EASTERN GOLDFIELDS LIMITED
ABN 69 100 038 266
ANNUAL REPORT
FOR THE YEAR ENDED 30 JUNE 2017
1
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
ABN 69 100 038 266
CORPORATE DIRECTORY AND CONTENTS
Corporate directory and contents ..................... 1
Directors’ report ................................................ 2
Auditor’s independence declaration ................ 25
Consolidated statement of profit or loss and
other comprehensive income….……………...26
Consolidated statement of financial position...27
Consolidated statement of changes in equity.28
Consolidated statement of cash flows…….….29
Notes to the consolidated financial
statements ……………………………………...30
Directors’ declaration ……………………….…66
Independent auditor’s report ……………….…67
Tenement Schedule……………………………70
Additional ASX Information……...…………….73
BOARD OF DIRECTORS
Michael Fotios
Alan Still
Craig Readhead
Executive Chairman
Non-Executive Director
Non-Executive Director
COMPANY SECRETARY
Shannon Coates
REGISTERED OFFICE AND PRINCIPAL PLACE OF
BUSINESS
24 Mumford Place
Balcatta WA 6021
Telephone: (61-8) 6241 1802
Facsimile: (61-8) 6241 1811
E-mail: admin@easterngoldfields.com.au
Web-site: www.easterngoldfields.com.au
SHARE REGISTRY
Computershare Investor Services Pty Ltd
Level 11, 172 St. George’s Terrace
Perth WA 6000
Telephone: (61-8) 9323 2000
Facsimile:
(61-8) 9323 2033
E-mail: perth.services@computershare.com.au
Web-site: www.computershare.com.au
AUDITORS
Ernst & Young
SOLICITORS
Squire Patton Boggs
BANKERS
National Australia Bank Limited
SECURITIES EXCHANGE LISTING
Shares in Eastern Goldfields Limited are listed on the
Australian Securities Exchange under the trading code
EGS
This financial report covers the consolidated financial statements for the Group, consisting of Eastern
Goldfields Limited and its subsidiaries.
The annual financial report is presented in Australian dollars.
Eastern Goldfields Limited is a company limited by shares, incorporated and domiciled in Australia.
1
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
The Directors of Eastern Goldfields Limited (“Eastern Goldfields” or “Company”) present their report on the results and
state of affairs of the consolidated entity, being the Company and its controlled entities (“Group”) for the financial year
ended 30 June 2017.
DIRECTORS
The names of the Directors of Eastern Goldfields in office during the course of the financial year and up to the date of
this report are as follows:
Michael Fotios
Craig Readhead
Alan Still
Executive Chairman
Non-Executive Director
Non-Executive Director
All Directors held their position as a Director throughout the entire financial year and up to the date of this report.
INFORMATION ON DIRECTORS & COMPANY SECRETARY
Director
Qualifications, experience and special responsibilities
Michael Fotios
Executive
Chairman
BSc (Hons) MAusIMM
A Director since September 2012, Mr Fotios is a geologist specialising in economic geology with
27 years’ extensive experience in exploration throughout Australia for gold, base metals, tantalum,
tin and nickel and taking projects from exploration to feasibility. He previously held positions with
Homestake Australia Limited and Sons of Gwalia Limited. He was Managing Director and a
Director with Tantalum Australia NL (now ABM Resources Ltd) from September 1999 to October
2005. His last position was as Managing Director of Galaxy Resources Limited. Michael Fotios is
founder and current Executive Chairman of Investmet Limited and is regarded as having control
of Investmet.
Other current listed company directorships: Pegasus Metals Limited (from December 2009),
Horseshoe Metals Limited (from May 2012), Redbank Copper Limited (from September 2012)
and Oklo Resources Limited (from July 2016).
Former directorships in the last three years: Northern Star Resources Limited (from September
2009 to October 2014), General Mining Corporation Limited (from June 2012 to November 2016)
and Galaxy Resources Limited (from August 2016 to December 2016).
Alan Still
Non-Executive
Director
AMIM
Alan Still is a metallurgist with over 14 years’ experience in steelmaking and a further 41 years’
mining experience in a variety of commodities including a detailed knowledge of a number of
African based rare metals projects.
Other current listed company directorships: Horseshoe Metals Limited (from June 2014) and
Pegasus Metals Limited (from January 2015).
Former directorships in the last three years: General Mining Corporation Limited (to August
2016).
Craig Readhead
Non-Executive
Director
B Juris Lib
Mr Readhead is one of WA’s leading mining and resource lawyers with over 33 years legal and
corporate advisory experience specialising in the resources sector, including the implementation
of large scale mining projects both in Australia and overseas. In 2009, Craig was identified as one
of the top ten Best Mining Lawyers in Australia published by the Australian Financial Review. Craig
is a former Partner of law firm, Allion Legal.
Other current listed company directorships: Beadell Resources Limited (from October 2010),
Western Areas Limited (from June 2014) and Redbank Copper Limited (from April 2013).
Former directorships in the last three years: General Mining Corporation Limited (to October 2015)
and Heron Resources Limited (to April 2015).
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EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
INFORMATION ON DIRECTORS & COMPANY SECRETARY (CONTINUED)
Shannon Coates
Company
Secretary
LLB, CSA, GAICD
Appointed 23 October 2015, Ms Coates holds a Bachelor of Laws from Murdoch University and
has over 20 years’ experience in corporate law and compliance. She is a director of Perth based
corporate advisory firm Evolution Corporate Services Pty Ltd, which specialises in the provision
of corporate services to ASX, JSE and AIM listed companies.
Ms Coates is a Chartered Secretary, an Associate Member of both the Institute of Chartered
Secretaries & Administrators and the Governance Institute of Australia and a graduate of the
Australian Institute of Company Directors.
3
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
OPERATING AND FINANCIAL REVIEW
This review provides to shareholders an overview of Eastern Goldfields’ 2017 operations, financial position, business
strategies and prospects.
The review also provides contextual information, including the impact of key events that have occurred during 2017 and
material business risks faced by the business so that shareholders can make an informed assessment of the results
and prospects of the Group. The review compliments the financial report and has been prepared in accordance with
recently released guidance set out in ASIC Regulatory Guide 247 (“RG 247”).
1. Operating Review
Core Business
Eastern Goldfields, via its subsidiaries, is the 100% owner of the Davyhurst Gold Project 120km north-west of Kalgoorlie,
and the Mt Ida Gold Project located 200km north-west of Kalgoorlie. Processing infrastructure includes a 1.2Mtpa
processing plant, two camps (Davyhurst Central and Mt Ida), mains power and working bore fields.
The Group also holds a substantial tenement position (1,658 square kilometres, 150km strike length), surrounding the
existing infrastructure.
4
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
Principal Activities and Significant Changes in those Activities
The principal activity of the Group during the financial year was mineral exploration and evaluation, commencement of
both open pit and underground gold mining combined with processing activities at the Davyhurst Gold Project. Care
and maintenance of its historically producing gold mine at the Mt Ida Gold Project remained ongoing.
The Davyhurst Project includes both open cut and underground mining operations, combined with a number of
development targets. Mining operations have commenced on open pit resources at ‘Siberia’ (as identified within the
above tenement interest area diagram) and underground resources within the Davyhurst area. The Davyhurst area
hosts some of the largest deposits within the entire portfolio and has considerable potential for the discovery of new
gold deposits, in addition to the extension of existing resources.
Significant achievements for the financial year included:
• Siberia resource definition drill out complete – 15,300 metres drilled
• Advancement of resource development and exploration works – 19,000 metres drilled
• Siberia resource upgrade delivered - 498,000 ounces reported in accordance with JORC Code 2012, an
increase of 88%
• Siberia maiden reserve delivered - 150,000 ounces reported in accordance with JORC Code 2012
• Completed refurbishment of 1.2Mtpa Davyhurst Processing Facility
• Commissioning activities well advanced, poured first gold post period end
• Mobilisation of open pit mining fleet and commencement of early works at Siberia
• Mobilised underground mining fleet and commencement of early works at Golden Eagle
• Formal Exploration Farm-In Joint Venture Agreement signed with Intermin Resources Limited (ASX.IRC)
and its wholly owned subsidiary
• Most significant drilling intersections delivered for the year include:
Top 10 Significant Results
Deposit
Interval
Grade
ASX Release Date
Sand King
Missouri
Sand King
Missouri
Sand King
Sand King
Callion
Sand King
Callion
Callion
11.0 m @
4.3 m @
8.0 m @
13.0 m @
20.3 m @
6.1 m @
7.0 m @
15.0 m @
7.0 m @
22.31 g/t
41.65 g/t
20.16 g/t
9.79 g/t
4.97 g/t
13.14 g/t
11.37 g/t
5.14 g/t
10.68 g/t
6.7 m @
11.03 g/t
15/12/2016
22/09/2016
23/11/2016
6/12/2016
13/09/2016
22/09/2016
10/01/2017
23/11/2016
20/02/2017
24/11/2016
Operations
Davyhurst Processing Facility
In September 2016 the Company announced that it had awarded a contract to GR Engineering Services Limited (GRES)
to refurbish the Davyhurst Gold Processing Plant following on from the completion of a study by GRES. Refurbishment
works commenced in October, following the mobilisation of contactors to site.
The scope of works was designed to refurbish and upgrade the processing facility to its nameplate capacity of 1.2Mtpa,
and to secure process efficiency gains wherever possible. Significant works included:
• Refurbishment of all concrete and steel structures
•
•
•
• Overhaul of all conveyors including new belts, guards, motors/gearboxes and rollers as required
Installation of a grizzly on the ROM bin to eliminate oversize blockages in the primary crusher
Installation of two new cone crushers (secondary and tertiary) and upsized electrical motors
Installation of a new triple deck screen in the three stage crushing circuit
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EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
Installation of a new gravity circuit including two Nelson Concentrators and an Acacia reactor
Installation of a new and dedicated electro-winning circuit for gravity gold
Installation of a new control room including new control (PLC) systems and data fibre throughout the circuit
•
•
•
• Refurbishment of the leach and CIP absorption circuits
• Refurbishment of the elution circuit and gold room
•
•
• Completion of an upstream tailings lift on the TSF
• Refurbishment of the Battery Borefield and upgrade of pumping infrastructure telemetry
•
Installation of a new tailings thickener
Installation of new liquid cyanide and oxygen tank facilities
Installation of new 5MW diesel fired power station with inbuilt expansion capability out to 7MW
Completion of the mill refurbishment was announced with the shift to commissioning activities in June 2017.
Post the reporting period, the first gold pour was completed on 25 July 2017. Since this time the operational team
continues to work through the commissioning process and push the through-put rate up toward name-plate capacity.
Open Pit Mining
The Siberia mining centre is 37 kilometres south east of the Davyhurst Mill and has a current, recently upgraded Mineral
Resource estimate of 5.7Mt @ 3.1g/t Au for 577,000 ounces. The two main deposits, namely Sand King and Missouri,
achieved a mine-ready state as announced on 3 January 2017 and 15 December 2016 respectively. The project has a
combined open pit mining Reserve for the Missouri and Sand King deposits of 2,025,000t @ 2.3g/t Au for 150,000
ounces, as announced to ASX 14 February 2017.
Key Siberia activities for the year included:
• Completion of 15,300m resource definition drilling program
• Delivered Siberia 498,000 ounce resource, reported in accordance with JORC Code 2012, an increase of 88%
• Delivered maiden Siberia 150,000 ounce reserve reported in accordance with JORC Code 2012
• Conclusion of mining study and delivery of Mining Reserve
• Regulatory approval received for the commencement of mining
• Site establishment and civil works relating to mining operations at Siberia
• Stockpiling of low grade ore at Siberia
• Commencement of surface haulage operations
• Construction commencement of Siberia bypass haul road nearing completion
Siberia Key Mining Characteristics
Waste Tonnes Moved
Ore Tonnes Processed
Stripping Ratio
Average Head Grade
Total Metal Production
Units
7.7 M bcm
2,025
tonnes ('000)
10.3 O:W
(g/t)
2.3
150.0 Oz ('000)
Resource definition and extensional drilling programs were conducted over both the Sand King and Missouri deposits.
A high proportion of these programs utilised diamond core drilling methods, which provided superior geological and
structural information to inform the resource estimate and mining models. The drilling statistics for the period are tabled
below:
Project Area
Deposit
Drill Type
No. of Holes
Metres Drilled
Siberia
Sand King
Missouri
Total
RC
DD
RC
DD
6
54
26
49
12
141
3,901
4,317
5,573
1,530
15,321
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
Mineral resource estimates were completed during the year and were the result of a thorough data validation and
reinterpretation process that, along with additional confirmatory drilling, allowed a JORC Code 2012 upgrade for the
deposits. The combined resource increased by 88% from 265,000 ounces to 498,000 ounces.
The resource upgrade then allowed the completion of a mining study to follow and the subsequent generation of a
company maiden reserve for these two deposits. Entech Pty LTD, an independent international mining consultant
specialising in mining engineering, was engaged to conduct the mining study and to generate the open pit mining
reserve. The mining study was informed by additional specialised consultants.
Open pit mining contractor RJV Mining Service’s mobilised the mining fleet to the Siberia open pit project, located 37
kilometres from the processing plant. Operations commenced focusing on site establishment and early works,
progressing to the mining of the existing historic low grade stockpile created by Western Mining Corporation during the
1980s.
A grade control drilling rig arrived on site at period end to commence grade control drilling of the southern portion of the
Sand King deposit.
Underground Mining
Following a resource definition drilling program that was completed prior to the reporting period, an underground mining
study was successfully concluded on the Golden Eagle deposit. With a positive mining outcome determined, the
decision to proceed to mining was made and PitnPortal Mining Services were engaged as the underground mining
contractor.
The Golden Eagle deposit is hosted within a 10‐20 metre wide mineralised (quartz, silica, pyrrhotite and pyrite), sub‐
vertical, siliceous biotite schist unit. Historically, mining in the Golden Eagle pit has focused on the Central and North
Shoots. In the Central Shoot a hanging wall and a footwall lode were mined. In the North Shoot, mining focused on the
Hanging Wall Shoot although drilling has intersected narrow high‐grade mineralisation in the footwall position. Both
shoots plunge north at between 20 and 30 degrees. Within the larger biotite schist unit, a high grade quartz‐feldspar
lode (QFL) association has developed in the hanging wall position of the North Shoot and is the target of the
underground mining event. This same unit hosts the Lights of Israel Deposit (located 3 kilometres north along strike of
the same structure) which has produced 4,000,000 tonnes @ 3.1 g/t for 400,000 ounces to date, through both open pit
and underground mining.
Toward the end of the reporting period the mining contractor had mobilised to site and commenced site establishment,
pit dewatering and portal access works. Establishment of the portal continued at period end.
Post the period end development had establish a drill platform on the 388 Level which will allow underground diamond
drilling to commence, targeting the down plunge positions of the Golden Eagle central shoot. The decline continued on,
cutting first ore on the 375 level during October 2017.
Significant exploration potential remains at the Golden Eagle deposit with the Central Shoot open directly below the
open pit and the North Shoot open down plunge. Exploration success within this lode system has the potential to extend
the current underground mine life.
Project Development
Overview
The Resource Development team successfully concluded the mining study and operational handover of the Siberia
open pit mining project. Resource Development work continues on quantifying the following:
1. Siberia underground mining potential
2. Riverina open pit mining potential
3. Callion open pit and underground mining potential
4. Waihi open pit and underground mining potential
5. LOI Complex underground mining potential
6. Mt Ida underground mining potential
7
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
Siberia Project Area
The Siberia mining centre is 37 kilometres south east of the Davyhurst Mill and has a Mineral Resource estimate of
5.7Mt @ 3.1g/t Au for 577,000 ounces. The two main deposits, namely Sand King and Missouri, are at a mine-ready
state.
The Company carried out and extensive Resource definition drilling program during the year, focusing on the Missouri
and Sand King deposits with a total of 140 holes for 15,270 metres drilled. With the completion of drilling in December
2016, a JORC 2012 Mineral Resource and Reserve were completed on the Missouri and Sand King Deposits with
subsequent open pit Reserves of 85,000 ounces and 65,000 ounces respectively. (Refer to ASX announcements dated
3 January 2017 and 15 December 2016 for more information).
During the reporting period, these deposits were handed over to the Operations team to proceed with open pit mining.
Mine evaluation work continues into the underground mining potential that exist below both the Sand King and Missouri
open pits.
At Sandking a total of 3,901 reverse circulation percussion drilling metres and a further 4,317 diamond core drilling
metres for 8,218 drilling metres were completed during the reporting period. This resulted in the reporting of 172
significant intersections, with the top ten tabled below.
At Missouri, a total of 5,573 reverse circulation percussion drilling metres and a further 1,530 diamond core drilling
metres for 7,103 drilling metres were completed during the reporting period. This resulted in the reporting of 188
significant intersections, with the top ten tabled below.
Sand King Top 10 Significant Results
Missouri Top 10 Significant Results
Interval
Grade
ASX Release Date
Interval
Grade
ASX Release Date
11.0 M @
8.0 M @
20.3 M @
6.1 M @
15.0 M @
5.0 M @
16.5 M @
6.0 M @
13.0 m @
8.7 m @
22.31 g/t
20.16 g/t
4.97 g/t
13.14 g/t
5.14 g/t
13.71 g/t
3.92 g/t
10.63 g/t
4.45 g/t
6.6 g/t
Riverina Project Area
15/12/2016
23/11/2016
13/09/2016
22/09/2016
23/11/2016
15/12/2016
23/11/2016
23/11/2016
15/12/2016
2/11/2016
4.3 m @
13.0 m @
3.1 m @
16.0 m @
6.9 m @
2.2 m @
7.0 m @
5.9 m @
4.0 m @
6.0 m @
41.65 g/t
9.79 g/t
23.66 g/t
4.38 g/t
7.81 g/t
23.54 g/t
6.99 g/t
7.61 g/t
10.38 g/t
6.67 g/t
22/09/2016
6/12/2016
22/09/2016
23/11/2016
25/10/2016
22/09/2016
6/12/2016
13/09/2016
15/11/2016
15/11/2016
The Riverina Project area is located approximately 48 kilometres north of the Davyhurst Mill, and has a current Mineral
Resource estimate of 2.6Mt @ 2.5g/t Au for 207,000 ounces. It is one of several high priority development targets within
the Company’s Davyhurst Project and is seen as the next open pit mining focus following on from Siberia.
Riverina is at an advanced stage, with considerable oxide tonnes already defined. The focus of the current drill program
is to upgrade the existing Mineral Resource to a mine ready state, which will culminate in the generation of a higher
confidence Resource model based on comprehensive 3D geological, structural and mineralisation models.
The Riverina deposit has a long history of underground mining (100Kt @ 15.8g/t Au), in addition to a more recent but
brief shallow open pit mining event (22Kt @ 1.78g/t Au) that focused on the eastern footwall lodes. The planned drilling
program is aimed at infill drilling of the eastern lodes, while also assessing the underground potential of the main lodes.
Drilling to date has intersected an intercollated series of mafic volcanics, fine grained sediments and ultramafic
lithologies with mineralisation consistently related to an intense silicification. The sulphide assemblage associated with
brecciated quartz veins in the Central Lode consists of Galena, Sphalerite, Arsenopyrite with abundant fine gold. Drilling
of Reggies (east) lode showed an intensely silicified light grey shale with pyrite and pyrrhotite.
8
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
A total of 4,336 of reverse circulation percussion drilling metres and a further 3,379 of diamond core drilling metres for
8,309 drilling metres were completed during the reporting period. This resulted in the reporting of 83 significant
intersections, with the top ten tabled below:
Interval
12.0 m
5.0 m
4.0 m
6.0 m
2.0 m
10.0 m
3.0 m
4.0 m
7.0 m
6.0 m
Riverina Significant Results
Grade
ASX Release Date
@
@
@
@
@
@
@
@
@
@
4.94
g/t
11.56 g/t
10.78 g/t
3.93
9.78
1.65
5.26
3.96
2.21
2.49
g/t
g/t
g/t
g/t
g/t
g/t
g/t
12/01/2017
12/01/2017
12/01/2017
12/01/2017
20/02/2017
25/01/2017
12/01/2017
12/01/2017
12/01/2017
25/01/2017
Callion Deposit
Drilling at its Callion deposit (Callion), located 12 kilometres south west of the Davyhurst Mill, continued during the
reporting period. Drilling successfully intersected strong gold mineralisation in the target horizon. Both reverse
circulation and diamond core drilling remains ongoing.
Historically the deposit has produced in excess of 280,000 tonnes @ 10.2g/t Au for approximately 92,000 ounces.
Callion was mined via both open pit and underground methods. In the past 2 years, significant time has been invested
into historical data compilation of open pit grade control drilling and underground mining records including mine survey,
geological and structural mapping, gold assay sampling and Resource and Reserve estimate plans. All historical hard
copy information is now digitally captured and spatially located.
The Company’s geologist commenced work on a detailed mineralisation model that will form the basis of an upcoming
resource estimate. The development plan for this deposit will see a resource upgrade followed by reserve definition.
The conceptual mine plan involves an open pit cut back to establish portal access, a remnant underground mining
operation to reclaim large high grade pillars contained within the historical mine, prior to moving to virgin mining
operations at depth and down plunge on the resource extensions.
Exploration drilling is planned to continue and is designed to define and expand the known extent of the mineralisation.
