt
2.0Mt
-
2.0Mt
39.2Mt
39.2Mt
78.4Mt
Competent Persons’ Statements
The information in this announcement that relates to Mineral Resources on the Silver King Deposit and the East
Fault Block Deposit was first reported by the Company in its prospectus released to ASX on 20 June 2017, and
the South Block Deposit was first reported by the Company to ASX on 15 January 2018. The Company confirms
that it is not aware of any new information or data that materially affects the information included in the
original market announcements, and in the case of estimates of Mineral Resources, that all material
assumptions and technical parameters underpinning that estimates in the relevant market announcements
continue to apply and have not materially changed. The Company confirms that the form and context in which
the Competent Person’s findings are presented have not been materially modified from the original market
announcement.
The information in this announcement that relates to the Ore Reserve at the Century Tailings Deposit was first
reported by the Company in its ASX announcement titled "New Century Reports Outstanding Feasibility Results
that Confirm a Highly Profitable, Large Scale Production and Low Cost Operation for the Century Mine Restart"
dated 28 November 2017. The Company confirms that it is not aware of any new information or data that
materially affects the information included in the original market announcement, and in the case of estimates
of Mineral Resources or Ore Reserves, that all material assumptions and technical parameters underpinning the
estimates in the relevant market announcement continue to apply and have not materially changed. The
Company confirms that the form and context in which the Competent Person's findings are presented have not
been materially modified from the original market announcement.
The information in this report relating to Exploration Results and to JORC Compliant (Coal) Resources and
Reserves for the Coke and Atkins Seams on the Gurnee Property at the Kodiak Coking Coal Project, Alabama,
USA has been reviewed and is based on information compiled by Mr Alan Stagg of Stagg Resource Consultants
Inc. Mr Stagg is a Registered Member of the Society of Mining, Metallurgy, and Exploration, Inc. (SME),
registration number 3063550RM, and has sufficient experience which is relevant to the style of mineralisation
and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent
Person as defined in the 2004 Edition of the “Australian Code for Reporting of Mineral Resources and Ore
Reserves”. Mr Stagg consents to the inclusion in the report on the matters on this information in the form and
context in which it appears. The information in this report was first disclosed under the JORC Code 2004 on 8
October 2012, 12 October 2012, 27 November 2012, 19 March 2013, 6 August 2013 and 14 November 2013. It
has not been updated since to comply with the JORC 2012 on the basis that the information has not materially
changed since first being reported.
xxi
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
DIRECTORS' REPORT
The Directors present their report, together with the financial statements, on the consolidated entity (referred to
hereafter as the 'Group' or the ‘Consolidated Entity’) consisting of New Century Resources Limited (referred to
hereafter as ‘New Century Resources Limited’ or the 'Company') and the entities it controlled for the financial year
ended 30 June 2018.
Directors
The names of Directors who held office during or since the end of the financial year and until the date of this report are
set out below. Directors were in office for the entire period unless otherwise stated.
Evan Cranston
Tom Eadie
Bryn Hardcastle
Tolga Kumova
Oonagh Malone
Patrick Walta
Peter Watson
(appointed 13 July 2017)
(appointed 13 July 2017)
(resigned 13 July 2017)
(appointed 13 July 2017)
(appointed 22 January 2018)
Information on current directors
Evan Cranston, Executive Chairman (age 36)
Evan Cranston is an experienced mining executive with a background in corporate and mining law. He is the principal
of corporate advisory and administration firm Konkera Corporate and has extensive experience in the areas of equity
capital markets, corporate finance, structuring, asset acquisition, corporate governance and external stakeholder
relations. He holds both a Bachelor of Commerce and Bachelor of Laws from the University of Western Australia.
Mr Cranston was appointed to the Board on 10 October 2012 as an executive director. In April 2015, Mr Cranston
transitioned to a non-executive director role.
Mr Cranston was appointed as Executive Chairman on 13 July 2017.
Other current listed directorships
Former listed directorships in last 3 years
Carbine Resources Limited (from 23 March 2010)
Cradle Resources Limited (to 8 May 2016)
Boss Resources Limited (from 2 May 2012)
Primary Gold Limited (to 29 November 2017)
Clancy Exploration Ltd (to 1 December 2017)
Patrick Walta, Managing Director (age 36)
Patrick Walta is a qualified metallurgist, mineral economist and board executive with experience across both technical
and commercial roles within the mining and water treatment industries. Graduating from Melbourne University with
degrees in Chemical Engineering and Science, Mr Walta has gone on to complete postgraduate studies including an
MBA, Masters of Science (Mineral Economics) and a Diploma of Project Management.
Mr Walta's experience within the mining industry includes public and private company management, mineral
processing, mergers and acquisitions, initial public offerings, project management, feasibility studies, exploration
activities, competitive intelligence and strategic planning. Mr Walta also has a broad level of resource industry
experience through Rio Tinto, Citic Pacific Mining, Cradle Resources, Carbine Resources, Primary Gold and Clean TeQ.
Mr Walta was appointed to the Board on 13 July 2017.
Other current listed directorships
Nil
Former listed directorships in last 3 years
Carbine Resources Limited (to 13 April 2016)
Matador Mining Limited (to 3 July 2018)
Primary Gold Limited (to 31 May 2017)
4
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Tolga Kumova, Corporate Director (age 40)
Tolga Kumova has 15 years' experience in stockbroking, corporate finance and corporate restructuring, and has
specialised in initial public offerings and capital requirements of mining focused companies. He has raised in excess of
$500 million for mining ventures, varying from inception stage through to construction and development.
Mr Kumova was a founding shareholder of Syrah Resources in 2010 and served as an Executive Director from May
2013 to October 2016, and as Managing Director from October 2014 to October 2016. During his tenure at Syrah
Resources, Mr Kumova led the business from resource stage through to full funding through to development, gaining
experience negotiating offtake agreements with numerous globally recognised counterparties. Mr Kumova is currently
non-executive chairman of European Cobalt Ltd.
Mr Kumova was appointed to the Board on 13 July 2017.
Other current listed directorships
Former listed directorships in last 3 years
European Cobalt Ltd (from 29 May 2017)
Syrah Resources Limited (to 5 October 2016)
(Ernest) Tom Eadie, Non-Executive Director (age 64)
Tom Eadie is a well-credentialed mineral industry leader and explorer with broad experience in both the big end and
small end of town. He was the founding Chairman of Syrah Resources, Copper Strike and Discovery Nickel as well as
a founding Director of Royalco Resources. At Syrah, he was at the helm during acquisition, discovery and early
feasibility work of the huge Balama graphite deposit in Mozambique which started production in late 2017.
Copper Strike, where he was also Managing Director for 10 years, made several significant copper/gold and
lead/zinc/silver discoveries in North Queensland, and while at Discovery Nickel (later to be renamed Discovery
Metals), Mr Eadie assisted with gaining control of the Boseto copper deposit in Botswana. Prior to this, Mr Eadie was
Executive General Manager of Exploration and Technology at Pasminco Limited, at the time the largest zinc producer
in the world. This came after technical and later management responsibilities at Cominco and Aberfoyle in the 1980s.
Mr Eadie has a Bachelor of Science (Hons) in Geology and Geophysics from the University of British Columbia, a
Master of Science in Physics (Geophysics) from the University of Toronto and a Graduate Diploma in Applied Finance
and Investment from the Security Institute of Australia. He is a Fellow (and past board member) of the AusIMM.
Mr Eadie was appointed to the Board on 13 July 2017.
Other current listed directorships
Former listed directorships in last 3 years
Strandline Resources Limited (from 9 October 2015)
Copper Strike Ltd (to 6 September 2016)
Alderan Resources Limited (from 23 January 2017)
Hill End Gold Limited (from 4 July 2018)
Bryn Hardcastle, Non-Executive Director (age 39)
Bryn Hardcastle is Managing Partner of Perth-based law firm, Bellanhouse, specialising in corporate, commercial and
securities law. He advises on equity capital markets, takeovers & schemes and corporate acquisitions, reconstructions
and disposals predominantly in the energy and resources sector. Mr Hardcastle has previously worked in London,
Melbourne and Dubai at Freehills and Allen & Overy and is a former partner of Perth boutique law firm, Hardy Bowen
Lawyers.
Mr Hardcastle was appointed to the Board on 8 December 2011.
Other current listed directorships
Former listed directorships in last 3 years
Nil
Flamingo Ai Limited (formerly Cre8tek Limited)
(to 27 August 2018)
ServTech Global Holdings Ltd (to 22 November 2017)
Vysarn Limited (formerly MHM Metals Limited)
(to 27 October 2017)
5
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Peter Watson, Non-Executive Director (age 56)
Peter Watson is a chemical engineer with over 30 years’ experience in the resources sector, both in Australia and
overseas. He has held technical and executive roles with a number of companies throughout his career, culminating in
his appointment as the Managing Director & Chief Executive Officer of Sedgman Limited, a market leading
engineering and mining services firm. Initially joining Sedgman as Chief Operating Officer Metals Division in 2010, Mr
Watson successfully led and supported the development and execution of Engineering, Procurement and Construction
as well as Operations Contracts in excess of $2 billion as he progressed through roles as Executive General Manager
(2011 – 2012) and Global Executive Director (2012 – 2014), before being made Managing Director & Chief Executive
Officer (2014 – 2016).
During this time at Sedgman, Mr Watson provided leadership and guidance across a suite of over ten large scale mine
operations contracts and over 30 EPC contracts across a broad spectrum of commodities.
Mr Watson has a Bachelor of Chemical Engineering (Hons) from the University of Sydney and a Diploma in
Accounting & Financial Management. He is Fellow of the Institute of Engineers Australia and a Graduate of the
Australian Institute of Company Directors.
Mr Watson was appointed to the Board on 22 January 2018.
Other current listed directorships
Former listed directorships in last 3 years
Resource Generation Limited (from 22 November 2017)
Strandline Resources Limited (from 10 September 2018)
Sedgman Limited (from 26 June 2014 to 7
October 2016)
Oonagh Malone, Company Secretary and former Non-Executive Director (age 43)
Oonagh Malone is a principal of a corporate advisory firm which provides company secretarial and administrative
services. She has over 9 years’ experience in administrative support roles for listed exploration companies and is a
member of the Governance Institute of Australia. Ms Malone is a non-executive director of Hawkstone Mining Limited
and Carbine Resources Limited. She is currently company secretary to ASX listed companies Boss Resources
Limited, Bunji Corporation Limited, Carbine Resources Limited, Clancy Exploration Limited, Hawkstone Mining
Limited, Matador Mining Limited and New Century Resources Limited.
Ms Malone was appointed as a Director on 4 June 2016 and resigned as a Director on 13 July 2017.
Other current listed directorships
Former listed directorships in last 3 years
Hawkstone Mining Limited (from 23 February 2015)
New Century Resources Limited (to 13 July 2017)
Carbine Resources Limited (from 23 March 2018)
6
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Directors’ meetings
During the financial year ended 30 June 2018, there were 7 meetings of the Board of Directors. The Board acts as
Audit and Remuneration Committees. Attendances by each Director during the period were as follows:
Director
Evan Cranston
Patrick Walta
Tolga Kumova
Tom Eadie
Bryn Hardcastle
Peter Watson
Oonagh Malone
Number
attended
Number eligible
to attend
7
7
6
7
6
4
-
7
7
7
7
7
4
-
The Directors made and approved 6 circular resolutions during the financial period ended 30 June 2018.
Principal activities
The principal activities of the Group for the financial year were the review and development of mineral exploration
projects.
Dividends
No dividend has been declared or paid by the Group during the financial year and the Directors do not at present
recommend a dividend.
Operating results
The consolidated loss of the Group amounted to $123,310,765 (2017: Loss $3,785,112) after providing for income tax.
Review of operations and significant changes in the state of affairs
During the financial year, the Group acquired the Century Project. Further details are set out in Note 29 to the
Financial Statements.
The Century Project feasibility study confirmed the technical and economic viability of mining Century zinc. Further
information is set out in the Company’s ASX announcement which is located at the Company’s website.
A strategic decision was made by the Group to suspend work on the definitive feasibility study for the Kodiak Coking
Coal Project, which is located in Alabama, USA. During the financial year the Group maintained the Kodiak Coking
Coal Project in care and maintenance mode, including environmental studies and monitoring. The Group is
considering its options with regards to future financing of the Kodiak Coking Coal Project.
Matters subsequent to the end of the financial year
On 13 August 2018, the Group announced that it has commenced zinc concentrate production at the Century Mine.
Further details are set out in the ASX announcement that is located at the Company’s website.
On 3 September 2018, the Company announced the entry into a legally binding term sheet for a $40 million senior
secured debt and bank guarantee facility with National Australia Bank. Further information is set out in the Company’s
ASX announcement which is located at the Company’s website.
There have been no other events that have occurred subsequent to the reporting date which have significantly
affected or may significantly affect the Group’s operations or results in future years.
7
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Future developments, prospects and business strategies
Disclosure of further information regarding likely developments in the operations of the Group in future financial
periods and the expected results of those operations are set out in the Company’s ASX announcements which are
located at the Company’s website.
Share options
At the date of this report, the Group had the following options over ordinary shares on issue:
Type of
options
Unquoted options issued under the ESOP
Unquoted options issued to Directors
Unquoted options issued to Directors
Unquoted options issued to Directors
Unquoted options issued to Directors
Unquoted options issued to Directors
Unquoted options issued to Directors
Unquoted options issued to Vendors
Unquoted options issued under the ESOP
Unquoted consideration options
Unquoted consideration options
Unquoted consideration options
Unquoted consideration options
Unquoted options issued under the ESOP
Total
Directors’ interests
Number of
options
Exercise
price
Expiry
date
6,900,000
6,000,000
6,000,000
7,500,000
7,500,000
7,500,000
7,500,000
30,000,000
500,000
22,000,000
6,000,000
3,500,000
3,500,000
500,000
114,900,000
$0.25
$0.25
$0.50
$0.25
$0.50
$0.75
$1.00
$0.25
$1.60
$0.25
$0.50
$0.75
$1.00
$0.25
13/07/2020
13/07/2020
13/07/2020
13/07/2021
13/07/2021
13/07/2021
13/07/2021
13/07/2022
02/10/2020
27/02/2021
27/02/2021
27/02/2021
27/02/2021
27/02/2021
The relevant interest of each Director in the share capital of the Group shown in the Register of Directors’
shareholdings as at the date of this report is:
Directors
Ordinary shares fully paid
Options
Evan Cranston
(Ernest) Tom Eadie
Bryn Hardcastle
Tolga Kumova
Patrick Walta
Peter Watson
Total
Direct
Indirect
Direct
-
-
180,000
31,500,000
2,000,000
933,334
-
17,916,666
-
-
-
-
32,000,000
-
15,750,000
-
39,370
-
Indirect
8,750,000
5,000,000
4,000,000
30,000,000
-
-
32,180,000
52,389,370
15,750,000
47,750,000
8
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
REMUNERATION REPORT
The Remuneration Report, which has been audited, outlines the Director and executive remuneration arrangements
for the Group and the Company, in accordance with the requirements of the Corporations Act 2001 and its
Regulations.
Compensation of Key Management Personnel (KMP)
Remuneration is referred to as compensation throughout this report.
KMPs have authority and responsibility for planning, directing and controlling activities of the Group, directly or
indirectly, including directors of the Company and other key executives. KMPs comprises the Directors of the Company
and the senior executives for the Group that are named in this report.
Compensation levels for KMPs of the Group are competitively set to attract and retain appropriately qualified and
experienced directors and executives, while at the same time being cognisant of the Company’s financial position and
activities. The Remuneration Committee, which at the date of this report comprises the full Board, assesses the
appropriateness of compensation packages of the Group given trends in comparative companies and the objectives of
the Group’s compensation strategy.
The Constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive directors shall be
determined from time to time by a general meeting.
The compensation structures explained below are designed to attract suitably qualified candidates, reward the
achievement of strategic objectives, and achieve the broader outcome of creation of value for shareholders. The
compensation structures take into account:
-
-
-
the capability and experience of key management personnel
the key management personnel’s ability to control the relevant segments’ performance
the Group’s performance including:
the Group’s earnings;
the growth in share price and delivering constant returns of shareholder wealth; and
the amount of incentives within each KMPs compensation.
Compensation packages can include a mix of fixed and variable compensation, and short and long term performance
based incentives.
Fixed compensation
Fixed compensation consists of base compensation (which is calculated on a total cost basis), as well as non-
monetary benefits, leave entitlements and employer contributions to defined contribution superannuation funds.
Compensation levels are reviewed annually by the Board through a process that considers individual and overall
performance of the Group. In addition, the Board may from time to time engage external consultants to provide
analysis and advice to ensure the Directors’ and senior executives’ compensation is competitive in the market place.
Performance linked compensation
Performance linked compensation includes both short and long term incentives, and is designed to reward senior
executives for meeting or exceeding their financial and personal objectives. Short term incentives (STIs) are an “at
risk” bonus provided in the form of cash. The long term incentive (LTI) can be issued in the form of options or
performance rights.
Short term incentive bonus
The Board sets key performance indicators (KPIs) for relevant senior executives. The KPIs generally include
measures relating to the Group, the relevant segment, and the individual, and can include financial, people, strategy
and risk measures. The measures are chosen as they directly align the individual’s reward with the KPIs of the Group
and with its strategy and performance.
At the end of the financial year, the Board assesses performance against any KPIs set at the beginning of the financial
year. A percentage of the pre-determined maximum amount is awarded depending on results. The Board retains the
9
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
discretion to vary the final cash incentive if performance if considered to be deserving of either a greater or lesser
amount.
Long term incentive
The Company issues options to KMPs in accordance with the Company’s Employee Share Option Plan or in
accordance with shareholder approval in the case of directors. Vesting conditions including length of service can be
applied to these options. The Company views the exercise price being set at a premium to the share price at the time
of issue as an incentive designed to drive Group performance.
Performance rights may be issued in accordance with the Company’s Performance Rights Plan. Performance rights
convert to ordinary shares of the Company on a one-to-one basis depending on the achievement of performance
hurdles. The Board believes that the performance hurdle aligns the interests of the KMPs with the interests of the
Company’s shareholders.
Rights that do not vest at the end of the five year period from issue will lapse, unless the Board in its discretion
determines otherwise. Performance rights do not entitle holders to dividends that are declared during the vesting
period.
Long term incentives are used to ensure that remuneration of KMPs reflects the Group’s financial performance, with
particular emphasis on the Group’s earnings and the consequence of the Group’s performance on shareholder wealth.
At the 2017 Annual General Meeting, 99.8 percent of the votes received supported the adoption of the remuneration
report for the financial year ended 30 June 2017. The Company did not receive any specific feedback at the Annual
General Meeting regarding its remuneration practices.
Additional information for consideration of shareholder wealth
This table summarises the earnings of the consolidated entity and other factors that are considered to affect
shareholder wealth for the five years to 30 June 2018. Comparative basic losses per share differ from those in
previous financial reports because they have been updated to reflect the January 2016 rights issue and the March
2016 placements, in accordance with Australian Accounting Standards.
