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2017 ANNUAL REPORT
CONTENTS
MISSION STATEMENT
ABOUT US
LETTER FROM CHAIRMAN AND MANAGING DIRECTOR
REVIEW OF OPERATIONS
EXPLORATION
FY2018 GOALS
DIRECTORS’ REPORT
CORPORATE GOVERNANCE STATEMENT
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
AUDITOR’S INDEPENDENCE DECLARATION
FINANCIAL REPORT
CONSOLIDATED INCOME STATEMENT
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
CONSOLIDATED BALANCE SHEET
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
ADDITIONAL SHAREHOLDER INFORMATION
SCHEDULE OF TENEMENTS
RESOURCES AND RESERVES
CORPORATE DIRECTORY
2
2
3
7
13
15
16
41
48
49
54
55
56
57
58
59
60
61
115
117
119
122
COMPETENT PERSONS
The information in this report that relates to Exploration Targets and Exploration Results is based on information compiled by John Hicks. Mr Hicks
is a member of the Australasian Institute of Mining and Metallurgy (AusIMM) and is a full-time employee and shareholder of Panoramic Resources
Limited. Mr Hicks also holds performance rights to shares in relation to Panoramic Resources Limited.
The aforementioned has sufficient experience that is relevant to the style of mineralisation and type of target/deposit under consideration and to the
activity which he is undertaking to qualify as a Competent Person as defined in the Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves(the JORC Code 2012 Edition). Mr Hicks consents to the inclusion in the report of the matters based on the information
in the form and context in which it appears.
Information in this report relating to Ore Reserves has been compiled by or reviewed by Lilong Chen (MAusIMM). The aforementioned is a full-time
employee of Panoramic Resources Limited. The aforementioned has sufficient experience that 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
Australiasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. The aforementioned consents to the inclusion in the
release of the matters based on his information in the form and context in which it appears.
2017 ANNUAL REPORT | PAGE 1
MISSION STATEMENT
We strive to achieve excellence in all aspects of our business to provide
long term capital growth and dividend return to our shareholders, a safe
and rewarding work environment for our employees, and opportunities and
benefits to the people in the communities we operate in.
Vision - Building a multi-commodity company producing base metals, battery metals and PGMs
Commitment - Maximise margins to deliver capital growth and dividends to our shareholders
Results - A sustainable mining company
AUSTRALIAN BASED RESOURCE COMPANY WITH SIGNIFICANT EXPOSURE TO THE
“BATTERY METALS” Ni, Cu and Co
PRODUCED OVER 185,000t Ni, 600,000t Cu and 5,000t Co BETWEEN 2004-2016 FROM TWO MINES
CURRENT RESOURCE BASE OF OVER 300,000t Ni, 105,000t Cu, 15,000t Co,
1.4Mt Pt and Pd OVER FOUR PROJECTS
SAVANNAH PROJECT POSED TO RESTART AND COULD PRODUCE 11,000tpa Ni, 6,000tpa Cu and
800tpa Co OVER INITIAL 8.5 YEAR MINE LIFE
EXPERIENCED MINE DEVELOPMENT AND OPERATING TEAM IN PLACE
EXPOSURE TO 1.3Moz GOLD IN RESOURCE THROUGH 51% INTEREST IN ASX LISTED
HORIZON GOLD LIMITED (ASX:HRN)
ABOUT US
Panoramic Resources Limited (ASX Code: PAN) is a Western
Australian mining company formed in 2001 for the purpose of
developing the Savannah Nickel Project in the East Kimberley.
Panoramic successfully commissioned
the $65 million
Savannah Project in late 2004 and then in 2005 purchased
and restarted the Lanfranchi Nickel Project, near Kambalda. In
FY2014, the Company produced a record 22,256t contained
nickel and produced 19,301t contained nickel in FY2015. The
Lanfranchi and Savannah Projects were placed on care and
maintenance in November 2015 and May 2016 respectively
pending a sustained recovery in the nickel price.
Following the successful development of the nickel projects,
the Company diversified its resource base to include platinum
group metals (PGM) and gold. The PGM Division consists
of the Panton Project, located 60km south of the Savannah
Project and the Thunder Bay North Project in Northern Ontario,
Canada, in which Rio Tinto is earning 70% by spending up
to C$20 million over five years. Following the ASX listing of
Horizon Gold Limited (ASX Code: HRN) in December 2016, the
Company’s interest in gold consists of an indirect investment
in the Gum Creek Gold Project located near Wiluna through its
51% majority shareholding in Horizon.
Panoramic has been a consistent dividend payer and has paid
out a total of $114.3 million in fully franked dividends between
2008 and 2016.