A total of 2,602 reverse circulation percussion drilling metres and a further 1,969 diamond core drilling metres for 4,571
drilling metres were completed during the reporting period. This resulted in the reporting of 37 significant intersections,
with the top ten tabled below:
Interval
7.0 m
7.0 m
6.7 m
7.7 m
3.9 m
2.0 m
5.0 m
8.9 m
4.0 m
6.0 m
Callion Top 10 Significant Results
Grade
ASX Release Date
@
@
@
@
@
@
@
@
@
@
11.37 g/t
10.68 g/t
11.03 g/t
g/t
9.35
16.04 g/t
17.25 g/t
g/t
6.68
g/t
2.93
3.22
1.55
g/t
g/t
9
10/01/2017
20/02/2017
24/11/2016
28/07/2016
10/01/2017
10/01/2017
10/01/2017
10/01/2017
10/01/2017
10/01/2017
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
Waihi Deposit
The Waihi Complex is located 3km west of the Davyhurst Mill. The first two diamond holes of a larger drilling program
were completed at Waihi during the reporting period. These holes targeted a structural corridor at the interpreted
intersection of the north and northwest trending controlling structures. The holes were successful in providing much
needed lithological and structural data directly under the existing Waihi North and Homeward Bound open pits at a point
of structural significance.
The Waihi Complex comprises the historical Waihi and Golden Pole deposits. Both deposits were initially mined in the
early-to-mid 1900s as high grade underground mines to a maximum depth of 180 metres, targeting steeply dipping,
north plunging shoots and produced approximately 95,500 ounces at an average grade of 27g/t Au. In the late 1990s,
approximately 740,000 tonnes @ 2.40g/t Au was extracted via open pit methods at the Waihi deposit, to a maximum
depth of 90 metres producing an additional 56,000 ounces.
The Company has recovered all available historical mining records for the Golden Pole underground mine. The survey
plans and stoping records have been utilised to reconstruct the historical mine in a three dimensional model which has
been integral in providing direction to the current resource definition and exploration effort.
A significant number of historical drill holes have been drilled at Waihi, mostly to a depth of less than 180 vertical metres
below surface. The deepest of these intersected the lode surface at approximately 250 metres below the surface. A
large number of these have returned outstanding results. Listed below are those results that have returned greater than
50 gram metres (gold grade (g/t) x down hole drill width = gram metres).
30m @ 18.46 g/t Au from 109m
10m @ 46.88 g/t Au from 60m
8m @ 32.75 g/t Au from 40m
5m @ 42.88 g/t Au from 48m
5m @ 40.61 g/t Au from 110m
44m @ 4.55 g/t Au from 0m
14m @ 12.99 g/t Au from 124m
3.4m @ 44.8 g/t Au from 49.6m
3m @ 50.58 g/t Au from 43m
2m @ 73.88 g/t Au from 36m
9m @ 12.81 g/t Au from 58m
9m @ 11.27 g/t Au from 0m
3m @ 30.97 g/t Au from 88m
4m @ 22.18 g/t Au from 30m
8m @ 10.69 g/t Au from 90m
13m @ 6.26 g/t Au from 123m
14m @ 5.65 g/t Au from 62m
3m @ 22.91 g/t Au from 37m
5m @ 13.21 g/t Au from 20m
6m @ 9.97 g/t Au from 98m
12m @ 4.7 g/t Au from 121m
10m @ 5.55 g/t Au from 167m
7m @ 7.93 g/t Au from 60m
7m @ 7.7 g/t Au from 85m
5m @ 10.76 g/t Au from 128m
13m @ 3.88 g/t Au from 53m
7m @ 7.19 g/t Au from 142m
Note: These are calculated on down holes widths, not true width. These results were previously released on 22 February 2017.
A total of 332 diamond core drilling metres were completed during the reporting period. This resulted in the following
significant intersections:
Waihi Complex Significant Results
Interval
1.9 m
2.6 m
1.0 m
Grade
ASX Release Date
@
@
@
10.31 g/t
g/t
3.45
5.22
g/t
10/08/2016
10/08/2016
10/08/2016
LOI Mining Centre
Results were received for 3 confirmation drill holes on the Makai Lode while a further 5 holes were drilled on the Great
Ophir lode system.
The LOI Complex is located within one kilometre of the Davyhurst processing plant. The deposit was first mined in
1906, then in the 1980s and again in the early 2000s. The LOI Complex contains three ore lodes, namely the LOI,
Makai and Great Ophir shoots with previous mining extracting a total of 4,000,000 tonnes at 3.1g/t Au for approximately
10
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
400,000 ounces of gold. The current Mineral Resource stands at 2,300,000 tonnes at 2.2g/t Au for 171,000 ounces of
gold, equating to a deposit endowment of 571,000 ounces of gold.
The Company has conducted several phases of drilling on the deposit, with confirmation holes drilled into the Makai
Shoot along with several explorative holes assessing the potential of the Great Ophir Lode. Drilling of the Makai lode
was successful in intercepting the mineralisation and was the final stage of bringing this Resource to a mine ready
state. The drilling at Great Ophir was more exploratory in design, aiming to provide much needed geological data
(diamond core) to assist in building an understanding on the control of mineralisation. Provided significant geological
data along with several strong intersections.
A total of 1,892 diamond core drilling metres were completed at the LOI Complex during the reporting period. This
resulted in the reporting of 30 significant intersections, with the top five tabled below:
LOI Complex Significant Results
Deposit
Interval
Grade
ASX Release Date
Lights Of Israel
Lights Of Israel
Lights Of Israel
5.5 m @
7.0 m @
7.0 m @
Great Ophir
Great Ophir
9.3 m @
15.5 m @
5.95 g/t
4.05 g/t
3.60 g/t
2.87 g/t
0.97 g/t
10/08/2016
10/08/2016
10/08/2016
9/02/2017
9/02/2017
Mt Ida Gold Project
The Mt Ida Project is a high grade underground deposit located 200km north-west of Kalgoorlie-Boulder, 120km from
the Davyhurst Processing Plant, containing a mineral resource of 316,700t @ 13.8g./t for 140,500 ounces. Mt Ida Mine
last operated in 2007 as narrow vein mining operation via fully serviced shaft, winder and workshops 80-person
operating camp servicing the mine and an airstrip at the nearby abandoned Bottle Creek mine.
The exploration potential for this multiple lode system is considered high. The Company continued to progress with
project review and evaluation works, field mapping and drill planning during the reporting period. The intention is to drill
out the system to identify additional mineral resource for inclusion in a feasibility study. This study will look at
conventional decline access targeting multiple mineralised horizons and a standalone processing facility.
Regional Exploration
The Company is focused on the discovery of new and extensional resources, taking projects through to Inferred
Resource category
A concerted regional exploration effort is now possible through several large consolidations of tenure over the past
decade resulting in a massive, near-contiguous holding of tenements, covering 200km strike of extremely prospective
greenstone belt, centred some 110km NW of Kalgoorlie. Utilising more sophisticated exploration methodologies the
company has a clear plan to vector in on large gold-bearing systems, and to make significant gold discoveries. The
Company currently has in excess of 200 targets for drilling prioritisation.
The Company is currently utilising the following strategies for review and target generation and ranking:
• Acquire and compile multiclient geophysical data
• Compile regional 1:25000 solid geology mapping
• Ongoing 1:5000 and 1:10000 geological mapping for later compilation
• Ongoing historic drilling and geochemical sampling data acquisition and validation
• Ongoing review of regolith and historical sampling effectiveness
• Ongoing auger geochemistry acquisition
• Systematic pXRF and spectral data acquisition from all available archival material
• Establish regional EOH, top of fresh rock, and base of transported cover multi-element geochemistry
• Establish regional fresh rock spectral dataset for alteration analysis
• Prioritise early diamond drilling of prospects to identify mineralisation controls
• Complete structural and genetic model review for implementation in respect of second-order targets
11
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
The Company considers that the current database, while of considerable size (1,880km of drilling, 145,000 geochemical
samples), is very surface-focused (the average length of 21,600 RC drill holes is 43m; and the average length of 30,000
RAB/Aircore holes is 32m); and has been a very shallow and only partially-effective test of large gold-bearing systems
within the tenure.
Given the significant continuity shown by drilled gold continuity from the database, considerable potential remains even
at shallow depths, and only a tiny proportion have been tested at depths below 150m as high-grade underground
targets. The Exploration team expects substantial advances in geological understanding will lead to significant
discoveries being made in near-mine and extensional environments, particularly at depth along strike and down-plunge
at known resources.
The Company currently has several priority RC and diamond drill programmes planned for the Peachtree-Young
Australia, Siberia-Consols and the Timber Flats areas; the latter containing the poorly drilled-tested but historically rich
Golden Wonder and Little Wonder workings, interpreted to lie proximal to the Zuleika Shear, north of the Lights of Israel
Complex. The Company plans to drill test these opportunities at the earliest opportunity.
Exploration Joint Venture with Intermin Resources (ASX:IRC)– Menzies and Goongarrie Areas
On 5 September 2016, Eastern Goldfields Limited announced that it had signed a Heads of Agreement (HOA) for an
Exploration Farm-in Joint Venture (JV) Agreement for certain tenements at the Menzies and Goongarrie projects with
Intermin Resources Limited (ASX:IRC) (Intermin) and its wholly owned subsidiary Black Mountain Gold Ltd (BMG).
The Tenements contain nearly 200,000 oz Au in reported resources (refer ASX:IRC 8 March 2016 and 16 August 2016),
with historic production in excess of 830,000 oz, primarily from underground sources. The Project areas lie
approximately 50km northeast and east of the Davyhurst mill.
Subsequent to the HOA, the parties executed the formal arrangement on 1 June 2017.
Details of the earn-in JV include:
• EGS to earn 25% of the project areas by spending A$2m within a 2 year period
• EGS to earn a further 25% by spending A$2m over the following 2 year period
• EGS to earn a further 15% by solely contributing expenditure of A$1.5m inclusive of a Bankable Feasibility
Study to support a mill installation in the Mt Ida / Menzies region during the total 4 year period
• EGS to invest A$1.5m in equity in Intermin (completed)
During the earn-in period, EGS will manage the exploration program and tenure with direction from the JV committee
comprising representatives from both parties. Upon EGS satisfying the earn-in terms, each party will contribute to
ongoing expenditure in accordance with their respective percentages.
The JV Tenements comprise the following:
• Menzies Gold Project
M 29/410, M 29/14, M 29/88, M 29/153-154, M 29/184, P 29/2153-2156, P 29/2251-2254,
P 29/2344-2345, L 29/42-44, ELA 29/966 and ELA 29/984.
• Goongarrie Gold Project
E 29/419, E 29/922, L 29/109, P 29/2073, P 29/2269, P 29/2286-2290, P 29/2307-2308,
M 29/420, P 29/2070 and P 29/2268.
12
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
ANNUAL RESOURCE AND RESERVES STATEMENT
In accordance with ASX Listing Rule 5.21, the Company reviews and reports its Mineral Resources and Ore
Reserves at least annually. The date of reporting is 30 June each year, to coincide with the Company’s end of
financial year balance date. If there are any material changes to its Mineral Resources or Ore Reserves over the
course of the year, the Company is required to promptly report these changes.
As at 30 June 2017, the Company has the following reported Mineral Resources and Ore Reserves:
• Total Mineral Resources are estimated of 21.0 Mt @ 2.6 g/t Au for 1.78 Moz of contained gold.
• Total Ore Reserves are estimated of 2.0 Mt @ 2.3 g/t Au for 150 Koz of contained gold.
Mineral Resources as at 30 June 2017
The Company’s total Measured, Indicated and Inferred Mineral Resources as at 30 June 2017 are 21.0 million tonnes
(Mt) @ 2.6 grams per tonne of gold (g/t Au) containing 1.78 million ounces of gold (Moz).
At 30 June 2016, the estimate of Mineral Resources was 19.0 Mt @ 2.5 g/t Au containing 1.5 Moz of gold as at 30
June 2016. The Mineral Resources were updated on 15 December 2016 and 3 January 2017 following exploration
success at Davyhurst. No project area has been converted to an active operation yet and hence no resource
depletion has occurred for the review period.
Mineral Resource Table
PROJECT
MEASURED
INDICATED
INFERRED
('000t)
(g/t Au)
('000t)
(g/t Au)
('000t)
(g/t Au)
TOTAL MATERIAL
(g/t Au)
('000oz.)
('000t)
Golden Eagle
Lights Of Israel U/G
Makai Shoot
Waihi
Central Davyhurst Subtotal
Lady Gladys
Riverina Area
Forehand
Silver Tongue
Sunraysia
Riverina-Mulline Subtotal
Sand King
Missouri
Palmerston / Camperdown
Berwick Moreing
Black Rabbit
Thiel Well
Siberia Subtotal
Callion
Callion Subtotal
Federal Flag
Salmon Gums
Walhalla
Walhalla North
Mt Banjo
Macedon
Walhalla Subtotal
Iguana
Lizard
Lady Ida Subtotal
Davyhurst Total
Baldock
Baldock Sth
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
32
0
0
0
0
0
32
0
106
106
138
0
0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
2.0
0.0
0.0
0.0
0.0
0.0
2.0
0.0
4.0
4.0
3.5
0.0
0.0
345
74
1,985
805
3,209
1,858
941
386
155
175
3,515
1,773
2,022
118
0
0
0
3,913
86
86
112
199
448
94
109
0
962
690
75
765
12,441
136
0
13
2.5
4.3
2.0
2.4
2.2
1.9
2.4
1.7
2.7
2.1
2.1
3.3
3.0
2.3
0.0
0.0
0.0
3.1
2.8
2.8
1.8
2.8
1.8
2.4
2.3
0.0
2.1
2.1
3.7
2.3
2.5
18.6
0.0
311
180
153
109
753
190
1,644
436
19
318
2,607
680
409
174
50
434
18
1,765
83
83
238
108
216
13
126
186
887
2,032
13
2,045
8,187
0
0
2.6
4.2
1.7
2.4
2.6
2.4
2.5
1.9
1.3
2.0
2.3
3.7
2.6
2.4
2.3
3.5
6.0
3.2
2.3
2.3
2.5
2.9
1.4
3.0
1.4
1.8
2.0
2.0
2.8
2.0
2.4
0.0
0.0
656
254
2,138
914
3,962
2,048
2,585
822
174
493
6,122
2,453
2,431
292
50
434
18
5,678
169
169
382
307
664
107
235
186
1,881
2,722
194
2,916
20,728
2.5
4.2
2.0
2.4
2.3
1.9
2.5
1.8
2.5
2.0
2.2
3.4
2.9
2.4
2.3
3.5
6.0
3.1
2.6
2.6
2.3
2.8
1.7
2.5
1.8
1.8
2.1
2.0
3.8
2.1
2.4
136
0
18.6
0.0
54
35
136
71
296
128
205
48
14
32
427
272
227
22
4
49
3
577
14
14
28
28
36
9
14
11
126
177
24
201
1,641
81
0
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
PROJECT
Meteor
Whinnen
Mount Ida Total
MEASURED
INDICATED
INFERRED
('000t)
0
0
0
(g/t Au)
0.0
0.0
0.0
('000t)
0
0
136
(g/t Au)
0.0
0.0
18.6
('000t)
143
39
182
(g/t Au)
9.3
13.3
10.2
TOTAL MATERIAL
(g/t Au)
9.3
13.3
13.8
('000oz.)
43
17
141
('000t)
143
39
318
Combined Total
138
3.5
12,577
2.7
8,369
2.6
21,046
2.6
1,782
1. All Resources listed above with the exception of the Missouri and Sand King Resources were prepared and first disclosed under the JORC Code 2004
(refer to ASX release “Swan Gold Prospectus”, 13/2/2013). It has not been updated since to comply with JORC Code 2012 on the basis that the
information has not materially changed since it was last reported.
2. The Missouri, Sand King and low grade stockpile Mineral Resources has been updated and complies with all relevant aspects of the JORC code 2012,
and initially released to the market on 15 December 2016 (Missouri ), 3 January 2017 (Sand King).
3. The above table contains rounding errors.
Ore Reserves at 30 June 2017
The Company’s total Proved and Probable Gold Ore Reserve as at 30 June 2017 are 2.0 million tonnes (Mt) @ 2.3
grams per tonne of gold (g/t Au) containing 150,000 ounces of gold (Koz). The maiden Ore Reserves for Missouri and
Sand King were announced to ASX on 15 December 2016 and 14 February 2017 respectively and there was
previously no publicly reported estimate of Gold Ore Reserves as at 30 June 2016. No project area has been
converted to an active operation yet and hence no resource depletion has occurred for the review period.
Ore Reserve Table
Reserve
Proven
Probable
Total
('000t)
(g/t Au)
('000t)
(g/t Au)
('000t)
(g/t Au)
('000oz.)
Missouri - Dec 2016
Sand King – Feb 217
Combined Total
-
-
-
-
-
-
1,205
820
2,025
2.2
2.5
2.3
1,205
820
2,025
2.2
2.5
2.3
85
65
150
Governance Arrangements and Internal Controls
Eastern Goldfields has ensured that the Mineral Resources and Ore Reserves quoted are subject to good governance
arrangements and internal controls. The Mineral Resources and Ore Reserves reported have been generated by
internal Company geologists, who are experienced in best practice in modelling and estimation methods. The
competent person has also undertaken reviews of the quality and suitability of the underlying information used to
generate the resource estimation. In addition, Eastern Goldfields management carry out regular reviews and audits of
internal processes and external contractors that have been engaged by the Company.
14
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
Competent Person Statement
The information in this report that relates to Exploration Results and the Sand King and Missouri Mineral Resources is
based on information compiled under the supervision of Mr Michael Thomson, a former employee of Eastern Goldfields
Limited, who is Member of the Australian Institute of Mining and Metallurgy. Mr Thomson 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 2012 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’. The Company confirms that the form and context in which
the Competent Person’s findings are presented have not been modified from the original announcement and, in the
case of estimates of Mineral Resources, all material assumptions and technical parameters underpinning the estimates
in the initial announcement continue to apply and have not materially changed.
The information in this report that relates to Mineral Resources (with the exception of the Sand King and Missouri
Mineral Resources) is based on information compiled under the supervision of Mr Michael Thomson, a former employee
of Eastern Goldfields Limited, who is Member of the Australian Institute of Mining and Metallurgy. Mr Thomson 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 and 2012 Edition of the
‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. 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. The Company confirms that the form and context in which the Competent Person’s findings are
presented have not been modified from the original announcement and, in the case of estimates of Mineral Resources,
all material assumptions and technical parameters underpinning the estimates in the initial announcement continue to
apply and have not materially changed. This information was prepared and first disclosed under the JORC Code 2004.
It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially
changed since it was last reported.
The information in this report that relates to Ore Reserves is based on information compiled by Mr Craig Mann, who is
an independent mining engineering consultant and a full-time employee of Entech PTY LTD, and has sufficient relevant
experience to advise Eastern Goldfields Limited on matters relating to mine design, mine scheduling, mining
methodology and mining costs. Mr Mann is satisfied that the information provided in this statement has been determined
to a PFS level of accuracy, based on the data provided by Eastern Goldfields Limited. 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. The Company confirms that the form and context in which the Competent Person’s findings are
presented have not been modified from the original announcement and, in the case of estimates of Ore Reserves, all
material assumptions and technical parameters underpinning the estimates in the initial announcement continue to
apply and have not materially changed.
This Annual Resources and Reserves Statement has been compiled under the supervision of Mr Andrew Czerw, a
permanent employee of Eastern Goldfields Limited, who is Member of the Australian Institute of Mining and Metallurgy.
Mr Czerw 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 2012 Edition
of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Czerw
consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
Mr Czerw also consents to the Annual Resources and Reserves Statement as a whole.
15
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
2. Operating Financial Results
The Company’s financial performance and result is attributable to its ongoing exploration, evaluation and development
costs and corporate administration costs.
The Group’s net loss after tax for the year was $18,102,506 (2016: $18,001,267).
Financial Position
At 30 June 2017 total Group assets were $66,910,561 (2016: $21,327,243) and net assets were $11,114,734 (2016:
$4,164,491).
Liquidity and Capital Resources
The table below sets out summary information about the Group’s earnings and movement in shareholder wealth for the
five years to 30 June 2017.
Performance Measures
FY 2017
FY 2016
FY 2015
FY 2014
FY 2013
$
$
$
$
$
Net assets/(liabilities)
11,114,734
4,164,491
(40,896,509)
(33,269,842)
(27,143,125)
Current assets
Cash
8,029,816
16,669,018
43,791
15,401,037
260,877
52,366
988,457
215,699
5,836,151
235,603
Contributed equity
251,281,564
228,342,835
168,040,331
167,965,331
167,665,331
Accumulated losses
(250,333,227)
(232,230,721)
(214,229,454)
(206,527,787)
(200,101,070)
Net loss before tax
(18,102,506)
(18,011,267)
(7,701,667)
(6,469,017)
(24,886,641)
Share price at start of year
Share price at end of year
Loss per share
0.43
0.37
(0.03)
0.15*
0.43
(0.08)
0.15*
0.15*
(0.08)
0.15*
0.15*
(0.07)
0.15*
0.15*
(0.30)
*The share price of the Company remained unchanged since its suspension from the ASX in 2008.
3. Key Developments
Significant Changes in the State of Affairs
Capital Raising
As announced, 18 April 2017, the Company received firm commitments for an equity capital raising of $25 million to
professional and sophisticated investors, through the issue of 80 million shares at an issue price of $0.35 per share
(Placement). The Placement was to be completed in two tranches
As at 30 June 2017, the Company had issued approximately 64.1 million shares under the above raising (approximately
70 million shares in total were issued for the year) which raised approximately $22.4 million. Pursuant to the shareholder
approval received on 30 May 2017, the Company had pre-approval to issue a further 45.9 million shares. Post the end
of the period, the Company issued a further 674,030 shares to raise approximately $131,437.