2018
2017
2016
2015
2014
Loss after income tax attributable to
shareholders - $
Share price at financial year end - $
Movement in share price for the year - $
Total dividends declared – cents
Returns of capital – cents
(119,021,291)
(3,785,112)
(3,722,417)
(6,530,288)
(6,752,119)
1.31
1.115
-
-
0.195
-
-
-
0.195
0.035
-
-
0.16
(0.22)
-
-
0.38
(0.06)
-
-
Basic loss per share - cents
(32.32)
(2.02)
(2.27)
(4.20)
(5.57)
10
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Compensation of Key Management Personnel
Short-term
benefits
cash salary
and fees
$
Post
employment
benefits
superannuation
$
Termination
benefit
$
Share
based
payments
$
Proportion of
remuneration
performance
related
%
Total
$
2018
Executive
Directors
Evan Cranston
Tolga Kumova
Patrick Walta
Non-Executive
Directors
Tom Eadie
Bryn Hardcastle
Peter Watson
Other KMPs
John Carr
Barry Harris
Oonagh Malone (i)
Total
172,032
47,706
220,000
439,738
47,372
53,134
22,372
122,878
180,000
167,597
35,694
383,291
945,907
-
-
-
-
4,500
-
2,125
6,625
-
14,250
-
14,250
20,875
-
-
-
-
-
-
-
-
-
-
-
-
-
-
172,032
1,428,525 1,476,231
220,000
-
1,428,525 1,868,263
240,700
192,560
-
292,572
245,694
24,497
433,260
562,763
-
180,450
144,420
180,000
362,297
180,114
324,870
722,411
2,186,655 3,153,437
(i)
Company Secretary for full financial year. No remuneration paid for Directorship to 13 July 2017.
2017
Non-Executive
Directors
Evan Cranston
Bryn Hardcastle
Company Secretary
Oonagh Malone (i)
Total
24,000
24,000
48,000
30,000
78,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
24,000
24,000
48,000
30,000
78,000
-
95
-
76
82
78
-
77
-
50
80
45
69
-
-
-
-
-
(i)
Company Secretary for full financial year. No remuneration paid for Directorship.
Movements in annual leave and current long service leave provisions for KMPs have been recognised as short term
cash benefits.
11
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Other transactions with Key Management Personnel
Evan Cranston is a director of Konkera Corporate. Konkera Corporate received $120,000 (2017: $120,000) during the
financial year for administrative, bookkeeping and accounting services. The company secretarial fees of $35,694
(2017: $30,000) for Oonagh Malone and Director fees of $172,032 (2017: $24,000) for Evan Cranston were also
payable to Konkera Corporate. Bryn Hardcastle is a director of Bellanhouse which provided legal services totalling
$1,067,814 (2017: $179,049) in the financial year ended 30 June 2018. $137,303 was outstanding as payable to
Bellanhouse at 30 June 2018 (2017: $112,100).
John Carr and Patrick Walta each received 7,000,000 of the 30,000,000 share options that were issued on 13 July
2017 as purchase consideration for the initial 70 percent interest in Century Mining Rehabilitation Project Pty Ltd, as
detailed in note 29. These share options have been valued at $0.08239 per share option as disclosed in note 27.
Evan Cranston, Patrick Walta and John Carr each received 31,500,000 ordinary shares and a total of 8,750,000 share
options, as described in note 29, as part of the purchase consideration for the acquisition of the remaining non-
controlling interest.
Share based payment compensations
No shares were issued to KMPs of the Group as part of their remuneration.
Details of options over ordinary shares in the Company provided as remuneration to KMPs are set out below. When
exercised, each option is convertible into one ordinary share of New Century Resources Limited. These options were
granted with nil additional consideration. These options fully vested during the financial year. No options issued to
current or previous KMPs expired or lapsed during the financial year.
Key
Management
Personnel
Grant
date
Number
granted
Exercise
price
$
Value per
option $
Value of
options
granted
$
Issue and
vesting
date
Expiry
date
Tolga Kumova
31/05/2017
7,500,000
0.25
0.07207
540,525
13/07/2017 13/07/2021
Tolga Kumova
31/05/2017
7,500,000
0.50
0.04979
373,425
13/07/2017 13/07/2021
Tolga Kumova
31/05/2017
7,500,000
0.75
0.03802
285,150
13/07/2017 13/07/2021
Tolga Kumova
31/05/2017
7,500,000
1.00
0.03059
229,425
13/07/2017 13/07/2021
Tom Eadie
31/05/2017
2,500,000
0.25
0.05983
149,575
13/07/2017 13/07/2020
Tom Eadie
31/05/2017
2,500,000
0.50
0.03645
91,125
13/07/2017 13/07/2020
Bryn Hardcastle
31/05/2017
2,000,000
0.25
0.05983
119,660
13/07/2017 13/07/2020
Bryn Hardcastle
31/05/2017
2,000,000
0.50
0.03645
72,900
13/07/2017 13/07/2020
Barry Harris
13/07/2017
3,000,000
0.25
0.06015
180,450
13/07/2017 13/07/2020
Oonagh Malone
31/05/2017
1,500,000
0.25
0.05983
89,745
13/07/2017 13/07/2020
Oonagh Malone
31/05/2017
1,500,000
0.50
0.03645
54,675
13/07/2017 13/07/2020
Total
45,000,000
2,186,655
The assessed fair value at grant date of options granted to the individuals is allocated equally over the period from
issue date to vesting date, and the amount is included in the remuneration tables above. Fair values at grant date are
independently determined using a Black-Scholes option pricing model that takes into account the exercise price, the
term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying
share, the expected dividend yield, the risk-free interest rate for the term of the option and the liquidity of the share
market. Further details are set out in Note 27 to the Financial Statements.
12
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Details of all options held by KMPs, at the date of this report, are shown below.
KMP
Issue
date
Evan Cranston
27/02/2018
Evan Cranston
27/02/2018
Evan Cranston
27/02/2018
Evan Cranston
27/02/2018
Tolga Kumova
13/07/2017
Tolga Kumova
13/07/2017
Tolga Kumova
13/07/2017
Tolga Kumova
13/07/2017
Patrick Walta
Patrick Walta
Patrick Walta
Patrick Walta
Patrick Walta
Tom Eadie
Tom Eadie
13/07/2017
27/02/2018
27/02/2018
27/02/2018
27/02/2018
13/07/2017
13/07/2017
Bryn Hardcastle
13/07/2017
Bryn Hardcastle
13/07/2017
John Carr
John Carr
John Carr
John Carr
John Carr
Barry Harris
13/07/2017
27/02/2018
27/02/2018
27/02/2018
27/02/2018
13/07/2017
Oonagh Malone
13/07/2017
Oonagh Malone
13/07/2017
Number
granted
5,500,000
1,500,000
875,000
875,000
7,500,000
7,500,000
7,500,000
7,500,000
7,000,000
5,500,000
1,500,000
875,000
875,000
2,500,000
2,500,000
2,000,000
2,000,000
7,000,000
5,500,000
1,500,000
875,000
875,000
3,000,000
1,500,000
1,500,000
Value of options
granted
$
Vesting
date
Expiry
date
Vested
%
6,501,000
27/02/2018
27/02/2021
1,545,000
27/02/2018
27/02/2021
799,750
27/02/2018
27/02/2021
718,375
27/02/2018
27/02/2021
540,525
13/07/2017
13/07/2021
373,425
13/07/2017
13/07/2021
285,150
13/07/2017
13/07/2021
229,425
13/07/2017
13/07/2021
576,730
13/07/2017
13/07/2022
6,501,000
27/02/2018
27/02/2021
1,545,000
27/02/2018
27/02/2021
799,750
27/02/2018
27/02/2021
718,375
27/02/2018
27/02/2021
149,575
13/07/2017
13/07/2020
91,125
13/07/2017
13/07/2020
119,660
13/07/2017
13/07/2020
72,900
13/07/2017
13/07/2020
576,730
13/07/2017
13/07/2022
6,501,000
27/02/2018
27/02/2021
1,545,000
27/02/2018
27/02/2021
799,750
27/02/2018
27/02/2021
718,375
27/02/2018
27/02/2021
180,450
13/07/2017
13/07/2020
89,745
13/07/2017
13/07/2020
54,675
13/07/2017
13/07/2020
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Total
85,250,000
32,032,490
13
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Service agreements
A summary of service agreements with Executives and Non-executive Directors effective during the financial year is
set out below. These details are in addition to the share options issued as share based payment compensation.
Base salary or fee
per annum for 2018
including any
superannuation(i)
(Non-performance
based)
Termination
conditions
Proportion of
elements of
remuneration
related to
performance
KMP
Evan
Cranston
Tolga Kumova
Patrick Walta
Term of
agreement
To 20 July
2020
To 20 July
2020
To 28
February
2020
Role
Executive
Chairman
Executive
Director
Managing
Director
$180,000
6 month notice
period
$50,000
3 month notice
period
$240,000
6 month notice
period
Tom Eadie
No specified
term
Non-executive
Director
$50,000
No notice required
to terminate
Bryn
Hardcastle
No specified
term
Non-executive
Director
$50,000
No notice required
to terminate
Peter Watson
No specified
term
Non-executive
Director
$50,000
No notice required
to terminate
John Carr
To 1 July
2018
Chief Business
Development Officer
Barry Harris
No specified
term
Chief Operating
Officer
$180,000
$164,250
1 month notice
period
3 month notice
period
Oonagh
Malone
No specified
term
Company
Secretary
$36,000
3 month notice
period
(i)
Base salary quoted is the position as at 30 June 2018; salaries are reviewed at least annually.
-
95
-
82
78
-
-
50
80
On appointment to the Board, all Non-executive Directors enter into a service agreement with the Company in the
form of a letter of appointment. The letter summarises the Board policies and terms, including compensation, relevant
to the office of director. The major provisions for 2018 relating to remuneration are set out in the table above. The
Company Secretary, Ms Malone was not paid any additional fee for her directorship.
14
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Option holdings of Key Management Personnel
The number of options over ordinary shares of New Century Resources Limited held by each KMP of the Group
during the financial year is as follows:
KMP
Balance at
beginning of
year or
appointment
Granted as
remuneration
during the
year
Options
exercised
during
the year
Other
changes
during the
year
Balance
at end of
year
Vested
during
the year
Vested
and
exercisable
Evan Cranston
-
Tolga Kumova
30,000,000
Patrick Walta
Tom Eadie
Bryn Hardcastle
Peter Watson
John Carr
Barry Harris
Oonagh Malone
-
-
-
-
4,000,000
-
-
7,000,000
5,000,000
-
-
7,000,000
-
-
3,000,000
3,000,000
49,000,000
10,000,000
-
-
-
-
-
-
-
-
-
-
8,750,000
8,750,000
8,750,000
8,750,000
- 30,000,000 30,000,000 30,000,000
8,750,000 15,750,000 15,750,000 15,750,000
-
-
-
5,000,000
5,000,000
5,000,000
4,000,000
4,000,000
4,000,000
-
-
-
8,750,000 15,750,000 15,750,000 15,750,000
-
-
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
26,250,000 85,250,000 85,250,000 85,250,000
Shareholdings of Key Management Personnel
The number of shares in New Century Resources Limited held by each KMP of the Group and their related parties
during the financial year is as follows:
Other
changes
during the
year
31,500,000
1,250,000
31,500,000
-
933,334
39,370
Balance at end
of year
31,500,000
17,916,666
32,000,000
2,000,000
1,113,334
39,370
31,500,000
32,000,000
35,000
(23,336)
1,235,000
180,000
96,734,368
117,984,370
KMP
Evan Cranston
Tolga Kumova
Patrick Walta
Tom Eadie
Bryn Hardcastle
Peter Watson
John Carr
Barry Harris
Oonagh Malone
Balance at
beginning of
year or
appointment
-
16,666,666
500,000
2,000,000
180,000
-
500,000
1,200,000
203,336
21,250,002
End of audited remuneration report
Granted as
remuneration
during the year
Issued on exercise
of options during
the year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Indemnifying officers or auditor
The Company has paid premiums to insure all Directors and Officers against liabilities for costs and expenses
incurred by them in defending any legal proceedings arising out of their conduct while acting in their capacity of
director of the Company, other than conduct involving a wilful breach of duty in relation to the Company.
Disclosure of the nature and the amount of the premium is prohibited by the confidentiality clause of the insurance
contract.
No indemnities have been given or agreed to be given or insurance premiums paid or agreed to be paid, during or
since the financial year ended 30 June 2018, to any person who is or has been an auditor of the Company.
Auditor
Bentleys Audit & Corporate (WA) Pty Ltd has been appointed as auditor of the Group in accordance with section 327
of Corporations Act 2001.
Non-audit services
There were no non-audit services provided by a related practice of the Group’s auditor during the financial year ended
30 June 2018.
Proceedings on behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any proceedings
to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of those
proceedings.
The Group was not a party to any such proceedings during the financial year.
Environmental regulations
The Group is required to carry out its activities in accordance with the Mining Laws and regulations in the areas in
which it undertakes its exploration activities. The Group is not aware of any matter which requires disclosure with
respect to any significant environmental regulation in respect of its operating activities.
Auditor’s independence declaration
The lead auditor’s independence declaration for the financial year ended 30 June 2018 has been received and can be
found on the following page.
Made and signed in accordance with a resolution of the Directors.
Evan Cranston
Executive Chairman
Perth
27 September 2018
16
To The Board of Directors
Auditor’s Independence Declaration under Section 307C of the
Corporations Act 2001
As lead audit Partner for the audit of the financial statements of New Century Resources
Limited for the financial year ended 30 June 2018, I declare that to the best of my
knowledge and belief, there have been no contraventions of:
the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
any applicable code of professional conduct in relation to the audit.
Yours faithfully
BENTLEYS
Chartered Accountants
CHRIS NICOLOFF CA
Partner
Dated at Perth this 27th day of September 2018
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2018
Other income
Depreciation and amortisation expense
Exploration and evaluation expenditure
Employee benefits – share based payments
Employee benefits – other
Professional expenses
Foreign exchange losses
Loss on acquisition classified as exploration expenditure
Increase in rehabilitation provision
Finance income
Finance costs
Impairment loss
Other expenses
Loss before income tax expense
Income tax expense
Loss for the year
Note
2018
$
2017
$
4
10
4
4
4
29
14
4
4
30
4
5
1,854,976
-
(25,701)
(12,041,913)
(3,224,270)
(1,980,801)
(1,527,631)
(1,868)
(70,092,066)
(21,763,731)
7,366,665
(2,622,646)
(18,153,406)
(1,098,373)
(21,589)
(435,386)
(48,000)
(339,829)
(872)
-
-
16,232
(2,401,314)
-
(554,354)
(123,310,765)
(3,785,112)
-
-
(123,310,765)
(3,785,112)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Exchange gain/(loss) on translation of foreign controlled entities,
net of tax
Other comprehensive income/(loss) for the year
673,009
(579,970)
673,009
(579,970)
Total comprehensive loss for the year
(122,637,756)
(4,365,082)
Loss for the year attributable to:
Members of the parent entity
Non-controlling interests
Total comprehensive loss for the year attributable to:
Members of the parent entity
Non-controlling interests
Loss per share
Basic loss per share
Diluted loss per share
The accompanying notes form part of these financial statements.
18
(119,021,291)
(4,289,474)
(3,785,112)
-
(123,310,765)
(3,785,112)
(118,348,282)
(4,289,474)
(4,365,082)
-
(122,637,756)
(4,365,082)
26
26
Cents
32.32
32.32
Cents
2.02
2.02
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2018
Current assets
Cash and cash equivalents
Trade and other receivables
Financial assets
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Deferred exploration, evaluation and development expenditure
Other financial assets
Total non-current assets
TOTAL ASSETS
Current liabilities
Trade and other payables
Employee provisions
Borrowings
Total current liabilities
Non-current liabilities
Environmental rehabilitation provisions
Other payables
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
Equity
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
The accompanying notes form part of these financial statements.
19
Note
2018
$
2017
$
6
7
8
9
10
11
8
12
14
13
14
12
15
46,249,135
2,881,331
17,250,000
1,327,400
5,606,108
117,915
-
4,835
67,707,866
5,728,858
60,412,157
-
3,167,752
13,831,105
3,287,297
810,727
63,579,909
17,929,129
131,287,775
23,657,987
23,013,820
678,548
-
856,050
-
18,600,115
23,692,368
19,456,165
117,297,685
-
739,531
845,921
117,297,685
1,585,452
140,990,053
21,041,617
(9,702,278)
2,616,370
311,618,023
4,145,917
(325,466,218)
32,259,433
6,669,444
(36,312,507)
(9,702,278)
2,616,370
Comprehensive income
Loss for the year
Other comprehensive
income for the year
Exchange differences on
translation of controlled
entities
Total comprehensive loss
for the year
Transactions with owners,
in their capacity as
owners, and other
transfers
Transfer of opening option
reserve to accumulated
losses
Transfer of equity
component of convertible
notes to accumulated losses
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
2018
Ordinary
shares
$
Accumulated
losses
$
Foreign
currency
translation
reserve
$
Share based
payments
reserve
$
Non-
controlling
interest
$
Total
$
Balance at 1 July 2017
32,259,433
(36,312,507)
3,472,908
3,196,536
-
2,616,370
-
(119,021,291)
-
-
(4,289,474)
(123,310,765)
-
-
673,009
-
(119,021,291)
673,009
-
-
-
673,009
(4,289,474)
(122,637,756)
-
-
-
-
-
-
-
-
114,505,108
3,224,270
2,471,700
(5,089,834)
4,289,474
-
-
-
(4,792,136)
(9,702,278)
-
-
-
-
-
-
-
-
3,196,536
(3,196,536)
(404,548)
404,548
Issue of shares
114,505,108
-
Issue of options expensed
Issue of options for
acquisition
Shares to be issued from
prior year
Acquisition of non-controlling
interest
-
-
3,224,270
2,471,700
(5,089,834)
-
175,140,000
(179,429,474)
Costs arising from issues
(4,792,136)
-
-
-
-
-
-
-
-
Balance at 30 June 2018
311,618,023
(325,466,218)
4,145,917
The accompanying notes form part of these financial statements
20
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Ordinary
shares
$
Accumulated
losses
$
Foreign
currency
translation
reserve
$
Share based
payments
reserve
$
Non-
controlling
interest
$
26,715,502
(32,527,395)
4,052,878
3,196,536
-
(3,785,112)
-
-
-
-
(579,970)
(3,785,112)
(579,970)
2017
Balance at 1 July 2016
Comprehensive income
Loss for the year
Other comprehensive
income for the year
Exchange differences on
translation of controlled
entities
Total comprehensive loss
for the year
Transactions with owners,
in their capacity as
owners, and other
transfers
Issue of shares/options
Shares to be issued
-
-
-
-
-
Total
$
1,437,521
(3,785,112)
(579,970)
(4,365,082)
500,000
5,089,834
(45,903)
2,616,370
-
-
-
-
-
-
-
-
Costs arising from issues
(45,903)
500,000
5,089,834
-
-
-
-
-
-
Balance at 30 June 2017
32,259,433
(36,312,507)
3,472,908
3,196,536
The accompanying notes form part of these financial statements.