The Company’s vision is to broaden its exploration and
production base, with the aim of becoming a major, diversified
mining company. The growth path will include developing
existing resources, discovering new ore bodies, acquiring
additional projects and is being led by an experienced
exploration-to-production team with a proven track record.
PAGE 2 | 2017 ANNUAL REPORT
LETTER FROM THE CHAIRMAN
AND MANAGING DIRECTOR
Dear Shareholder
The major highlights for the financial year were the
strong recovery in commodity prices together with the
completion of the Savannah Feasibility and Optimisation
Studies which demonstrate that the Savannah Project
can produce significant quantities of nickel, copper and
cobalt and generate strong cashflows. The completion
of the Feasibility Study lead to a major upgrade in the
Savannah Reserves to 116,800t Ni, 52,400t Cu and
7,600t Co which should support at least an eight-year
mine life.
After several years of weak commodity prices and soft
global demand growth, the world experienced a significant
rally in base metal prices towards the end of 2016, in
anticipation of
in 2017 and
improving demand growth
beyond. Concurrently, the move towards electric vehicles
(EVs) has gathered momentum and has led to strong interest
in the so-called “battery metals” which include the three
metals Savannah can produce – nickel, copper and cobalt.
One forecaster is predicting the global EV fleet could rise from
one million to 15 million EVs by 2025, 140 million by 2035 and
as many as one billion by 2050.
Historically, stainless steel has accounted for some 70% of
world nickel consumption, which has driven nickel demand
growth and prices. While stainless steel demand growth is
expected to continue, the battery sector is set to become a major
source of new and growing nickel consumption. The growth
in EV battery production could lead to a 10-40% increase in
incremental nickel demand by 2025. This means somewhere
between 300-900ktpa Ni, depending on the battery chemistry,
could be required in addition to current global consumption of
~2.2Mtpa Ni. This development is leading most analysts to
forecast long-term nickel prices ranging between US$6.00-
8.00/lb. Already, the nickel price has rebounded strongly from its
2016 lows and reached US$5.50/lb in September 2017, before
pulling back to ~US$4.70/lb in late September on profit taking.
2017 ANNUAL REPORT | PAGE 3
Nickel Demand & Supply (ktpa) Source: Bloomberg, UBS Research. -5001,0001,5002,0002,5003,0003,50005001,0001,5002,0002,5003,0003,5002010201120122013201420152016201720182019202020212022202320242025OtherFoundryPlatingNon-Ferrous AlloysAlloy SteelBattery / EV'sStainless SteelSupply LETTER FROM THE CHAIRMAN
AND MANAGING DIRECTOR
In relation to cobalt, prices have risen from US$10/lb in mid-
2016 to around US$28/lb recently. The price increase is due to
a combination of expected strong demand from EVs together
with traditional end-user markets and supply concerns from the
DRC. Importantly, the cobalt price is still approximately 50%
below its peak of $US51/lb in 2008 when supply was tight.
Copper demand is expected to increase due to a combination
of growth in EV production and electricity grid upgrades. If
forecasters are correct and EV production reaches 15 million
units by 2025, this could drive copper demand as much as
~1.2Mtpa or an additional ~5% providing support for copper
prices in excess of US$3.00/lb.
PAGE 4 | 2017 ANNUAL REPORT
Long-term cobalt prices, US$/lb Source: Bloomberg, Metal Bulletin, UBS; Note: price for high grade product 0102030405060Jan-92Jan-94Jan-96Jan-98Jan-00Jan-02Jan-04Jan-06Jan-08Jan-10Jan-12Jan-14Jan-16Cobalt (US$/lb)Prices are still materially below the level in 2008 Overall copper demand (ktpa) & growth (%) Source: AME, WBMS, UBS. -4.0%-2.0%0.0%2.0%4.0%6.0%8.0%10.0%10,00015,00020,00025,00030,0002000200220042006200820102012201420162018e2020e2022e2024eCopper demand from EV'sCopper demand ex EV'sGlobal copper growth (RHS) In summary, it is reasonable to assume stronger nickel, copper
and cobalt prices going forward with all three commodities
benefiting from the EV revolution.
Given the stronger commodity price outlook, the priority
for Panoramic is to be ready to recommence production
at Savannah, which will again provide a revenue stream
to underpin our long-term strategy of generating returns to
shareholders through dividends and capital growth.