Unmarketable Parcel Facility
During the period, the Company undertook an Unmarketable Parcel Sale Facility for holders of parcels of shares worth
less than $500 (Unmarketable Parcels) in the Company (UPS Facility) as at 3 April 2017.
The Company offered this sale to assist holders of unmarketable parcels to sell shares without having to use a broker
or pay brokerage. The Company values all its shareholders, however, it incurs significant administration costs
maintaining such a large number of unmarketable parcels. By facilitating this sale, the Company expects to reduce the
administrative costs associated with maintaining a large number of very small holdings.
The UPS Facility closed on 30 June 2017 and as a result there were 1,272,431 ordinary shares held by 2,773
shareholders to be sold (Sale Shares).
16
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
SIGNIFICANT EVENTS AFTER REPORTING DATE
On 11 July 2017 the Company received a writ of summons for proceedings in the Supreme Court of Western Australia
commenced by GR Engineering Services Limited (GRES) in relation to the Davyhurst Gold Project refurbishment
contract entered into by GRES and the Company on 22 September 2016 (Contract).
The Contract price is approximately $12.5 million, of which the Company has already paid the sum of $10.4 million to
GRES.
GRES made further payment claims in April 2017 that did not comply with the Contract and have been disputed by the
Company. The Company is of the view that GRES then wrongfully suspended work at the Davyhurst Mill in May 2017.
On 15 June 2017 GRES represented to the Company that it would immediately and unconditionally recommence work
towards commissioning the Davyhurst Mill, but has failed to do so. As a consequence, the Company has taken steps
itself to complete the refurbishment of the Davyhurst Mill, during which it has discovered numerous defects and
omissions by GRES. Rectifying those defects, GRES’ wrongful suspension and GRES’ failure to assist the Company
to complete the refurbishment has delayed the recommencement of production. GRES now claims “liquidated damages
in the sum of $9,940,991.59, or alternatively $5,000,000”. The Company intends to vigorously defend the proceedings
and will pursue by counterclaim its rights to damages and costs arising from GRES’ breaches of contract, defective
work and other conduct.
As announced by the Company on 14 July 2017, mechanical, electrical and water commissioning of the Davyhurst Mill,
located approximately 120 kilometres north-west of Kalgoorlie, within the Davyhurst mining hub, is now complete. All
circuits are now operational and continuous ore processing has commenced. The first gold pour from the gravity circuit
occurred in July 2017 and the first leach circuit gold pour scheduled shortly after.
On 30 October 2017, the Company announced it’s Annual General Meeting (‘AGM’) for the 30 June 2017 year which
is to be held on 30 November 2017. Further information can be found within the Company’s announcement on the ASX
for this date
As announced on 1 November 2017, ore development has commenced at Golden Eagle and 1,400 tonnes of
development ore has been delivered to the ROM. Once consistent ore production is achieved at Golden Eagle, it is
planned to commence reopening of the existing Lights of Israel decline.
On 2 November 2016, the Board resolved to issue 4,500,000 fully paid ordinary shares to Stirling Resources Pty Ltd
(‘Stirling’). The shares issued were in accordance with the Settlement Deed entered into on 30 December 2015, which
stipulated that the Company would issue shares to Stirling within 6 months of commencement of gold production at the
Davyhurst gold operation.
On 9 November 2017 the Company announced that it had entered into a binding agreement with Hawke’s Point Holding
L.P (‘Hawke’s Point’) for a cornerstone investment of $17.5 million. Under this agreement, the Company also procure
an additional $12.5 million from sophisticated and institutional investors as. In total, the Company will issue between
137,500,000 and up to 150,000,000 fully paid ordinary shares in the Company at a price of $0.20 per share to provide
up to $30 million. All shares issued under the placement will be issued with a corresponding 1 for 1 free attaching
unlisted options. The options will be issued in two tranches in conjunction with shares, with one half of the options
having an exercise price of $0.25 and the other half having an exercise price of $0.275. All options have an expiry of 5
years after issue with accelerated expiry should certain objective conditions be met.
42,000,000 shares and options will be issued to sophisticated and institutional investors in the first tranche on or around
27 November 2017 with second tranche to take place shortly afterwards after shareholder approval has been obtained
at the Company’s upcoming AGM. Up to 2,500,000 shares and options will be issued to Michael Fotios or his related
parties subject to additional shareholder approval.
There has not been any other matter or circumstance that has arisen after balance date that has significantly affected,
or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the
Group in future financial periods.
DIVIDENDS
No amounts were paid or declared by way of dividend since the end of the previous financial year. The Directors do
not recommend the payment of a dividend in respect of the current financial year.
17
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
DIRECTOR’S INTERESTS IN THE SHARES AND OPTIONS OF EASTERN GOLDFIELDS
Details of Directors’ interests in the securities of Eastern Goldfields as at the date of this report are as follows:
Director
Michael Fotios
Alan Still
Craig Readhead
Fully paid shares
201,296,386
-
9,775,134
Unlisted options
19,372,338
3,600,000
-
SHARES UNDER OPTION
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Date options granted
24/03/2016 (i)
Various (ii)
Various (ii)
12/12/2016
15/03/2017
Number of
unissued ordinary shares
under option
4,372,338
20,250,000
22,650,000
9,578,544
5,446,623
Issue price of
shares
$1.000
$0.168
$0.189
$0.261
$0.459
Expiry date of the
options
24/03/2018
08/03/2018
08/03/2020
12/12/2018
15/03/2019
(i) Options granted in the previous period to Investmet Limited (a related party of Mr Fotios) over the shares held
by MGMC Pty Ltd.
(ii) Consists of options provided to employees, directors and as consideration for tenements acquired. The issue
date of these options were 30/12/15, 04/04/16 and 03/05/16. Further details of their issue are contained within Note
28 of this financial report.
The following ordinary shares of the Company were issued during or since the end of the financial year as a result
of the exercise of an option:
Date issued
28/12/2016
28/12/2016
26/04/2017
07/06/2017
30/06/2017
30/06/2017
14/07/2017
14/07/2017
Number of ordinary shares
issued
Amount paid per share
1,800,000
1,800,000
750,000
416,666
600,000
600,000
324,030
250,000
$0.168
$0.189
$0.168
NIL (i)
$0.168
$0.189
NIL (i)
$0.168
(i) Exercised utilising the cashless exercise facility outlined within the Employee Share Option Plan.
MEETINGS OF DIRECTORS
The number of meetings of the Board of Directors held during the year and the number of meetings attended by
each Director was as follows:
Number held whilst in office
Number attended
Michael Fotios
Craig Readhead
Alan Still
2
2
2
2
2
2
18
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
REMUNERATION REPORT (audited)
This Remuneration Report outlines the Director and executive remuneration arrangements of the Group in accordance
with the requirements of the Corporations Act 2001 and its Regulations. This report forms part of the Directors’ report
and has been audited in accordance with Section 300A of the Corporations Act 2001.
For the purposes of this report Key Management Personnel are defined as those persons having authority and
responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including any
Director (whether executive or otherwise) of the parent company. Unless otherwise indicated, all key management
personnel held their position as a throughout the entire financial year and up to the date of this report.
Details of key management personnel during the year up to the date of this report:
Directors
Michael Fotios
Alan Still
Craig Readhead
Executive Chairman
Non-executive Director
Non-executive Director
Principles used to determine the nature and amount of remuneration
Directors and executives remuneration
Overall remuneration policies are determined by the Board of Directors and are adapted to reflect competitive market
and business conditions. Within this framework, the board considers remuneration policies and practices generally,
and determines specific remuneration packages and other terms of employment for executive Directors and senior
management. Executives may be provided with longer-term incentives through participation in option schemes, which
serve to align the interests of the executives with those of shareholders. Executive remuneration and other terms of
employment are reviewed annually by the Board having regard to performance and relevant comparative information.
Non-executive Directors’ remuneration
The Company’s Policy is to remunerate non- executive Directors (NEDs) at market rates (for comparable companies)
for time commitment and responsibilities. Fees for non-executive Directors are not linked to the performance of the
Company, however to align Directors interest with shareholders interest Directors are encouraged to hold shares in the
Company. The amount of aggregate remuneration sought to be approved by shareholders and the fee structure is
reviewed annually against fees paid to NEDs of comparable companies.
Payments to non- executive Directors reflect the demands that are made on, and the responsibilities of the NEDs. Non-
executive Director’s fee and payments are reviewed annually by the Board. The Company’s constitution and the ASX
listing rules specify that the NED fee pool shall be determined from time to time by a general meeting.
In accordance with current corporate governance practices, the structure for the remuneration of non-executive
Directors and senior executives is separate and distinct. Shareholders approve the maximum aggregate remuneration
for non-executive Directors, with the current approved limit being $500,000. The Board determines the actual payments
to Directors.
19
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
REMUNERATION REPORT (audited)
Share based payments
2017
During the 30 June 2017 financial year, no options were issued under the Company’s Employee Option Plan.
2016
The following unlisted options under the Company’s Employee Option Plan were provided to Directors in 2016. The
unlisted options were to provide incentive to the Directors to grow shareholder value by providing them with an
opportunity to receive an ownership interest in the Company.
Director
Number of Options
Michael Fotios
Alan Still
Craig Readhead
Total
Exercisable at $0.168 expiring 2
years from issue date
7,500,000
1,800,000
1,800,000
Exercisable at $0.189 expiring 4
years from issue date
7,500,000
1,800,000
1,800,000
Total
15,000,000
3,600,000
3,600,000
22,200,000
Remuneration Strategy
The Company has yet to adopt any remuneration strategy and will review this strategy at the appropriate time.
Details of remuneration
The following table discloses details of the nature and amount of each element of the emoluments of each Director of
Eastern Goldfields and each of the officers receiving the highest emoluments for the year ended 30 June 2017.
30 June 2017
Name
Executives & Directors
Michael Fotios (Executive)1
Alan Still1
Craig Readhead1
Primary (short-term)
Post-employment
Salary and
Directors
fees
$
Non-
monetary
benefits
$
Superannuation
$
$
60,000
40,000
40,000
140,000
-
-
-
-
-
-
-
-
Equity (share-
based
payments)
Total 1
$
60,000
40,000
40,000
140,000
-
-
-
-
1
Cash component in aggregate did not exceed the $500,000 limit
30 June 2016
Name
Directors
Michael Fotios
Alan Still
Craig Readhead
Primary (short-term)
Post-employment
Salary and
Directors
fees
$
Non-
monetary
benefits
$
Superannuation
$
$
Equity (share-
based
payments)
Total
$
60,000
40,000
40,000
140,000
-
-
-
-
-
-
-
-
893,730
214,495
214,495
953,730
254,495
254,495
1,322,720
1,462,720
There were no proportions of any elements of Key Management Personnel remuneration that related to performance.
Other than Directors of Eastern Goldfields, there were no other executive officers of the Group during the year.
20
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
REMUNERATION REPORT (audited)
Option holdings of key management personnel (consolidated)
30 June 2017
Balance at
1 July 2016
On the
exercise of
options
Options
awarded and
vested during
the year
Balance at
30 June 2017
Award date
Vesting date
Directors
Michael Fotios
Alan Still
Craig Readhead
30 June 2016
Directors
Michael Fotios
Alan Still
Craig Readhead
19,372,338
3,600,000
3,600,000
-
-
(3,600,000)
26,572,338
(3,600,000)
-
-
-
-
19,372,338
3,600,000
-
22,972,338
-
-
-
-
-
-
Balance at
1 July 2015
On the
exercise of
options
Options
awarded and
vested during
the year
Balance at
30 June 2016
Award date
Vesting date
4,372,338
-
-
-
-
-
15,000,000
3,600,000
3,600,000
19,372,338
3,600,000
3,600,000
30 Dec 15
30 Dec 15
30 Dec 15
30 Dec 15
30 Dec 15
30 Dec 15
4,372,338
-
22,200,000
26,572,338
There were no Options granted to key management personnel during the year ended 30 June 2017 (2016: as
disclosed). $642,600 was paid on the 14 December 2016 for the Options exercised by key management personnel
during the year as outlined within the above and below schedules (2016: Nil). There were also no options issued to key
management personnel that lapsed during the year (2016: Nil). The fair value of options on exercise that were issued
to key management during 2016 was $0.168 (Series 1) and $0.152 (Series 2) per instrument. 1.8 million options were
exercised for both Series of options(3.6 million in total).
Shareholdings of key management personnel (consolidated)
30 June 2017
Directors
Michael Fotios1
Alan Still
Craig Readhead2
30 June 2016
Directors
Michael Fotios1
Alan Still
Craig Readhead2
Balance at
1 July 2016
On the
exercise of options
Net change other
Balance at
30 June 2017
191,488,723
-
1,653,332
-
-
3,600,000
9,807,663
-
4,521,802
201,296,386
-
9,775,134
193,142,055
3,600,000
14,329,465
211,071,520
Balance at
1 July 2015
On the
exercise of options
Net change other
Balance at
30 June 2016
41,238,671
-
166,667
41,405,338
-
-
-
-
150,250,052
-
1,486,665
191,488,723
-
1,653,332
151,736,717
193,142,055
1 This includes shareholdings by Mr Michael Fotios and entities he controlled (Michael Fotios Family A/C, Investmet Limited, Delta Resource
Management Pty Ltd, Whitestone Minerals Limited).
2 This includes shareholdings and on market share purchases by Mr Craig Readhead and entities he controlled (Hengolo Pty Ltd as trustee for CL
Readhead Family Trust).
Shares issued during the year as a result of the exercise of options granted as part of remuneration are as
highlighted above. There were no alterations to the terms and conditions of options granted as remuneration
since their grant date. There were no forfeitures during the period.
All equity transactions with key management personnel have been entered into under terms and conditions no
more favourable than those the Group would have adopted if dealing at arm’s length.
Loans to key management personnel
There were no loans to key management personnel during the financial year (2016: Nil).
21
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
REMUNERATION REPORT (audited)
Other transactions with Directors
The following transactions occurred during the year between the Group and Directors or their director-related
entities.
The following amounts are not included in the Remuneration table in the preceding pages:
Delta Resources Management Pty Ltd (“Delta”), a company which Mr Michael Fotios is a substantial shareholder
in, and Chairman of, provided technical and administrative support to the Company to the value of $571,695
(inclusive of GST) (30 June 2016: $112,079). A total of $93,089 remains due and payable as at 30 June 2017
(30 June 2016: $25,705). $210,000 worth of services received were settled by way of shares issued (refer Note
28 of this report for further details) as approved at the general meeting of shareholders held on 30 May 2017. All
charges are on commercial terms. A repayment of a working capital loan from Delta to the Company of $52,844
was made to repay in full the loan amount outstanding at 30 June 2017. No amount is payable on the loan
balance as at 30 June 2017 (2016: $52,844). Delta received a loan of $12,766 which remains receivable at 30
June 2017.
Whitestone Minerals Pty Ltd (“Whitestone”), a company which is 100% owned by Investmet Ltd, a company
which Mr Michael Fotios is a substantial shareholder in, and Chairman of, provided consulting services to the
Company to the value of $12,020,789 (inclusive of GST) (30 June 2016: $3,803,409). $2,670,524 remains due
and payable as at 30 June 2017 (30 June 2016: $1,809,675). $3,500,000 worth of services received were settled
by way of shares issued (refer Note 15 of this report for further details) as approved at the general meeting of
shareholders held on 30 May 2017. All charges are on commercial terms.
Horseshoe Metals Limited, a company which Mr Michael Fotios is a substantial shareholder in and a Director of,
received consulting and administrative support from the Company to the value of $74,916 (inclusive of GST) (30
June 2016: $24,974). A total of $74,916 remains due and receivable by the Company as at 30 June 2017 (30
June 2016: $55,866). All charges are on commercial terms. Interest is not charged.
Pegasus Metals Limited, a company which Mr Michael Fotios is a substantial shareholder in and a Director of,
received consulting and administrative support from the Company to the value of $25,079 (inclusive of GST) (30
June 2016: $45,848). $25,079 remains due and receivable by the Company as at 30 June 2017 (2016: $0). All
charges are on commercial terms. Interest is not charged.
Redbank Copper Limited, a company which Mr Michael Fotios is a substantial shareholder in and a Director of,
received consulting and administrative support from the Company to the value of $35,473 (inclusive of GST) (30
June 2016: $116,324). $35,473 remains due and receivable by the Company as at 30 June 2017 (30 June 2016:
$120,039). All charges are on market terms. At 30 June 2017, a loan of $101,744 remains receivable (30 June
2016: $0). Interest is not charged.
During the year, the Company drew down on a loan with Investmet Limited (“Investmet”), a company which Mr
Michael Fotios is a substantial shareholder and Chairman, The interest rate of the loan is the BBR rate plus a
margin of 4% until production at the Davyhurst Project commences and then 3% after production has
commenced. A total of $2,620,000 was drawn down on the loan during the year, of which $350,000 was repaid
via the issue of shares (refer Note 15 of this report for further details), as approved at the general meeting of
shareholders held on 30 May 2017. At 30 June 2017 the outstanding loan balance is $115,353 at 30 June 2017
(30 June 2016: nil). Investmet also provided consulting services to the Company to the value of $17,097
(inclusive of GST) (30 June 2016: nil). $15,296 remains due and payable by the Company as at 30 June 2017
(30 June 2016: nil). All charges are on commercial terms and interest is not charged.
Readhead Legal, a company which Mr Craig Readhead is a substantial shareholder in, charged $204,000 (30
June 2016: $84,000) for consulting fees to the Company. $89,400 of consulting fees were not invoiced during
the period and remain unpaid as at 30 June 2017 (30 June 2016: $37,400).
22
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
Terms and conditions of transactions with Director-related entities:
Transactions with related parties are made at terms equivalent to those that prevail in arm’s length transactions.
Outstanding balances at the year-end are unsecured and settlement occurs in cash unless agreed otherwise. There
have been no guarantees provided or received for any related party receivables or payables. For the year ended June
2017, the Group has not recorded any impairment of receivables relating to amounts owed by related parties. This
assessment is undertaken each financial year through examining the financial position of the related party and the
market in which the related party operates.
Service agreements
The terms of employment for executive Directors and specified executives were formalised in service agreements
during the year ended 30 June 2017. The principal terms of the executive service agreements existing at reporting date
are set out below:
Mr Michael Fotios
The Group and Mr Michael Fotios entered into an executive services agreement on 20 October 2016 for his role as
Executive Chairman which commenced on 14 September 2012. The principal terms of this agreement are as follows
(a) a base fee of $60,000 per annum for acting as Executive Chairman; and
(b) Termination is upon written resignation being presented to the Group or if Mr Fotios is not re-elected by
shareholders as and when required by the Corporations act and the ASX listing rules.
Company performance
The table below shows the performance of the Group as measured by its earnings per share. In the past five years the
Group has incurred losses and no dividends have been paid. Any improvement to earnings is viewed as a long term
position that is not yet fully determinable.
30 June
2017
30 June
2016
30 June
2015
30 June
2014
30 June
2013
Loss per share
(0.03)
(0.08)
(0.08)
(0.07)
(0.30)
End of Remuneration Report (audited)
ENVIRONMENTAL REGULATIONS
The Group is subject to significant environmental regulation in respect to its mineral exploration activities. These
obligations are regulated under relevant government authorities within Australia. The Group is a party to exploration
and mine development licences. Generally, these licences specify the environmental regulations applicable to
exploration and mining operations in the respective jurisdictions. The Group aims to ensure that it complies with the
identified regulatory requirements in each jurisdiction in which it operates.
Compliance with environmental obligations is monitored by the Board of Directors. No environmental breaches have
been notified to the Group by any government agency during the year ended 30 June 2017.
WARDENS COURT PROCEEDINGS
The Company (and its wholly owned subsidiaries) is a party to various proceedings in the Wardens Court pursuant to
which third parties are seeking to challenge its title to various mining tenements by way of forfeiture and other
proceedings. The Directors are confident that the Company (and its wholly owned subsidiaries) will be successful in
defending these proceedings. There were no proceedings against any subsidiary that could bring into doubt whether
the Company controlled any of its subsidiaries within the Group.
23
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
30 JUNE 2017 FULL YEAR REPORT
DIRECTORS’ REPORT
PROCEEDINGS ON BEHALF OF THE COMPANY
Other than as referred to above, no person has applied for leave of court or to bring proceedings on behalf of the
Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on
behalf of the Company, for all or any part of those proceedings.
NON-AUDIT SERVICES
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the Company are important. The Directors consider the general standard of
independence for auditors imposed by the Corporations Act 2001 before any engagements are agreed.
During the year, no non-audit services were provided by Ernst & Young as the external auditors (2016: $nil). Further
details of remuneration of the auditors are set out at Note 17.
AUDITOR INDEPENDENCE
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is
included immediately following the Directors’ report and forms part of this Directors’ report.
INDEMNIFICATION OF AUDITORS
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms
of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified sum). No
payment has been made to indemnify Ernst & Young during or since the financial year end.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has entered into indemnity agreements with each of the Directors and officers of the Company. Under
the agreements, the Company will indemnify those officers against certain claims or for any expenses or costs which
may arise as a result of work performed in their respective capacities as officers of the Company or any related entities.
The Company has taken out an insurance policy insuring Directors and Officers of the Company against any liability
arising from a claim bought by a third party against the Company or its Directors or Officers, and against liabilities for
costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in
their capacity as a Director or Officer of the Company, other than conduct involving a wilful breach of duty in relation to
the Company.