21
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
CONSOLIDATED STATEMENT OF CASHFLOWS
For the year ended 30 June 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees (inclusive of GST)
Interest received
Financing charges
Other income
Payment of MMG bank guarantee support fees
Note
2018
$
2017
$
(19,488,474)
569,188
(15,541)
345,128
(1,934,662)
(1,573,799)
12,913
(4)
-
-
Net cash (outflow) from operating activities
25
(20,524,361)
(1,560,890)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for mining lease interests
Payments for bonds and investments
Refund of bonds
Cash acquired on acquisition of subsidiaries
Payments for property, plant and equipment
Proceeds on disposal of property, plant and equipment
(263,124)
(1,818,091)
33,105
4,732,628
(39,091,964)
1,555,817
(267,727)
(33,105)
287,592
-
(2,151)
-
Net cash (outflow) from investing activities
(34,851,629)
(15,391)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from share issues
Payments for share issue costs
MMG funding support received
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Exchange difference on cash and cash equivalents
95,062,493
(4,792,136)
5,750,000
5,872,173
(24,594)
-
96,020,357
5,847,579
40,644,367
5,606,108
(1,340)
4,271,298
1,325,655
9,155
Cash and cash equivalents at the end of the financial year
6
46,249,135
5,606,108
The accompanying notes form part of these financial statements.
22
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
NOTES TO THE FINANCIAL STATEMENTS
The consolidated financial statements and notes represent those of New Century Resources Limited (formerly called
Attila Resources Limited) and Controlled Entities (the “Group”). The separate financial statements of the parent entity
have not been presented within this financial report as permitted by the Corporations Act 2001.
The financial statements for the Group were authorised for issue in accordance with a resolution by the Board of
Directors on 27 September 2018.
Note 1: Summary of significant accounting policies
Basis of preparation
The financial statements are general purpose financial statements that have been prepared in accordance with
Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the
Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The Group is a for-profit entity for
financial reporting purposes under Australian Accounting Standards.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial
statements containing relevant and reliable information about transactions, events and conditions. Compliance with
Australian Accounting Standards ensures that the financial statements and notes also comply with International
Financial Reporting Standards as issued by the IASB. Material accounting policies adopted in the preparation of these
financial statements are presented below and have been consistently applied unless stated otherwise.
Except for cash flow information, the financial statements have been prepared on an accruals basis and are based on
historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial
assets and financial liabilities.
(a) Going concern
This report has been prepared on the going concern basis which assumes the continuity of normal business activity
and the realisation of assets and the settlement of liabilities in the normal course of business.
The primary activity of the Group during the financial year has been the acquisition and development of the Century
Project. $70,092,066 of exploration and evaluation expenditure associated with the acquisition of the Century Project
in July 2017, together with all subsequent exploration and evaluation expenditure in relation to the Century Project
from the acquisition date and up to 31 December 2017 were expensed. Together with the impairment loss recognised
for Kodiak Project, this has led to the Group incurring a net loss of $123,310,765 during the financial year.
As at 30 June 2018, the Group had net current assets of $44,015,498. The Group expects to generate net profit and
positive operating cashflows for the 12 months following the approval of the annual financial statements. Expectations
of continued positive operating cashflows are supported by new revenue streams from the Century Project which
commenced production in August 2018 and is expected to be commissioned for accounting purposes in the last
quarter of 2018.
In addition, the Directors of the Company note the following considerations relevant to the Group’s ability to continue
as a going concern:
• as at 30 June 2018, total cash and cash equivalents $46,249,135 were held by the Group.
•
•
cash flow forecasts show that the Group will have sufficient cash flows to meet all commitments and working
capital requirements for the 12 month period from the date of signing this financial statement.
the entry into a legally binding term sheet for a $40 million senior secured debt and bank guarantee facility
with National Australia Bank. Further information is set out in the Company’s ASX announcement which is
located at the Company’s website.
As a result the Directors are of the view that the Group will be able to meet its debts as and when they fall due and
accordingly the Directors have prepared the consolidated financial statements on a going concern basis.
23
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
(b) Principles of consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent (New Century
Resources Limited) and all of the subsidiaries (including any structured entities). Subsidiaries are entities the parent
controls. The parent controls an entity when it is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power over the entity. A list of the subsidiaries is
provided in Note 23.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group
from the date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the
date that control ceases. Intercompany transactions, balances and unrealised gains or losses on transactions
between Group entities are fully eliminated on consolidation. Accounting policies of subsidiaries have been changed
and adjustments made where necessary to ensure uniformity of the accounting policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “non-controlling
interests”. The Group initially recognises non-controlling interests that are present ownership interests in subsidiaries
and are entitled to a proportionate share of the subsidiary’s net assets on liquidation at either fair value or at the non-
controlling interests’ proportionate share of the subsidiary’s net assets. Subsequent to initial recognition, non-
controlling interests are attributed their share of profit or loss and each component of other comprehensive income.
Non-controlling interests are shown separately within the equity section of the statement of financial position and
statement of profit or loss and other comprehensive income.
(c) Income tax
The income tax expense (revenue) for the financial year comprises current income tax expense (income) and deferred
tax expense (income).
Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities
(assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation
authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the
financial year as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates to
items that are recognised outside profit or loss.
Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset or
liability, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the
asset is realised or the liability is settled and their measurement also reflects the manner in which management
expects to recover or settle the carrying amount of the related asset or liability. With respect to non-depreciable items
of property, plant and equipment measured at fair value and items of investment property measured at fair value, the
related deferred tax liability or deferred tax asset is measured on the basis that the carrying amount of the asset will
be recovered entirely through sale.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures,
deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can
be controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur.
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New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Deferred tax assets and liabilities are offset where: (a) a legally enforceable right of set-off exists; and (b) the deferred
tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity
or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the
respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities
are expected to be recovered or settled.
(d) Foreign currency transactions and balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements are presented in Australian dollars,
which is the parent entity’s functional currency.
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of
the transaction. Foreign currency monetary items are translated at the financial year-end exchange rate. Non-
monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction.
Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were
determined.
Exchange differences arising on the translation of monetary items are recognised in profit or loss, except where
deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive
income to the extent that the underlying gain or loss is recognised in other comprehensive income; otherwise the
exchange difference is recognised in profit or loss.
Group companies
The financial results and position of foreign operations, whose functional currency is different from the Group’s
presentation currency, are translated as follows:
assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations with functional currencies other than Australian
dollars are recognised in other comprehensive income and included in the foreign currency translation reserve in the
statement of financial position. These differences are recognised in profit or loss in the period in which the operation is
disposed of.
(e) Cash and cash equivalents
Cash and cash equivalents includes cash on hand and deposits held at call with financial institutions which are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(f) Property, plant and equipment
Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any
accumulated depreciation and impairment losses.
Property, plant and equipment are measured on the cost basis and therefore carried at cost less accumulated
depreciation and any accumulated impairment. In the event the carrying amount of property, plant and equipment is
greater than the estimated recoverable amount, the carrying amount is written down immediately to the estimated
recoverable amount and impairment losses are recognised in profit or loss. A formal assessment of recoverable
amount is made when impairment indicators are present (refer to Note 1(j) for details of impairment).
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New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
The carrying amount of property, plant and equipment is reviewed annually by directors to ensure it is not in excess of
the recoverable amount from these assets.
The cost of fixed assets constructed within the consolidated group includes the cost of materials, direct labour,
borrowing costs and an appropriate proportion of fixed and variable overheads.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the
item can be measured reliably. All other repairs and maintenance are recognised as expenses in the statement of
profit or loss and other comprehensive income during the financial period in which they are incurred.
Depreciation
Depreciation of assets commences when the assets are ready for their intended use. Capital Work in Progress, which
relates mainly to Century Mine, is not depreciated. Depreciation on this will commence when the Century Mine starts
commercial production, which will be on the units of production basis over the life of the mine. Mining, Plant and
Equipment, which relates mainly to Kodiak Mine, is not depreciated as the Mine is currently under care and
maintenance. The depreciation expense for the period was calculated mainly on a straight line basis over the life of
the asset.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each
reporting period and adjusted prospectively, if appropriate. Where depreciation rates or methods are changed, the net
written down value of the asset is depreciated from the date of the change in accordance with the new depreciation
rate or method, with the change accounted for as a change in accounting estimate.
Items of property, plant and equipment initially recognised are derecognised upon disposal or when no future
economic benefits are expected from their continued use. Any gain or loss arising on the disposal of an asset are
determined as the difference between the net disposal proceeds and the carrying amount of the asset and are
recognised as other income or other expenses in the Income Statement.
(g) Intangibles other than goodwill
Trademarks, licences and logos are recognised at cost of acquisition. Trademark, licences and logos are carried at
cost less any accumulated amortisation and any impairment losses. Amortisation is calculated and determined based
on case by case basis.
(h) Exploration and evaluation expenditure
Exploration and evaluation expenditure is recognised in the Income Statement as incurred. If the expenditure is
expected to be recouped by sale, it is recognised as an asset on an area of interest basis.
Exploration and evaluation assets are classified as tangible (as part of property, plant and equipment) or intangible
according to the nature of the assets. As the assets are not yet ready for use they are not depreciated.
Exploration and evaluation assets are assessed for impairment if:
•
sufficient data exists to determine technical feasibility and commercial viability; or
• other facts and circumstances suggest that the carrying amount exceeds the recoverable amount.
For the purposes of the impairment testing, exploration and evaluation assets are allocated to cash-generating units to
which the exploration activity relates. The cash generating units (CGU) are not larger than the area of interest.
Once the technical feasibility and commercial viability of the extraction of mineral reserves in an area of interest are
demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and
then reclassified to relevant categories within property, plant and equipment.
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New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
(i) Goods and Services Tax (GST) and other indirect taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority,
in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense
item as applicable; and
receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the statement of financial position.
Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows
arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are
classified as operating cash flows included in receipts from customers or payments to suppliers.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
(j) Impairment of assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be
impaired. The assessment will include the consideration of external and internal sources of information including
dividends received from subsidiaries, associates or jointly controlled entities. If such an indication exists, an
impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the
asset’s fair value less costs to sell and value in use, to the asset’s carrying amount. Any excess of the asset’s carrying
amount over its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a
revalued amount in accordance with another Standard (e.g. in accordance with the revaluation model in AASB 116).
Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that other Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs. Impairment testing is performed annually
for goodwill and intangible assets with indefinite lives.
(k) Share based payments
Equity-settled share-based payments are measured at fair value at the date of grant. Fair value is measured by use of
a Black-Scholes model. The expected life used in the model is adjusted, based on management’s best estimate, for
the effects of non-transferability, exercise restrictions, and behavioural considerations.
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 Company’s estimate of shares that will eventually vest.
(l) Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year
which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
(m) Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds.
(n) Employee benefits
A provision is made for the Group’s liability for employee benefits arising from services rendered by employees to
balance date. Short-term employee benefits are expensed as the related service is provided. A liability is recognised
for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a
result of past service provided by the employee and the obligation can be estimated reliably. Employee benefits that
are expected to be settled wholly within one year have been measured at the amounts expected to be paid when the
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New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
liability is settled plus related on costs. Employee benefits not expected to be wholly settled within one year have been
measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the
liability, consideration is given to employee wages increases and the probability that the employee may satisfy vesting
requirements. Those cash flows are discounted using market yields on high quality corporate bonds with terms to
maturity that match the expected timing of cash flows.
Equity-settled compensation
Share-based payments to employees are measured at the fair value of the instruments on grant dates and amortised
over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or
services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or
services cannot be reliably measured, and are recorded at the date the goods or services are received. The
corresponding amount is recorded to the option reserve. The number of shares and options expected to vest is
reviewed and adjusted at the end of each reporting period such that the amount recognised for services received as
consideration for the equity instruments granted is based on the number of equity instruments that eventually vest.
(o) Financial instruments
Recognition
The Group recognises financial assets and financial liabilities on the date that they are originated. All other financial
assets are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of
the instrument.
Classification and subsequent measurement
Financial instruments are subsequently valued at fair value, amortised cost using the effective interest method, or
cost.
Amortised cost
Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at initial
recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation
of the difference between that initial amount and the maturity amount calculated using the effective interest method.
The effective interest method
The effective interest method is used to allocate interest income or interest expense over the relevant period and is
equivalent to the rate that discounts estimated future cash payments or receipts (including fees, transaction costs and
other premiums or discounts) over the expected life (or when this cannot be reliably predicted, the contractual term) of
the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected
future net cash flows will necessitate an adjustment to the carrying amount with a consequential recognition of an
income or expense item in profit or loss.
Fair value
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis,
depending on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly
(i.e. unforced) transaction between independent, knowledgeable and willing market participants at the measurement
date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used to
determine fair value. Adjustments to market values may be made having regard to the characteristics of the specific
asset or liability. The fair values of assets and liabilities that are not traded in an active market are determined using
one or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable
market data.
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New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
To the extent possible, market information is extracted from either the principal market for the asset or liability (ie the
market with the greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the
most advantageous market available to the entity at the end of the reporting period (ie the market that maximises the
receipts from the sale of the asset or minimises the payments made to transfer the liability, after taking into account
transaction costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant’s ability to use the
asset in its highest and best use or to sell it to another market participant that would use the asset in its highest and
best use.
The fair value of liabilities and the entity’s own equity instruments (excluding those related to share - based payment
arrangements) may be valued, where there is no observable market price in relation to the transfer of such financial
instruments, by reference to observable market information where such instruments are held as assets. Where this
information is not available, other valuation techniques are adopted and, where significant, are detailed in the
respective note to the financial statements.
Valuation techniques
In the absence of an active market for an identical asset or liability, the Group selects and uses one or more valuation
techniques to measure the fair value of the asset or liability. The Group selects a valuation technique that is
appropriate in the circumstances and for which sufficient data is available to measure fair value. The availability of
sufficient and relevant data primarily depends on the specific characteristics of the asset or liability being measured.
The valuation techniques selected by the Group are consistent with one or more of the following valuation
approaches:
–
–
–
Market approach: valuation techniques that use prices and other relevant information generated by market
transactions for identical or similar assets or liabilities.
Income approach: valuation techniques that convert estimated future cash flows or income and expenses
into a single discounted present value.
Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current
service capacity.
Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing
the asset or liability, including assumptions about risks. When selecting a valuation technique, the Group gives priority
to those techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs
that are developed using market data (such as publicly available information on actual transactions) and reflect the
assumptions that buyers and sellers would generally use when pricing the asset or liability are considered observable,
whereas inputs for which market data is not available and therefore are developed using the best information available
about such assumptions are considered unobservable.
Fair value hierarchy
AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which categorises fair
value measurements into one of three possible levels based on the lowest level that an input that is significant to the
measurement can be categorised into as follows:
Level 1
Level 2
Level 3
Measurements based on quoted
prices (unadjusted) in active markets
for identical assets or liabilities that
the entity can access at the
measurement date.
Measurements based on inputs other
than quoted prices included in Level
1 that are observable for the asset or
liability, either directly or indirectly.
Measurements based on
unobservable inputs for the asset or
liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more
valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market data.
If all significant inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one
or more significant inputs are not based on observable market data, the asset or liability is included in Level 3.
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New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
The Group would change the categorisation within the fair value hierarchy only in the following circumstances:
(i)
if a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3) or vice versa; or
(ii)
if significant inputs that were previously unobservable (Level 3) became observable (Level 2) or vice versa.
When a change in the categorisation occurs, the Group recognises transfers between levels of the fair value hierarchy
(ie transfers into and out of each level of the fair value hierarchy) on the date the event or change in circumstances
occurred.
The Group has no assets or liabilities measured at fair value because, while assets acquired and liabilities assumed in
business combinations have been measured at their acquisition date fair values, in accordance with paragraph 18 of
AASB 3, these initial measurements have formed the costs of the assets acquired and liabilities assumed for the
purpose of other accounting standards.
Impairment
At the end of each reporting period, the Group assesses whether there is objective evidence that a financial asset has
been impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is
objective evidence of impairment as a result of one or more events (a “loss event”) having occurred, which has an
impact on the estimated future cash flows of the financial asset(s).
In the case of available-for-sale financial assets, a significant or prolonged decline in the market value of the
instrument is considered to constitute a loss event. Impairment losses are recognised in profit or loss immediately.
Also, any cumulative decline in fair value previously recognised in other comprehensive income is reclassified to profit
or loss at this point.
In the case of financial assets carried at amortised cost, loss events may include: indications that the debtors or a
group of debtors are experiencing significant financial difficulty, default or delinquency in interest or principal
payments; indications that they will enter bankruptcy or other financial reorganisation; and changes in arrears or
economic conditions that correlate with defaults.
For financial assets carried at amortised cost (including loans and receivables), a separate allowance account is used
to reduce the carrying amount of financial assets impaired by credit losses. After having taken all possible measures
of recovery, if management establishes that the carrying amount cannot be recovered by any means, at that point the
written-off amounts are charged to the allowance account or the carrying amount of impaired financial assets is
reduced directly if no impairment amount was previously recognised in the allowance account.
When the terms of financial assets that would otherwise have been past due or impaired have been renegotiated, the
Group recognises the impairment for such financial assets by taking into account the original terms as if the terms
have not been renegotiated so that the loss events that have occurred are duly considered.
Financial liabilities
Non-derivative financial liabilities other than financial guarantees are subsequently measured at amortised cost. Gains
or losses are recognised in profit or loss through the amortisation process and when the financial liability is
derecognised.
Derecognition
Financial assets are derecognised when the contractual rights to receipt of cash flows expire or the asset is
transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and
benefits associated with the asset. Financial liabilities are derecognised when the related obligations are discharged,
cancelled or have expired. The difference between the carrying amount of the financial liability extinguished or
transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or
liabilities assumed, is recognised in profit or loss.
(p) Other income
Interest revenue is recognised using the effective interest method.
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New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
(q) Parent entity financial information
The financial information for the parent entity, New Century Resources Limited, disclosed in note 28 has been
prepared on the same basis as the consolidated financial statements, except as set out below.
Investments in subsidiaries
Investments in subsidiaries are accounted for at the lower of cost and recoverable amount in the financial statements
of New Century Resources Limited.
Tax consolidation legislation
New Century Resources Limited and its wholly-owned Australian controlled entities have implemented the tax
consolidation legislation. The Group has applied to become consolidated tax entity.
The head entity, New Century Resources Limited, and the controlled entity in the tax consolidated group account for
their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated
group continues to be a standalone taxpayer in its own right.
In addition to its own current and deferred tax amounts, New Century Resources Limited also recognises the current
tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed
from the controlled entity in the tax consolidated group.
New Century Resources Limited will be responsible for any current tax payable, current tax receivable and deferred
tax assets relating to unused tax losses or unused tax credits of the wholly owned subsidiary, which are transferred to
New Century Resources Limited under tax consolidation legislation.
The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax
instalments.
Assets or liabilities arising with the tax consolidated entity are recognised as current amounts receivable from or
payable to other entity in the Group.
Any difference between the amounts assumed and amounts receivable or payable are recognised as a contribution to
(or distribution from) wholly-owned tax consolidated entity.
Share-based payments
The grant by the Company of options over its equity instruments to the employees of subsidiary undertakings in the
Group is treated as a capital contribution to that subsidiary undertaking. The fair value of employee services received,
measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment
in subsidiary undertakings, with a corresponding credit to equity. The Company measures fair value for Share based
payments using the Black-Scholes model with the assumptions detailed in note 27.
(r) Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not
the legal ownership are transferred to entities in the consolidated group, are classified as finance leases.
Finance leases are capitalised by recognising an asset and a liability at the lower of the amounts equal to the fair
value of the leased property or the present value of the minimum lease payments, including any guaranteed residual
values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for
the period.