To that end, while reducing corporate holding costs and
securing our mines on care and maintenance, the team
at Panoramic has focussed on delivering the Savannah
Feasibility Study which incorporates mining the remaining
Savannah orebody and then transitioning to the Savannah
North orebody. The Feasibility Study was delivered
in
February 2017 demonstrating the project’s economic viability
at long term nickel price forecasts. Following the release of
the Feasibility Study, work commenced on an Optimisation
Study aimed at demonstrating the project could be restarted
at l ower nickel prices and still be economically robust. The
Optimisation work focussed on a combination of higher
production rates, higher ore grades,
input costs
and assumed improved by-product credits. The results of the
Optimisation Study were released in July 2017, confirming a
long-life project with significant metal production and leverage
to nickel, copper and cobalt prices.
lower
Highlights of the Optimisation Study include:
•
•
•
•
•
Initial mine life of 8.5 years;
Average annual contained metal production of
11,000tpa Ni, 5,800tpa Cu and 760tpa Co;
Low average C1 and operating costs;
Low pre-production capital; and
Short lead time to first production.
We also identified and continue to study opportunities to
enhance the Project value utilising new technologies that could
improve productivity and reduce costs.
The Feasibility Study assumed the production of a nickel-
copper-cobalt bulk concentrate as per the existing Savannah
plant flow-sheet. Indicative Term Sheets received from our
existing customer, the Jinchuan Group and other potential off-
takers confirm that the Savannah bulk concentrate remains a
sought-after material. We are also studying the possibility of
producing two concentrate products, a higher-grade nickel-
cobalt concentrate and a copper concentrate which could
improve metal payabilities and enhance project economics.
technically and
If
two-product stream concept
the
is
commercially viable, this could allow the production of nickel
and cobalt sulphate products at Savannah, to be sold directly
to battery manufacturers to feed the growing EV market.
Notwithstanding, the current plan is to restart Savannah based
on producing a bulk concentrate and then utilise cashflow to
finance future value-add projects.
typically have much greater
Given the short lead time and low capital investment required
to resume operations at Savannah, this puts Panoramic
in an enviable position compared with greenfield project
developers, who
funding
requirements and
longer pre-production development
timeframes. Savannah’s significant copper and cobalt by-
products are important contributors to project value. As
previously mentioned, nickel, copper and cobalt prices are
expected to remain strong and could increase significantly due
to the growing demand from the battery market. As a potential
near-term producer, Panoramic is well placed to capitalise on
the buoyant outlook for these commodities.
July 2017 Savannah FS Optimisation - Percentage contributions to
gross (mine gate) revenue of nickel, copper and cobalt
Management is updating the July 2017 Savannah Optimisation
Study with current market rates for all cost inputs, expected
metal recoveries following completion of the metallurgical
testwork, updated terms for the bulk concentrate and financing
options. We recognise the recent upswing in mining activity
in Western Australia has put upward pressure on salaries
and could create challenges in securing and training a new
workforce at Savannah: labour represents ~30% of our
operating costs. Work on marketing and project financing
continues, so we can be in position to make a decision to
restart at the appropriate time.
2017 ANNUAL REPORT | PAGE 5
LETTER FROM THE CHAIRMAN
AND MANAGING DIRECTOR
In relation to our other assets, we continue to look for ways
to advance these projects and it was pleasing to be able to
partially divest the Gum Creek Gold Project via the IPO of
Horizon Gold Limited on the ASX in December 2016 which
raised $15 million. We thank our major shareholder Zeta
Resources and Somers and Partners for their support of the
Horizon Gold IPO. Panoramic retains a 51% interest in Horizon
Gold and provides management support for Horizon. Our
Lanfranchi mine remains on care and maintenance pending
a recovery in nickel prices while our PGM assets continue to
provide Panoramic with exposure to platinum and palladium
and are held without significant cost.
On behalf of the Board, we thank the Panoramic team for their
efforts in completing and optimising the Savannah Feasibility
Study, and securing our mining assets at Savannah and
Lanfranchi on care and maintenance. Thanks also to our
stakeholders and shareholders for their ongoing support.
The world is entering a new era of transportation with the EV
revolution which is set to underpin higher nickel, copper and
cobalt prices that should support the restart and profitability of
our Savannah Project.
Yours sincerely,
Brian Phillips
Chairman
Peter Harold
Managing Director
PAGE 6 | 2017 ANNUAL REPORT
REVIEW OF OPERATIONS
Savannah Project
Nickel, copper, cobalt in concentrate
Background
The Savannah Nickel Project is located 240km south of
Kununurra in the East Kimberley region of Western Australia,
and consists of a number of nickel sulphide orebodies,
underground mining works, 1.0Mtpa processing plant
and associated infrastructure. The Savannah Project was
constructed during 2002/03 at a total cost of $65 million and
commissioned in late 2004 initially on open-pit ore. After 18
months, the operations transitioned to underground mining.