During the year, the Company paid premiums in respect of the above insurance policy. The contract prohibits the
disclosure of the nature of the liabilities and/or the amount of the premium.
ROUNDING OF AMOUNTS
In accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, the amounts in
the directors’ report and in the financial report have been rounded to the nearest one thousand dollars, or in certain
cases, to the nearest dollar (where indicated).
Signed in accordance with a resolution of the Directors.
Michael Fotios
Executive Chairman
Perth, Western Australia
22 November 2017
24
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s independence declaration to the Directors of Eastern Goldfields
Limited
As lead auditor for the audit of Eastern Goldfields Limited for the year ended 30 June 2017, I declare to
the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the review; and
b) no contraventions of any applicable code of professional conduct in relation to the review.
This declaration is in respect of Eastern Goldfields Limited and the entities it controlled during the
financial year.
Ernst & Young
G H Meyerowitz
Partner
22 November 2017
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
GHM:JT:EGS:012
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
Revenue
Other income
Expenses
Exploration costs expensed
Share based payments
Depreciation and amortisation expense
General and administration
Other operating expenses
Operating loss
Finance income
Finance costs
Loss before income tax expense
Income tax expense
Loss for the year
Other comprehensive income
items that may be reclassified to profit and loss
Changes in fair value of available for sale assets
Income tax relating to this item
Cash flow hedges
Other comprehensive income, net of income tax
NOTES
30 June 2017
$’000
30 June 2016
$’000
4
5
9
5
5
4
5
-
3,410
(9,261)
(1,194)
(310)
(5,122)
(1,444)
(17,331)
(8,282)
(2,407)
-
(8,890)
(124)
(16,293)
5
(777)
(18,103)
-
(18,103)
8
(1,726)
(18,011)
10
(18,001)
16
16
16
(3)
-
33
(10)
271
(268)
-
23
Total comprehensive loss for the year
(17,835)
(17,978)
Total comprehensive loss attributable to:
Equity holders of the Parent
(17,835)
(17,978)
Basic and diluted loss per share
(0.03)
(0.08)
The above statement should be read in conjunction with the accompanying notes.
26
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
AS AT 30 JUNE 2017
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Mine properties
Capitalised exploration expenditure
Available for sale financial assets
Derivative financial instruments
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Loans and borrowings
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provision for rehabilitation
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Accumulated losses
Reserves
TOTAL EQUITY
NOTES
30 June 2017
$’000
30 June 2016
$’000
7
8
8
9
10
11
16
12
13
14
44
7,986
15,401
1,268
8,030
16,669
64
55,703
585
2,258
271
58,881
66,911
64
3,607
454
533
-
4,658
21,327
28,618
15,060
206
43,884
7,666
53
63
7,782
14
11,912
9,380
11,912
55,796
11,115
9,380
17,162
4,164
15
16
16
251,282
(250,333)
10,166
228,343
(232,231)
8,052
11,115
4,164
The above statement should be read in conjunction with the accompanying notes.
27
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Consolidated
NOTES
$’000
$’000
$’000
$’000
$’000
$’000
Contributed
equity
Accumulated
losses
Share based
payments
reserve
Cash flow hedge
reserve
Available for sale
reserve
Total equity /
(shareholders’
deficit)
At 1 July 2015
168,040
(214,229)
5,293
-
-
(40,897)
Loss for the year
Other comprehensive income, net of
income tax
- (18,001)
-
-
- (18,001)
-
-
-
-
23
23
Total comprehensive loss
- (18,001)
-
-
23
(17,978)
Issue of ordinary shares (net of costs)
Options issued for tenement acquisition
Share based payments
60,303
-
-
-
-
-
-
329
2,407
-
-
-
- 60,303
- 329
2,407
-
At 30 June 2016
228,343
(232,231)
8,029
-
23
4,164
Loss for the year
Other comprehensive income, net of
income tax
- (18,103)
-
-
-
-
-
-
(18,103)
271
(3)
(268)
Total comprehensive loss
- (18,103)
-
271
(3)
(17,835)
Issue of ordinary shares (net of costs) 15
28
Share based payments
22,939
-
-
- 1,846
-
-
-
-
-
22,939
1,846
At 30 June 2017
251,282
(250,333)
9,875
271
20
11,115
The above statement should be read in conjunction with the accompanying notes.
28
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
CONSOLIDATED STATEMENT OF CASH FLOWS
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Payments for exploration and evaluation expenditure
Interest received
Finance costs paid
Net cash flows used in operating activities
Cash flows from investing activities
Payments for purchase of property, plant and equipment
Payments for mine properties
Payments for available for sale asset acquisition
Net cash flows (used in) / from investing activities
Cash flows from financing activities
Proceeds from share issue
Payments for costs of raising capital
Proceeds from loan advances
Repayment of loans
Net cash flows (used in) / from financing activities
NOTES
30 June 2017
$’000
30 June 2016
$’000
-
(10,551)
(7,608)
5
(499)
(18,653)
8
(8,435)
(125)
8
(139)
(8,684)
26
-
-
(27,754)
(1,500)
(29,254)
(607)
(500)
(1,107)
17,534
(456)
17,627
(2,155)
32,550
28,220
(1,328)
1,179
(2,932)
25,139
Net (decrease)/increase in cash and cash equivalents held
(15,357)
15,349
Cash and cash equivalents at the beginning of the financial period
15,401
52
Cash and cash equivalents at the end of the financial period
7
44
15,401
The above statement should be read in conjunction with the accompanying notes.
29
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
CORPORATE INFORMATION
The financial report of Eastern Goldfields for the year ended 30 June 2017 was authorised for issue in
accordance with a resolution of the Directors on the date of signing of the Directors’ report. Eastern Goldfields
is a for-profit company limited by shares that is incorporated and domiciled in Australia.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a)
(b)
Basis of preparation
The financial report is a general-purpose financial report which has been prepared in accordance with the
requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards Board. The financial report has been prepared on a
historical cost basis. The financial report is presented in Australian dollars.
Going concern
The consolidated financial statements of Group have been prepared on a going concern basis which
contemplates the continuity of normal business activities and the realisation of assets and the settlement of
liabilities in the ordinary course of business.
As at 30 June 2017, the Group had cash and cash equivalents of $43,791 (2016: cash and cash equivalents
$15,401,037), its current liabilities exceeded its current assets by $35,854,448 (2016: Net Current Assets of
$8,886,200) and total equity of $11,114,734 (2016: $4,164,491). The Group recorded a loss after tax of
$18,102,506 (2016: $18,001,267) for the year ended 30 June 2017 and its net cash used in operating activities
for the same period totalled $18,653,217 (2016: cash outflows of $8,683,621).
During the 30 June 2017, the Group has initiated the refurbishment works of the 1.2Mtpa Davyhurst Processing
Plant and recently commenced production at the plant. Mining of the open pit resources at Siberia and
underground resources within the Davyhurst area is scheduled to begin in November 2017. The Group also
undertook project development and ongoing explorations works which resulted in significant cash used in
investing activities of $29,254,416 (2016: cash outflows of $1,106,778).
The ability of the Group to operate as a going concern and meet it’s debts and when they fall due is primarily
dependent upon on:
- The continuance of it’s operations and generation of free cash flows from mining activities;
- Further capital raising initiatives as announced to the ASX on 12 October 2017;
- Utilisation of debt facilities currently in place that have been provided by Investec Australia Limited (‘Investec’)
- Ongoing support from Investmet Limited (‘Ínvestmet’)
The Group is currently in discussions with various debt and equity providers and the Directors are confident
they will be successful in raising the requisite debt and equity support to continue to discharge it’s liabilities as
and when they fall due. As announced on 9 November 2017, the Company reached an agreement with a
cornerstone investor to raise $17.5m and a further $12.5m from sophisticated and institutional investors. Refer
to Note 29 of this report for further details.
Should the Group not achieve the matters set out above, there is significant uncertainty whether the Group will
continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the
normal course of business and at the amounts stated in the financial statements.
The financial report does not include any adjustments relating to the recoverability and classification of recorded
asset amounts nor to the amounts and classification of liabilities that might be necessary should the Group not be
able to continue as a going concern.
(c)
Statement of compliance
The financial report complies with Australian Accounting Standards and International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board.
All new and amended Accounting Standards and Interpretations effective from 1 July 2016 have been applied
for the first time. There was no material impact on the financial report on adoption of these Standards and
Interpretations which included:
30
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(c)
Statement of compliance (continued)
— AASB 2014-4: Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of
Depreciation and Amortisation.
This Amending Standard amends AASB 116: Property, Plant and Equipment and AASB 138: Intangible
Assets to:
— establish the principle for the basis of depreciation and amortisation as being the expected pattern of
consumption of the future economic benefits of an asset; and
— clarify the limited circumstances in which revenue-based methods may be used for measuring the
consumption of the economic benefits embodied in an intangible asset.
— AASB 2015-1: Amendments to Australian Accounting Standards – Annual Improvements to Australian
Accounting Standards 2012-2014 Cycle.
This Amending Standard amends a number of Australian Accounting Standards arising from the issuance
of Annual Improvements to IFRSs 2012-2014 Cycle by the International Accounting Standards Board
(IASB), including:
— AASB 5: Non-current Assets Held for Sale and Discontinued Operations to clarify the accounting
treatment of an asset held for sale that is reclassified as held for distribution to owners, and the
reclassification of assets no longer held for distribution to owners;
— AASB 7: Financial Instruments: Disclosures to clarify: (a) what ‘continuing involvement’ means in the
context of a transferred financial asset; and (b) the circumstances in which the offsetting disclosures
in AASB 2012-2: Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial
Assets and Financial Liabilities apply to interim statements;
— AASB 119: Employee Benefits to clarify that the discount rates used to measure defined benefit
obligations should be determined based on the currency in which the obligations are denominated,
rather than the country where the obligation is located; and
— AASB 134: Interim Financial Reporting to clarify that certain disclosures may be incorporated in the
interim financial statements by cross-reference to another part of the interim financial report.
—
AASB 2015-2: Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to
AASB 101.
This Amending Standard makes a number of narrow-focus amendments that address concerns regarding
the application of some of the presentation and disclosure requirements in AASB 101: Presentation of
Financial Statements. These amendments include clarification that:
— an entity discloses its significant accounting policies (not a summary of those policies);
— specific line items in the statement of profit or loss and other comprehensive income and statement
of financial position can be disaggregated;
— materiality applies in respect of items specifically required to be presented or disclosed, even when
AASB 101 contains a list of specific requirements or describes them as minimum requirements;
— entities have flexibility in relation to the order in which they present their notes; and
—
the requirements that apply when additional subtotals are presented in the statement of profit or loss
and other comprehensive income and statement of financial position
31
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(c)
Statement of compliance (continued)
— AASB 2015-5: Amendments to Australian Accounting Standards – Investment Entities: Applying the
Consolidation Exception.
This Amending Standard amends AASB 10: Consolidated Financial Statements, AASB 12: Disclosure of
Interests in Other Entities and AASB 128: Investments in Associates and Joint Ventures to:
— confirm that the exemption from preparing consolidated financial statements applies to a parent entity
that is a subsidiary of an investment entity that produces financial statements for public use, subject
to the investment entity measuring all of its subsidiaries at fair value;
— clarify that only a subsidiary of an investment entity that is not an investment entity itself and that
provides investment services is consolidated, and all other subsidiaries are measured at fair value;
and
— clarify the applicability of AASB 12 to the financial statements of an investment entity.
— AASB 2014-3: Amendments to Australian Accounting Standards – Accounting for Acquisitions of Interests
in Joint Operations.
This Amending Standard amends AASB 1: First-time Adoption of Australian Accounting Standards and
AASB 11: Joint Arrangements to provide guidance on the accounting for acquisitions of interests in joint
operations in which the joint activity constitutes a business.
The following Accounting Standards and Interpretations have been issued by the AASB but are not yet effective
for the year ending 30 June 2017. The Group has not yet early adopted any other standard, interpretation or
amendment that has been issued but is not yet effective. The impact of the new and amended standards still
needs to be determined.
Title of Standard
Nature of Change
Impact
Mandatory
Application
date / Date of Adoption by
Group
AASB 2016-2
Amendments
Australian
Accounting
Standards
Disclosure
Initiative:
Amendments
AASB107
to
–
to
The amendments to AASB 107 Statement
of Cash Flows are part of the IASB’s
Disclosure initiative and help users of
financial statements better understand
in an entity’s debt/ The
change
amendments require entities to provide
disclosures about changes
their
liabilities arising from financing activities,
including both changes arising from cash
flows and non-cash changes (such as
foreign exchange gain or losses).
to
AASB 2016-5
Amendments to
Australian
Accounting
Standards –
Classification and
Measurement of
Share Based
Payment
Transactions
This Standard amends AASB2 Shares
Based Payment, clarifying how to account
for certain types of share based payment
transactions. The amendments provide
requirements on the accounting for vesting
and non-vesting conditions on cash settled
share based payments, withholding tax
obligations with net settlement and
modifications to the terms and conditions of
share based payment transactions from
cash to equity settled.
Management is currently assessing
the effects of applying the new
standard on the Group’s financial
statements.
Mandatory for financial years
commencing on or after 1
January 2017 but available
for early adoption.
At this stage the Group is not able
to estimate the effect of the new
rules on
financial
the Group’s
statements. The Group will make
more detailed assessments of the
effect over the next twelve months.
Expected date of adoption by
the Group: 1 July 2017
Management is currently assessing
the effects of applying the new
standard on the Group’s financial
statements.
Mandatory for financial years
commencing on or after 1
January 2018 but available
for early adoption.
At this stage the Group is not able
to estimate the effect of the new
financial
the Group’s
rules on
statements. The Group will make
more detailed assessments of the
effect over the next twelve months.
Expected date of adoption by
the Group: 1 July 2018
IFRS 23 Uncertainty
over Income Tax
Treatments
This interpretation clarifies the application
of recognition and measurement criteria for
IAS 12 Income Taxes when there is
uncertainty over income tax treatments,
including
and
determining taxable profit/loss or changes
in facts and circumstance
assumptions made
the
Management will assess
effects of applying
this new
interpretation once an Australian
Equivalent has been finalised. The
Group will make more detailed
assessments of the effect over the
next 12 months.
Mandatory for financial years
commencing on or after 1
January 2019 but available
for early adoption.
Expected date of adoption by
the Group: 1 July 2019
32
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(c)
Statement of compliance (continued)
Title of Standard
Nature of Change
Impact
Mandatory
Application
date / Date of Adoption by
Group
AASB 15,
AASB2014-5,
AASB2015-8,
AASB 2016-3
AASB2016-7
Revenue
Contracts
Customers
from
with
The AASB has issued a new standard for the
recognition of revenue. This will replace
AASB 118 which covers revenue arising from
the sale of goods and rendering of services
and AASB 111 which covers construction
contracts.
The new standard is based on the principle
that revenue is recognised when control of a
good or service transfers to a customer.
The standard permits either a full or a
the
modified retrospective approach
adoption
for
AASB 16
Leases
AASB 9,
AASB 2014-7,
AASB2014-8,
AASB2016-6
Financial
Instruments
AASB 16 was issued in February 2016. It will
result in almost all leases being recognised
on the balance sheet, as the distinction
between finance and operating leases is
removed. Under the new standard, an asset
(the right to use the leased item) and a
financial
rentals are
recognised. The exceptions are short term
and low value leases.
to pay
liability
instruments
139. Debt
the approach
AASB 9 introduces new requirements for the
classification and measurement of financial
assets and liabilities. These requirements
improve and simplify
for
classification and measurement of financial
assets compared with the requirements of
AASB
are
subsequently measured at fair value through
the profit and
loss (‘FVTPL’) or other
comprehensive income on the basis of their
contractual cash flows. There is a fair value
option that allows financial assets to be
designated as FVTPL if that eliminates or
reduced accounting mismatch. The incurred
credit model of AASB139 has also been
replaced by an expected credit loss model
under AASB9, along with amendments made
to hedge accounting
to align with risk
management and to address inconsistencies
in hedge accounting models.
is
Management
currently
assessing the effects of applying
the new standard on the Group’s
financial statements.
Mandatory for financial years
commencing on or after 1
January 2018 but available
for early adoption.
Expected date of adoption by
the Group: 1 July 2018
Mandatory for financial years
commencing on or after 1
January 2019. At this stage
the Group does not intend to
adopt the standard before it’s
issue date.
Mandatory for financial years
commencing on or after 1
January 2018. At this stage
the Group does not intend to
adopt the standard before it’s
issue date.
At this stage the Group is not able
to estimate the effect of the new
rules on the Group’s financial
statements. The Group will make
more detailed assessments of
the effect over the next twelve
months.
is
Management
currently
assessing the effects of applying
the new standard on the Group’s
financial statements.
At this stage the Group is not able
to estimate the effect of the new
rules on the Group’s financial
statements. The Group will make
more detailed assessments of
the effect over the next twelve
months.
is
currently
Management
assessing the effects of applying
the new standard on the Group’s
financial statements.
At this stage the Group is not able
to estimate the effect of the new
rules on the Group’s financial
statements. The Group will make
more detailed assessments of
the effect over the next twelve
months.
(d)
Principles of consolidation
The consolidated financial statements comprise the financial statements of Eastern Goldfields Limited and its
subsidiaries (as outlined in Note 23) (the Group) as at and for the year ended 30 June each year 2017.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the
Group is exposed to, or has rights to, variable returns from the it’s involvement with the entity and has the ability
to affect those returns through its power to direct the activities of the entity.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent company,
using consistent accounting policies. In preparing the consolidated financial statements, all intercompany
balances, transactions, unrealised gains and losses resulting from intra-group transactions and dividends have
been eliminated in full.
33
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(d)
Principles of consolidation (continued)
Subsidiaries are fully consolidated from the date on which control is obtained by the Group and cease to be
consolidated from the date on which control is transferred out of the Group.
Investments in subsidiaries held by Eastern Goldfields Limited are accounted for at cost in the separate financial
statements of the parent entity less any impairment charges. Dividends received from subsidiaries are recorded
as a component of other revenues in the separate income statement of the parent entity, and do not impact the
recorded cost of the investment. Upon receipt of dividend payments from subsidiaries, the parent will assess
whether any indicators of impairment of the carrying value of the investment in the subsidiary exist.
Where such indicators exist, to the extent that the carrying value of the investment exceeds its recoverable
amount, an impairment loss is recognised.
(e)
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefit will flow to the Group and the
revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or
receivables taking into account contractually defined terms of payment and excluding taxes or duty. The
following specific recognition criteria must also be met before revenue is recognised.
Interest
Revenue is recognised as the interest accrues using the effective interest rate method (which is the rate that
exactly discounts estimated future cash receipts through the expected life of the financial instrument to the net
carrying amount of the financial asset).
(f)
Mine properties
All assets acquired, including property, plant and equipment are initially recorded at their cost of acquisition
being the fair value of the consideration provided plus incidental costs directly attributable to the acquisition.
Property, plant and equipment located on a mine site is included at cost less provision for depreciation and any
impairment in value. All such assets are depreciated over the estimated remaining economic life of the mine,
using a unit of production basis.
All other property, plant and equipment is included at cost less provision for depreciation and any impairment
in value and depreciated on a straight-line basis commencing from the time the asset is held ready for use. All
other repairs and maintenance costs are recognised in profit or loss as incurred. The present value of the
expected cost for the decommissioning of an asset after its use is included in the cost of the respective asset if
the recognition criteria for a provision are met. Refer to significant accounting judgments, estimates and
assumptions (Note 3) and provisions for further information about the recognised decommissioning provision.
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal
or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on recognition
of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset)
is including the statement of profit or loss when the asset is derecognised.
(g)
Financial Instruments
Financial assets in the scope of AASB 139 “Financial Instruments – Recognition and Measurement” are
classified as either financial assets at fair value through profit or loss, loans and receivables, held to maturity
investments or available for sale investments as appropriate. When financial assets are recognised initially,
they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly
attributable transaction costs. The Group determines the classification of its financial assets at initial
recognition.
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual
provisions of the instrument. For financial assets, this is equivalent to the date that the entity commits itself to
either the purchase or sale of the asset (i.e. trade date accounting is adopted).
34
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(g)
Financial Instruments (continued)
Financial instruments are initially measured at fair value adjusted for transaction costs, except where the
instrument is classified as fair value through profit or loss, in which case transaction costs are immediately
recognised as expenses in profit or loss.
Loans, receivables and security deposits
Loans, receivables and security deposits are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective
interest method. Gains and losses are recognised in profit or loss when the loans and receivables are
derecognised or impaired as well as through the amortisation process.
Available-for-sale
Available-for-sale financial assets include any financial assets not included in the above categories or are
designated as such on initial recognition. Available-for-sale financial assets are subsequently measured at fair
value. Unrealised gains and losses arising from changes in fair value are taken directly to equity. The
cumulative gain or loss is held in equity until the financial asset is de-recognised, at which time the cumulative
gain or loss held in equity is reclassified from equity to profit or loss as a reclassification adjustment.
Non-listed investments for which fair value cannot be reliably measured, are carried at cost and tested for
impairment.
Financial liabilities
Financial liabilities include trade payables, other creditors, loans from third parties and loans or other amounts
due to director-related entities.
Non-derivative financial liabilities are subsequently measured at amortised cost, comprising original debt less
principal payments and amortisation.
Financial liabilities are classified as current liabilities unless the consolidated entity has an unconditional right
to defer settlement of the liability for at least 12 months after the reporting date.
Derivative financial instruments
The consolidated entity holds derivative financial instruments to mitigate its risk exposures from foreign currency
and interest rate movements.