Leased assets are depreciated on a straight-line basis over the shorter of the lease term or estimated useful lives.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are
recognised as expenses on a straight line basis over the lease term.
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New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the
lease term.
(s) Convertible notes
Compound financial instruments issued by the Group comprise convertible notes denominated in Australian dollars
that can be converted to ordinary shares at any time before maturity at the option of the holder, where the number of
shares to be issued is fixed and does not vary with changes in fair value.
The liability component of compound financial instruments is initially recognised at the fair value of a similar liability
that does not have an equity conversion option. The equity component is initially recognised at the difference between
the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any
directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial
carrying amounts.
Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised
cost using the effective interest method. The equity component of a compound financial instrument is not remeasured.
Interest related to the financial liability is recognised in profit or loss. On conversion, the financial liability is reclassified
to equity and no gain or loss is recognised.
(t) New and amended accounting policies adopted by the Group
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the
AASB that are mandatory for the current reporting period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted.
(u) New accounting standards for application in future periods
Accounting Standards and Interpretations issued by the AASB that are not yet mandatorily applicable to the Group,
together with an assessment of the potential impact of such pronouncements on the Group when adopted in future
periods, are discussed below:
•
AASB 9: Financial Instruments and associated Amending Standards (applicable from 1 July 2018 for the
Group)
AASB 9 includes a single approach for the classification and measurement of financial assets, based on cash flow
characteristics and the business model used for the management of the financial instruments. It introduces the
expected credit loss model for impairment of financial assets which replaces the incurred loss model used in AASB
139. The expected credit loss model requires an entity to account for expected credit losses and changes in those
expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. In other words, it
is no longer necessary for a credit event to have occurred before credit losses are recognised. The standard also
amends the rules on hedge accounting to align the accounting treatment with the risk management objective and
strategy of the business.
Given credit risk has not been a significant issue for the Group, and also given there are no hedge accounting
transactions for the Group, the new standard is expected to have an insignificant impact on the Group.
•
AASB 15: Revenue from Contracts with Customers and associated Amending Standards (applicable from 1
July 2018 for the Group)
AASB 15 establishes a single comprehensive model for entities to use in accounting for revenue arising from
contracts with customers. AASB 15 will supersede the current revenue recognition guidance including AASB 18
Revenue when it becomes effective. The core principle of AASB 15 is that an entity recognises revenue to depict the
transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity
expects to be entitled to in exchange for those goods or services.
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New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
The Group did not generate any revenue during the financial year. The new AASB 15 will require certain additional
disclosures, in particular in relation to the impact of provisional pricing adjustments. No other material measurement
differences for the Group have been identified between the current revenue recognition standard and AASB 15.
•
AASB 16 Leases (applicable from 1 July 2019 for the Group)
AASB 16 provides a comprehensive model for the identification of lease arrangements and their treatment in the
financial statements. The accounting model will require lessees to recognise their leases in the statement of financial
position as an asset (the right to use the leased item) and a liability reflecting future lease payments, except for short-
term leases and leases of low value assets. Depreciation of the leased asset and interest on lease liability will be
recognised over the lease term.
The Group’s project for the implementation of the new accounting standard AASB 16 Leases is currently underway.
This includes identifying changes to the Group’s accounting policies, internal and external reporting requirements, IT
systems, business processes and controls. The Directors anticipate that the application of AASB 16 from 1 July 2019
may have a material impact on the amounts reported and disclosures made in the Group’s financial statements. Upon
the application of AASB 16, the Group will recognise a right-of use asset and a corresponding liability in respect of the
lease arrangements, which meet the definition of lease, unless they qualify for low value or short-term leases. The
Group has in relation to Century Project transitioned from exploration to construction phase during 2018 financial year,
and is scheduled to announce commissioning in the last quarter of 2018. This has and continues to lead the Group to
negotiate and execute new contracts for the mining phase. Accordingly, it is not practicable to provide a reasonable
quantitative estimate of the effect of AASB 16 until the Group performs a more detailed assessment. The Group’s
adoption approach and application of the transition provisions under the new standard will depend on the outcome of
this assessment.
Other mandatory accounting standards and interpretations issued and required to be adopted as of 1 July 2018 have
not been included above as they do not have a material impact on the Consolidated Financial Statements.
• Other mandatory Accounting Standards and Interpretations
Other mandatory Accounting Standards and Interpretations issued and available for early adoption but not applied by
the Group or not available for early adoption which will become mandatory in subsequent years have not been
included above as they are not expected to have a material impact on the Group financial statements.
(v) Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which
it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the
reporting period.
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New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Note 2. Critical accounting judgements, estimates and assumptions
Estimates and judgements are continually evaluated and are based on experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates may differ
from the actual results. The critical estimates and judgements that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Going concern
For the reasons detailed in note 1(a), the financial report is prepared on a going concern basis.
Mine rehabilitation, restoration and dismantling obligations
Provision is made for the anticipated costs of future restoration and rehabilitation of mining areas from which natural
resources have been extracted in accordance with the accounting policy. These provisions which include future cost
estimates associated with reclamation, plant closures, waste site closures, monitoring, demolition of equipment,
decontamination, water purification and permanent storage of historical residues, are discounted to their present
value.
At each reporting date the rehabilitation liability is remeasured in line with changes in discount rates, and timing or
amounts of the costs to be incurred. Rehabilitation, restoration and dismantling provisions are adjusted for changes in
estimates. Adjustments to the estimated amount and timing of future rehabilitation and restoration cash flows are a
normal occurrence in light of the significant judgements and estimates involved.
Uncertainty exists as to the amount of rehabilitation obligations which will be incurred due to the impact of changes in
environmental legislation, and many other factors, including future developments, changes in technology, price
increases and changes in interest rates.
The calculation of these provision estimates requires assumptions such as application of environmental legislation,
plant closure dates, available technologies, engineering cost estimates and discount rates. A change in any of the
assumptions used may have a material impact on the carrying value of mine rehabilitation, restoration and dismantling
provisions. The provision at reporting date represents management’s best estimate of the present value of the future
rehabilitation costs required.
Recoverability of assets
The application of the Group’s accounting policy for exploration and evaluation expenditure requires judgement to
determine whether future economic benefits are likely, from either future exploitation or sale, or whether activities have
not reached a stage that permits a reasonable assessment of the existence of reserves.
The recoverable amount of each cash-generating unit is determined as the higher of the asset’s fair value less costs
to sell and its value in use. Value in use and fair value less cost to sell assessments require the use of estimates and
assumptions including discount rates, exchange rates, commodity prices, future capital requirements and future
operating performance, as well as the value that a market participant would place on any resources which have yet to
be proven as reserves associated with the CGU.
A change in any of the critical assumptions listed will alter the value as initially determined and may therefore impact
the carrying value of assets in the future.
Status of asset commissioning
The Group assesses the stage of each mine under construction to determine when a mine moves into the production
phase, this being when the mine is substantially complete and ready for its intended use. The criteria used to assess
the status of commissioning are based on the unique characteristics of each project. Some of the criteria used to
identify the status of commissioning include, but are not limited to completion of a reasonable period of testing of the
mine plant and equipment, the ability to produce metal in saleable form (within specifications) and the ability to sustain
ongoing production of metal.
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New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
When a mine development/construction project moves into the production phase, the capitalisation of certain mine
development/construction costs ceases and costs are either regarded as forming part of the cost of inventory or
expensed, except for costs that qualify for capitalisation relating to mining asset additions or improvements. At this
point all related amounts are reclassified from capital work in progress to relevant categories within Property, Plant
and Equipment and depreciation/amortisation commences.
Income tax and deferred tax assets and liabilities
The Group is subject to income taxes of Australia and jurisdictions where it has foreign operations. Significant
judgement is required in determining the group provision for income taxes. There are many transactions and
calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain for
which provisions are based on estimated amounts. Where the final tax outcome of these matters is different from the
amounts that were initially recorded, such differences will impact the current and deferred tax provision in the period in
which the determination is made.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable profits will be available to utilise those temporary differences and losses, and the tax losses
continue to be available having regard to the nature and timing of their origination and compliance with the relevant
tax legislation associated with their recoupment.
Assumptions about the generation of future taxable profits depend on estimates of future cash flows. These estimates
are based on future production and sales volumes, operating costs, restoration costs, capital expenditure and other
capital transactions. Judgements are also required about the application of income tax legislation. These judgements
and assumptions are subject to risk and uncertainty, which may impact the amount of deferred tax assets and
liabilities recognised and the amount of other tax losses and temporary differences not yet recognised.
Contingencies
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur.
Determination of the Group’s contingent liabilities disclosed in the Consolidated Financial Statements requires the
exercise of significant judgement regarding the outcome of future events.
35
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Note 3. Operating segments
Description of segments
The Group has determined the operating segments based on geographical locations of its major projects. The Group
has two reportable segments; namely, Australia (which constitutes Century Mine) and the United States of America
(which constitutes Kodiak Project), which are the Group’s strategic business units.
Basis of accounting for purposes of reporting by operating segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors, being the chief operating decision maker with
respect to operating segments, are determined in accordance with accounting policies that are consistent to those
adopted in the annual financial statements of the Group.
Intersegment transactions
Segment assets and liabilities are presented net of any intersegment borrowings.
Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of
economic value from the asset. In the majority of instances, segment assets are clearly identifiable on the basis of
their nature and physical location.
Segment liabilities
Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the
operations of the segment. Segment liabilities include trade and other payables and certain direct borrowings.
Unallocated items
There are no items of revenue, expenses, assets and liabilities that are not allocated to operating segments.
36
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Segment information
Australia
United States of America
Group
2018
$
2017
$
2018
$
2017
$
2018
$
2017
$
7,366,665
11,263
-
4,969
7,366,665
16,232
(104,550,872)
(3,373,976)
(18,759,893)
(411,136)
(123,310,765)
(3,785,112)
Total finance
income
Segment result
Loss after income
tax
Assets
Segment assets
130,328,026
5,711,809
959,749
17,946,178
131,287,775
23,657,987
Liabilities
Segment liabilities
(139,124,401)
(19,321,251)
(1,865,652)
(1,720,366)
(140,990,053)
(21,041,617)
(19,125)
(5,810)
(6,576)
(15,779)
(25,701)
(21,589)
(11,451,665)
(44,126)
(590,248)
(391,260)
(12,041,913)
(435,386)
-
-
-
-
-
(1,980,801)
(48,000)
(1,527,631)
(339,829)
(2,622,646)
(2,401,314)
(18,153,406)
-
(1,098,373)
(554,354)
Other
Depreciation and
amortisation
expense
Exploration and
evaluation
expenditure
Employee benefits
– other
Professional
expenses
(1,980,801)
(48,000)
-
(1,523,413)
(339,829)
(4,218)
Finance costs
(2,622,505)
(2,401,314)
(141)
Impairment loss
-
-
(18,153,406)
Other expenses
(1,093,068)
(554,354)
(5,305)
37
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Note 4. Loss before income tax
Other income
Gain on sale of property, plant and equipment
Other income
Total
Loss before income tax includes the following expenses
Exploration and evaluation expenditure
Kodiak Project costs
Century Project costs
2018
$
1,410,837
444,139
1,854,976
2017
$
-
-
-
(590,248)
(11,451,665)
(12,041,913)
(391,260)
(44,126)
(435,386)
Exploration and evaluation costs for the Century Project have been expensed until the technical and commercial
viability of the project was finalised. All eligible expenditure during the construction phase has been capitalised as
Property, Plant and Equipment.
Employee benefit expenses
Wages and salaries including director fees
Other employment expenses
Professional expenses
Legal fees
Auditor's remuneration
- audit or review of financial report
Other professional expenses
Finance income
Interest received
Interest reversed on convertible notes
Discount unwind relating to MMG support fee
Finance costs
MMG bank guarantee support fee
Interest accrued on convertible notes
Borrowing costs
Other expenses
Century Project acquisition costs
Share registry expenses
Rent expenses
Travel expenses
Other administrative expenses
38
(1,954,457)
(26,344)
(1,980,801)
(1,232,963)
(106,663)
(188,005)
(1,527,631)
569,188
4,292,334
2,505,143
7,366,665
(2,586,715)
-
(35,931)
(2,622,646)
(149,600)
(63,440)
(155,649)
(230,558)
(499,126)
(1,098,373)
(48,000)
-
(48,000)
(62,783)
(42,009)
(235,037)
(339,829)
16,232
-
-
16,232
-
(2,401,310)
(4)
(2,401,314)
(318,704)
(6,242)
(82,621)
(49,124)
(97,663)
(554,354)
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Note 5. Income tax benefit
Numerical reconciliation of income tax benefit to prima facie tax payable
Loss from operations before income tax expense
Tax at the Australian tax rate of 30% (2017: 30%)
Tax effect amounts which are not deductible/(taxable) in calculating taxable
income:
Tax effect of different tax rate of overseas subsidiaries
Share based payments
Interest on convertible notes
Write off of receivable
Loss on acquisition classified as exploration expenditure
Accretion in rehabilitation provision
Impairment loss
Income tax benefits not recognised
Other
Income tax expense
Unrecognised deferred tax assets – tax losses
2018
$
2017
$
123,310,765
3,785,112
(36,993,230)
(1,135,534)
(60,649)
967,281
(1,287,700)
2,677,170
21,027,620
6,529,119
5,446,022
1,688,469
5,898
-
(45,113)
-
720,393
-
-
-
-
346,969
113,285
-
Gross tax losses Australia and USA
33,050,743
25,132,337
Tax benefit not recognised Australia
Tax benefit not recognised USA
Total tax benefit not recognised
Unrecognised temporary differences
Exchange differences
Accrued expenses
General provisions
Rehabilitation provision
Funding receivable
Capital raising costs
PP&E and Mineral Inventory
Impairment of overseas investments
Total timing differences not recognised
3,509,597
8,540,835
1,766,304
7,788,833
12,050,432
9,555,137
(1,023,426)
314,499
203,564
34,958,411
(5,175,000)
1,241,624
62,419,303
3,929,789
96,868,764
739,210
76,957
-
-
-
160,697
-
-
976,864
The above temporary differences and tax losses have not been brought to account as they do not meet the
recognition criteria as per the Group’s accounting policy. The benefit of these deferred tax assets will only be obtained
if:
(1) the Group derives future assessable income of a nature and of an amount sufficient to enable the benefit from
the deductions for the temporary differences to be realised;
(2) the Group continues to comply with the conditions for deductibility imposed by tax legislation; and
(3) no changes in tax legislation adversely affect the entity in realising the benefit from the deductions for the
temporary differences.
No franking credits are available.
39
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Note 6. Cash and cash equivalents
Cash on hand
Cash at bank
Cash on deposit
The effective interest rate on cash on deposit was 2.07 percent (2017: NA).
An amount of $82,574 (2017: $52,317) was held in USD at balance date.
Note 7. Trade and other receivables
GST receivable
Other receivable
Note 8. Financial assets
Current
2018
$
15
16,749,120
29,500,000
2017
$
114
5,605,994
-
46,249,135
5,606,108
2,539,424
341,907
22,257
95,658
2,881,331
117,915
MMG funding support payment receivable
17,250,000
-
MMG agreed to pay a series of funding support payments for a total of $34,500,000 to support rehabilitation of the
Century Project. The first three payments of $5,750,000 each have been received by Century Mine Rehabilitation
Project Pty Ltd (CMRP) on 24 March 2017 and 3 July 2017 (before the acquisition of the Century Project by the
Group) and on 5 January 2018. The balance at 30 June 2018 represents the remaining three payments which have
been valued at the amounts receivable. The receipt of these payments, offset by the reduction in the net present value
of remaining funding support payments receivable, is recognised as finance income as shown in note 4.
Non-current
Deposits held as security guarantees
3,167,752
810,727
Term deposits held as security guarantees are for the benefit of other parties in guarantee of liabilities. They are
valued at the face value of the term deposits.
Note 9. Other current assets
Prepayments
Other
840,405
486,995
1,327,400
4,835
-
4,835
40
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Note 10. Property, plant and equipment
At 30 June 2018
At cost
Accumulated depreciation
Movements in carrying value
Year ended 30 June 2018
Balance 1 July 2017
Acquisition of subsidiaries
Additions
Disposals
Exchange differences
Depreciation expense for the year
Impairment loss – refer Note 30
Balance at 30 June 2018
At 30 June 2017
At cost
Accumulated depreciation
Movements in carrying value
Year ended 30 June 2017
Balance 1 July 2016
Additions
Disposals
Exchange differences
Depreciation expense for the year
Balance at 30 June 2017
Land and
buildings
$
Mining plant and
equipment
$
Capital work
in progress
$
Total
$
2,171,694
-
2,171,694
14,848,356
(14,464,283)
57,856,390
-
74,876,440
(14,464,283)
384,073
57,856,390
60,412,157
454,368
1,800,000
-
(82,674)
-
-
-
2,171,694
13,376,737
-
970,291
-
430,930
(25,701)
(14,368,184)
-
-
57,856,390
-
-
-
-
13,831,105
1,800,000
58,826,681
(82,674)
430,930
(25,701)
(14,368,184)
384,073
57,856,390
60,412,157
454,368
-
454,368
13,447,135
(70,398)
13,376,737
470,644
-
-
(16,276)
-
454,368
13,852,717
26,550
-
(480,941)
(21,589)
13,376,737
-
-
-
-
-
-
-
-
-
13,901,503
(70,398)
13,831,105
14,323,361
26,550
-
(497,217)
(21,589)
13,831,105
Note 11. Deferred exploration and development expenditure
Opening balance
Additions during the year
Exchange differences
Impairment loss
Total
2018
$
3,287,297
347,051
150,874
(3,785,222)
2017
$
3,053,375
346,127
(112,205)
-
-
3,287,297
The deferred exploration and development expenditure relates to the Kodiak Project. The ultimate recoupment of the
deferred exploration and development expenditure is dependent upon the successful development and commercial
exploration or alternatively the sale of respective areas of interest. Refer to Note 30 for details on impairment loss
recognised during the financial year.
41
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Note 12. Trade and other payables
Current unsecured liabilities
Trade payables
Amounts payable to director related party
Fund received for shares to be refunded
Other payables and accrued expenses
Non-current
Present value of expected amount payable for Gurnee lease
All payables are on industry standard payment terms.
Note 13 Borrowings – convertible notes
Secured liabilities - current:
Face value of convertible notes on issue
Accrued interest expense
Total carrying value of liability at 30 June
Conversion
2018
$
2017
$
20,738,060
137,303
-
2,138,457
23,013,820
201,868
191,450
282,339
180,393
856,050
-
845,921
-
-
-
14,307,780
4,292,335
18,600,115
Details regarding the issue of the convertible note are set out in the Group’s prior year Annual Report.
On 13 July 2017, all notes were converted by noteholders with the issue of 71,538,898 ordinary shares at an agreed
price of $0.20 per share, for a value of $14,307,780. This resulted in the previously recognised accrued interest
payable of $4,292,335 being reversed and being recognised as finance income during the financial year.