Over an initial twelve-year period, Savannah milled 8.5 million
tonnes at an average grade of 1.29% Ni, 0.65% Cu and 0.06%
Co to produce 1.22 million tonnes of concentrate containing
94,600t Ni, 53,000t Cu and 5,000t Co. In FY2016, Savannah
achieved a record year with 9,845t Ni, 6,011t Cu and 476t Co
in concentrate produced. The Savannah Project was placed
onto care and maintenance in May 2016 (when the nickel price
reached historic lows) pending a sustained recovery in the
US$ nickel price and confirmation that Savannah North was
a viable project.
Since placing the Project on care and maintenance, the focus been on delivering the Savannah Feasibility Study which incorporates
mining the remaining Savannah orebody and then transitioning to the Savannah North orebody. The Feasibility Study was
delivered in February 2017, demonstrating the project’s economic viability at long-term nickel price forecasts. Following the
release of the Feasibility Study, work commenced on an Optimisation Study aimed at confirming that the Project could be
restarted at lower nickel prices and still be economically robust. The Optimisation work focussed on a combination of higher
production rates, higher ore grades, lower input costs and assumed improved by-product credits. The results of the Optimisation
Study were released in July 2017 confirming a long-life project with significant metal production and leverage to nickel, copper
and cobalt prices.
Mining Method
Open stoping with paste fill
Processing
1.0Mtpa capacity plant
SAG mill, flotation and filtering to produce a bulk concentrate
Historic Production
8-10,000t Ni pa, 5-6,000t Cu pa, 350-500t Co pa
Offtake
The Jinchuan Group until March 2020
2017 ANNUAL REPORT | PAGE 7
REVIEW OF OPERATIONS
Savannah and Savannah North Plan View
Cross section of Savannah and Savannah North on
Section 6050mE
PAGE 8 | 2017 ANNUAL REPORT
REVIEW OF OPERATIONS
FY2017 HIGHLIGHTS
Major Resource upgrade for Savannah North
Life of mine cash costs
•
•
10.27Mt at 1.70% Ni, 0.72% Cu and 0.12% Co
• US$2.00/lb Ni in concentrate
175,100t Ni, 74,400t Cu and 12,700t Co metal
contained
Savannah Feasibility Study*
• US$3.30/lb payable Ni
• US$4.40/lb Ni all in sustaining costs
Savannah Feasibility Study Optimisation
• Maiden Savannah North Ore Reserve – 6.65Mt at
•
Long Mine Life – 8.5 years
1.42% Ni, 0.61% Cu and 0.10% Co
•
Total Savannah Ore Reserve – 8.21Mt at 1.37% Ni,
0.64% Cu and 0.09% Co
• Average annual production – 9,700t Ni, 5,000t Cu,
670t Co in concentrate
•
Low pre-production capital – $20 million
• Average annual production – 11,000t Ni, 5,800t Cu,
760t Co in concentrate
• Competitive cash costs
• Robust project economics with leverage to nickel,
copper and cobalt prices
• Significant opportunities identified to enhance
project value
* The study disclosed a life-of-mine nickel production target of 114,000 tonnes of contained nickel in ore. This target included an additional 1,400 tonnes of contained
nickel classified as Inferred Resources, which, under the JORC Code, has a low level of geological confidence.
FY2018 ACTIVITIES
Update Optimisation Study to incorporate the
following parameters
Study further value-add projects
• Separate nickel-cobalt and copper concentrates
• Capex and Opex assumptions to reflect the current
• Pre-Feasibility Study on nickel and cobalt sulphate
market
• Metallurgical testwork results
• Offtake terms
• Other inputs as required
production
Marketing
• Receive firm terms from short-listed offtakers
•
Finalise long-term contract(s)
Study further mine productivity improvements
Financing
• Ore passes
• Battery loaders
• Shortlist potential financiers
• Allow shortlisted financiers to complete due
• Surface-operative remote bogging
diligence
• Alternative truck technology
• Small drive sizes
• Drilling automation
•
Finalise term sheet(s)
Pre-Production Planning
Decision to proceed, subject to favourable
commodity prices and suitable project financing
being obtained
2017 ANNUAL REPORT | PAGE 9
REVIEW OF OPERATIONS
Lanfranchi Project
Nickel and copper in ore
Background
The Lanfranchi Project is located 42km south of Kambalda,
Western Australia and has a Resource base of approximately
5.65Mt at an average grade of 1.69% Ni for 95,500t Ni
contained. Panoramic purchased the Project in 2004 and
produced 3.85Mt or ore at an average grade of 2.44% Ni
containing 94,079t of Ni over a ten-year period between
2005-2015. The Project was placed on care and maintenance
in November 2015 due to a combination of the depletion of
the Deacon orebody, a localised seismic event and the historic
low nickel price which made the extraction of the Jury-Metcalfe
orebody sub-economic. In March 2016, a maiden Resource
estimate for the high-grade Lower Schmitz deposit of 131,000t
at 5.1% Ni for 6,700t Ni was released. The Lower Schmitz
mineralisation is confined within a pronounced “channel-
like” zone, approximately 100m wide and averages 5-6% Ni.