Derivatives that are not designated in a qualifying hedge relationship are subsequently measured at fair value
through profit or loss. Derivatives designated as hedging instruments are accounted for as described below.
Some financial instruments have embedded derivatives within them. Embedded derivatives are separated from
the host contract and accounted for separately if the economic characteristics and risks of the host contract and
the embedded derivative are not closely related, a separate instrument with the same terms as the embedded
derivative would meet the definition of a derivative, and the combined instrument is not measured at fair value
through profit or loss.
Impairment of financial assets
Financial assets are tested for impairment at each financial year end to establish whether there is any objective
evidence for impairment as a result of one or more events (‘loss events’) having occurred and which have an
impact on the estimated future cash flows of the financial assets.
For loans and receivables and held-to-maturity investments carried at amortised cost, impairment losses are
measured as the difference between the asset’s carrying amount and the present value of estimated future
cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original
effective interest rate.
Individual receivables and held-to-maturity investments that are known to be uncollectible are written off to profit
or loss by reducing the carrying amount of the asset directly. For other receivables and held-to-maturity
investments, estimated impairment losses are recognised in a separate provision for impairment.
35
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(g) Other financial assets (continued)
The consolidated entity applies the following criteria as objective evidence that an impairment loss has occurred:
-
-
-
-
-
significant financial difficulties of the debtor;
payments more than 30 days overdue and failure by the debtor to adequately respond to a follow-up request
for payment;
payment more than 90 days overdue;
it becoming probable that the debtor will enter bankruptcy or other financial reorganisation; and
the consolidated entity, for reasons relating to the debtor’s financial difficulty, granting to the debtor a
concession the entity would not otherwise consider.
When it is concluded that it is probable the consolidated entity will not recover the net carrying amount (gross
carrying amount less impairment provisions) of an impaired receivable or held-to-maturity investment, the
allowance amount attributable to the asset is written off directly against the gross carrying amount of the asset.
An available-for-sale financial asset is considered impaired if there has been a significant or prolonged decline
in its fair value below its original cost. If an available-for-sale financial asset is impaired, the cumulative loss is
reclassified from equity to profit or loss as a reclassification adjustment. For impaired equity investments,
subsequent increases in the fair value of the investment are not reversed through profit or loss. For impaired
debt investments, subsequent increases in the fair value of the investment are treated as a reversal of the
impairment loss and recognised in profit or loss if the subsequent fair value increase can be objectively related
to the previous impairment event.
Hedge accounting
Certain derivatives are designated as hedging instruments and are further classified as either fair value hedges
or cash flow hedges.
At the inception of each hedging transaction, the consolidated entity documents the relationship between the
hedging instruments and hedged items, its risk management objective and its strategy for undertaking the hedge
transaction. The consolidated entity also documents its assessment, both at hedge inception and on an ongoing
basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly
effective in offsetting changes in fair values or cash flows of hedged items.
Cash flow hedge
To qualify as a cash flow hedge the underlying transactions generating the cash flows must be highly probable.
Changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognised in
equity in the cash flow hedging reserve (net of tax). This gain or loss is released to profit or loss in the same
periods when the forecast transactions occur, thereby offsetting any exchange fluctuations that would have
been recognised in the absence of the hedge.
(h)
Exploration and evaluation expenditure
Once the legal right to explore has been acquired, exploration and evaluation costs are expensed to the
Statement of Profit or Loss and Other Comprehensive Income as incurred unless the Directors conclude that a
future economic benefit is more likely than not to be realised. Costs incurred during this phase are expensed
in the Statement of Comprehensive Income as ‘exploration and evaluation expenditure’. In evaluating if
expenditures meet the criteria to be capitalised, several different sources of information are utilised. The
information that is used to determine the probability of future economic benefits depends on the extent of
exploration and evaluation that has been performed.
Impairment
The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment whenever
facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amount.
The recoverable amount of capitalised exploration and evaluation expenditure is the higher of fair value less
costs to sell and value in use. An impairment loss exists when the carrying amount of an asset or cash-
generating unit exceeds its estimated recoverable amount. The asset or cash-generating unit is then written
down to its recoverable amount. Any impairment losses are recognised in profit or loss.
(i)
Impairment of non-financial assets
At each reporting date, the consolidated entity assesses whether there is any indication that an asset may be
impaired. Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount.
36
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and
is written down to its recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an
individual asset, unless the asset’s value in use cannot be estimated to be close to its fair value less costs to
sell and it does not generate cash inflows that are largely independent of those from other assets or groups of
assets, in which case, the recoverable amount is determined for the cash-generating unit to which the asset
belongs. The estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset.
(j)
Joint operations
The Group has an interest in a joint arrangement that is a joint operation. A joint arrangement is a contractual
arrangement whereby two or more parties undertake an economic activity that is subject to joint control. Joint
control is the contractual agreed sharing of control of the arrangement which exists only when decisions about
the relevant activities require unanimous consent of the parties sharing control. To the extent the joint
arrangement provides the Group with rights to the individual assets and obligations arising from the joint
arrangement, the arrangement is classified as a joint operation and as such the Group recognises its:
•
•
•
•
•
assets, including its share of any assets held jointly;
liabilities, including its share of any assets held jointly;
revenue from the sale of its share of the output arising from the joint operation
share of revenue from the sale of the output by the joint operation; and
expenses, including its share of any expenses incurred jointly.
(k)
Income tax
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
•
•
When the deferred income tax liability arises from the initial recognition of goodwill or of an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss.
In respect of taxable temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled
and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences, and the carry forward of
unused tax credits and unused tax losses can be utilised, except:
•
•
When the deferred tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss.
In respect of deductible temporary differences associated with investments in subsidiaries, associates
and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable
that the temporary differences will reverse in the foreseeable future and taxable profit will be available
against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset
to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to
the extent that is has become probable that future taxable profits will allow the deferred tax asset to be
recovered.
37
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(k)
Income tax (continued)
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date. Deferred tax relating to items recognised outside profit or loss is
recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction
either in other comprehensive income or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax
assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the
same taxation authority.
(l)
Trade and other receivables
Trade receivables, which generally have 30 to 90 day terms, are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest method less an allowance for impairment.
An allowance for doubtful debts is made when there is objective evidence that the Group will not be able to
collect the debts. Bad debts are written off when identified.
Collectability of trade receivables is reviewed on an ongoing basis. Financial difficulties of the debtor, default
payments or debts more than 180 days overdue are considered objective evidence of impairment. The amount
of the impairment loss is the receivable carrying amount compared to the present value of estimated future cash
flows, discounted at the original effective interest rate.
(m) Trade and other payables
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services
provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes
obliged to make future payments in respect of the purchase of these goods and services.
(n)
(o)
(p)
Loans and borrowings
All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of
issue costs associated with the borrowing. After initial recognition, interest-bearing loans and borrowings are
subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by
taking into account any issue costs, and any discount or premium on settlement. Gains and losses are recognised
in the statement of comprehensive income when the liabilities are derecognised as well as through the amortisation
process.
Contributed equity
Ordinary share capital is recognised at the fair value of the consideration received.
Earnings per share
Basic earnings per share is determined by dividing net operating results after income tax attributable to
members of the parent entity, excluding any costs of servicing equity other than ordinary shares, by the
weighted average number of ordinary shares outstanding during the financial year.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares and the weighted average number of shares assumed to have been issued for no consideration
in relation to potential ordinary shares.
(q) Goods and services tax
Revenues, expenses and assets are recognised net of goods and services tax (GST), except where the amount
of GST incurred is not recoverable. In these circumstances the GST is recognised as part of the cost of acquisition
of the asset or as part of the expense item.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from
or payable to the tax authority is included as a current asset or liability in the statement of financial position. Cash
flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising
from investing and financing activities which are recoverable from or payable to the tax authority are classified as
operating cash flows.
38
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(r)
Provisions
Employee benefits
Provision for employee benefits represents the amount which the Group has a present obligation to pay resulting
from employees’ service provided up to the balance date.
Liabilities arising in respect of employee benefits expected to be settled within twelve months of the balance date
are measured at their nominal amounts based on remuneration rates which are due to be paid when the liability
is settled. All other employee benefit liabilities are measured at the present value of the estimated future cash
outflow to be made in respect of services provided by employees up to the balance date.
Rehabilitation costs
Full provision for rehabilitation costs is made based on the net present value of the estimated cost of restoring
the environmental disturbance that has occurred up to the balance date. Increases due to additional
environmental disturbances are capitalised and amortised over the remaining lives of the operations. These
increases are accounted for on a net present value basis.
Rehabilitation provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability.
When discounting is used, the increase in the provision due to the passage of time is recognised as a financing
cost. The estimated costs of rehabilitation are reviewed annually and adjusted as appropriate for changes in
legislation, technology or other circumstances.
(s)
Leases
Leases are classified at their inception as either operating or finance leases based on the economic
substance of the agreement so as to reflect the risks and benefits incidental to ownership.
Operating leases
The minimum lease payments of operating leases, where the lessor effectively retains substantially all of the
risks and benefits of ownership of the leased item, are recognised as an expense on a straight-line basis.
(t)
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank and short-term deposits
with an original maturity of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value. For the purposes of the statement of cash flows,
cash includes cheque account, trust account, credit card accounts and deposits at call which are readily
convertible to cash on hand and which are used in the cash management function on a day to day basis, net
of outstanding bank overdrafts.
(u) Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all
attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income
on a systematic basis over the periods that the related costs, for which it is intended to compensate, are
expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected
useful life of the related asset. When the Group receives grants of non-monetary assets, the asset and the
grant are recorded at nominal amounts and released to profit or loss over the expected useful life of the asset
based on the pattern of consumption of the benefits of the underlying asset by equal annual instalments.
(v)
Rounding of amounts
The parent entity and the consolidated entity have applied the relief available under ASIC Corporations
(Rounding in Financial/Directors’ Reports) Instrument 2016/191 and accordingly, the amounts in the
consolidated financial statements and in the directors’ report have been rounded to the nearest thousand
dollars, or in certain cases, to the nearest dollar (where indicated).
(w) Comparative figures
Where necessary, comparative information has been reclassified and repositioned for consistency with current
year disclosures.
(x)
Borrowing costs
Borrowing costs can include interest expense calculated using the effective interest method, finance charges
in respect of finance arrangements. Borrowing costs are expensed as incurred except for borrowing costs
incurred as part of the cost of construction of a qualifying asset which are capitalised until the asset is ready for
its intended use or sale.
39
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(y)
Share-Based payment arrangements
Goods or services received or acquired in a share-based payment transaction are recognised as an increase in
equity if the goods or services were received in an equity-settled share-based payment transaction or as a liability
if the goods and services were acquired in a cash settled share-based payment transaction.
For equity-settled share-based transactions, goods or services received are measured directly at the fair value of
the goods or services received provided this can be estimated reliably. If a reliable estimate cannot be made the
value of the goods or services is determined indirectly by reference to the fair value of the equity instrument granted
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 and the risk free interest rate for the term of the option.
Transactions with employees and others providing similar services are measured by reference to the fair value at
grant date of the equity instrument granted using a Black-Scholes option pricing model.
3.
JUDGEMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
Judgements made by management in the application of IFRS that have significant effects on the financial
statements and estimates with a significant risk of material adjustments in the next year are disclosed, where
applicable, in the relevant note to the financial statements. The following are the key assumptions concerning
the future, and other key sources of estimation uncertainty at the balance date, that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year:
Fair value measurements
For financial reporting purposes, ‘fair value’ is the price that would be received to sell an asset, or paid to transfer
a liability, in an orderly transaction between market participants (under current market conditions) at the
measurement date, regardless of whether that price is directly observable or estimated using another valuation
technique.
When estimating the fair value of an asset or liability, the Company uses valuation techniques that are
appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising
the use of relevant observable inputs and minimising the use of unobservable inputs. Inputs to valuation
techniques used to measure fair value are categorised into three levels according to the extent to which the
inputs are observable:
-
-
-
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the
entity can access at the measurement date.
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset
or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for the asset or liability.
Exploration and evaluation costs carried forward
The future recoverability of capitalised exploration and evaluation expenditure is dependent on several factors,
including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers
the related exploration and evaluation asset through sale. Factors which could impact the future recoverability
include the level of proved, probable and inferred mineral resources, future technological changes which could
impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and
changes to commodity prices. To the extent that capitalised exploration and evaluation expenditure is
determined not to be recoverable in the future, this will reduce profits and net assets in the period in which this
determination is made.
40
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3.
JUDGEMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION
UNCERTAINTY (continued)
Impairment of mine properties and receivables
Assets, including property, plant and equipment and receivables, are reviewed for impairment if there is any
indication that the carrying amount may not be recoverable. Where a review for impairment is conducted, the
recoverable amount is assessed by reference to the higher of “value in use” (being the net present value of
expected future cash flows of the relevant cash generating unit) and “fair value less costs to sell”.
Provision for decommissioning and restoration costs
Decommissioning and restoration costs are a normal consequence of mining and much of this expenditure is
incurred at the end of a mine’s life. In determining an appropriate level of provision, consideration is given to
the expected future costs to be incurred, the timing of these expected future costs (largely dependent on the
life of the mine) and the estimated future level of inflation. The ultimate cost of decommissioning and restoration
is uncertain and costs can vary in response to many factors including changes to the relevant legal
requirements, the emergence of new restoration techniques or experience at other mine sites. The expected
timing of expenditure can also change, for example in response to changes in reserves or to production rates.
Changes to any of the estimates could result in significant changes to the level of provisioning required, which
would in turn impact future financial results.
Deferred tax assets
Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against
which the losses can be utilised. Significant management judgement is required to determine the amount of
deferred tax assets that can be recognised. Deferred tax assets have not been recognised because it is not
probable that future taxable profit will be available against which the Group can utilise the benefits thereof.
Share Based Payments
The Group measures the cost of equity settled share based payments at fair value at the grant date using the
Black-Scholes model taking into account the exercise price, the term of the option, the impact of dilution, the
share price at grant date, the expected volatility of the underlying share, the expected dividend yield and risk
free interest rate for the term of the option.
41
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2017
$’000
30 June 2016
$’000
-
7
- 3,403
8
5
5
3,418
136
1,194
77
1,080
140
2,407
88
652
2,487
3,287
9,261
8,282
2,629
133
118
-
2,242
2,181
179
127
5,144
1,259
5,122
8,890
403
374
88
1,638
777
1,726
301
205
160
778
80
-
32
12
1,444
124
4. REVENUE AND OTHER INCOME
Other revenue
Management fees
Profit on sale of investment
Interest
5. LOSS FROM CONTINUING OPERATIONS
Loss from continuing operations before income tax has been
determined after the following specific expenses:
Employee benefits included within expenses
Directors fees
Share-based payments (refer Note 28)
Superannuation guarantee contributions
Other employee benefits
Exploration and evaluation expenditures
Total amount expensed during the current year
General & Administration expense
Consulting fees
Travel and accommodation
Regulatory expenses
Changes in rehabilitation provision
Other general & administration expenses
Finance costs expensed
Interest accretion in relation to rehabilitation provisions
Other loans
Other operating expenses
Site contractors & consultants
Mobilisation costs
Site administration & maintenance
Other operating expenses
42
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6. INCOME TAX
(a) Components of tax expense:
Current tax
Deferred tax
Under/(over) provision in prior years
(b) Prima facie tax payable
The prima facie tax payable on loss before income tax is
reconciled to the income tax expense as follows:
Prima facie income tax payable on loss before income tax
at 30% (2016: 30%)
Tax effect of:
- expenses not deductible in determining taxable profit
- items which are non-assessable in determining taxable
profit
- other non-allowable items
- losses and other deferred tax balances not recognised
during the period
Income tax expense attributable to loss
(c) Reconciliation of deferred income tax related to items
charged or credited directly to equity
Tax expense (benefit) in relation to components of
comprehensive income
Available-for-sale financial assets
(d) Deferred tax
Deferred tax relates to the following:
Deferred tax assets
Available for sale asset
Tax losses carried forward
Deferred tax liabilities
Available for sale asset
Net deferred tax assets/(liabilities)
30 June 2017
$’000
30 June 2016
$’000
-
-
-
(10)
-
-
-
(10)
(5,430)
(5,403)
559
722
(64)
(1,021)
-
-
4,935
5,692
-
(10)
-
10
-
-
-
(10)
-
(10)
-
10
-
10
43
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The tax benefits of the above deferred tax assets will only be obtained if:
•
•
•
-
the Group derives future assessable income of a nature and of an amount sufficient to enable the benefits
to be utilised;
the Group continues to comply with the conditions for deductibility imposed by law; and
no changes in income tax legislation adversely affect the Group in utilising the benefits.
The deductible tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised
in respect of these items because it is not probable that future taxable profit will be available against which the Group
can utilise the benefits therefrom.
(e)
Tax consolidation
Eastern Goldfields and its wholly owned Australian resident subsidiary have formed a tax consolidated Group.
Eastern Goldfields is the head entity of the tax consolidated Group. For the purposes of income taxation, Eastern
Goldfields and its 100% owned subsidiaries have formed a tax consolidated Group.
(i) Members of the tax consolidated Group and the tax sharing agreement
Eastern Goldfields and its 100% owned Australian resident subsidiaries formed a tax consolidated Group with
effect from 1 July 2002. Eastern Goldfields is the head entity of the tax consolidated Group. Members of the
Group have entered into a tax sharing agreement that provides for the allocation of income tax liabilities between
the entities should the head entity default on its tax payment obligations. No amounts have been recognised in
the financial statements in respect of this agreement on the basis that the possibility of default is remote.
(ii) Tax effect accounting by members of the tax consolidated Group.
The head entity and the controlled entities in the tax consolidated Group continue to account for their own
current and deferred tax amounts. The Group has applied the Group allocation approach in determining the
appropriate amount of current taxes and deferred taxes to allocate to members of the tax consolidated Group.
The current and deferred tax amounts are measured in a systematic manner that is consistent with the broad
principles in AASB 112 Income Taxes.
7. CASH AND CASH EQUIVALENTS
Cash at bank and on hand
8. TRADE AND OTHER RECEIVABLES
CURRENT
Trade receivables
GST Receivables
Prepayments (i)
Security deposits (ii)
Related party receivables (iii)
Other receivables (iii)
less provision for non-recovery of other receivables
NON-CURRENT
Security deposits (iv)
44
30 June 2017
$’000
30 June 2016
$’000
44
15,401
44
15,401
3
6,612
515
400
232
432
(209)
3
950
-
-
221
93
-
7,986
1,268
64
64
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8. TRADE AND OTHER RECEIVABLES (continued)
(i) Prepayments consist of expenses paid in advance and inventory stores on site as at year end
(ii) Security deposits relate to amounts paid to secure the services of contractors
(iii) These receivables relate to advances provided to related parties as well as the recharge of costs incurred from
suppliers. There are no interest charges on these amounts
(iv) Security deposits consist of bank guarantees held for credit card of the Group. Amounts cannot be released
until such time as any outstanding amounts for these items have been met.
Financial assets that are neither past due nor impaired are expected to be received in accordance with their credit terms
or have been provided for at year end. The carrying amount of trade and other receivables approximates their fair value.
No collateral is held by the Group in relation to any amounts included above. Trade and other Receivables including
those from related parties which are past due have not been impaired as the Group has not called upon amounts due
and expects to receive settlement of amounts in full.
9. MINE PROPERTIES
Plant and equipment
At cost
Accumulated depreciation and impairment
Construction in progress
At cost
Mine development
At cost
Accumulated depreciation and impairment
Total mine properties
At cost
Accumulated depreciation and impairment
30 June 2017
$’000
30 June 2016
$’000
14,628
(11,455)
14,145
(11,145)
3,173
3,000
35,197
607
17,333
-
-
-
17,333
-
67,158
14,752
(11,455)
(11,145)
55,703
3,607
Impairment of Plant and Equipment
The processing plant is under construction. During the 2015 year, the company obtained a market valuation report
from an independent third party. The report contained an upper, preferred and lower valuation based on a trade sale.
The carrying value of the property, plant and equipment was impaired to the lower valuation contained in the report to
ensure the carrying value reflects the risk of pricing uncertainty due to current second hand market conditions and to
cover costs to sell.
The recoverable amount was determined using fair value less costs to dispose using the market comparable method
(level 3 in the hierarchy). This means that valuations performed by the valuer are based on active market prices,
significantly adjusted for differences in the nature, location or condition of the specific plant. Since performing a
valuation in the previous year, depreciation charges have been recognised for some items of Plant & Equipment based
on their expected useful lives.
45
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
9. MINE PROPERTIES (continued)
(a) Reconciliations
Reconciliations of the carrying amounts of mine properties at the
beginning and end of the current financial year
Plant and equipment
Carrying amount at beginning of year
Additions
Disposals
Transfers in from construction in progress
Depreciation/Impairment expense
Carrying amount at the end of year
Construction in progress
Carrying amount at beginning of year
Additions
Transfers to Plant and Equipment
Carrying amount at the end of year
Mine development
Carrying amount at beginning of year
Additions (i)
Less amount written off to the profit and loss
Carrying amount at the end of year
30 June 2017
$’000
30 June 2016
$’000
3,000
483
3,000
4
-
-
-
-
(310)
(4)
3,173
3,000
607
34,590
-
607
-
-
35,197
607
-
-
17,333
5,144
- (5,144)
17,333
-
(i) A total of $2.129m is included above for reassessment of rehabilitation provisions during the year. This amount
was attributed directly to mine properties as the Group at the time of reassessment was not in production. Refer
to Note 14 for further details.