42
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Note 14. Provisions
Current provisions for employee entitlements
Balance at 1 July
Movement for the year
Balance at 30 June
Non-current provision for mine site restoration
Opening balance
Provision for mine site restoration on acquisition of subsidiaries
Increase in provision
Reduction in provision required
Exchange Differences
Balance at 30 June
2018
$
-
678,548
678,548
739,531
94,764,306
21,763,731
-
30,117
117,297,685
2017
$
-
-
-
1,045,835
-
-
(287,592)
(18,712)
739,531
The Group has provisions for mine site restoration associated with the Kodiak Project in Alabama and the Century
Project in Queensland. Movements in balances for the separate projects are as follows:
Century Mine
Provision for mine site restoration on acquisition of subsidiaries
Increase in provision
Balance at 30 June
94,764,306
21,763,731
116,528,037
-
-
-
Kodiak Project
Opening balance
Reduction in provision required
Exchange differences
Balance at 30 June
739,531
-
30,117
769,648
1,045,835
(287,592)
(18,712)
739,531
The provision for the mine site restoration on acquisition of subsidiaries was measured at its fair value.
The increase in provision reflects revisions in mine rehabilitation cost estimates. The rehabilitation will be carried out
at the end of life of the Group’s mining operations.
43
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Note 15. Issued capital
503,972,048 (2017: 189,852,519) fully paid ordinary shares
Funds received for shares to be issued
Other equity securities
2018
$
2017
$
311,618,023
26,765,051
-
-
5,089,834
404,548
311,618,023
32,259,433
Holders of ordinary shares have the right to receive dividends as declared and in the event of winding up the parent
entity, to participate in the proceeds from the sale of all surplus assets in proportion to the number of shares held and
the amount paid up.
At shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each
shareholder has one vote on a show of hands.
Issue of ordinary shares and other equity instruments during the year
Opening balance
189,852,519
32,259,433
186,519,186 26,715,502
2018
2017
Number of
shares
Number of
shares
$
$
-
3,333,333
500,000
Shares issued 2 May 2017 @ $0.15 in placement
Funds received to 30 June 2017 for shares issued in
July 2017
-
-
(5,089,834)
Shares issued 13 July 2017 @ $0.15 from public
offer
34,333,333
5,150,000
Shares issued 13 July 2017 at $0.20 on conversion
of convertible notes
71,538,898
14,307,780
Shares issued 13 November 2017 at $1.20 under
sophisticated investor placement
Shares issued 13 November 2017 at $0.25 on
conversion of share options
44,058,703
52,870,444
1,100,000
275,000
Shares issued 13 November 2017 at agreed value of
$0.15 in payment for services
300,000
45,000
Shares issued 14 November 2017 at $1.20 under
cleansing prospectus
Shares issued 27 February 2018 at market value of
$1.39 for non-controlling interest acquisition
Shares issued 12 April 2018 at $0.25 on conversion
of share options
Shares issued 8 May 2018 at $1.15 under
sophisticated investor placement
Transfer of equity component of convertible notes to
accumulated losses on conversion of notes
Costs arising from issue of shares
10
12
126,000,000
175,140,000
500,000
125,000
36,288,585
41,731,872
-
-
-
-
-
-
-
-
-
-
5,089,834
-
-
-
-
-
-
-
-
-
-
-
(404,548)
(4,792,136)
-
(45,903)
503,972,048
311,618,023
189,852,519 32,259,433
44
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Options over ordinary shares
As at 30 June 2018, there were 114,900,000 (2017: nil) unquoted options over ordinary shares in the Company. The
fair value of unquoted options granted for nil cash consideration during the financial year ended 30 June 2018 was
$43,952,470 (2017: nil). 1,600,000 unquoted employee options with an exercise price of $0.25 each were converted
during the financial year as disclosed in Note 15.
As at 30 June 2018, there were no (2017: nil) quoted options over ordinary shares in the Company.
Each option entitled the holder to subscribe for one share upon exercise of each option.
Total options on issue by the Company as at 30 June 2018 are 114,900,000 (2017: nil). The weighted average
contractual life is 3.02 years (2017: nil). The weighted average exercise price is $0.4238 (2017: nil).
Capital management
The Company’s debt and capital includes ordinary share capital, and financial liabilities, supported by financial assets.
There are no externally imposed capital requirements.
The Board effectively manages the Company’s capital by assessing the Company’s financial risks and adjusting its
capital structure in response to changes in these risks and in the market. These responses include the management
of debt levels and share issues. The Board frequently review budgets and budget variance analyses that include cash
flow projections and working capital projections, to ensure prudent management of capital budgeting requirements.
There has been no change in the strategy adopted by the Board to control the capital of the Group since the prior
year.
Note 16. Reserves
Historically, the Group has recognised accounting adjustments for share-based payment transactions in a Share
Based Payments reserve. From 1 July 2017, a change in presentation has been adopted to recognise adjustments in
the accumulated losses section of equity, rather than in the Share Based Payments reserve. Accordingly, the balance
in the Share Based Payments reserve of $3,196,536 as at 30 June 2017 was transferred to accumulated losses on 1
July 2017.
Note 17. Financial instruments
Financial risk management
The Group’s principal financial instruments are cash, receivables, deposits held as security guarantees, and payables
(including convertible notes).
Overview
The Group has exposure to the following financial risks from their use of financial instruments:
-
-
-
-
liquidity risk
credit risk
interest rate risk; and
foreign exchange risk
This note presents information about the Group’s exposure to each of the above risks. There was no material
exposure to price risk or market risk in 2018 as the Group had no significant exposures to equity markets or
derivatives.
Financial risk management policies
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework. Risk management policies are established by the Board of Directors to identify and analyse the risks faced
by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.
45
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Financial assets
Cash and cash equivalents
Trade and other receivables
Current financial assets
Non-current financial assets
Financial liabilities
Trade and other payables
Current convertible notes
Non-current payables
2018
$
2017
$
46,249,135
2,881,331
17,250,000
3,167,752
5,606,108
117,915
-
810,727
69,548,218
6,534,750
23,013,820
-
-
856,050
18,600,115
845,921
23,013,820
20,302,086
Non-current other financial assets of $3,167,752 (2017: $810,727) consist of security deposits of $2,398,104 (2017:
$73,105) plus an environmental bond of $769,648 (2017: $737,622).
Liquidity risk and liquidity risk management
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is
to ensure that it will have sufficient cash to meet its liabilities when they are due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of
funding through an adequate amount of credit facilities or other fund raising initiatives.
The Board frequently reviews budget variance analyses that include working capital projections to monitor working
capital requirements and optimise cash utilisation.
The Group had funding through convertible notes of $18,600,115 at 30 June 2017 which were all converted in July
2017. The completion of the Century Project transaction in July 2017 and completion of the associated capital raising
provided ongoing funding liquidity following conversion of the convertible notes. The Group continuously monitors
forecast and actual cash flows and the maturity profiles of financial assets and financial liabilities to manage its
liquidity risk. Refer to note 1(a) Going concern for further details of liquidity risk management.
The following are the contractual maturities of financial liabilities:
Non-derivative financial liabilities
30 June 2018
Trade and other payables (note 12)
30 June 2017
Trade and other payables (note 12)
Convertible notes (note 13)
Other payables (note 12)
Carrying
Amount
Under 6
Months
6 – 12
Months
1 - 2
years
2 – 5
years
23,013,820
23,013,820
23,013,820
23,013,820
856,050
18,600,115
845,921
751,649
18,600,115
-
20,302,086
19,351,764
46
-
-
-
-
-
-
-
-
-
-
845,921
845,921
-
-
-
-
-
-
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Credit risk
Credit risk refers to the risk that counterparties will default on its contractual obligations resulting in financial loss to the
Group. The Group has adopted the policy of only dealing with credit worthy counterparties and obtaining sufficient
collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults.
Banks and financial institutions are chosen only if they are independently rated parties with a minimum rating of ‘A’.
The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties
having similar characteristics other than MMG.
The carrying amount of financial assets recorded in the financial statements, net of any provisions for losses,
represents the Group’s maximum exposure to credit risk without taking account of the value of any collateral or other
security obtained.
Interest rate risk
Interest rate risk is managed with a mixture of fixed and floating rate debt. The Group’s exposure to interest rate risk
and the effective weighted average interest rate for each class of financial assets and financial liabilities is set out in
the following table:
Weighted
average
interest
rate
%
Fixed
interest
maturing in
1 year or
less
$
Fixed
interest
maturing
in over 1
year
$
Floating
interest
rate
$
Non-
interest
bearing
$
Total
$
2018
Financial asset
Cash and cash equivalents
Trade and other
receivables
Current financial assets
Non-current financial
assets
Financial liabilities
Trade and other payables
1.25
16,310,520
29,500,000
-
-
1.5
0.42
-
-
-
-
-
-
2,388,879
(968,409)
Net financial assets
16,310,520
30,920,470
2017
Financial asset
Cash and cash equivalents
Trade and other
receivables
Non-current other financial
assets
Financial liabilities
Trade and other payables
Convertible notes
Other payables
0.43
4,037,690
-
0.27
-
15
10
-
-
-
-
-
-
-
73,105
-
-
-
-
-
-
-
-
-
438,615
46,249,135
2,881,331
17,250,000
2,881,331
17,250,000
778,873
3,167,752
(22,045,411)
(23,013,820)
(696,592)
46,534,398
1,568,418
5,606,108
117,915
117,915
737,622
810,727
-
(18,600,115)
-
-
-
(845,921)
(856,050)
-
-
(856,050)
(18,600,115)
(845,921)
Net financial assets
4,037,690
(18,527,010)
(845,921)
1,567,905
(13,767,336)
47
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
In respect of the above interest rate risk exposure at the balance date, an increase or decrease in interest rates by 1
percent would have decreased the post-tax loss and increased equity by $472,310 (2017: increase in both post-tax
loss and equity by $153,352).
The following tables summarises the sensitivity of the Group’s financial assets and financial liabilities to interest rate
risk:
Carrying
Amount
$
-1%
+1%
Profit
Equity
Profit
Equity
$
$
$
$
2018
Cash and cash equivalents
Trade and other receivables
Current financial assets
Non-current financial assets
Trade and other payables
46,249,135
2,881,331
17,250,000
3,167,752
(23,013,820)
(458,105)
-
-
(23,889)
9,684
(458,105)
-
-
(23,889)
9,684
Total increase/(decrease)
46,534,398
(472,310)
(472,310)
458,105
-
-
23,889
(9,684)
472,310
458,105
-
-
23,889
(9,684)
472,310
2017
Cash and cash equivalents
Trade and other receivables
Non-current other financial
assets
Trade and other payables
Convertible notes
Other payables
5,606,108
117,915
(40,377)
-
(40,377)
-
40,377
-
40,377
-
810,727
(856,050)
(18,600,115)
(845,921)
(731)
-
-
-
(731)
-
-
-
731
-
-
-
731
-
-
-
Total increase/(decrease)
(13,767,336)
(41,108)
(41,108)
41,108
41,108
Foreign exchange risk
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial instrument fluctuating
due to movement in foreign exchange rates of currencies in which the Group holds financial instruments which are
other than the AUD functional currency of the Group.
With instruments being held by overseas operations, fluctuations in the US dollar may impact on the Group’s financial
results unless those exposures are appropriately hedged. The Group does not currently have any foreign currency
hedging facility in place.
The following table shows the foreign currency risk on the financial assets and liabilities of the Group’s operations
denominated in currencies other than the presentation currency.
2018
Net Financial Assets/(Liabilities) in $AUD
Consolidated Group
USD
(106,223)
Total
(106,223)
2017
Net Financial Assets/(Liabilities) in $AUD
Consolidated Group
USD
66,955
48
Total
66,955
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
In respect of the above USD foreign currency risk exposure in existence at the balance sheet date a sensitivity of
-10 percent lower and 10 percent higher has been applied. With all other variables held constant, post tax loss and
equity would have been affected as follows:
AUD $10,622 gain; AUD $10,622 loss(2017: AUD $6,695 loss; AUD $6,695 gain).
Financial risk management objectives
The Group's and parent entity's activities expose them to a variety of financial risks: market risk (including price risk
and interest rate risk), credit risk and liquidity risk. The Group's and parent entity's overall risk management program
focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial
performance of the Group. The Group and parent entity use different methods to measure different types of risk to
which it is exposed. These methods include sensitivity analysis in the case of interest rate and other price risks,
ageing analysis for credit risk and beta analysis in respect of investment portfolios to determine market risk.
Risk management is carried out by the Board of Directors. These policies include identification and analysis of the risk
exposure of the Group and parent entity and appropriate procedures, controls and risk limits.
Fair value estimation
The net fair value of cash and non interest bearing monetary assets and financial liabilities of the Group approximates
their carrying amount. The convertible notes were valued using an income approach using level 3 inputs.
Note 18. Interests of KMPs
Refer to the remuneration report contained in the Directors’ Report for additional details of the remuneration paid or
payable to each member of the Group’s KMPs for the financial year ended 30 June 2018.
The totals of remuneration paid to KMPs of the Company and the Group during the financial year are as follows:
Short-Term
Benefits
Post Employment
Benefits
Termination
Payments
Share-Based
Payments
Total KMP
Compensation
$
$
945,907
20,875
78,000
-
$
-
-
$
$
2,186,655
3,153,437
-
78,000
2018
Total
2017
Total
Other KMPs Transactions
For details of other transactions with KMPs, refer to Note 22 Related party transactions and balances.
Note 19. Remuneration of auditors
Remuneration of the auditors for:
- Audit or review of the financial report
Remuneration of previous auditors for:
- Audit or review of the financial report
49
2018
$
2017
$
106,663
36,018
-
106,663
5,991
42,009
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Note 20. Contingent liabilities
Bank guarantees
The Group has provided certain bank guarantees to third parties, primarily associated with the terms of mining leases,
exploration licences and office leases, in respect of which the relevant entity is obliged to indemnify the bank if the
guarantee is called upon. At the end of the financial year, no claims have been made under any of these guarantees.
The amount of some of these guarantees may vary from time to time depending upon the requirements of the
recipient. These guarantees are backed by deposits which amounted to $3,167,752 as at 30 June 2018 (30 June
2017: $810,727).
Deeds of indemnity
The Group has granted indemnities under Deeds of Indemnity with current and former Executive and Non-executive
Directors and officers. Each Deed of Indemnity indemnifies the relevant director or officer to the fullest extent
permitted by law for liabilities incurred while acting as an officer of the Group, its related bodies corporate and any
associated entity, where such an office is or was held at the request of the Company. Under these indemnities, the
Company meets the legal costs incurred by Company officers in responding to investigations by regulators and may
advance funds to meet defence costs in litigation, to the extent permitted by the Corporations Act 2001.
Other
The Company and its controlled entities are defendants from time to time in other legal proceedings or disputes,
arising from the conduct of their business. The Group does not consider that the outcome of any of these proceedings
or disputes is likely to have a material effect on the Company’s or the Group’s financial position.
Note 21. Commitments
Century Mine
As part of the acquisition of Century Project, the Group has an agreement with MMG for MMG to acquire and stand
behind Financial Assurance Bond of $193.7 million for the benefit of Century to meet its financial assurance
obligations with the Queensland Government for a period of ten years through to 31 December 2026.
Once production restarts at the Century Project, the Group must allocate an amount equal to 40 percent of its
earnings before interest, tax, depreciation and amortisation (EBITDA), which will go towards replacing the Financial
Assurance Bond. In the event that the total balance of the Financial Assurance Bond has not been replaced by 31
December 2026, the Group will be required to source alternative financing for the outstanding amount. Both the
Company and subsidiaries holding the Century Project have indemnified MMG against any default on amounts owing
to MMG under these agreements.
The Group has an obligation to pay MMG a fee of 1.35 percent per annum payable quarterly in advance on the face
value of the Financial Assurance Bond until the expiry of the Financial Assurance Bond agreement on 31 December
2026.
Operating leases
The Group leases various offices and premises under non-cancellable operating leases. The future aggregate
minimum lease payments under non-cancellable operating leases as at 30 June 2018 was approximately $1 million.
Capital commitments
The Group did not have any significant commitments for capital expenditure contracted for at the reporting date but
not recognised as liabilities.
Take or pay contracts
The Group has entered into take or pay contracts for supply of electricity and gas for its Century Mine. The aggregate
future take or pay commitment as at 30 June 2018 was $130 million.
50
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Note 22. Related party transactions and balances
The Group’s main related entities are KMPs and Kingslane Pty Ltd (and its associated entities). KMPs are any people
having authority and responsibility for planning, controlling and directing the activities of the entity, directly or indirectly,
including any director (whether executive or otherwise). For further disclosures relating to KMPs see note 18.
Kingslane Pty Ltd and associated entities (Kingslane) is a substantial shareholder in the Company and held
42,177,536 (2017: 22,090,028) ordinary shares in the Company at 30 June 2018. Entities controlled by Kingslane
also:
hold a 10 percent non-controlling interest in the Kodiak Project and Kodiak Mining Company LLC through a non-
controlling shareholding in 70 percent owned Attila Resources US LLC;
held convertible notes with face values of $4,504,301 at 30 June 2017 that were converted into 22,521,506
ordinary shares on 17 July 2017. These were recognised as a current liability of $5,855,592 at 30 June 2017; and
received $60,000 (2017: $60,000) during the financial year for serviced office rent.
Evan Cranston is a director of Konkera Corporate. Konkera Corporate received $120,000 (2017: $120,000) during the
financial year for administrative, bookkeeping and accounting services. The company secretarial fees of $35,694
(2017: $30,000) for Oonagh Malone and Director fees of $172,032 (2017: $24,000) for Evan Cranston were also
payable to Konkera Corporate. Bryn Hardcastle is a director of Bellanhouse which provided legal services totalling
$1,067,814 (2017: $179,049) in the financial year ended 30 June 2018. $137,303 was outstanding to Bellanhouse at
30 June 2018 (2017: $112,100).
John Carr and Patrick Walta each received 7,000,000 of the 30,000,000 share options that were issued on 13 July
2017 as purchase consideration for the initial 70 percent interest in Century Mining Rehabilitation Project Pty Ltd, as
detailed in note 29. These share options have been valued at $0.08239 per share option as shown in note 27.
Evan Cranston, Patrick Walta and John Carr each received 31,500,000 ordinary shares and a total of 8,750,000 share
options, as described in note 29, as part of the purchase consideration for the remaining non-controlling interest.
All related party transactions are on normal arms’ length terms.
51
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Note 23. Controlled entities
Information about principal subsidiaries
Set out below are the Group’s subsidiaries at 30 June 2018. The subsidiaries listed below have share capital
consisting solely of ordinary shares, which are held directly by the Group, and the proportions of ownership interests
held equals the voting rights held by the Group. Each subsidiary’s country of incorporation or registration is also its
principal place of business.