The mineralisation is consistent throughout the channel zone
and there is evidence to indicate that a steep west dipping fault
has displaced mineralisation at depth. Further exploration is
required to confirm this displacement.
The Lower Schmitz mineralisation remains one of the priority
exploration targets at Lanfranchi while many of the other
mineralised komatiite channels at Lanfranchi remain open at
depth, including the Lanfranchi, Deacon, East Deacon and
Schmitz channels.
Mining Method
Open stoping with paste fill and airleg mining
Processing
BHP Billiton Nickel West Kambalda Concentrator
Historic Production
500-600,000tpa ore
10-12,000t Ni & 1,000t Cu pa
Offtake
BHP Billiton Nickel West until February 2019
FY2017 HIGHLIGHTS
Lower Schmitz
•
Internal studies undertaken on mining Lower
Schmitz
Care and Maintenance Activities
• Equipment rationalisation – non-essential
equipment sold off or relocated to Savannah
• Camp - 200 person accommodation village leased
from 30 June 2017 for six months with an option to
extend for a further six months
PAGE 10 | 2017 ANNUAL REPORT
REVIEW OF OPERATIONS
Exploration potential at Lanfranchi
PGM Assets
Thunder Bay North Project
Background
Panton Project
Background
The Thunder Bay North (TBN) Project is located near Thunder
Bay in northwest Ontario, Canada. The advanced exploration
project claims cover an aggregate area of 40,816 hectares.
The TBN Project Resource contains 10.4Mt at 1.13g/t Pt and
1.07g/t Pd for ~0.4Moz Pt and ~0.4Moz Pd with exploration
potential at depth and along strike.
Recent activities
In 2015, Rio Tinto Exploration Canada Inc. (RTEC) commenced
a farm-in whereby RTEC can earn a 70% interest in the TBN
Project by sole funding C$20 million in expenditure over five
years, with a minimum spend of C$5 million. In January 2017,
RTEC confirmed that it had achieved the minimum spend of
C$5 million on the Project.
Panton is located 60km south of the Savannah Nickel Project
in the East Kimberley region of Western Australia. Panton is a
significant PGM Resource containing ~1.0Moz Pt at 2.2g/t and
~1.1Moz Pd at 2.4g/t with exploration potential at depth and
along strike.
Panoramic considers the Panton Project to be a quality PGM
development asset which fits within the Company’s commodity
diversification and growth strategy and is a key part of its
Kimberley Hub concept.
Recent activities
The Company is continuing to sponsor research being
undertaken by Curtin University on alternative PGM leaching
methods applicable to Panton ore.
2017 ANNUAL REPORT | PAGE 11
REVIEW OF OPERATIONS
Investments
Horizon Gold Limited (Panoramic 51%)
Horizon will focus on the following areas in the first two years:
Background
In July 2016, the Company announced that it had begun the
process to partially divest the 100% owned Gum Creek Gold
Project by way of an Initial Public Offering. On 21 October 2016,
Panoramic entered into various agreements with Horizon Gold
Limited to transfer the Gum Creek Gold Project and its wholly
owned subsidiary, Panoramic Gold Pty Ltd, to Horizon on
completion of the $15 million IPO and the successful spin-out of
Horizon onto the ASX Official List. Horizon was subsequently
listed on the ASX on 21 December 2016 (ASX Code: HRN).
Horizon’s Objectives and Strategy
Horizon’s primary objective is to fast track exploration and
development studies to become a stand-alone gold producer
through the successful development of the Gum Creek Gold
Project.
The strategy adopted by Horizon to achieve this goal is to:
•
•
•
undertake extensional and infill drilling on the existing
Gum Creek resources to grow the known resources
and lift defined resources into higher-confidence JORC
categories;
undertake
regional exploration
discoveries outside of the known resources; and
targeting new gold
carry out development studies (including, but not limited
to metallurgical and processing investigations) on the free
milling and refractory mineralisation.
•
•
•
•
infill and extension drilling on the known Gum Creek
Resources;
staged programs of ground EM surveys, IP surveys, RC
and air-core drilling, to better define regional geophysical,
geochemical and structural targets;
optimisation studies on free milling material to identify
areas for possible reductions in operating and capital
costs; and
further metallurgical test work to confirm the suitability
of Wilsons refractory mineralisation to treatment by a
moderate temperature and pressure oxidation process.