Within the prior year, the Group impaired mine development expenditure incurred prior to the development decision
for the refurbishment of the Davyhurst Plant in July 2016, in accordance with the accounting policy.
+
10. CAPITALISED EXPLORATION EXPENDITURE
Exploration and evaluation assets
Carrying amount at beginning of year
Expenditure incurred during the year
Amortisation/Impairment expense
Carrying amount end of year
454
131
-
454
-
-
585
454
During the 30 June 2017 year, $9.261m of exploration costs incurred were expensed in the Statement of Profit and
Loss, relating to works carried out on the Davyhurst project. In accordance with the Group’s accounting policy for
exploration and evaluation, costs are expensed to the Statement of Profit or Loss and Other Comprehensive Income
as incurred unless the Directors conclude that a future economic benefit is more likely than not to be realised.
Costs capitalised during the year related to the acquisition of the rights to gold as part of the Siberia Gold Tenement
region, as announced by the Company on 23 January 2017.
The ultimate recoupment of exploration and evaluation expenditure carried forward is dependent upon successful
development and commercial exploitation.
46
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11. AVAILABLE FOR SALE FINANCIAL ASSETS
NON-CURRENT
At fair value:
Shares in Orion Gold NL
Shares in Intermin Resources Limited
Listed options in Intermin Resources Limited
Total available for sale financial assets at fair value
12. TRADE AND OTHER PAYABLES
CURRENT
Trade payables
Accruals
Payable to Stirling Resources Pty Ltd
Other Payables
30 June 2017
$’000
30 June 2016
$’000
1,061
1,138
59
533
-
-
2,258
533
24,447
1,304
-
2,867
3,985
3,530
150
1
28,618
7,666
Trade payables and accruals are non-interest bearing and generally settled within 30-90 day terms. The carrying
amount of trade payables approximate their fair values.
Included within trade and other payables are balances to related parties totalling $2,967,536 (2016: $1,885,280)
13. LOANS AND BORROWINGS
Unsecured
RLF - Investec
Delta Resources Pty Ltd – Unsecured
Total loans and borrowings
Carrying amount at beginning of year
Advances
Repayments
Closing balance
30 June 2017
$’000
30 June 2016
$’000
15,060
-
-
53
15,060
53
15,060
53
Investec
Delta
$’000
$’000
Total
$’000
-
15,060
-
53
53
- 15,060
(53)
(53)
15,060
-
15,060
47
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13. LOANS AND BORROWINGS (continued)
(a) Terms and conditions for loans and borrowings
Investec Australia Limited
As announced on the ASX by the Company on 14 December 2016, Investec Australia Limited (‘Investec’) agreed to
provide debt facilities totalling $25 million. These consisted of:
(i) Revolving Loan Facility of $15 million (‘RLF’);
(ii) Equity Linked Facility of $10 million (‘ELF’); and
(iii) Gold Hedging Facility of 40,000 ounces, half of which the Company is required to undertake and the other half at
their own discretion.
The RLF was subject to the following conditions precedent:
(i) Completion of legal documentation;
(ii) Confirmation of a committed $10 million standby facility by Investmet Limited (a company controlled by Michael
Fotios);
(iii) Satisfactory review of various technical matters in respect of the Davyhurst Gold Project;
(iv) Issue of two equal tranches of call options to Investec. The options were exercisable at a 25% premium to the
Volume Weighted Average Price (‘VWAP’) of the Company 11 days prior to the commitment letter date for the first
tranche and the date that the aggregate amount drawn under the RLF exceeds $5 million for the second tranche.
Each tranche of call options are to be of a sufficient number to repay up to $2.5 million of the RLF; and
(v) Other conditions precedent for facilities typical of those being provided.
On 10 March 2017, the Company, after previously securing the price for 20,000 ounces of gold through forward sales
contracts, drew down the full amount of the RLF upon successful completion of all conditions precedent. The majority
of these funds were used for costs associated with the refurbishment of the Davyhurst Gold Mine.
The RLF is available for a period of 24 months from February 2017 on a scheduled reduction basis, reducing to
maximum of $10 million in available funds by February 2018 and a further reduction to $5 million in available funds
from August 2018.
During the year, approximately $275,000 in interest and line fees were incurred by the Group with a further $300,000
in establishment costs paid. $200,000 of these costs has been capitalised within Mine Properties with the remaining
attributed to the Statement of Profit and Loss. This allocated was based on the Directors best estimate as to the use
of funds.
Investec is aware of non-compliance with certain debt covenants in relation to the Facility Agreement with EGS,
particularly since the end of the reporting period. Investec continue to support EGS during its current capital raising,
however, it has reserved its rights in respect of these matters in the event the capital raising is unsuccessful.
14. PROVISIONS
CURRENT
Employee benefits
NON-CURRENT
Provision for rehabilitation
(a) Reconciliations
Reconciliations of the carrying amounts of provisions at the
beginning and end of the current financial year
Provision for rehabilitation
Carrying amount at beginning of year
Movement as a result of re-assessment of provision
Accretion
Carrying amount at the end of year
48
30 June 2017
$’000
30 June 2016
$’000
206
63
11,912
9,380
9,380
2,129
403
4,148
5,144
88
11,912
9,380
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. PROVISIONS (continued)
The Group makes full provision for the future cost of rehabilitating mine sites and related production facilities on a
discounted basis on the development of mines or installation of those facilities.
The rehabilitation provision represents the present value of rehabilitation costs relating to mine sites. These
provisions have been created based on Eastern Goldfields’ internal estimates. Assumptions, based on the current
economic environment, have been made which management believes are a reasonable basis upon which to
estimate the future liability. These estimates are reviewed regularly to take into account any material changes to
the assumptions. However, actual rehabilitation costs will ultimately depend upon future market prices for necessary
decommissioning works required which will reflect market conditions at the relevant time.
Furthermore, the timing of rehabilitation is likely to depend on when the mines cease to produce at economically
viable rates. This, in turn, will depend upon future gold prices, which are inherently uncertain.
During the financial year ended 30 June 2017, management undertook a detailed review of the Group’s future
rehabilitation obligations in relation to the mine. This re-assessment resulted in a $2.129m increase in provisions
(2016 increase: $5.144m). This amount was capitalised into mine properties during the 2017 year as the Group
had not commenced production by year end.
15. CONTRIBUTED CAPITAL
(a) Issued and paid up capital
Ordinary shares fully paid
Shares to be issued for Stirling Loan
settlement (i)
30 June 2017
30 June 2016
559,778,054
489,597,819
4,500,000
4,500,000
i)
As part of a settlement deed with Stirling Resources Limited the company will issue Stirling Resources Pty
Ltd, 4,500,000 shares recognised at a value of $675,000. Refer to note 29 for further details.
(b) Movements in
shares on issue
Balance 1 July 2015
27/11/2015
8/03/2016
8/03/2016
8/03/2016
8/03/2016
8/03/2016
8/03/2016
21/03/2016
23/03/2016
13/04/2016
Shares issued at $0.15 per share - Sophisticated
Investor placement
Shares issued at $0.15 per share - Sophisticated
Investor placement
Shares issued deemed at $0.15 per share -
conversion of debt/loans
Shares issued deemed at $0.15 per share -
conversion of debt/loans
Shares issued deemed at $0.15 per share - in lieu
of fees owing for services provided
Shares issued at $0.15 per share - Placement per
the Prospectus issued 24/12/15
Shares issued deemed at $0.15 per share -
conversion of debt/loans
Shares issued at $0.15 per share - Placement per
the Prospectus issued 24/12/15
Shares buy back - part settlement with Stirling
Resources Pty Ltd
Shares issued at $0.15 per share - Oversubscribed
issues per Prospectus 24/12/15
Shares for Stirling Loan settlement at $0.15 per
share to be issued
Cost of Capital Raising
49
Share No.
91,850,223
$'000
168,040
10,666,667
1,600
66,666,667
10,000
202,478,114
30,372
1,493,082
224
7,980,000
1,197
33,333,333
5,000
420,221
63
66,666,667
10,000
(8,632,822)
(0)
16,666,667
2,500
-
675
-
(1,328)
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15. CONTRIBUTED CAPITAL (continued)
(b) Movements in
shares on issue
Balance 30
June 2016
Share No.
$'000
489,597,819
228,343
28/12/2016 Shares issued upon exercise of options
3,600,000
643
26/04/2017
26/04/2017
26/04/2017
30/05/2017
30/05/2017
7/06/2017
7/06/2017
30/06/2017
30/06/2017
Shares issued at $0.35 per share - Tranche 1
of placement shares
Shares issued at $0.168 per share -
Exercise of options
Shares issued at $0.15 per share - Relating
to March 2016 capital raising
Shares issued at $0.35 per share - Tranche 1
of placement shares
Shares issued at $0.35 per share –
Conversion of debt
Shares issued at $0.35 per share - Tranche 2
of placement shares
Shares issued - Conversion of ESOP Options to
shares using cashless exercise facility
Shares issued at $0.168 per share -
Exercise of options
Shares issued - Conversion of Michael Fotios
debt as approved at the EGM 29 May 17
Cost of Capital Raising
Balance 30
June 2017
34,985,205
12,245
750,000
126
100,000
15
8,571,429
3,000
5,000,000
1,750
3,956,935
1,385
416,666
-
1,200,000
202
11,600,000
4,060
(487)
559,778,054
251,282
(c) Rights of each type of share
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to
the number of shares held. At shareholders meetings each ordinary share gives entitlement to one vote
when a poll is called.
(d) Share Options
Options over ordinary shares:
Employee share scheme
The Group continued to offer employee participation in short-term and long-term incentive schemes as part
of the remuneration packages for the employees of the consolidated entity. Refer to Note 28: Share Based
Payments for detailed disclosures.
(e) Capital Management
When managing capital, management's objective is to ensure the Group continues to maintain optimal
returns to shareholders and benefits for other stakeholders, whilst also trying to safeguard the Group’s ability
to continue as a going concern.
Management also aims to maintain a capital structure that ensures the lowest cost of capital available to the
entity. Capital is comprised of shareholders’ equity as disclosed in the statement of financial position.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. Management
has no current plans to reduce the capital structure through a share buy-back. The Group is not subject to
any externally imposed capital restrictions.
50
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15. CONTRIBUTED CAPITAL (continued)
The following shares were issued during the financial year in order to settle amounts owing to trade creditors. All
issues were made based on the fair value of equity instruments granted in order to settle liabilities:
Beneficiary
Expense
Shares
Nos.
Options
Nos.
Value
$
2017
Pit N Portal Group Pty Ltd
Whitestone Mining
Services Pty Ltd (i)
Investmet Limited (i)
Delta Resources
Management Pty Ltd (i)
Shares in lieu of services rendered
5,000,000
-
1,750,000
Shares in lieu of services rendered
10,000,000
-
3,500,000
Shares in lieu of services rendered
1,000,000
-
350,000
Shares in lieu of services rendered
600,000
16,600,000
-
-
210,000
5,810,000
(i) Shares issued to related parties of Mr Fotios, as approved at the general meeting of shareholders on 30 May
2017.
16. RESERVES AND ACCUMULATED LOSSES
Available for sale financial asset reserve
Cash flow hedge reserve
Share-based payment reserve
Notes
30 June 2017
$’000
30 June 2016
$’000
(a)
(b)
(c)
20
271
9,875
23
-
8,029
10,166
8,052
Accumulated losses
(d)
(250,333)
(232,231)
(a) Available for sale financial asset reserve
(i) Nature and purpose of reserve
This reserve is used to record unrealised movements in fair values of financial assets classified
as available-for-sale and not distributable.
(ii) Movements in reserve
Balance at beginning of year
Change in fair value of available for sale financial
assets, net of tax
Balance at end of year
(3)
20
23
-
23
23
The Group holds listed shares and options in Orion Gold NL and Intermin Resources Limited. The change in fair
value of these securities is believed to be temporary and accordingly, the decline in fair value has been recognised
in the statement of comprehensive income during the current year.
The fair value of securities is monitored by the Group and the Directors will reassess the classification of these
securities should the downtown in price continue for a prolonged period.
(b) Cash flow hedge reserve
(i) Nature and purpose of reserve
This reserve is used to record gains or losses on derivatives that are designed and qualify as cash flow hedges and
that are recognised in other comprehensive income. Amounts are reclassified to profit and loss when the
associated hedged transaction affects profit or loss.
(ii) Movements in reserve
Balance at beginning of year
Revaluations, net of tax
271
-
-
-
Balance at end of year
271
-
51
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16. RESERVES AND ACCUMULATED LOSSES
(continued)
30 June 2017
$’000
30 June 2016
$’000
(i) Nature and purpose of reserve
This reserve is used to record the fair value of shares or options issued to employees and directors as part of their
remuneration. The balance is transferred to share capital when options are granted and balance is transferred to
retained earnings when options lapse.
(ii) Movements in reserve
Balance at beginning of year
Fair value of options issued for tenement acquisition
Share based payments issued during the year
5,293
329
2,407
1,846
8,029
-
Balance at end of year
9,875
8,029
(d) Accumulated losses
Balance at the beginning of year
Net loss attributable to members of Eastern Goldfields
Ltd
Balance at end of year
232,230
214,229
18,103
18,001
250,333
232,230
30 June 2017
30 June 2016
17. REMUNERATION OF AUDITORS
Amounts paid or due and payable to:
Ernst & Young
- Auditing and reviewing the financial reports
18. KEY MANAGEMENT PERSONNEL
Aggregate Remuneration
- Short-term
- Post-employment
- Share based payments (refer note 28)
19. EXPENDITURE COMMITMENTS
170,864
170,864 159,500
159,500
30 June 2017
$’000
30 June 2016
$’000
140
-
-
140
140
-
1,323
1,463
Under the terms of mineral tenement licences held by the Group, minimum annual expenditure obligations of
$5,284,798 (2016: $4,973,393) may be required to be expended during the forthcoming financial year in order for the
tenements to maintain a status of good standing. This expenditure may be incurred by the Group and may be subject
to variation from time to time in accordance with Department of Industry and Resources regulations.
52
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20. SEGMENT INFORMATION
The Group has identified its segments based on the internal management reporting that is used by the executive
management team in assessing performance and allocating resources. At present the Group’s focus has been on the
exploration and evaluation of its interests in mineral tenement licences associated with the Davyhurst Gold Project.
The Group operates in one geographical segment – Australia.
As such, the consolidated entity only operates in one segment and no additional information is provided to that
contained in the consolidated financial statements contained herein.
21. RELATED PARTY TRANSACTIONS
(a) Subsidiaries of the Company can be found at Note 23 of this financial report.
(b) Directors who held office for any time during the period are disclosed in the Directors’ report.
(c) Terms and conditions of transactions with related parties:
Transactions with related parties are made at terms equivalent to those that prevail in arm’s length transactions.
Outstanding balances at the year-end are unsecured and settlement occurs in cash unless agreed otherwise.
There have been no guarantees provided or received for any related party receivables or payables. For the
year ended June 2017, the Group has not recorded any impairment of receivables relating to amounts owed by
related parties. This assessment is undertaken each financial year through examining the financial position of
the related party and the market in which the related party operates.
(d) Transactions with related parties:
The following transactions occurred during the year between the Group and Directors or their director-related
entities:
Delta Resources Management Pty Ltd (“Delta”), a company which Mr Michael Fotios is a substantial shareholder in,
and Chairman of, provided technical and administrative support to the Company to the value of $571,695 (inclusive
of GST) (30 June 2016: $112,079). A total of $93,089 remains due and payable as at 30 June 2017 (30 June 2016:
$25,705). $210,000 worth of services received were settled by way of shares issued (refer Note 28 of this report for
further details) as approved at the general meeting of shareholders held on 30 May 2017. All charges are on
commercial terms. A repayment of a working capital loan from Delta to the Company of $52,844 was made to repay
in full the loan amount outstanding at 30 June 2017. No amount is payable on the loan balance as at 30 June 2017
(2016: $52,844). Delta received a loan of $12,766 which remains receivable at 30 June 2017.
Whitestone Minerals Pty Ltd (“Whitestone”), a company which is 100% owned by Investmet Ltd, a company which Mr
Michael Fotios is a substantial shareholder in, and Chairman of, provided consulting services to the Company to the
value of $12,020,789 (inclusive of GST) (30 June 2016: $3,803,409). $2,670,524 remains due and payable as at 30
June 2017 (30 June 2016: $1,809,675). $3,500,000 worth of services received were settled by way of shares issued
(refer Note 15 of this report for further details) as approved at the general meeting of shareholders held on 30 May
2017. All charges are on commercial terms.
Horseshoe Metals Limited, a company which Mr Michael Fotios is a substantial shareholder in and a Director of,
received consulting and administrative support from the Company to the value of $74,916 (inclusive of GST) (30 June
2016: $24,974). A total of $74,916 remains due and receivable by the Company as at 30 June 2017 (30 June 2016:
$55,866). All charges are on commercial terms. Interest is not charged.
Pegasus Metals Limited, a company which Mr Michael Fotios is a substantial shareholder in and a Director of, received
consulting and administrative support from the Company to the value of $25,079 (inclusive of GST) (30 June 2016:
$45,848). $25,079 remains due and receivable by the Company as at 30 June 2017 (2016: $0). All charges are on
commercial terms. Interest is not charged.
53
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21. RELATED PARTY TRANSACTIONS (continued)
Redbank Copper Limited, a company which Mr Michael Fotios is a substantial shareholder in and a Director of,
received consulting and administrative support from the Company to the value of $35,473 (inclusive of GST) (30 June
2016: $116,324). $35,473 remains due and receivable by the Company as at 30 June 2017 (30 June 2016: $120,039).
All charges are on market terms. At 30 June 2017, a loan of $101,744 remains receivable (30 June 2016: $0). Interest
is not charged.
During the year, the Company drew down on a loan with Investmet Limited (“Investmet”), a company which Mr Michael
Fotios is a substantial shareholder and Chairman, The interest rate of the loan is the BBR rate plus a margin of 4%
until production at the Davyhurst Project commences and then 3% after production has commenced. A total of
$2,620,000 was drawn down on the loan during the year, of which $350,000 was repaid via the issue of shares (refer
Note 15 of this report for further details), as approved at the general meeting of shareholders held on 30 May 2017.
At 30 June 2017 the outstanding loan balance is $115,353 at 30 June 2017 (30 June 2016: nil). Investmet also
provided consulting services to the Company to the value of $17,097 (inclusive of GST) (30 June 2016: nil). $15,296
remains due and payable by the Company as at 30 June 2017 (30 June 2016: nil). All charges are on commercial
terms and interest is not charged.
Readhead Legal, a company which Mr Craig Readhead is a substantial shareholder in, charged $204,000 (30 June
2016: $84,000) for consulting fees to the Company. $89,400 of consulting fees were not invoiced during the period
and remain unpaid as at 30 June 2017 (30 June 2016: $37,400).
Zedsee Enterprises Pty Ltd, a company which Mr Alan Still is a substantial shareholder in, charged $32,037 (30 June
2016: $40,000) for Directors fees to the Company. $7,963 of director fees were not invoiced during the period and
remain unpaid as at 30 June 2017 (30 June 2016: $12,500).
22. FINANCIAL RISK MANAGEMENT
The Group is exposed to the following financial risks in respect to the financial instruments that it held at the end of
the reporting period:
-
-
-
-
-
Market price risk (Equity and Other Price risk)
Currency risk
Interest rate risk
Credit risk
Liquidity risk
The board of directors has overall responsibility for identifying and managing operational and financial risks.
Financial assets
Cash and cash equivalents
Trade & other receivables
Available for sale financial assets
Derivative financial instruments
Financial liabilities
Bank and other loans
30 June 2017
$’000
30 June 2016
$’000
44
1,374
2,257
271
15,401
318
533
-
3,946
16,252
15,060
53
15,060
53
54
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(a)
Equity price risk
At reporting date the Group owned 42,433,333 (2016: 33,333,333) listed shares in Orion Gold NL, 6,250,000 listed
shares in Intermin Resources Limited and 3,125,000 listed options in Intermin Resources Limited. The Group’s listed
equity securities are susceptible to market price risk arising from uncertainties about future values of the investment
securities. The Group manages the equity price risk through, where appropriate, diversification and by placing limits
on individual and total equity instruments. Reports on the equity portfolio are submitted to the Group’s senior
management on a regular basis. The Group’s Board of Directors reviews and approves all equity investment decisions.
At the reporting date, the exposure to listed equity securities at fair value was $2.258 million (2016: $0.53 million). A
decrease of 10% in the price of securities on reporting date would have an impact of $225,800 on the income or equity
attributable to the Group, depending on whether the decline is significant or prolonged. An increase of 10% in the
value of the listed securities would only impact equity, but would not have an effect on profit or loss.
55
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22. FINANCIAL RISK MANAGEMENT (continued)
(b)
Other price risk
Other price risk relates to the risk that the fair value of future cash flows of financial instruments will fluctuate because
of changes in market prices largely due to demand and supply factors (other than those arising from interest rate risk
or currency risk) for commodities.
The Group is exposed to commodity price risk through its operations of its Davyhurst and Mt Ida Gold Projects.
Contracts for the sale and physical delivery of gold are executed on a pricing basis intended to achieve a relevant
index target. Where pricing terms deviate from the index, derivative commodity contracts may be used when available
to return realised prices to the index. Contracts for the physical delivery of gold are generally not financial instruments
and are carried in the statement of financial position at cost. Gold future markets and economic forecasts are
constantly monitored to determine whether to implement a hedging program. There is currently a cash flow hedging
program in place at the end of the reporting period. Refer to Note 16 (b) for details of movement in cash flow hedge
arrangements during the year.