Name of Subsidiary
Principal place
of business
Ownership interest held by
the Group
Proportion of non-controlling
interests
Attila Resources US Pty Ltd
Australia
Attila Resources Holding US
Ltd
United States of
America
Attila Resources US LLC
Kodiak Mining Company LLC
United States of
America
United States of
America
Century Bull Pty Ltd
Century Mining Rehabilitation
Pty Ltd (CMRP)
Australia
Australia
Century Mining Limited (CML)
Australia
PCML SPC Pty Ltd (PCML)
SPC1 Pty Ltd
SPC2 Pty Ltd
Investment Co Pty Ltd
*Indirect Holdings
Australia
Australia
Australia
Australia
2018
100%
2017
100%
100%*
100%*
70%*
70%*
70%*
100%
100%
100%*
100%*
100%*
100%*
100%*
70%*
-
-
-
-
-
-
-
2018
2017
-
-
30%
30%
-
-
-
-
-
-
-
-
-
30%
30%
-
-
-
-
-
-
-
Since acquisition on 13 July 2017, the Group now also own:
• 49 percent interest in Lawn Hill & Riversleigh Pastoral Holding Company Pty Ltd through a 49 percent
shareholding and 1 special share held by PCML. Pursuant to the Gulf Communities Agreement (GCA), CML and
the Gulf Aboriginal Development Company (GADC) established PCML as a special purpose vehicle to hold
shares in Lawn Hill and Riversleigh Pastoral Holding Company Pty Ltd (Pastoral Company), which holds leases
for the adjacent Lawn Hill and Riversleigh cattle stations. The GADC incorporated Waanyi SPC Pty Ltd to hold
the other 51 percent of shares in the Pastoral Company. No assets or liabilities of PCML or Pastoral Company
are recognised as assets, liabilities or equity interests by the Group.
• 1 Class C share in ABDT Pty Ltd, the trustee of the Aboriginal Development Benefits Trust (ADBT), which is a
charitable trust established pursuant to the GCA for the delivery of economic benefits to the Native Title Groups
and other Aboriginal peoples living in communities across the Lower Gulf Region.
52
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Summarised financial information of subsidiaries with material non-controlling interests
Century Mining Rehabilitation Pty Ltd
When CMRP and associated entities were acquired on 13 July 2017 as described in note 29, the 30 percent non-
controlling interests in CMRP and subsidiary entities acquired had nil value at the date of acquisition because the
value at the date of acquisition of the assets acquired less liabilities assumed was negative. This is because the
Company has chosen to not capitalise the effective $70,092,066 of mineral exploration and evaluation expenditure
associated with the acquisition of the Century Project.
From acquisition of the controlling interests on 13 July 2017, until acquisition of the remaining non-controlling interests
on 27 February 2018 as described in note 29, CMRP and associated entities had a loss of $14,298,248. 30 percent of
this loss, being $4,289,474, has been ascribed to the non-controlling interest.
Attila Resources US LLC
The 30 percent non-controlling interests in Attila Resources US LLC and Kodiak Mining Company LLC (Kodiak) had
nil value at the date of acquisition because the value at the date of acquisition of the business combination was
calculated by deducting New Century Resources Limited’s convertible note liability from the fair value of the Kodiak
minority shareholders’ proportionate interests in the net assets of Kodiak. This is because the convertible note is
secured by the members of Kodiak in proportion with each members’ interest in the shares of Kodiak.
In accordance with the agreements with the Kodiak minority shareholders, subsequent to acquisition, all funding
towards the feasibility study and operations of Kodiak is to be funded and borne by New Century Resources Limited
resulting in a free carry for the non-controlling interests until a decision to mine is made. Once a decision to mine is
made capital contributions made by New Century Resources Limited will be refunded in priority to normal equity
distributions to Kodiak equity holders. New Century Resources Limited considers that this is an arrangement to share
profits (losses) in a manner other than in proportion to their ownership interests. Accordingly, New Century Resources
Limited has reflected this profit-sharing arrangement when attributing the profit or loss and other comprehensive
income of Kodiak, resulting in the non-controlling interest being carried at nil value.
Set out below is the summarised financial information for each subsidiary that has non-controlling interests that are
material to the Group.
Summarised financial position before intra-group eliminations
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
2018
$
179,837
778,873
2017
$
166,407
17,837,482
(26,129,695)
(23,394,654)
(769,648)
(1,487,016)
(25,940,633)
(6,877,781)
Carrying amount of non-controlling interests
-
-
The non-current assets and non-current liabilities of Kodiak include a secured deposit of $778,873 (30 June 2017:
$737,622) that is security against a non-current reclamation liability of $769,648 (30 June 2017: $739,531). The nature
of this non-current reclamation liability restricts the Group’s ability to access the secured deposit for the purpose of
meeting other liabilities of the Group.
The current liabilities of Kodiak also include intra-group loan balances totaling $25,033,960 (30 June 2017:
$23,142,491). These intra-group loan balances are unsecured and at call, so consequently considered current.
Although the functional currency of Kodiak is United States dollars and the presentation currency of the Group is
Australian dollars, there are no foreign currency translation reserve movements recognised in other comprehensive
reserve movements only arise on consolidation.
income of Kodiak as
foreign currency
translation
53
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Summarised financial performance before intra-group eliminations
Revenue
Loss before income tax
Income tax expense
Post-tax loss
Other comprehensive income
Total comprehensive income
Profit/(loss) attributable to non-controlling interests
Distributions paid to non-controlling interests
Summarised cash flow information before intra-group eliminations
Net cash from/(used in) operating activities
Net cash from/(used in) investing activities
Net cash from/(used in) financing activities
2018
$
-
2017
$
-
(18,750,370)
(402,069)
-
-
(18,750,370)
(402,069)
-
-
(18,750,370)
(402,069)
-
-
2018
$
(866,230)
(10,828)
901,678
-
-
2017
$
(699,458)
19,865
885,144
Cash and cash equivalents at end of year
80,274
52,317
Kodiak’s net cash from financing activities for both 2018 and 2017 solely comprised movements in intra-group loan
account balances.
Note 24. Events occurring after reporting period
On 13 August 2018, the Company announced that it has commenced zinc concentrate production at the Century
Mine. Further details are set out in the ASX announcement that is located at the Company’s website.
On 3 September 2018, the Company announced the entry into a legally binding term sheet for a $40 million senior
secured debt and bank guarantee facility with National Australia Bank. Further information is set out in the Company’s
ASX announcement which is located at the Company’s website.
There have been no other events that have occurred subsequent to the reporting date which have significantly
affected or may significantly affect the Group’s operations or results in future years.
54
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Note 25. Cash-flow information
Reconciliation of cashflow from operations with loss after income tax
Loss after income tax
Non-cashflows in loss
Depreciation and amortisation
Loss on acquisition classified as exploration expenditure
Impairment loss
Gain on disposal of property, plant and equipment
Share based payments
Equity settled expenses
Reversal of interest expense on convertible notes
Changes in assets and liabilities net of effects of purchase of subsidiaries
Increase in trade and other receivables
Increase in prepayments
Increase in other assets
(Decrease)/increase in trade and other payables
Increase in borrowings due to accrued interest payable and expensing of
capitalised borrowing costs
Increase/(decrease) in provisions
Exchange differences
2018
$
2017
$
(123,310,765)
(3,785,112)
25,701
70,092,066
18,153,406
(1,410,837)
3,224,270
45,000
(4,292,334)
(99,011)
(452,132)
(3,178,831)
(1,493,829)
-
22,172,935
-
21,589
3,395
-
-
-
-
-
(3,809)
(592)
-
93,597
2,401,310
(287,592)
(3,676)
Net cash used in operating activities
(20,524,361)
(1,560,890)
Acquisition of subsidiaries
Refer to note 29 regarding the acquisition of the Century Project.
Non cash financing and investing activities
The Group did not have any non-cash financing and investing activities during the financial year ended 30 June 2018
(2017:nil) except as disclosed in note 15 related to the issue of ordinary shares as a result of conversion of notes, and
as disclosed in note 29 for the acquisition of the Century Project.
55
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Note 26. Earnings per share
The following reflects the income used in the basic and diluted earnings per share computations:
2018
2017
Basic / dilutive earnings per share
Basic loss per share - cents
Weighted average number of ordinary shares outstanding during the year used in
calculation of basic earnings per share - $
(32.32)
(2.02)
368,312,425
187,057,999
Net loss used in the calculation of basic earnings per share - $
(119,021,291)
(3,785,112)
Share options are not considered dilutive as the conversion of options will result in a decrease in the net loss per
share. The weighted average number of shares has no dilutive effect to the diluted earnings per share.
Due to the Group being in a loss position, it is considered counter dilutive and therefore earnings per share are not
diluted.
Note 27. Share based payments
Options
No options were issued or recognised in the financial year ended 30 June 2017. The following options were
recognised during the financial year:
Number of
options
Exercise
price
$
Issue
date
Expiry
date
Value of
options
$
Amount
recognised
in period
$
Century Project
Consideration options
30,000,000
0.25 13/07/2017 13/07/2022
2,471,700
2,471,700
25c 3 year director options
6,000,000
0.25 13/07/2017 13/07/2020
50c 3 year director options
6,000,000
0.50 13/07/2017 13/07/2020
25c 4 year director options
7,500,000
0.25 13/07/2017 13/07/2021
50c 4 year director options
7,500,000
0.50 13/07/2017 13/07/2021
75c 4 year director options
7,500,000
0.75 13/07/2017 13/07/2021
$1 4 year director options
7,500,000
1.00 13/07/2017 13/07/2021
25c 3 year employee
options
8,500,000
0.25 13/07/2017 13/07/2020
October employee options
February employee options
500,000
500,000
1.60
2/10/2017
2/10/2020
1.99 27/02/2018 27/02/2021
358,980
218,700
540,525
373,425
285,150
229,425
511,275
330,130
376,660
358,980
218,700
540,525
373,425
285,150
229,425
511,275
330,130
376,660
Tranche 1 non-controlling
interest options
Tranche 2 non-controlling
interest options
Tranche 3 non-controlling
interest options
Tranche 4 non-controlling
interest options
22,000,000
0.25 27/02/2018 27/02/2021
26,004,000
26,004,000
6,000,000
0.50 27/02/2018 27/02/2021
6,180,000
6,180,000
3,500,000
0.75 27/02/2018 27/02/2021
3,199,000
3,199,000
3,500,000
1.00 27/02/2018 27/02/2021
2,873,500
2,873,500
Total
116,500,000
43,952,470
43,952,470
All options granted during the year were issued during the financial year and vested during the financial year. Amounts
recognised for director and employee options, totalling $3,224,270, have been recognised as a share based payment
56
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
expense. The $2,471,700 recognised for the Century Project consideration options has been recognised as loss on
acquisition classified as exploration expenditure on the original acquisition as detailed in note 29. The $38,256,500
recognised for the non-controlling interest options has been reflected directly in the balance of accumulated losses as
described in note 29.
These options have been valued using the Black-Scholes model with the following additional parameters.
Tranche
Century Project
Consideration options
Share
price
grant
date
$
Number of
options
30,000,000
0.15
25c 3 year director options
6,000,000
50c 3 year director options
6,000,000
0.15
0.15
25c 4 year director options
7,500,000
0.15
50c 4 year director options
7,500,000
0.15
75c 4 year director options
7,500,000
0.15
$1 4 year director options
7,500,000
0.15
25c 3 year employee
options
8,500,000
0.15
October employee options
500,000 1.115
February employee options
500,000 1.115
Tranche 1 non-controlling
interest options
Tranche 2 non-controlling
interest options
Tranche 3 non-controlling
interest options
Tranche 4 non-controlling
interest options
22,000,000
1.39
6,000,000
1.39
3,500,000
1.39
3,500,000
1.39
Term
years
Volatility
%
Interest
rate
%
Value
per
option
$
Grant
date
Value of
options
$
5
3
3
4
4
4
4
3
3
4
3
3
3
3
80
80
80
80
80
80
80
80
107
107
1.9 13/07/2017 0.08239
2,471,700
1.65 31/05/2017 0.05983
1.65 31/05/2017 0.03645
358,980
218,700
1.69 31/05/2017 0.07207
540,525
1.69 31/05/2017 0.04979
373,425
1.69 31/05/2017 0.03802
285,150
1.69 31/05/2017 0.03059
229,425
1.94 13/07/2017 0.06015
2.15
2.24
2/10/2017 0.66026
2/10/2017 0.75332
511,275
330,130
376,660
76.63
2.06 27/02/2018 1.18230 26,004,000
76.63
2.06 27/02/2018
1.03006 6,180,000
76.63
2.06 27/02/2018
0.91353 3,199,000
76.63
2.06 27/02/2018
0.82065 2,873,500
Total
116,500,000
43,952,470
There were no options on issue at 30 June 2017. The weighted average remaining contractual life of options
outstanding at the end of the financial year was 3.02 years. The weighted average exercise price was $0.424. The
weighted average value of options recognised during the financial year was $0.0382.
57
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
The following options were issued to Directors as part of their remuneration. Although these options have been
escrowed for two years from the issue date, they vested at the issue date for financial accounting purposes.
Director
Tolga Kumova
Ernest Thomas Eadie
Bryn Hardcastle
Oonagh Malone
Number
of
Options
7,500,000
7,500,000
7,500,000
7,500,000
2,500,000
2,500,000
2,000,000
2,000,000
1,500,000
1,500,000
Exercise
Price
$
Term
years
0.25
0.50
0.75
1.00
0.25
0.50
0.25
0.50
0.25
0.50
4
4
4
4
3
3
3
3
3
3
Value
for
Director
$
Total
value
$
540,525
373,425
285,150
229,425
1,428,525
149,575
91,125
240,700
119,660
72,900
89,745
54,675
192,560
144,420
Total
42,000,000
2,006,205
2,006,205
Performance rights
There were no performance rights on issue or recognised in 2018 or 2017.
58
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Note 28. Parent entity
The following information has been extracted from the books and records of the parent entity and has been prepared
in accordance with Accounting Standards.
Statement of financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Statement of profit or loss and comprehensive income
Total loss
Total comprehensive loss
Guarantees
2018
$
2017
$
46,111,855
262,719
5,581,371
17,381,174
46,374,574
22,962,545
304,249
-
19,321,251
-
304,249
19,321,251
46,070,325
3,641,294
311,971,571
-
(265,901,246)
32,259,433
3,196,536
(31,814,675)
46,070,325
3,641,294
(281,286,577)
(3,373,976)
(281,286,577)
(3,373,976)
There are no guarantees entered into by the parent entity in the financial year ended 30 June 2018 in relation to the
debt of a subsidiary.
Contingent liabilities and Commitments
Refer to Note 20 for Contingent liabilities and Note 21 for Commitments.
59
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Note 29. Acquisition of Century Project
During 2017, the Company executed a binding earn-in agreement to earn 100 percent of Century Mine Rehabilitation
Project Pty Ltd (CMRP), a wholly owned subsidiary of Century Bull Pty Ltd (Century Bull), via:
-
Initial 70 percent of CMRP (transferred up front) in consideration for:
-
the issue of 30 million unquoted options in New Century Resources Limited with an exercise price of
$0.25 each and expiring five years from the date of issue to Century Bull or its nominees;
- a 2 percent net smelter royalty from operations; and
- a commitment to sole fund project expenditure of $10 million for first three years.
- Following expenditure of the $10 million, an option to acquire the remaining 30 percent based on an agreed New
Century Resources Limited enterprise value formula, being 30 percent of the fully diluted enterprise value of New
Century Resources Limited, to be paid at New Century Resources Limited’s sole election in any combination of
cash (if permitted by the Listing Rules applicable at the time) and New Century Resources Limited shares subject
to requisite shareholder approval.
Completion of this acquisition was finalised on 13 July 2017. Evan Cranston and Patrick Walta, both Directors of New
Century Resources Limited, were shareholders in Century Bull. John Carr, a KMP of the Group was also a
shareholder in Century Bull.
CMRP owns 100 percent of the Century Mine and associated infrastructure, following agreements with MMG for the
acquisition of the relevant MMG Australian subsidiaries which hold the Century assets. The Century assets include:
- All MLs and the EPM associated with the Century Project;
- All site infrastructure including processing plant, mining camp and airport;
- The slurry pipeline, Karumba Port Facility and M.V. Wunma Transhipment Vessel; and
- A 49 percent interest in the Lawn Hill & Riversleigh Pastoral Holding Company.
As part of the transaction with MMG, CMRP also acquired:
-
-
$34.5 million in progressive cash payments to assist with ongoing rehabilitation and care and maintenance
activities for the site;
$12.1 million in cash, administered by an independent trust, to assist with remaining obligations contained in the
Gulf Communities Agreement and agreed community projects for the benefit of Lower Gulf communities; and
- An agreement with MMG for MMG to procure and stand behind the existing provision of bank guarantees of
$193.7 million for the benefit of Century to meet its financial assurance obligation with the Queensland
Government for a period of ten years through to 31 December 2026, which is to be progressively replaced via
profits from operations.
On 13 July 2017, the Group issued 30,000,000 unquoted share options (Consideration Options) exercisable at $0.25
each and expiring on 13 July 2022 in partial consideration for the Century Project. This is in addition to acceptance of
commitments as detailed in note 21. The Consideration Options are valued at a total of $2,471,700 as detailed in note
27. The acquisition has been accounted for as an acquisition of subsidiaries with associated assets and liabilities, not
as an acquisition of a business combination. It is not considered an acquisition of a business combination because
relevant processes were not acquired as part of the acquisition.
60
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Details of the purchase consideration and the net deficit acquired are as follows:
Purchase consideration paid by New Century Resources Limited
Consideration Options
Total purchase consideration
The fair value of assets and liabilities recognised as a result of the acquisition are as follows:
Cash and cash equivalents
Trade and other receivables and prepayments
MMG funding support payments receivable
Property, plant and equipment
Trade and other payables
Employee provisions
Provision for rehabilitation
Net deficit acquired at fair value
Loss on acquisition classified as an exploration expenditure
13 July 2017
$
2,471,700
2,471,700
4,732,628
1,421,018
20,494,857
1,800,000
(1,035,219)
(269,344)
(94,764,306)
(67,620,366)
(70,092,066)
Non-controlling interest acquisition on 27 February 2018
On 27 February 2018, following shareholder approval on 23 February 2018, the Company acquired the remaining 30
percent interest in the Century Project in consideration for 126,000,000 shares and 35,000,000 unquoted share
options (Non-controlling Interest Consideration Options). This interest was acquired through the acquisition of Century
Bull.
The shares have been valued at $1.39 each, being the fair value on 27 February 2018 based on the closing share
price on the ASX, for a total value of $175,140,000. The Non-controlling Interest Consideration Options have a total
value of $38,256,500.
The total of $175,140,000 for issue of the shares along with the $4,289,474 balance of the non-controlling interest as
at the transaction date, totalling $179,429,474 has been recognised directly in accumulated losses.
Vendors for Century Bull and the non-controlling interest included Directors Patrick Walta and Evan Cranston, along
with John Carr, a KMP of the Group. They each received:
• 31,500,000 shares:
• 5,500,000 Tranche 1 Non-controlling Interest Consideration Options as described in Note 27:
• 1,500,000 Tranche 2 Non-controlling Interest Consideration Options as described in Note 27:
• 875,000 Tranche 3 Non-controlling Interest Consideration Options as described in Note 27: and
• 875,000 Tranche 4 Non-controlling Interest Consideration Options as described in Note 27.
61
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
Note 30. Impairment
Pre
tax
2018
$
Tax
impact
2018
$
Post
tax
2018
$
Pre
tax
2017
$
Tax
impact
2017
$
Post
tax
2017
$
Property, plant and equipment
Deferred exploration and development
expenditure
14,368,184
- 14,368,184
3,785,222
-
3,785,222
Total impairment
18,153,406
- 18,153,406
-
-
-
-
-
-
-
-
-
The Group recognised an impairment loss of $18,153,406 for its Kodiak Project during the year ended 30 June 2018,
comprising property plant and equipment impairment of $14,368,184 and deferred exploration and development
impairment of $3,785,222. The resulted in the carrying value of Kodiak Project reduced to nil as at 30 June 2018.