The 39.03 million shares in Horizon held by Panoramic are
escrowed until December 2018.
Under
the October 2016 Management Agreement with
Panoramic, Horizon utilises Panoramic’s management team
to provide corporate, technical, managerial and administrative
services to Horizon, providing a cost-effective administration
and continuity of knowledge in relation to Gum Creek. This
Management Agreement is for an initial two year period with
flexibility to extend by mutual agreement.
Arial view of Gum Creek open pits, processing plant and tailing dam (not a Panoramic asset)
PAGE 12 | 2017 ANNUAL REPORT
EXPLORATION
Since
inception, Panoramic has delivered significant
exploration success across its asset base. In aggregate, over
the past sixteen years, the Company’s exploration team has
been instrumental in the discovery of:
effort on building upon the nickel resource base at Savannah
and conducting additional surface drilling to test the potential
extent of the Savannah North mineralisation. The highlights for
FY2017 were:
•
•
•
•
342,700 tonnes nickel
125,000 tonnes copper
18,700 tonnes cobalt
630,000 ounces gold
Panoramic continues to conduct exploration activities on
its tenement package in a systematic manner. Following on
from the Savannah North discovery in early 2014 and the
release of the maiden Savannah North Mineral Resource
estimate in FY2016, Panoramic has focused its exploration
•
•
The release of a major Mineral Resource upgrade for
Savannah North; and
The completion of additional surface drilling at Savannah
North which resulted in an improved understanding of
the pathway of the mineralisation away from the known
resource area.
Panoramic spent $4.8 million on exploration and project
evaluation related activities in FY2017, down from $7.9 million
in FY2016.
Savannah and Savannah North Projects
•
•
•
The focus of exploration activities at Savannah in FY2017
was the ongoing evaluation of Savannah North and adding
to the existing Mineral Resource inventory.
In August 2016, the Company released an ungraded
Savannah North Mineral Resource estimate of 10.27
million tonnes at 1.70% Ni, 0.72% Cu and 0.12% Co for
175,100t Ni, 74,400t Cu and 12,700t Co. The Resource
upgrade was a 60% increase in contained Ni on the
maiden Savannah North Resource released in October
2015.
The upgraded Resource is based on underground
resource definition drilling completed between February
and July 2016. The drilling had been designed to infill and
convert Inferred areas of the maiden Resource estimate
to Indicated category while also testing for extension to
the Resource both up dip to the east and down dip to the
west and north.
•
•
•
The Company also completed additional surface drilling
at Savannah North with two drill holes completed to the
west and east of the upgraded Resource area and a fifth
drill hole completed to provide an initial deep drill test
of Subchamber D. Down-hole electromagnetic (DHEM)
surveys were completed on all five drill holes.
The geological and DHEM data provided by the two holes
drilled to the west of Savannah North indicate that, at
depth, the orientation of the mineralised Savannah North
intrusion adopts a more pronounced north-westerly trend
and that the mineralisation remains open in this direction.
From the two holes drilled to the east, the geological and
DHEM data confirm that the Savannah and Savannah
North intrusions remain separate bodies at depth in this
direction with the Savannah intrusion folded back towards
the west beneath the Savannah North intrusion. The data
also indicate that the Savannah North mineralisation may
extend upwards of 200m further to the east beyond the
current Resource area.
2017 ANNUAL REPORT | PAGE 13
EXPLORATION
Simplified Savannah geological plan showing location of Subchamber D
Simplified Savannah geological cross section on Section 2600mN
PAGE 14 | 2017 ANNUAL REPORT
EXPLORATION
Lanfranchi Project
•
Following on from the release of the maiden Lower Schmitz Mineral Resource estimate of 131,000t at 5.10% Ni for 6,700t
Ni during the March 2016, no further exploration has been undertaken at Lanfranchi due to priorities at Savannah. There is
currently no plan to conduct exploration work at Lanfranchi in FY2018.
PGMs
Thunder Bay North (TBN) Project
Panton Project
•
•
In 2015, Rio Tinto Exploration Canada Inc. (RTEC)
commenced a farm-in whereby RTEC can earn a 70%
interest in the TBN Project by sole funding C$20 million
in expenditure over five years, with a minimum spend of
C$5 million.
•
•
In January 2017, RTEC confirmed that it had achieved
the minimum spend of C$5 million on the Project. The
Company is now in discussions with RTEC regarding their
future plans and strategy for TBN.
Panoramic considers the Panton Project to be a quality
PGM development asset which fits within the Company’s
commodity diversification and growth strategy and is a
key part of its Kimberley Hub concept.