There were no reclassifications from the cash flow hedge reserve to profit or loss during the period.
(c)
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate as a result of
changes in market interest rates.
The Group’s exposure to the risk of changes in market interest rates is minimal and relates primarily to cash and
security deposits held with the Company’s bankers. Interest rate risk represents the risk that the value of a financial
instrument will fluctuate as a result of changes in market interest rates. The exposure of the Group to interest rate risk
and the effective weighted average interest rate for classes of financial assets and liabilities is set out below.
30 June 2017
Financial instruments
Interest bearing
Non-interest
bearing
Total carrying
amount
Weighted
average effective
interest rate
$'000
$'000
$'000
Financial assets
Cash
Debtors
-
44
- 1,374
44
1,374
0.00%
0.00%
Total financial assets
-
1,418
1,418
56
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22. FINANCIAL RISK MANAGEMENT (continued)
30 June 2017
Financial instruments
Interest bearing
Non-interest
bearing
Total carrying
amount
Weighted
average effective
interest rate
$'000
$'000
$'000
Financial liabilities
Bank and other loans
Creditors
15,060
- 28,530
70 15,130
28,530
5.51%
0.00%
Total financial liabilities
15,060
28,600
43,660
30 June 2016
Financial instruments
Interest bearing
Non-interest
bearing
Total carrying
amount
Weighted
average effective
interest rate
Financial assets
Cash
Debtors
$'000
$'000
$'000
- 15,401
- 1,268
15,401
1,268
0.00%
0.00%
Total financial assets
- 16,669
16,669
30 June 2016
Financial instruments
Interest bearing
Non-interest
bearing
Total carrying
amount
Weighted
average effective
interest rate
$'000
$'000
$'000
Financial liabilities
Bank and other loans
Creditors
53
- 7,666
- 53
7,666
0.00%
0.00%
Total financial liabilities
53
7,666
7,719
Sensitivity
If interest rates were to increase/decrease by 100 basis points from rates used to determine fair values as at the
reporting date, assuming all other variables that might impact on fair value remain constant, then the impact on profit
for the year and equity is as follows:
+ / - 100 basis points
Impact on profit after tax
Impact on equity
30-Jun-17
$'000
+/- 151
+/- 151
30-Jun-16
$'000
+/- 0.529
+/- 0.529
Net financial assets subject to
changes in interest rates
(15,060)
(53)
57
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22. FINANCIAL RISK MANAGEMENT (continued)
(d)
Liquidity risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of loans
and other available lines of credit. The Group manages liquidity risk by monitoring forecast cash flows. The table below
reflects all contractually fixed pay-offs and receivables for settlement, repayments and interest resulting from
recognised financial assets and liabilities as of 30 June 2017. Cash flows for financial assets and liabilities without
fixed amount or timing are based on the conditions existing at 30 June 2017.
Maturity analysis
The tables below represents the undiscounted contractual settlement terms for financial instruments and
managements expectation for settlement of undiscounted maturities.
Year ended 30 June
2017
< 6 months
6-12 months
1-5 years
$'000
$'000
$'000
Bank and other loans
Creditors
Net maturities
28,530
28,530
- 15,655
-
10,378
-
5,277
Year ended 30 June
2016
< 6 months
6-12 months
1-5 years
Bank and other loans
Creditors
Net maturities
$'000
53
7,666
7,719
$'000
-
-
-
$'000
-
-
-
Total
contractual
cash flows
$'000
15,655
28,530
44,185
Total
contractual
cash flows
$'000
53
7,666
7,719
Carrying
amount
$'000
15,030
28,530
43,590
Carrying
amount
$'000
53
7,666
7,719
(e)
Fair value measurements
The following table provides the fair value classification of those assets and liabilities held by the Group that are
measured either on a recurring basis at fair value.
Year ended 30 June
2017
Recurring fair value measurements
Financial assets
Available for sale financial assets at fair value
Hedging instruments
Total financial assets
Level 1
Level 2
Level 3
$’000
$’000
$’000
Total
$’000
2,258
-
2,258
-
271
271
-
-
-
2,258
271
2,529
(f)
Fair value of financial assets & liabilities
The carrying amount of financial assets and financial liabilities recorded in the financial statements represents their
respective net fair values, determined in accordance with the accounting policies disclosed in Note 3. The Directors
consider that the carrying amount of financial assets and other financial liabilities recorded in the financial statements
approximate their net fair values (2016: net fair values).
58
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. INVESTMENTS IN CONTROLLED ENTITIES
Name of entity
Monarch Nickel Pty Ltd
Monarch Gold Pty Ltd (i)
Carnegie Gold Pty Ltd
Siberia Mining Corporation Pty Ltd
Country of
incorporation
Class
of shares
Equity holding
2016
2017
Australia
Australia
Australia
Australia
Ordinary
Ordinary
Ordinary
Ordinary
100
80
100
100
100
80
100
100
Controlled entities of Siberia Mining Corporation Pty Ltd
Mt Ida Gold Operations Pty Ltd
Australia
Ordinary
100
100
Controlled entities of Siberia Mining Corporation Pty Ltd
Ida Gold Operations Pty Ltd
Pilbara Metals Pty Ltd
Siberia Gold Operations Pty Ltd
Mt Ida Gold Pty Ltd
Australia
Australia
Australia
Australia
Ordinary
Ordinary
Ordinary
Ordinary
100
100
100
100
100
100
100
100
(i) This entity is in the process of being deregistered and has no assets or liabilities no operating results for the
year (2016: Nil).
24. INTERESTS IN JOINTLY CONTROLLED OPERATIONS
The Group entered into a joint arrangement with Kingsday Holdings Pty Ltd for the operation of the Mt Ida Excluded Area
joint operation. Under the agreement Eastern Goldfields retains a 70% interest in the asset. The Group contributes 100%
of the funding of the joint operation with the other participant’s share repayable from the gold production of the asset.
Eastern Goldfields will be paid interest on the funds used and in relation to the other participant’s share of costs at a rate
of 30% per annum during periods where mining operations are occurring on the Mt Ida Excluded Area. The face value of
the amount receivable as at 30 June 2017 is $6,534,637 (2016: $6,534,637) with an applicable notional interest rate of
30%, subject to an interest free period of 20 months when Eastern Goldfields had yet to recommence mining operations.
This balance continues to be fully impaired as at 30 June 2017 as the recovery of this balance is dependent on gold
production and remains uncertain. There are no assets employed by the joint operation and the Group’s expenditure in
respect of the joint operation is brought to account initially as exploration and evaluation through profit and loss.
The joint operation has no contingent liabilities or capital commitments.
25. CONTINGENT LIABILITIES
As at 30 June 2017 the Group had no contingent liability (2016: nil).
59
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2017
$’000
30 June 2016
$’000
26. CASH FLOW STATEMENT
(a) Reconciliation of cash and cash equivalents
Cash balances comprise:
Cash and cash equivalents
For the purpose of the cash flow statement, cash and cash equivalents
consist of cash and cash equivalents as defined above, net of
outstanding bank overdrafts.
(b) Reconciliation of net cash outflow from operating activities to
loss after income tax
Loss after income tax
Adjusted for non- cash items:
Depreciation of property, plant and equipment
Mine development expense
Interest expense – capitalised against loan
Accretion
Gain on loan relinquishment
Share based payments
Payments for exploration and evaluation expenditure
Payments to suppliers made via equity settlement
Income tax expense (benefit) recognised
Changes in operating assets and liabilities:
(Increase)/decrease in receivables
Increase/(decrease) in payables
Increase/(decrease) of provisions
(Increase)/decrease of inventory
Net cash outflow from operating activities
44
15,401
(18,103)
(18,001)
310
-
200
403
-
1,194
-
5,810
-
(7,196)
(1,414)
143
-
(18,653)
-
5,144
1,504
88
(3,403)
2,407
125
1,260
(10)
(1,070)
3,501
11
11
(8,684)
27. LOSS PER SHARE
Loss per share (basic and diluted)
(0.03)
(0.08)
Loss used in the calculation of basic loss per share
18,102,506
18,001,267
Weighted average number of ordinary shares on issue used in the
calculation of basic earnings per share
Effect of dilution:
Weighted average number of ordinary shares on issue adjusted for the
effect of dilution
Number
Number
503,722,482
-
215,057,645
-
503,722,482
215,057,645
A total of 62,397,505 options were on issue as at 30 June 2017 and have not been accounted for in the above diluted
loss per share calculations, as the Group was in a loss position for the year ended. Further disclosure of options on
issue is included within the Directors Report for the year.
60
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
28. SHARE BASED PAYMENTS
Share based payments are provided to directors, consultants and other advisors. The issue to each individual
director, consultant or advisor is controlled by the Board and the ASX Listing Rules. Terms and conditions of the
payments are determined by the Board, subject to approval where required.
The following share-based payments were made during the financial year:
Beneficiary
Expense
Shares
Nos.
Options
Nos.
Value
$
2017
Investec Australia Limited
Investec Australia Limited
Tranche 1 Options issued in accordance with
the RLF debt facility
Tranche 2 Options issued in accordance with
the RLF debt facility
-
9,578,544
702,107
-
5,446,623
491,830
-
15,025,167
1,193,937
Movements during the year
The following table illustrates the number and weighted average exercise prices ('WAEP') of, and
movements in, share options during the year
2017
Nos.
2017
WAEP ($)
2016
Nos.
2016
WAEP ($)
Outstanding at 1 July
48,200,000
0.1785
-
-
Granted during the year
Forfeited during the year
Exercised during the year (i)
Expired during the year
Outstanding at 30 June
5,966,666
0.1647
15,025,167
-
-
57, 258,501
0.3328
48,200,000
0.1785
-
-
-
-
-
-
-
-
0.1996
48,200,000
0.1785
(i) The weighted average share price at the date of exercise of these options was $0.2603.
The weighted average remaining contractual life for the share options outstanding as at 30 June 2017 was 10 months
(2016: 32 months)
The weighted average fair value of options granted during the year was $0.1000 (2016: $0.1785)
The range of exercise values for options outstanding at the end of the year was $0.1680 to $0.4590 (2016: $0.1680 to
$0.1890)
Valuation
The fair value of options granted during the 2017 year was calculated at the date of grant using the Black-Scholes
option pricing model. The following table gives the assumption made in determining the fair value of options on
grant date:
Option Series
Fair value per option
Grant date
Number of options
Expiry date
Exercise price
Price of shares on grant date
Estimated volatility
Risk-free interest rate
Dividend yield
Investec Options
Tranche 1
Investec Options
Tranche 2
$0.0785
12/12/2016
9,578,544
12/12/2018
$0.26
$0.21
80%
1.88%
0%
$0.1377
15/03/2017
5,446,623
15/03/2019
$0.46
$0.37
80%
1.79%
0%
61
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
28. SHARE BASED PAYMENTS (continued)
The share based payment of $1,193,937 was recognised in the statement of profit or loss relating to the above
options.
During the 30 June 2017 year, a total of $652,416 was recorded as share based payments relating to options issued
to employees in 2016.
$339,561 of the above was recognised as part of capitalised mine development costs for the 30 June 2017 year
end with the remaining $312,855 included in exploration and evaluation expenses.
The share based payments of $2,407,477 as recognised in the statement of profit or loss and other comprehensive
income incurred during the 30 June 2016 year relates to the following options issued:
2016
Directors
Michael Fotios
Craig Readhead
Alan Still
Employees
TOTAL
Unlisted Options
at $0.168
expiring 8 March
2018
Series 1
Unlisted Options
at $0.189
expiring 8 March
2020
Series 2
Total
7,500,000
1,800,000
1,800,000
7,500,000
1,800,000
1,800,000
15,000,000
3,600,000
3,600,000
13,000,000
13,000,000
26,000,000
24,100,000
24,100,000
48,200,000
Series 1 Options: 24,100,000 Unlisted Options exercisable at $0.168 expiring 8 March 2018 issued to Directors
and employees under the Company Share Option Plan. These options vested on the date of issue (11,100,100 on
30 December 2015 and 13,000,000 on 4 April 2016).
Series 2 Options: 24,100,000 Unlisted Options exercisable at $0.189 expiring 8 March 2020 issued to Directors
and employees under the Company Share Option Plan. Options issued to Directors vested on 30 December 2015.
The Options issued to employees vest on 14 April 2018 subject to continual employment and engagement by the
Company by the vesting date.
The fair value of options granted during the 2016 year was calculated at the date of grant using the Black-Scholes
option-pricing model. The following table gives the assumption made in determining the fair value of options on
grant date:
Option Series
Fair value per option
Grant date
Number of options
Expiry date
Exercise price
Price of shares on grant
date
Estimated volatility
Risk-free interest rate
Dividend yield
Director Options
Series 1
$0.051492
30/12/15
11,100,000
08/03/2018
$0.168
$0.15
Director Options
Series 2
$0.067672
30/12/15
11,100,000
08/03/2020
$0.189
$0.15
Emp.Options
Series 1
$0.07187
4/04/16
13,000,000
08/03/2018
$0.168
$0.21
Emp.Options
Series 2
$0.09172
4/04/16
13,000,000
08/03/2020
$0.189
$0.21
75%
2.00%
0%
75%
2.00%
0%
80%
2.00%
0%
80%
2.00%
0%
62
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
28. SHARE BASED PAYMENTS (continued)
The share based payments of $328,953 as recognised as part of capitalised exploration expenditure (refer Note
10) relates to the following options issued:
In May 2016, Eastern Goldfields paid $125,000 and issued 2,000,000 unlisted options (1,000,000 unlisted options
exercisable at $0.168 each on or before 8 March 2018 and 1,000,000 unlisted options exercisable at $0.189 each
on or before 8 March 2020) to acquire the exploration tenements from Goldstar Resources (WA) Pty Ltd, a wholly
owned subsidiary of Orion Gold NL.
The fair value of options issued for the purchase of the exploration tenements were calculated at the date of grant
using the Black-Scholes option-pricing model. The following table gives the assumption made in determining the
fair value of options on grant date:
Option Series
Fair value per option
Grant date
Number of options
Expiry date
Exercise price
Price of shares on grant date
Estimated volatility
Risk-free interest rate
Series 1
$0.15147
3/05/16
1,000,000
08/03/2018
$0.168
$0.26
80%
1.75%
Series 2
$0.17747
3/05/16
1,000,000
08/03/2020
$0.189
$0.26
80%
1.75%
Dividend yield
0%
0%
29. SUBSEQUENT EVENTS
On 11 July 2017 the Company received a writ of summons for proceedings in the Supreme Court of Western Australia
commenced by GR Engineering Services Limited (GRES) in relation to the Davyhurst Gold Project refurbishment
contract entered into by GRES and the Company on 22 September 2016 (Contract).
The Contract price is approximately $12.5 million, of which the Company has already paid the sum of $10.4 million to
GRES.
GRES made further payment claims in April 2017 that did not comply with the Contract and have been disputed by
the Company. The Company is of the view that GRES then wrongfully suspended work at the Davyhurst Mill in May
2017. On 15 June 2017 GRES represented to the Company that it would immediately and unconditionally
recommence work towards commissioning the Davyhurst Mill, but has failed to do so. As a consequence, the
Company has taken steps itself to complete the refurbishment of the Davyhurst Mill, during which it has discovered
numerous defects and omissions by GRES. Rectifying those defects, GRES’ wrongful suspension and GRES’ failure
to assist the Company to complete the refurbishment has delayed the recommencement of production. GRES now
claims “liquidated damages in the sum of $9,940,991.59 alternatively $5,000,000”. The Company intends to vigorously
defend the proceedings and will pursue by counterclaim its rights to damages and costs arising from GRES’ breaches
of contract, defective work and other conduct.
As announced by the Company on 14 July 2017, mechanical, electrical and water commissioning of the Davyhurst
Mill, located approximately 120 kilometres north-west of Kalgoorlie, within the Davyhurst mining hub, is now complete.
All circuits are now operational and continuous ore processing has commenced. The first gold pour from the gravity
circuit occurred in July 2017 and the first leach circuit gold pour scheduled shortly after.
As announced on 1 November 2017, ore development has commenced at Golden Eagle and 1,400 tonnes of
development ore has been delivered to the ROM. Once consistent ore production is achieved at Golden Eagle, it is
planned to commence reopening of the existing Lights of Israel decline.
As announced on 17 August 2017, EGS’ securities were suspended from official quotation on 15 August 2017
pursuant to ASX Listing Rule 17.3, following an order by the Supreme Court of Western Australia that the Company
be wound up and a liquidator appointed to it (Order). The Order followed an application by Genalysis Laboratory
Services Pty Ltd (Genalysis) to wind up the Company on account of non-payment of moneys for services rendered to
EGS by Genalysis. The Order was set aside on the basis that the moneys claimed by Genalysis had been paid, that
EGS was solvent and that the Company’s creditors and shareholders would be prejudiced if the winding up was not
terminated.
63
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
29. SUBSEQUENT EVENTS (continued)
On 2 November 2016, the Board resolved to issue 4,500,000 fully paid ordinary shares to Stirling Resources Pty Ltd
(‘Stirling’). The shares issued were in accordance with the Settlement Deed entered into on 30 December 2015, which
stipulated that the Company would issue shares to Stirling within 6 months of commencement of gold production at
the Davyhurst gold operation.
On 9 November 2017 the Company announced that it had entered into a binding agreement with Hawke’s Point
Holding L.P (‘Hawke’s Point’) for a cornerstone investment of $17.5 million. Under this agreement, the Company also
procure an additional $12.5 million from sophisticated and institutional investors as. In total, the Company will issue
between 137,500,000 and up to 150,000,000 fully paid ordinary shares in the Company at a price of $0.20 per share
to provide up to $30 million. All shares issued under the placement will be issued with a corresponding 1 for 1 free
attaching unlisted options. The options will be issued in two tranches in conjunction with shares, with one half of the
options having an exercise price of $0.25 and the other half having an exercise price of $0.275. All options have an
expiry of 5 years after issue with accelerated expiry should certain objective conditions be met.
42,000,000 shares and options will be issued to sophisticated and institutional investors in the first tranche on or
around 27 November 2017 with second tranche to take place shortly afterwards after shareholder approval has been
obtained at the Company’s upcoming AGM. Up to 2,500,000 shares and options will be issued to Michael Fotios or
his related parties subject to additional shareholder approval.
There has not been any other matter or circumstance that has arisen after balance date that has significantly
affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of
affairs of the Group in future financial periods.
30. PARENT ENTITY INFORMATION
(a) Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity/(Deficit)
Contributed equity
Accumulated losses
Reserves
Total equity / (deficit)
(b) Financial performance
Loss for the year
Other comprehensive income
Total comprehensive loss for the
year
64
30 June 2017
30 June 2016
$’000
$’000
8,003
36,515
44,518
43,870
656
44,526
15,196
-
15,196
11,205
-
11,205
251,282
(261,455)
10,166
(7)
228,318
(232,380)
8,052
3,991
(29,075)
268
(49,749)
23
(28,807)
(49,726)
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30. PARENT ENTITY INFORMATION (continued)
(a) Contingent Liabilities and Commitments
Contingent liabilities identified are as per those detailed within Note 25 of this report (2016: $NIL)
65
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
DIRECTORS DECLARATION
In accordance with a resolution of the Directors of Eastern Goldfields Limited, I state that:
1. In the opinion of the Directors:
a. The consolidated financial statements and accompanying notes set out on pages 26 to 65 of the Group are in
accordance with the Corporations Act 2001, including:
i. Giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its performance for
the year ended on that date.
ii. Complying with Accounting Standards (including the Australian Accounting Interpretations) and
Corporations Regulations 2001.
b. The financial statements and notes also comply with International Financial Reporting Standards (‘IFRS’) as
issued by the International Accounting Standards Board (‘IASB’) as disclosed in Note 2(c).
c. Subject to the matters disclosed in Note 2(b), there are reasonable grounds to believe that the Company will
be able to pay its debts as and when they become due and payable.
2. 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 2017.
On behalf of the Board
Michael Fotios
Executive Chairman
Perth, Western Australia
22 November 2017
66
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor's report to the Members of Eastern Goldfields
Limited
Report on the audit of the financial report
Qualified opinion
We have audited the financial report of Eastern Goldfields Ltd (the Company) and its subsidiaries
(collectively the Group) , which comprises the consolidated statement of financial position as at 30 June
2017, the consolidated statement of profit or loss and other comprehensive income, consolidated
statement of changes in equity and consolidated statement of cash flows for the year then ended, notes
to the financial statements, including a summary of significant accounting policies, and the directors'
declaration.
In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion
section of our report, the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
a)
giving a true and fair view of the Group's financial position as at 30 June 2017 and of its financial
performance for the year ended on that date; and
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for qualified opinion
During the financial year ended 30 June 2016, management undertook a detailed review of the
consolidated entity’s future rehabilitation obligations and recognised a provision of $9,379,934. An
amount of $5,231,834 was recognised as an expense in the consolidated statement of profit or loss and
other comprehensive income for the year ended 30 June 2016. Our audit opinion on the 30 June 2016
financial report was qualified as we were unable to determine whether the opening balance of the
rehabilitation provision as at 1 July 2015 was accurately stated and therefore we were unable to
determine whether the expense recognised in consolidated statement of profit or loss and other
comprehensive income for the year ended 30 June 2016 was appropriate.