The Group performs an impairment assessment when facts and circumstances suggest that the carrying amount of an
exploration and evaluation asset may exceed its recoverable amount. The impairment assessment at 30 June 2018
was triggered by the fact that the Kodiak Project is currently on care and maintenance.
Impairment is recognised when the accounting carrying amount exceeds the recoverable amount. Any variation in the
key assumptions used to determine the value would result in a change of the assessed value.
62
New Century Resources Limited and Controlled Entities - ABN 53 142 165 080
DIRECTORS' DECLARATION
The Directors of the Company declare that:
1.
the financial statements and notes, as set out on pages 18 to 62 are in accordance with the Corporations
Act 2001 and:
a.
comply with Accounting Standards, which, as stated in accounting policy Note 1 to the financial
statements, constitutes explicit and unreserved compliance with International Financial Reporting
Standards (IFRS); and
b. give a true and fair view of the financial position as at 30 June 2018 and of the performance for the
year ended on that date of the company and consolidated group;
2.
in the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable.
This declaration has been made after receiving the declarations required to be made to the Directors in accordance
with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2018.
This declaration is made in accordance with a resolution of the Board of Directors.
Evan Cranston
Executive Chairman
Perth
27 September 2018
63
Independent Auditor's Report
To the Members of New Century Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of New Century Resources Limited (“the Company”)
and its subsidiaries (“the Consolidated Entity”), which comprises the consolidated
statement of financial position as at 30 June 2018, the consolidated statement of profit or
loss and other comprehensive income, the consolidated statement of changes in equity
and the consolidated statement of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies, and the
directors’ declaration.
In our opinion:
a.
the accompanying financial report of the Consolidated Entity 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 2018 and of its financial performance for the year then ended;
and
(ii)
complying with Australian Accounting Standards and the Corporations
Regulations 2001.
b.
the financial report also complies with International Financial Reporting Standards
as disclosed in Note 1.
Basis for Opinion
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 about
whether the financial report is free from material misstatement. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Consolidated Entity in
accordance with the auditor independence requirements of the Corporations Act 2001
and the ethical requirements of the Accounting Professional and Ethical Standards
Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independent Auditor’s Report
To the Members of New Century Resources Limited (Continued)
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report of the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Key audit matter
How our audit addressed the key audit matter
Acquisition of the Century Mine Rehabilitation
Project Pty Ltd
Our audit procedures included but were not limited
to:
As disclosed in note 29 to the financial statements, the
Consolidated Equity acquired an initial 70% of Century
Bull Pty Ltd and its subsidiary which holds the Century
Mine Rehabilitation Project (“the acquisition”) via the
issue of 30 million unquoted options to the value of
$2,471,700. A total loss on acquisition of $70,092,066
was recognised. The acquisition has been accounted
for as a share based payment measured in accordance
with AASB 2 Share Based Payments.
On 27 February 2018, the acquisition of the remaining
30% interest was completed via the issue of 126 million
ordinary shares and 35 million unquoted options which
were valued at $175,140,000 and $38,256,500
respectively.
Accounting for the acquisition constituted a key audit
matter due to:
The size and scope of the acquisition;
The complexities inherent in such a transaction;
and
The judgement required in determining the value
of the consideration transferred.
Reviewing the earn-in and shareholders
agreement (“the agreement”) to obtain an
understanding of the key terms and conditions;
Critically evaluating the accounting treatment in
accordance with the relevant Australian
Accounting Standards;
Assessing management’s valuation of the
consideration issued including relevant
assumptions;
Evaluating management’s valuation models and
assessing the assumptions and inputs used;
Evaluating the acquisition date balance sheet of
the acquiree with reference to the acquisition
agreement and supporting documentation; and
Assessing the appropriateness of relevant
disclosures in note 29 to the financial
statements.
Exploration and evaluation expenditure
During the year the Consolidated Entity incurred
exploration expenses of $12,041,913 on the Century
Mine Project.
Exploration expenditure is a key audit matter due to:
The significance to the Consolidated Entity’s
statement of profit or loss and other
comprehensive income; and
Our audit procedures included but were not limited
to:
Assessing management’s determination of its
areas of interest for consistency with the
definition in AASB 6. This involved analysing the
tenements in which the Consolidated Entity
holds an interest and the exploration programs
planned for those tenements;
Independent Auditor’s Report
To the Members of New Century Resources Limited (Continued)
Key audit matter
How our audit addressed the key audit matter
The level of judgement required in evaluating
management’s application of the requirements of
AASB 6 Exploration for and Evaluation of
Mineral Resources. AASB 6 is an industry
specific accounting standard requiring the
application of significant judgements, estimates
and industry knowledge.
We assessed the Consolidated Entity’s rights to
tenure by corroborating to government registries;
and
We tested exploration expenditure for the year
by evaluating a sample of recorded expenditure
for consistency to underlying records, the
requirements of the Consolidated Entity’s
accounting policy and the requirements of
AASB 6.
Property, plant and equipment
Our procedures included, amongst others:
As disclosed in note 10 in the financial report, as at
30 June 2018 the carrying value of property, plant
and equipment is $60,412,157. Of significance in
this amount is $57,856,390 which relates to the
capital work in progress carried out at Century Zinc
Mine Project.
Confirming that the capitalised work in progress
relating to the Century Zinc Mine project has
been recognised in accordance with the
requirements of AASB 116 – Property, Plant and
Equipment;
Obtaining a project management report to
Plant and equipment is considered to be a key audit
matter due to:
confirm that the development on Century Zinc
Mine remains on schedule and on budget;
The significant value of the asset to the
Consolidated Entity’s financial position; and
Discussions were held with the management to
confirm that abnormal costs have not been
The complexity in identifying the elements of
cost attributable to the asset.
capitalised in work in progress;
Testing the Consolidated Entity ’s additions to
capitalised work in progress for the year by
evaluating a sample of recorded expenditure for
consistency to underlying records, and the
capitalisation requirements of AASB 116 for
qualifying assets;
Evaluating management’s assessment as to
whether indicators of impairment had occurred;
and
Assessing the adequacy of the disclosures
included in the financial report.
Independent Auditor’s Report
To the Members of New Century Resources Limited (Continued)
Key audit matter
How our audit addressed the key audit matter
Recognition and measurement of restoration
provision
Our audit procedures included but were not limited
to:
As disclosed in note 14 to the financial statements,
as at 30 June 2018 the Consolidated Equity had a
Restoration Provision of $117,297,685 relating to
the Consolidated Equity ’s requirement to
rehabilitate its exploration fields.
The recognition and measurement of restoration
provisions was considered a key audit matter as the
calculation of the provision requires judgment in
estimating the future costs, the timing as to when
the future costs will be incurred and the
determination of an appropriate rate to discount the
future costs to their net present value.
Assessing the report and qualifications of the
independent expert engaged to assess the
accuracy of the rehabilitation amount recognised
at 30 June 2018;
Assessing whether sufficient evidence was
available to support the cost estimates;
Assessing the accuracy of the calculations used
to determine the rehabilitation provision including
the discount rate applied and the
appropriateness of the current or non-current
classification of the provision; and
We also assessed the appropriateness of the
related disclosures in note 14 to the financial
statements.
Impairment of Kodiak Project
Our procedures amongst others included:
As disclosed in note 30, $3,785,222 in deferred
exploration costs and $14,368,184 in plant and
equipment (Total $18,153,046) was capitalised for
the Kodiak project in prior years. During the year,
New Century paid a total of $347,051 in annual
lease payments.
Impairment is a key risk given materiality of the total
balance as at 30 June 2018 and the fact the
Consolidated Equity is now focusing on the Century
Project.
Verifying the annual lease payments to
agreements;
Discussions were held with the management to
confirm that New Century has exploration
activities planned for the project;
Evaluating management’s assessment as to
whether indicators of impairment had occurred;
and
Assessing the adequacy of the disclosures
included in Notes 10 and 11 to the financial
statements.
Based on impairment assessment performed, an
impairment loss $18,153,046 has been recorded
as at 30 June 2018.
Independent Auditor’s Report
To the Members of New Century Resources Limited (Continued)
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Consolidated Entity’s annual report for the year ended 30 June 2018, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error. In [Note 1], the
directors also state in accordance with Australian Accounting Standard AASB 101 Presentation of Financial
Statements, that the financial report complies with International Financial Reporting Standards.
In preparing the financial report, the directors are responsible for assessing the Consolidated Entity’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Consolidated Entity or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our responsibility is to express an opinion on the financial report based on our audit. Our objectives are to
obtain reasonable assurance about whether the financial report as a whole is free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian
Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Independent Auditor’s Report
To the Members of New Century Resources Limited (Continued)
Obtain an understanding of internal control relevant to the audit 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 Consolidated Entity’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Consolidated Entity’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Consolidated Entity to cease to
continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Consolidated Entity to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Consolidated Entity audit. We remain
solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2018.
The directors of the Company are responsible for the preparation and presentation of the remuneration report
in accordance with s 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.
Independent Auditor’s Report
To the Members of New Century Resources Limited (Continued)
Auditor’s Opinion
In our opinion, the Remuneration Report of the Company, for the year ended 30 June 2018, complies with
section 300A of the Corporations Act 2001.
BENTLEYS
Chartered Accountants
CHRIS NICOLOFF CA
Partner
Dated at Perth this 27th day of September 2018
Corporate Governance
The Company is committed to implementing the highest standards of corporate governance. In determining what
those high standards should involve the Company has turned to the ASX Corporate Governance Council’s
Corporate Governance Principles and Recommendations (3rd Edition).
Unless disclosed below, all the principles and recommendations of the ASX Corporate Governance Council have
been applied for the entire financial year ended 30 June 2018.
Board of Directors
The skills, expertise and experience relevant to the position of each Director who is in office at the date of the
Financial Report and their term of office are detailed in the Directors’ Report.
The Directors are responsible for overseeing the Company’s business operations and its management for the
benefit of Shareholders, employees and other stakeholders and to enhance Shareholder value. The Board is
responsible for the overall corporate governance of the Company and its subsidiaries.
Responsibilities and Functions of the Board
Under the Board charter, the Board's responsibilities include:
•
•
•
•
•
•
•
•
setting the strategic direction of the Company and monitoring management's performance within that
framework;
ensuring there are adequate resources available to meet the Company’s objectives;
appointing and removing Executive Directors and overseeing succession plans for the senior executive
team;
evaluating the performance of the Board and its Directors on an annual basis and determining remuneration
levels of Directors;
approving and monitoring financial reporting, capital management and the progress of business objectives;
ensuring that adequate risk management procedures exist and are being used;
ensuring that the Company has appropriate corporate governance structures in place, including standards
of ethical behaviour and a culture of corporate and social responsibility; and
ensuring that the Board is and remains appropriately skilled to meet the changing needs of the Company.
Responsibilities of Executive Management
The role of senior executives within the organisation is to:
•
•
•
•
•
•
•
•
•
•
•
•
•
develop with the Board, implement and monitor the strategic and financial plans for the Company;
plan, develop and implement the annual budgets and business plans and continuously monitor all capital
expenditure, capital management and all major corporate transactions, including the issue of any securities
of the Company;
develop all financial reports, and all other material reporting and external communications by the Company,
including material announcements and disclosures, in accordance with the Company’s external
communications policy;
manage the appointment of the chief financial officer, the general counsel and company secretary and any
other specific senior management positions;
develop, implement and monitor the Company’s risk management framework;
keep the Board fully informed of all material matters which may be relevant to the Board, in their capacity
as directors of the Company;
provide effective management of the Company in order to:
encourage cooperation and teamwork;
build and maintain staff morale at a high level;
build and maintain a strong sense of staff identity with, and a sense of allegiance to the Company;
ensure a safe workplace for all personnel;
ensure that the Company has regard to the interests of employees and customers of the company and the
community and environment in which the company operates; and
otherwise carry out the day-to-day management of the Company.
71
Corporate governance policies
The Board has adopted the following corporate governance policies:
Continuous Disclosure
The Board places a high priority on communication with Shareholders and is aware of the obligations it has under
the Corporations Act and ASX Listing Rules to keep the market fully informed of information which is not generally
available and which may have a material effect on the price or value of the Company’s securities.
Communication to Shareholders
The Board recognises the importance of communicating regularly with Shareholders and aims to have transparent
and effective communications. The Company will post all reports, ASX and media releases and copies of
significant business presentations and speeches on the Company’s website at www.newcenturyresources.com.
Shareholders will be encouraged to attend and participate in General Meetings.
Share Trading
The Company has in place a share trading policy which restricts all Directors, employees or consultants of the
Company from dealing in shares of the Company whilst in possession of price sensitive information or similarly
passing information to other parties to buy or sell the Company’s Shares.
In addition to insider trading prohibitions arising from the Corporations Act, Directors, executive officers and senior
management are prohibited from trading as follows:
•
•
•
•
No Director or executive officer should buy or sell Shares without the prior approval of the Board;
No senior manager should buy or sell Shares without the prior approval of the Board;
Unless there are unusual circumstances, trades in Shares by Directors and members of senior
management are limited to stipulated periods;
Directors and senior management are generally prohibited from trading Shares for a short term gain.
Before trading in the Company’s Shares, Directors, employees and consultants must request in writing
authorisation to trade in the Company’s securities from their relevant authorising officer.
Confidentiality
In addition to obligations under the Corporations Act in relation to inside information, all Directors, employees and
consultants also have a duty of confidentiality to the Company in relation to confidential information they possess.
Matters for Approval by the Board of Directors
The Board has adopted a list of matters required to be brought before the Board of Directors for approval. This
provides an important means of dividing responsibility between the Board and management, assisting those
affected by corporate decisions to better understand the respective accountabilities and contributions of the Board
and the Senior Executives.
Evaluation of Board and Senior Executives
The Board of New Century Resources considers the evaluation of its own and senior executive performance as
fundamental to establishing a culture of performance and accountability. The Board also considers the ongoing
development and improvement of its own performance as critical input to effective governance. The Board
undertakes an annual evaluation of its effectiveness as a whole.
The basis of the review is on goals that have been set for the Company based on corporate requirements and
any areas for improvement identified in previous reviews. The Board does not endorse the reappointment of a
director who is not satisfactorily performing the role.
All senior executives of the Company are subject to an annual performance evaluation. Each year, senior
executives establish a set of performance targets with her or his superior. These targets are aligned to overall
business goals and requirements of the position.
An informal assessment of progress is carried out each half year. A full evaluation of the executive’s performance
against the agreed targets takes place once a year. This will normally occur in conjunction with goal setting for
the coming year. Since the Company is committed to continuous improvement and the development of its people,
the results of the evaluation form the basis of the executive’s development plan.
72
The Company is also committed to continuing development of its directors and executives. Any director wishing
to undertake either specific directional training or personal development courses is expected to approach the
Board for approval of the proposed course.
External Auditor Selection Process
Should there be a vacancy for the position of external auditor, New Century Resources conducts a formal
tendering process, either a general or selective tender. Tenders are evaluated in accordance with the criteria, as
appropriate from time to time, provided to tenderers. Tenders are not assessed solely on the basis of price, but
on a number of issues such as:
•
•
•
•
•
•
•
skills and knowledge of the team proposed to do the work;
quality of work;
independence of the audit firm;
lead signing partner and independent review partner rotation and succession planning;
value for money;
ethical behaviour and fair dealing; and
independence from New Century Resources.
The Board identifies and recommends an appropriate external auditor for appointment, in conjunction with senior
management and/or New Century Resources in general meeting. The appointment is made in writing.
The external auditor is required to rotate its audit partners so that no partner of the external auditor is in a position
of responsibility in relation to New Century Resources’ accounts for a period of more than five consecutive years.
Further, once rotated off New Century Resources’ accounts no partner of the external auditor may assume any
responsibility in relation to New Century Resources’ accounts for a period of five consecutive years. This requires
succession planning on the part of the external auditor, a process in which New Century Resources is involved.
Risk Management Policy
Risk recognition and management are viewed by New Century Resources as integral to the Company’s objectives
of creating and maintaining shareholder value, and the successful execution of the Company’s mineral exploration
and development. The Board as a whole is responsible for oversight of the processes by which risk is considered
for both ongoing operations and prospective actions.
Management is responsible for establishing procedures which provide assurance that major business risks are
identified, consistently assessed and appropriately addressed.
Not all aspects of risk management can be formalised and New Century Resources places considerable reliance
on the skill, experience and judgement of its people to take risk managed decisions within the policy framework,
and to communicate openly on all risk related matters.
There are a range of specific risks that have the potential to have an adverse impact on New Century Resources’
business. The Company has developed a framework for a risk management policy and internal compliance and
control system which covers organisational, financial and operational aspects of the Company's affairs.
Key elements of the framework for the management of risk by New Century Resources are:
•
•
•
•
•
•
•
•
oversight of the Company’s financial affairs by the Directors;
the formulation of programmes for exploration and development;
regular reporting against established targets;
approval guidelines for exploration and capital expenditure;
regulatory compliance programmes and reporting in key areas such as safety and environment;
management of capital and financial risk;
an annual insurance program;
oversight of the conduct of contractors.
In assessing and managing identified risks:
•
•
•
•
•
risks are assessed in terms of potential consequences and likelihood;
risks are ranked in accordance with their likely impact;
the acceptability of each identified risk is assessed;
proposed actions to eliminate, reduce or manage each material risk are considered and agreed;
responsibilities for the management of each risk are assigned.
73
Diversity Policy
The Company recognises that a diverse and talented workforce is a competitive advantage and that the
Company’s success is the result of the quality and skills of our people. Our policy is to recruit and manage on the
basis of qualification for the position and performance, regardless of gender, age, nationality, race, religious
beliefs, cultural background, sexuality or physical ability. It is essential that the Company employs the appropriate
person for each job and that each person strives for a high level of performance.
The Company’s strategies are to:
1.
2.
3.
4.
5.
6.
7.
recruit and manage on the basis of an individual’s competence, qualification and performance;
create a culture that embraces diversity and that rewards people to act in accordance with this policy;
appreciate and respect the unique aspects that individual brings to the workplace;
foster an inclusive and supportive culture to enable people to develop to their full potential;
identify factors to be taken into account in the employee selection process to ensure we have the right
person for the right job;
take action to prevent and stop discrimination, bullying and harassment; and
recognise that employees at all levels of the Company may have domestic responsibilities.
The Board is accountable for ensuring this policy is effectively implemented. Each employee has a responsibility
to ensure that these objectives are achieved.
74
Compliance with ASX Recommendations
Recommendation
New Century Resources Limited
1.1
A listed entity should disclose:
(a) The respective roles and responsibilities of its
board and management; and
(b) Those matters expressly reserved to the board
and those delegated to management.
1.2
A listed entity should:
(a) Undertake appropriate checks before appointing
a person, or putting forward to security holders
a candidate for election, as a director; and
(b) Provide security holders with all material
information in its possession relevant to a
decision on whether or not to elect or re-elect a
director.
The Company’s Board Charter sets out the roles and
responsibilities of the Board and Management. A
summary is provided above and the full Charter is
available for review at www.newcenturyresources.com
The Company undertakes police and bankruptcy
checks on all directors before appointment or putting to
shareholders for election.
The Company provides all relevant information on all
directors in its annual report and on its website.