Due to funding constrains, no exploration activities
were undertaken in FY2017, however, the Company
did continue to sponsor research being undertaken by
Curtin University on alternative PGM leaching methods
applicable to Panton ore.
FY2018 GOALS
SAFETY
No LTIs
RESOURCES
Continue to grow
resource base
* Subject to attractive commodity prices and project financing
NICKEL OPERATIONS
Restart Savannah*
Study value-add products
• separate concentrates
• nickel and cobalt sulphate
Study options for Lanfranchi
PGMs
Advance both projects
2017 ANNUAL REPORT | PAGE 15
DIRECTORS’ REPORT
PAGE 16 | 2017 ANNUAL REPORT
Directors' report
For the Financial Year ended 30 June 2017
The directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of
Panoramic Resources Limited and the entities it controlled at the end of, or during, the year ended 30 June 2017.
Directors
Brian M Phillips (Non-Executive Chairman)
AWASM-Mining, FAusIMM
Appointed 27 March 2007; Non-Executive Chairman from 17 November 2011
Brian is a mining engineer who has had extensive mining industry experience in operational and management roles
over a 50 year period. Brian has worked as an executive, and on the boards of mining companies in Australia and
overseas involved with copper, gold, nickel, mineral sands and coal. He is a past President of the Victorian
Chamber of Mines (now the Minerals Council of Australia - Victorian Division).
During the past three years, Brian has also served as a director of the following listed companies:
•
Indophil Resources NL (Non-Executive Director from 1 April 2005 to 21 April 2005 and Non-Executive
Chairman from 21 April 2005 to 23 January 2015)
• White Rock Minerals Ltd (Non-Executive Chairman from 26 March 2010)*
* Denotes current directorship
Peter J Harold (Managing Director)
B.AppSc(Chem), AFAICD
Appointed 16 March 2001
Peter is a process engineer with over 30 years corporate experience in the minerals industry, specialising in
financing, marketing, business development and general corporate activities. Peter has extensive experience with
the development and operation of both sulphide and laterite nickel projects having been responsible for metals
marketing and various corporate functions relating to the Scuddles/Golden Grove copper lead zinc mine, Cawse
nickel laterite project and the Silver Swan and Mt Keith nickel sulphide projects. Peter held various senior
management positions with Shell Australia, Australian Consolidated Minerals Limited, Normandy Mining Limited,
MPI Mines Limited and the Gutnick network of companies prior to founding Panoramic Resources Limited (formerly
Sally Malay Mining Limited) in March 2001.
During the past three years, Peter has also served as a director of the following listed companies:
• Pacifico Minerals Limited (Non-Executive Director from 19 August 2013)*
• Peak Resources Limited (Non-Executive Chairman from 1 December 2015)*
* Denotes current directorship
John Rowe (Non-Executive Director)
BSc (Hons), ARSM, MAusIMM
Appointed 5 December 2006
John is a geologist who has had extensive mining industry experience over a 40 year period. Until August 2006,
John was General Manager, Business Development with LionOre Australia responsible for assessing new
business, divesting assets and negotiating nickel ore and concentrate sales contracts. Prior to joining LionOre,
John spent 12 years with MPI Mines Limited in various group executive roles and was involved in the evaluation,
development and production of the high-grade Silver Swan nickel sulphide project as well as the Stawell Gold Mine
in Victoria.
During the past three years, John has also served as a director of the following listed companies:
• Evolution Mining Limited, formerly Catalpa Resources Limited, (Non-Executive Director from 12 October
2006 to 30 January 2008, Non-Executive Chairman from 30 January 2008 to 10 December 2009 and Non-
Executive Director from 10 December 2009 to 31 March 2016)
2017 ANNUAL REPORT | PAGE 17
Directors' report
For the Financial Year ended 30 June 2017
Peter R Sullivan (Non-Executive Director)
BE, MBA
Appointed 1 October 2015
Peter is an engineer with an MBA and has been involved in the management and strategic development of resource
companies and projects for more than 20 years. His work experience includes periods in project engineering,
corporate finance, investment banking, corporate and operational management and public company directorships.
During the past three years, Peter has also served as a director of the following listed companies:
• GME Resources Limited (Managing Director from 24 June 1996 to 1 October 2004 and Non-Executive
• Resolute Mining Limited (Managing Director from 14 February 2001 to 30 June 2015 and Non-Executive
Director from 1 October 2004)*
Director from 30 June 2015)*
• Zeta Resources Mining Limited (Non-Executive Chairman from 7 June 2013)*
• Pan Pacific Petroleum NL (Non-Executive Director from 26 September 2014)*
• Bligh Resources Limited (Non-Executive Director from 13 July 2017)*
* Denotes current directorship
Company Secretary
Trevor R Eton
B.A (Hons)(Econ), PostGradDip (Man), AFAIM
Appointed 12 March 2003
Trevor is an accountant with over 30 years of experience in corporate finance within the minerals industry. Prior to
joining the Company in 2003, he was Company Secretary and Group Financial Controller of MPI Mines Limited for
10 years. Trevor also worked for North Kalgurli Mines Limited, Metals Exploration Limited and Australian
Consolidated Minerals Limited in various corporate finance roles from the mid 1980’s.