The 30 June 2016 consolidated statement of profit or loss and other comprehensive income is included
in the 30 June 2017 financial report for comparison.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the 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 qualified opinion.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
GHM:JT:EGS:013
Material uncertainty related to going concern
We draw attention to Note 2(b) in the financial report, which describes the principal conditions that raise
doubt about the Group’s ability to continue as a going concern. These events or conditions indicate that a
material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
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 year. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate
opinion on these matters. In addition to the matters described in the Material Uncertainty Related to
Going Concern section and Basis for Qualified Opinion section, we have determined the matters described
below to be the key audit matters to be communicated in our report. For each matter below, our
description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of material
misstatement of the financial report. The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis for our audit opinion on the accompanying
financial report.
1. Capitalisation of costs to Mine Properties
Why significant
How our audit addressed the key audit matter
During the year the Group undertook a number
of major capital projects including the
refurbishment of the Davyhurst processing plant
and the development of mine site infrastructure
required to mine the Group’s resources. Total
expenditure capitalised to Mine Properties during
the year was $52.406 million.
Determining whether expenditure should be
capitalised to Mine Properties or expensed, in
accordance with the Group’s accounting policy,
can involve significant judgement.
Accordingly, the capitalisation of costs to Mine
Properties was considered to be a key audit
matter.
Our audit procedures included:
• Understanding the nature of capital projects
undertaken during the year
• Analysing a sample of capitalised
expenditure and its supporting
documentation to assess whether the
expenditure was capital in nature
• For certain indirect costs, such as salaries
and wages, assessing the appropriateness of
the allocation of these costs between capital
and operating expenditure.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
2. Completeness of trade and other payables
Why significant
How our audit addressed the key audit matter
The Group’s increased expenditure during the
year and the settlement of certain trade and
other payables being deferred beyond normal
credit terms has led to a significant increase in
trade creditors and other payables as at 30 June
2017 in comparison to the prior year.
The Group has also been the subject to a number
of legal claims due to non-payment of certain
amounts being claimed by trade creditors.
Accordingly, the completeness of trade creditors
and other payables was a key audit matter.
In considering the completeness of trade and other
payables balances our procedures included:
• For a sample of payments made to suppliers
subsequent to 30 June 2017, we assessed
whether the payments related to financial
obligations that existed as at 30 June 2017
and had been appropriately accrued for as at
30 June 2017
• For a sample of outstanding trade creditors
as at 30 June 2017, we compared the
outstanding amounts to statements received
from the relevant supplier
• Obtained representation from external
solicitors engaged by the Group to assess the
adequacy of provisions recorded in respect
of legal claims made against the Group by
trade creditors for non-payment.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the information
included in the Company’s 2017 Annual Report other than the financial report and our auditor’s report
thereon. We obtained the Directors’ Report that is to be included in the Annual Report, prior to the date
of this auditor’s report, and we expect to obtain the remaining sections of the Annual Report after the
date of this auditor’s report.
Our opinion on the financial report does not cover the other information and we do not and will not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report and
our related assurance opinion.
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 on the other information obtained prior to the date of this
auditor’s report, 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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of this financial report.
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.
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 Group’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 Group’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 Group 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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
•
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group 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 to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year 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 audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors' report for the year ended 30 June
2017.
In our opinion, the Remuneration Report of Eastern Goldfields Limited for the year ended 30 June 2017,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
Ernst & Young
G H Meyerowitz
Partner
Perth
22 November 2017
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
TENEMENT SCHEDULE
Tenement
ID
E 16/332
E 16/337
E 16/344
E 16/347
E 16/456
E 16/473
E 16/475
E 16/480
E 16/484
E 29/419
E 29/640
E 29/641
E 29/895
E 29/922
E 29/955
E 29/964
E 29/966
E 30/333
E 30/334
E 30/335
E 30/336
E 30/338
E 30/449
E 30/454
L 15/224
L 16/58
L 16/62
L 16/72
L 16/73
L 16/77
L 16/103
L 24/85
L 24/101
L 24/115
L 24/123
L 24/124
L 24/170
L 24/174
L 24/188
L 24/189
L 24/224
L 29/34
L 29/38
L 29/40
L 29/42
L 29/43
L 29/44
L 29/74
L 29/109
L 30/35
L 30/37
L 30/43
M 16/220
M 16/262
M 16/263
M 16/264
M 16/268
M 16/470
M 24/39
M 24/51
M 24/115
M 24/159
M 24/208
M 24/290
M 24/352
M 24/376
M 24/427
M 24/633
M 24/754
M 24/755
M 24/830
M 24/845
M 24/846
M 24/847
M 24/848
Registered Holder
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Goldstar Resources (WA) PTY LTD
Goldstar Resources (WA) PTY LTD
Black Mountain Gold LTD
Mt Ida Gold PTY LTD
Mt Ida Gold PTY LTD
Mt Ida Gold PTY LTD
Black Mountain Gold LTD
Siberia Mining Corporation PTY LTD
Goldstar Resources (WA) PTY LTD
Black Mountain Gold LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Delta Resource Management PTY LTD
Carnegie Gold PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Ida Gold Operations PTY LTD (Siberia)
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Carnegie Gold PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Black Mountain Gold LTD
Black Mountain Gold LTD
Black Mountain Gold LTD
Mt Ida Gold PTY LTD
Black Mountain Gold LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Charles Robert Gardner
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Registered
Interest
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
96/96
96/96
96/96
96/96
100/100
100/100
100/100
100/100
100/100
96/96
96/96
96/96
100/100
100/100
100/100
100/100
100/100
96/96
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
96/96
96/96
96/96
100/100
96/96
96/96
96/96
100/100
96/96
100/100
96/96
96/96
100/100
100/100
100/100
100/100
100/100
70
Registered Holder
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Goldstar Resources (WA) PTY LTD
Goldstar Resources (WA) PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Siberia Mining Corporation PTY LTD
Black Mountain Gold LTD
Black Mountain Gold LTD
Black Mountain Gold LTD
Black Mountain Gold LTD
Black Mountain Gold LTD
Black Mountain Gold LTD
Black Mountain Gold LTD
Black Mountain Gold LTD
Black Mountain Gold LTD
Black Mountain Gold LTD
Black Mountain Gold LTD
Black Mountain Gold LTD
Black Mountain Gold LTD
Black Mountain Gold LTD
Black Mountain Gold LTD
Black Mountain Gold LTD
Black Mountain Gold LTD
Tenement
ID
M 30/108
M 30/109
M 30/111
M 30/122
M 30/123
M 30/126
M 30/127
M 30/129
M 30/131
M 30/132
M 30/133
M 30/135
M 30/137
M 30/148
M 30/150
M 30/157
M 30/159
M 30/178
M 30/182
M 30/187
P 16/2514
P 16/2774
P 16/2775
P 16/2921
P 16/2922
P 24/4182
P 24/4750
P 24/4751
P 24/4752
P 24/4753
P 24/4754
P 29/2070
P 29/2073
P 29/2153
P 29/2154
P 29/2155
P 29/2156
P 29/2251
P 29/2252
P 29/2253
P 29/2254
P 29/2268
P 29/2269
P 29/2286
P 29/2287
P 29/2288
P 29/2289
P 29/2290
P 29/2291 Wayne Craig Van Blitterswyk
P 29/2292 Wayne Craig Van Blitterswyk
P 29/2293 Wayne Craig Van Blitterswyk
P 29/2294 Wayne Craig Van Blitterswyk
P 29/2295 Wayne Craig Van Blitterswyk
P 29/2296 Wayne Craig Van Blitterswyk
P 29/2297 Wayne Craig Van Blitterswyk
P 29/2298 Wayne Craig Van Blitterswyk
P 29/2299 Wayne Craig Van Blitterswyk
P 29/2300 Wayne Craig Van Blitterswyk
P 29/2301 Wayne Craig Van Blitterswyk
P 29/2302 Wayne Craig Van Blitterswyk
P 29/2303 Wayne Craig Van Blitterswyk
P 29/2304 Wayne Craig Van Blitterswyk
P 29/2305 Wayne Craig Van Blitterswyk
P 29/2307
P 29/2308
P 29/2310
P 29/2311
P 29/2312
P 29/2313
P 29/2314
P 29/2315
P 29/2316
P 29/2317
P 29/2318
P 29/2319
Black Mountain Gold LTD
Black Mountain Gold LTD
Mt Ida Gold PTY LTD
Mt Ida Gold PTY LTD
Mt Ida Gold PTY LTD
Mt Ida Gold PTY LTD
Mt Ida Gold PTY LTD
Mt Ida Gold PTY LTD
Mt Ida Gold PTY LTD
Mt Ida Gold PTY LTD
Mt Ida Gold PTY LTD
Mt Ida Gold PTY LTD
Registered
Interest
100/100
100/100
100/100
100/100
100/100
100/100
96/96
100/100
96/96
96/96
100/100
100/100
100/100
100/100
100/100
96/96
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
TENEMENT SCHEDULE
Registered Holder
Mt Ida Gold PTY LTD
Black Mountain Gold LTD
Black Mountain Gold LTD
Black Mountain Gold LTD
Black Mountain Gold LTD
Mt Ida Gold PTY LTD & Stuart Leslie Hooper
Black Mountain Gold LTD
Black Mountain Gold LTD
Tenement
ID
M 29/2
M 29/14
M 29/88
M 29/153
M 29/154
M 29/165
M 29/184
M 29/212
M 29/410 Wayne Craig Van Blitterswyk
M 29/420
M 29/422
M 30/1
M 30/5
M 30/7
M 30/16
M 30/21
M 30/34
M 30/39
M 30/42
M 30/43
M 30/44
M 30/48
M 30/59
M 30/60
M 30/63
M 30/72
M 30/73
M 30/74
M 30/75
M 30/80
M 30/84
M 30/97
M 30/98
M 30/100
M 30/102
M 30/103
M 30/106
M 30/107
Black Mountain Gold LTD
Mt Ida Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Registered
Interest
100/100
96/96
96/96
100/100
100/100
95/100 5/100
100/100
100/100
100/100
100/100
100/100
96/96
96/96
96/96
100/100
100/100
100/100
100/100
96/96
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
Registered Holder
Mt Ida Gold PTY LTD
Mt Ida Gold PTY LTD
Mt Ida Gold PTY LTD
Mt Ida Gold PTY LTD
Mt Ida Gold PTY LTD
Mt Ida Gold PTY LTD
Mt Ida Gold PTY LTD
Mt Ida Gold PTY LTD
Mt Ida Gold PTY LTD
Black Mountain Gold LTD
Black Mountain Gold LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Tenement
ID
P 29/2320
P 29/2321
P 29/2322
P 29/2323
P 29/2324
P 29/2325
P 29/2326
P 29/2327
P 29/2328
P 29/2344
P 29/2345
P 30/1042
P 30/1043
P 30/1060
P 30/1074
P 30/1100 Wayne Craig Van Blitterswyk
P 30/1101 Wayne Craig Van Blitterswyk
P 30/1102 Wayne Craig Van Blitterswyk
P 30/1103 Wayne Craig Van Blitterswyk
P 30/1104 Wayne Craig Van Blitterswyk
P 30/1105 Wayne Craig Van Blitterswyk
P 30/1107
P 30/1108
P 30/1109
P 30/1110
P 30/1111
P 30/1112
P 30/1113
P 30/1114
P 30/1115
P 30/1116
P 30/1117
P 30/1118
P 30/1119
P 30/1120
P 30/1121
P 30/1122
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Carnegie Gold PTY LTD
Registered
Interest
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
100/100
Tenement Applications:
• Application for L 24/232 – L 24/233 were made on 21/10/2016
• Application for L 30/66 was made on 13/4/2017
Tenement grants:
•
L 16/103 was granted on 05/7/2016
L 24/224 was granted on 06/7/2016
•
• E 16/484 was granted on 25/8/2016
• E 29/966 was granted on 06/9/2016
• P 24/5073 – P 24/5075 were granted on 03/10/2016
• E 16/482 was granted on 07/11/2016
• E 16/483, E 16/486 – E 16/487 were granted on 08/11/2016
• M 24/960 was granted on 02/12/2016
• E 16/474 was granted on 27/1/2017
• E 29/984 and E 30/468 were granted on 24/2/2017
• M 30/253 was granted on 03/3/2017
L 24/233 was granted on 21/3/2017
•
L 24/232 was granted on 21/4/2017
•
Tenement acquisitions:
• The company entered in an earn-in JV with Intermin Resources Ltd’s tenements (through tenements held in
their subsidiary entity, Black Mountain Gold Ltd) on or around September 2016; L 29/42 – L 29/44, L
29/109, M 29/153 – M 29/154, M 29/184, M 29/212, M 29/410, P 29/2153 – P 29/2156, P 29/2251 – P
29/2254, P 29/2268 – P 29/2269, P 29/2344 – P 29/2345
71
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
TENEMENT SCHEDULE
• The company acquired the following tenements from Heron Resources Ltd on or around January 2017; E
24/203 (application), E 29/889, M 24/634, M 24/660, M 24/663 – M 24/665, M 24/683, M 24/686, M 24/757,
M 24/772, M 24/797, M 24/915 – M 24/916, P 24/4395 – P 24/4396, P 24/4400 – P 24/4403
Annual Rents (in 2017, the DMIRS updated its policies and as a result tenements under plaint/forfeiture actions are
still obligated to pay its rents and other dues even after the tenement is relinquished):
• M 16/262 – M 16/264, M 24/208 due to third party plaint in place, the 2015-2016, 2016-2017, 2017-2018
annual rents have yet to be paid – DMIRS issued request for payment of outstanding amounts by end
October 17
• E 30/335, M 30/102 due to third party plaint in place, the 2015-2016, 2016-2017 annual rents have yet to be
paid – DMIRS issued request for payment of outstanding amounts by end October 17
• M 16/470 due to third party plaint in place, the 2016-2017 annual rents have yet to be paid – DMIRS issued
request for payment of outstanding amounts by end October 17
• No DMIRS issued notices of intention to forfeit tenement/s for breach of rental payment obligations recorded
as at 30 June 2017 against any titles held/beneficially held by the Group
Form 5 reports:
• No DMIRS compliance issue/s recorded as at 30 June 2017 against any titles held/beneficially held by the
Group
Extension of Term/Expiries/relinquishments/forfeitures:
• E 30/464 was surrendered 23/8/2016
• P 29/1938 – P 29/1940, P 30/1020 were surrendered 31/8/2017
• E 30/332, P 29/1942 – P 29/1944, P 29/1946 – P 29/1950, P 30/1017 – P 29/1018, P 30/1021, P 30/1023 –
P 30/1027, P 30/1033 – P 30/1034, P 30/1038, P 30/1040, P 30/1051 were surrendered 01/9/2016
• P 30/1012 – P 30/1016 were surrendered 15/9/2016
• E 30/478 was surrendered 28/10/2016
• P 29/2291 – P 29/2302, P 30/1100 – P 30/1105, were returned to Wayne van Blitterswyk on 30/1/2017
• M 24/51, M 24/290, M 24/352, M 24/427, M 24/633, M 24/754 – M 24/755, M 24/830, P 24/4182, P 24/4752 –
P 24/4753 were conditionally surrendered in favour of M 24/960 on 22/12/2016
• M 16/220, M 30/1, M 30/5, M 30/39, M 30/42, M 30/44, M 30/63, M 30/72 – M 30/74, M 30/80, M 30/100, M
30/106 – M 30/108, M 30/129, M 30/131 – M 30/132, M 30/135, M 30/137, P 30/1042 – P 30/1043 were
conditionally surrendered in favour of M 30/255 on 10/1/2017
• M 30/7, M 30/16, M 30/21, M 30/34, M 30/43, M 30/48, M 30/59, M 30/60, M 30/75, M 30/84, M 30/97 – M
30/98, M 30/109, M 30/122, M 30/148, M 30/150, M 30/159, M 30/178, P 30/1111 and part of M 30/157 were
conditionally surrendered in favour of M 30/256 on 21/4/2017
• Extension of Term submitted on E 16/332 – pending DMIRS assessment
Applications of Forfeiture/Plaints/DMIRS Notices of Intention to forfeit;
• M 16/262 – M 16/264 Application for forfeiture #371015 - #371017 made by Michael Allen Thompson
• E 30/335, M 16/470, M 30/102 and M 30/103 Application for forfeiture #460237 - #460240 made by Gerard
Francis Brewer
• M 24/846 – M 24/848 Application for forfeiture #469309, #469308 and #469310 made by Gerard Francis
Brewer and Glenn Alan Haythornthwaite jointly
• M 24/208 Application for forfeiture #469423 made by Michael John Photios
• M 24/376 Application for forfeiture 460290 made by Glenn Alan Haythornthwaite. Case dismissed 12/7/2016
All Shire rates due and payable for the 2016-2017 financial year were outstanding as at 30/6/2017.
72
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
ASX ADDITIONAL INFORMATION
Additional information required by the Australian Securities Exchange Listing Rules and not disclosed elsewhere in
this report is set out below, current as at 9 November 2017:
SHAREHOLDINGS (as at 9 November 2017)
Substantial shareholders
The number of shares held by substantial shareholders and their associates are set out below:
Shareholder
Number of ordinary
shares
% of issue capital
Orion Gold NL1
Mr Michael Fotios + his controlled entities Michael
Fotios Family A/C, Investmet Limited, Delta Resource
Management, Whitestone Minerals Limited2
Wyllie Group Pty Ltd3
Mr Hendricus Indrisie + controlled entity Perth Select
Seafoods Pty Ltd4
Industry Super Holdings Pty Ltd5
1. As provided to the Company on 22 September 2016.
2. As provided to the Company on 9 June 2016.
3. As provided to the Company on 15 June 2016.
4. As provided to the Company on 3 June 2016.
5. As provided to the Company on 25 May 2016.
Voting Rights
42,433,333
191,548,719
27,270,150
26,000,000
24,570,811
8.76
39.77
5.57
5.31
5.02
Each shareholder is entitled to receive notice of and attend and vote at general meetings of the Company. At a general
meeting every shareholder present in person or by proxy, representative or attorney will have one vote on a show of
hands and on a poll, one vote for each share held.
Distribution of Equity Security holders
Ordinary Shares
Category
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
Total
Number of Holders
Shares
284
1,173
307
645
245
127,966
2,945,314
2,399,120
26,919,566
532,560,118
2,654
564,952,084
Distribution of Unquoted Security holders
Unlisted Options exercisable at $0.168 each on or before 8 March 2018
Category
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
Total
Number of Holders
Options
-
-
-
5
23
28
-
-
-
300,000
19,950,000
20,250,000
73
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
ASX ADDITIONAL INFORMATION
Unlisted Options exercisable at $0.189 each on or before 8 March 2020
Category
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
Total
Number of Holders
Shares
-
-
-
5
31
36
-
-
-
300,000
22,350,000
22,650,000
Unlisted Options exercisable at $0.261 each on or before 12 December 2018
Number of Holders
Options
-
-
-
-
11
1
-
-
-
-
11
1
-
-
-
-
9,578,544
9,578,544
Shares
-
-
-
-
5,446,623
5,446,623
Category
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
Total
1. Investec Bank PLC holds 9,578,544 Options comprising 100.00% of this class.
Unlisted Options exercisable at $0.459 each on or before 15 March 2019
Number of Holders
Category
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
Total
1. Investec Bank PLC holds 5,446,623 Options comprising 100.00% of this class.
On market buy-back
There is not currently any on market buy-back.
Quoted Securities on issue
Category
Ordinary Shares
Escrowed (indefinitely)
Total
Unmarketable parcels
Number
564,885,416
66,668
564,952,084
There were 861 holders of less than a marketable parcel of ordinary shares, which as at 9 November 2017 was 2,128
shares based on a price of $0.2350 per share.
74
EASTERN GOLDFIELDS LIMITED AND CONTROLLED ENTITIES
FOR THE YEAR ENDED 30 JUNE 2017
ASX ADDITIONAL INFORMATION
Corporate Governance Statement
The Company’s Corporate Governance Statement for the 2017 financial year can be accessed at:
http://easterngoldfields.com.au/corporate-governance-2/
Twenty largest shareholders as at 9 November 2017
Rank
1
INVESTMET LIMITED
Name
DELTA RESOURCE MANAGEMENT PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
PERTH SELECT SEAFOODS PTY LTD
WYLLIE GROUP PTY LTD
DONALD SMITH VALUE FUND LP
Number of
Shares
106,438,370
57,691,527
30,477,161
29,550,000
27,270,150
20,000,000
MR MICHAEL GEORGE FOTIOS
16,986,487
JP MORGAN NOMINEES AUSTRALIA LIMITED
WHITESTONE MINING SERVICES PTY LTD
SOUTHERN CROSS CAPITAL PTY LTD
CITICORP NOMINEES PTY LIMITED
MR DONALD JEFFREY SMITH + MRS PATTY SUSAN SMITH
CARPE DIEM ASSET MANAGEMENT PTY LTD
BNP PARIBAS NOMINEES PTY LTD
LIDO TRADING LTD
TARNEY HOLDINGS PTY LTD
BOTSIS HOLDINGS PTY LTD
NATIONAL NOMINEES LIMITED
PIT N PORTAL MINING SERVICES
MR PHILIP COLIN HAMMOND + MS BETTY JEANETTE MOORE
16,457,069
16,000,000
10,000,000
9,058,725
8,700,000
7,808,061
6,744,455
6,666,667
5,127,015
5,100,000
5,058,489
5,000,000
4,633,333
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
% Interest
18.84
10.21
5.39
5.23
4.83
3.54
3.01
2.91
2.83
1.77
1.60
1.54
1.38
1.19
1.18
0.91
0.90
0.90
0.89
0.82
TOTAL
394,767,509
69.88
75