1.3
1.4
A listed entity should have a written agreement with
each director and senior executive setting out the
terms of their employment.
The Company requires that a detailed letter of
appointment or employment contract is agreed with
each director and employee prior to the
commencement of duties.
The company secretary of a listed entity should be
accountable directly to the board, through the chair,
on all matters to do with the proper functioning of the
board.
The Company’s organisation chart reflects the position
of the Company Secretary within the Company
structure as reporting directly to the Board and
confirms accountability through the Executive
Chairman.
The Company has adopted a formal Gender Diversity
Policy, a summary of which is provided above.
As at 30 June 2018:
•
•
•
The Board comprised six members, all of
whom were male.
The senior executives comprised nine people
(defined by the Board as the directors and
key management personnel), eight of whom
were male and one female.
The whole organisation (including directors,
excluding independent contractors)
comprised 82 people, 68 of whom were male
and 14 female.
1.5
A listed entity should:
(a) Have a diversity policy which includes
requirements for the board or a relevant
committee of the board to set measurable
objectives for achieving gender diversity and to
assess annually both the objectives and the
entity’s progress in achieving them;
(b) Disclose that policy or a summary of it; and
(c) Disclose as at the end of each reporting period
the measurable objectives for achieving gender
diversity set by the board or a relevant
committee of the board in accordance with the
entity’s diversity policy and its progress towards
achieving them, and either:
i. The respective proportions of men and
women on the board, in senior executive
positions and across the whole organisation
(including how the entity has defined “senior
executive” for these purposes); or
ii.
if the entity is a “relevant employer” under
the Workplace Gender Equality Act, the
entity’s most recent “Gender Equality
Indicators”, as defined in and published
under that Act.
75
The Board Performance Evaluation Policy is
summarised above and is available at
www.newcenturyresources.com
During the reporting period, the Board collectively
assessed their respective roles and contributions.
The Company considers the mix of corporate, financial,
and commercial experience to be appropriate for the
current time.
As the Company was in a period of recruitment and
talent building for a large portion of the reporting
period, the first annual review of senior executives
occurred subsequent to the reporting period.
The Board has established a combined Remuneration
& Nomination Committee which consists of 3 members,
two of whom are independent directors. Independent
non-executive director, Mr Tom Eadie, acts as Chair for
the Committee and non-executive directors, Mr Bryn
Hardcastle and Mr Peter Watson comprise the other
members.
The charter of the Nomination Committee is available
on the Company’s website,
www.newcenturyresources.com.
The Committee did not meet during the reporting
period due to the early stage of the Company’s
development.
1.6
A listed entity should:
(a) Have and disclose a process for periodically
evaluating the performance of the board, its
committees and individual directors; and
(b) Disclose, in relation to each reporting period,
whether a performance evaluation was
undertaken in the reporting period in
accordance with that process.
1.7
A listed entity should:
(a) Have and disclose a process for periodically
evaluating the performance of its senior
executives; and
(b) Disclose, in relation to each reporting period,
whether a performance evaluation was
undertaken in the reporting period in
accordance with that process.
2.1
The board of a listed entity should:
(a) Have a nomination committee which:
i. has at least three members, a majority of
whom are independent directors; and
ii.
is chaired by an independent director;
and disclose:
iii. the charter of the committee;
iv. the members of the committee; and
v. as at the end of each reporting period, the
number of times the committee met
throughout the period, and the individual
attendances of the members at those
meetings; or
(b) If it does not have a nomination committee,
disclose the fact and the processes it employs
to address board succession issues and to
ensure the board has the appropriate balance of
skills, knowledge, experience, independence
and diversity to enable it to discharge its duties
and responsibilities effectively.
2.2
A listed entity should have and disclose a board skills
matrix setting out the mix of skills and diversity that
the board currently has or is looking to achieve in its
membership.
The Board Charter, available at
www.newcenturyresources.com, incorporates a set of
skills and abilities that are desirable for the composition
of the Board.
During the reporting period, the Board collectively
assessed their respective roles and contributions.
The Company considered the mix of corporate,
financial, mining, geological and commercial
experience to be appropriate for the operations of the
Company during the reporting period.
76
2.3
A listed entity should disclose:
(a) The names of the directors considered by the
board to be independent directors;
(b) If a director has an interest, position,
association or relationship of the type described
in Box 2.3 but the board is of the opinion that it
does not compromise the independence of the
director, the nature of the interest, position,
association or relationship in question and an
explanation of why the board is of that opinion;
and
(c) The length of service of each director.
2.4
A majority of the board of a listed entity should be
independent directors.
2.5
The chair of the board of a listed entity should be an
independent director and, in particular, should not be
the same person as the CEO of the entity.
2.6
A listed entity should have a program for inducting
new directors and provide appropriate professional
development opportunities for directors to develop
and maintain the skills and knowledge needed to
perform their roles as directors effectively.
3.1
A listed entity should:
(a) Have a code of conduct for its directors, senior
executives and employees; and
(b) Disclose that code or a summary of it.
4.1
The board of a listed entity should:
(a) Have an audit committee which:
i. has at least three members, all of whom are
non-executive directors and a majority of
whom are independent directors; and
The Company considers that Mr Tom Eadie and Mr
Peter Watson are the independent directors on the
Board as at 30 June 2018.
The Company discloses the length of service for each
director in the Directors’ Report of its annual report.
At this time, the Company does not comply with this
recommendation as two of the six directors are
independent.
Three directors, Mr Evan Cranston, Mr Tolga Kumova
and Mr Patrick Walta, are employed as executive
directors and are therefore not considered to be
independent. Mr Bryn Hardcastle is not considered to
be independent as he is Managing Partner of a
professional services firm providing legal advice to the
Company.
The Company does not comply with this
recommendation as the current chair of the Company,
Mr Evan Cranston, is employed as Executive
Chairman. Mr Cranston does not perform the CEO
role.
The Company has an induction program for all new
directors to appropriately familiarise them with the
policies and procedures of the Company.
The Company encourages and facilitates all Directors
to develop their skills, including with the provision of in-
house seminars to maintain compliance in areas such
as risk and disclosure.
The Company’s Code of Conduct is available at
www.newcenturyresources.com
The Company has an audit committee comprising
three non-executive directors, two of whom are
independent. The Audit Committee is chaired by Mr
Bryn Hardcastle who is not considered independent as
he is Managing Partner of a professional services firm
providing legal advice to the Company.
ii.
is chaired by an independent director, who is
not the chair of the board;
The Audit Committee Charter is available on the
Company’s website, www.newcenturyresources.com.
and disclose:
iii. the charter of the committee;
iv. the relevant qualifications and experience of
the members of the committee; and
During the period, the Audit Committee met once to
review and consider the annual financial statements of
the Company. Prior to this, the full Board performed
the role of the Audit Committee.
The qualifications of the non-executive directors are
disclosed in the Directors’ Report.
77
v. as at the end of each reporting period, the
number of times the committee met
throughout the period, and the individual
attendances of the members at those
meetings; or
(b) If it does not have an audit committee, disclose
the fact and the processes it employs that
independently verify and safeguard the integrity
of its corporate reporting, including the
processes for the appointment and removal of
the external auditor and the rotation of the audit
engagement partner.
4.2
The board of a listed entity should, before it approves
the entity’s financial statements for a financial period,
receive from its CEO and CFO a declaration that, in
their opinion, the financial records of the entity have
been properly maintained and that the financial
statements comply with the appropriate accounting
standards and give a true and fair view of the
financial position and performance of the entity and
that the opinion has been formed on the basis of a
sound system of risk management and internal
controls which is operating effectively.
The Board receives a section 295A declaration from
the equivalent of the CEO and CFO for each quarterly,
half yearly and full year report in advance of approval
of these reports.
4.3
A listed entity that has an AGM should ensure that its
external auditor attends its AGM and is available to
answer questions from security holders relevant to
the audit.
The Company’s auditor is required to attend the
Company’s AGM and is available to answer questions
relevant to the audit.
5.1
A listed entity should:
(a) have a written policy for complying with its
continuous disclosure obligations under the
Listing Rules; and
(b) disclose that policy or a summary of it.
The Board has adopted a formal Continuous
Disclosure Policy to ensure compliance with the ASX
Listing Rules. The Policy is summarised above and is
available at www.newcenturyresources.com
6.1
A listed entity should provide information about itself
and its governance to investors via its website.
The Company complies with this recommendation and
all relevant information can be found at
www.newcenturyresources.com
6.2
6.3
6.4
A listed entity should design and implement an
investor relations program to facilitate effective two-
way communication with investors.
The Company has developed a Shareholder
Communications Strategy to ensure all relevant
information is identified and reported accordingly which
is summarised above.
A listed entity should disclose the policies and
processes it has in place to facilitate and encourage
participation at meetings of security holders.
The Company encourages all shareholders to attend
General Meetings of the Company via its notices of
meeting, and in the event they cannot attend, to
participate by recording their votes by proxy. The
Company has implemented an online voting system to
further encourage participation by shareholders.
A listed entity should give security holders the option
to receive communications from, and send
communications to, the entity and its security registry
electronically.
The Company and its share registry actively encourage
electronic communication. All new shareholders are
issued with a letter encouraging the registration of
electronic contact methods.
78
7.1
The board of a listed entity should:
(a) have a committee or committees to oversee
risk, each of which:
i. has at least three members, a majority of
whom are independent directors; and
ii.
is chaired by an independent director;
and disclose:
iii. the charter of the committee;
iv. the members of the committee; and
v. as at the end of each reporting period, the
number of times the committee met
throughout the period and the individual
attendances of the members at those
meetings: or
(b) if it does not have a risk committee or
committees that satisfy (a) above, disclose that
fact and the processes it employs for
overseeing the entity’s risk management
framework.
7.2
The board or a committee of the board should:
(a) review the entity’s risk management framework
at least annually to satisfy itself that it continues
to be sound; and
(b) disclose, in relation to each reporting period,
whether such a review has taken place.
7.3
A listed entity should disclose:
(a) if it has an internal audit function, how the
function is structured and what role it performs;
or
(b) if it does not have an internal audit function, that
fact and the processes it employs for evaluating
and continually improving the effectiveness of
its risk management and internal control
processes.
7.4
A listed entity should disclose whether it has any
material exposure to economic, environmental and
social sustainability risks and, if it does, how it
manages or intends to manage those risks.
8.1
The board of a listed entity should:
(a) have a remuneration committee which:
i. has at least three members, a majority of
whom are independent directors; and
ii.
is chaired by an independent director;
and disclose:
79
The Company implemented a Risk Committee in the
second half of the reporting period which is chaired by
independent director, Mr Peter Watson. Non-executive
director, Mr Bryn Hardcastle, and independent non-
executive director, Mr Tom Eadie comprise the other
members of the Committee.
The charter of the Risk Committee is available at
www.newcenturyresources.com.
The Board reviews its risk management strategy
annually.
The Company is not of the size or scale to warrant the
cost of an internal audit function. This function is
undertaken by the Board as a whole via the regular
and consistent reporting in all risk areas.
The Company does not currently have any material
exposure to any economic, environmental and social
sustainability risks other than the standard risks of
operating mining companies. The Board, via its Risk
Committee and regular communication with its senior
executives, monitors its exposure to these risks. The
Company has a full time employee responsible for
corporate affairs and social responsibility who liaises
closely with key stakeholders of the Company.
The Board has established a combined Remuneration
& Nomination Committee which consists of 3 members,
two of whom are independent directors. Independent
non-executive director, Mr Tom Eadie, acts as Chair for
the Committee and non-executive directors, Mr Bryn
Hardcastle and Mr Peter Watson comprise the other
members.
The charter of the Remuneration Committee is
available on the Company’s website,
iii. the charter of the committee;
www.newcenturyresources.com.
The Committee did not meet during the reporting
period due to the early stage of the Company’s
development and role was undertaken by the full Board
during this time.
iv. the members of the committee; and
v. as at the end of each reporting period, the
number of times the committee met
throughout the period and the individual
attendances of the members at those
meetings; or
(b) if it does not have a remuneration committee,
disclose that fact and the processes it employs
for setting the level and composition of
remuneration for directors and senior
executives and ensuring that such remuneration
is appropriate and not excessive.
8.2
A listed entity should separately disclose its policies
and practises regarding the remuneration of non-
executive directors and the remuneration of
executive directors and other senior executives.
8.3
A listed entity which has an equity-based
remuneration scheme should:
(a) have a policy on whether participants are
permitted to enter into transactions (whether
through the use of derivatives or otherwise)
which limit the economic risk of participating in
the scheme; and
(b) disclose that policy or a summary of it.
The Company discloses is policies on remuneration in
the Remuneration Report set out in its annual report.
The Company recognises that directors, executives
and employees may hold securities in the Company
and that most investors are encouraged by these
holdings. The Company’s Securities Trading Policy
(available at www.newcenturyresources.com) explains
and reinforces the Corporations Act 2001 requirements
relating to insider trading. The Policy applies to all
Directors, executives, employees and consultants and
their associates and closely related parties.
80
Additional Information
Shareholder Information
The following information is based on share registry information processed up to 26 October 2018.
Distribution of Fully Paid Ordinary Shares
The number of holders, by size of holding, for fully paid ordinary shares in the Company is:
Spread of Holders
Number of Holders
Number of Shares
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
656
1,276
530
1,062
285
3,809
411,943
3,560,227
4,235,881
36,793,416
458,970,581
503,972,048
There are 359 holders of unmarketable parcels comprising a total of 151,145 ordinary shares.
Twenty Largest Holders of Shares in New Century Resources Ltd (includes restricted securities)
Shareholder
JP Morgan Nominees Australia Limited
Mr John Carr
Konkera Pty Ltd
Mr Patrick Christopher Andrew Walta
Kingslane Pty Ltd
HSBC Custody Nominees (Australia) Limited
UBS Nominees Pty Ltd
Mrs Kay Mitris
Kitara Investments Pty Ltd
1
2
3
4
5
6
7
8
9
10 Kingslane Pty Ltd
11 Kingslane Pty Ltd
12 Mr Nicholas Mitris
13 Merrill Lynch (Australia) Nominees Pty Limited
14 Dr Stuart Lloyd Phillips & Mrs Fiona Jane Phillips
15 Pershing Australia Nominees Pty Ltd
16 Westyle Pty Ltd
17 HSBC Custody Nominees (Australia) Limited – A/C 2
18 Mr Rodney John Smith
19 Blu Bone Pty Ltd
20 Mr Michael Robert Pitt
Total
Number Held
35,532,049
31,500,000
31,500,000
31,500,000
18,725,000
18,639,129
16,862,091
15,282,720
13,333,333
11,764,150
10,598,356
9,152,911
8,323,983
7,865,000
7,747,500
6,614,820
6,580,411
6,300,000
6,300,000
6,300,000
300,421,453
% of Issued
Shares
7.05
6.25
6.25
6.25
3.72
3.70
3.35
3.03
2.65
2.33
2.10
1.82
1.65
1.56
1.54
1.31
1.31
1.25
1.25
1.25
59.61%
There are 377,972,048 ordinary fully paid shares currently listed and trading on the Australian Securities
Exchange. There are currently 126,000,000 shares subject to escrow. There is no current on-market buy back
taking place.
Voting Rights - Fully Paid Ordinary Shares
Every shareholder present in person or by proxy, attorney or representative has one vote on a show of hands,
and on a poll, one vote for each fully paid share.
81
Unquoted Equity Securities
Quantity
12,900,000
6,000,000
7,500,000
7,500,000
7,500,000
7,500,000
30,000,000
500,000
22,000,000
6,000,000
3,500,000
3,500,000
500,000
Class
Options exercisable at $0.25 each on or before 13 July 2020
Options exercisable at $0.50 each on or before 13 July 2020
Options exercisable at $0.25 each on or before 13 July 2021
Options exercisable at $0.50 each on or before 13 July 2021
Options exercisable at $0.75 each on or before 13 July 2021
Options exercisable at $1.00 each on or before 13 July 2021
Options exercisable at $0.25 each on or before 13 July 2022
Options exercisable at $1.60 each on or before 2 October 2020
Options exercisable at $0.25 each on or before 27 February 2021
Options exercisable at $0.50 each on or before 27 February 2021
Options exercisable at $0.75 each on or before 27 February 2021
Options exercisable at $1.00 each on or before 27 February 2021
Options exercisable at $1.99 each on or before 27 February 2021
Holders of Unquoted Securities (holding more than 20% of each equity security class)
Class
Options exercisable at $0.25 each on or before
13 July 2021
Options exercisable at $0.50 each on or before
13 July 2021
Options exercisable at $0.75 each on or before
13 July 2021
Options exercisable at $1.00 each on or before
13 July 2021
Options exercisable at $0.25 each on or before
13 July 2022
Options exercisable at $0.25 each on or before
13 July 2022
Options exercisable at $0.25 each on or before
13 July 2022
Options exercisable at $1.60 each on or before 2
October 2020
Options exercisable at $0.25 each on or before
27 February 2021
Options exercisable at $0.50 each on or before
27 February 2021
Options exercisable at $0.75 each on or before
27 February 2021
Options exercisable at $1.00 each on or before
27 February 2021
Options exercisable at $1.99 each on or before
27 February 2021
Holder
Kitara Investments Pty Ltd
Kitara Investments Pty Ltd
Kitara Investments Pty Ltd
Kitara Investments Pty Ltd
Mr John Carr
Longreach Capital Pty Ltd
Mr Patrick Walta
Mr William Wise
Mr John Carr
Konkera Pty Ltd
Mr Patrick Christopher Andrew Walta
Mr John Carr
Konkera Pty Ltd
Mr Patrick Christopher Andrew Walta
Mr John Carr
Konkera Pty Ltd
Mr Patrick Christopher Andrew Walta
Mr John Carr
Konkera Pty Ltd
Mr Patrick Christopher Andrew Walta
Mr William Wise
Number
7,500,000
7,500,000
7,500,000
7,500,000
7,000,000
7,000,000
7,000,000
500,000
5,500,000
5,500,000
5,500,000
1,500,000
1,500,000
1,500,000
875,000
875,000
875,000
875,000
875,000
875,000
500,000
82
Schedule of Mining Tenements
Project
Location
Status
Interest
Century Zinc Mine
ML 90058
ML 90045
EPM 10544
EPM 26722
EPM 26772
EPM 26812
EPM 26868
EPM 26873
EPM 26874
EPM 26875
EPM 26976
Queensland, Australia
Lawn Hill
Lawn Hill
Lawn Hill
Lawn Hill
Lawn Hill
Lawn Hill
Lawn Hill
Cloncurry
Lawn Hill
Cloncurry
Cloncurry
Kodiak Coking Coal Project
Alabama, USA
Coke Seam, Gurnee Property
Atkins Seam, Gurnee Property
Gholson Seam, Gurnee Property
Clark Seam, Gurnee Property
Shelby & Bibb Counties
Shelby & Bibb Counties
Shelby & Bibb Counties
Shelby & Bibb Counties
Granted
Granted
Granted
Granted
Granted
Application
Application
Application
Application
Application
Application
Lease
Lease
Lease
Lease
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
70%
70%
70%
70%
Company Secretary
Ms Oonagh Malone
Registered Office
Level 4
360 Collins Street
Melbourne VIC 3000
Telephone: +61 3 9070 3300
Share Registry
Automic
Level 5, 126 Philip Street
Sydney NSW 2000
Telephone: 1300 992 916
83