During the past three years, Trevor has not served as a director of any listed companies.
Meetings of Directors
The number of meetings of directors (including committee meetings of directors) held during the year ended 30
June 2017, and the number of meetings attended by each director are as follows:
Number of meetings held
Number of meetings
attended:
Brian M Phillips
Peter J Harold
John Rowe
Peter R Sullivan
Directors'
Meetings
6
6
6
6
6
Meetings of Committees
Audit
2
Remuneration
2
Environment,
Safety & Risk
-
2
-
2
2
2
-
2
1
-
-
-
-
PAGE 18 | 2017 ANNUAL REPORT
Directors' report
For the Financial Year ended 30 June 2017
Peter R Sullivan (Non-Executive Director)
BE, MBA
Appointed 1 October 2015
Peter is an engineer with an MBA and has been involved in the management and strategic development of resource
companies and projects for more than 20 years. His work experience includes periods in project engineering,
corporate finance, investment banking, corporate and operational management and public company directorships.
During the past three years, Peter has also served as a director of the following listed companies:
• GME Resources Limited (Managing Director from 24 June 1996 to 1 October 2004 and Non-Executive
• Resolute Mining Limited (Managing Director from 14 February 2001 to 30 June 2015 and Non-Executive
Director from 1 October 2004)*
Director from 30 June 2015)*
• Zeta Resources Mining Limited (Non-Executive Chairman from 7 June 2013)*
• Pan Pacific Petroleum NL (Non-Executive Director from 26 September 2014)*
• Bligh Resources Limited (Non-Executive Director from 13 July 2017)*
* Denotes current directorship
Company Secretary
Trevor R Eton
B.A (Hons)(Econ), PostGradDip (Man), AFAIM
Appointed 12 March 2003
Trevor is an accountant with over 30 years of experience in corporate finance within the minerals industry. Prior to
joining the Company in 2003, he was Company Secretary and Group Financial Controller of MPI Mines Limited for
10 years. Trevor also worked for North Kalgurli Mines Limited, Metals Exploration Limited and Australian
Consolidated Minerals Limited in various corporate finance roles from the mid 1980’s.
During the past three years, Trevor has not served as a director of any listed companies.
Meetings of Directors
The number of meetings of directors (including committee meetings of directors) held during the year ended 30
June 2017, and the number of meetings attended by each director are as follows:
Meetings of Committees
Directors'
Meetings
Audit
Remuneration
Environment,
Safety & Risk
Number of meetings held
Number of meetings
attended:
Brian M Phillips
Peter J Harold
John Rowe
Peter R Sullivan
6
6
6
6
6
2
2
-
2
2
2
2
-
2
1
-
-
-
-
-
Directors' report
For the Financial Year ended 30 June 2017
Committee Membership
As at the date of this report, the Company has an Audit Committee, a Remuneration Committee, and an
Environment, Safety and Risk Committee.
Members acting on the committees of the Board during the year were:
Audit
John Rowe (c)
Brian M Phillips
Peter R Sullivan
Remuneration
Brian M Phillips (c)
John Rowe
Peter R Sullivan
Environment, Safety & Risk
Brian M Phillips (c)
John Rowe
Peter R Sullivan
Peter J Harold
(c) designates the Chairman of the Committee. The Company Secretary, Trevor Eton, acts as the Secretary on each of the
committees of the Board.
Directors' Interests
The relevant interest of each director in the share capital as notified by the directors to the Australian Securities
Exchange in accordance with S205G(1) of the Corporations Act 2001, at the date of signing is as follows:
Name of Director
Brian M Phillips
Peter J Harold
John Rowe
Peter R Sullivan
Ordinary Shares
Direct
-
-
-
-
Indirect
287,407
5,246,160
87,407
-
Performance rights over
ordinary shares
-
1,450,000
-
-
Principal Activities
The principal activities of the consolidated entity during the course of the financial year consisted of exploration,
evaluation and development of mineral deposits.
The consolidated entity has four business divisions in which it operates, being:
Nickel Division - comprising the Lanfranchi Nickel Project and the Savannah Nickel Project (including the
Copernicus Nickel Project) which, as at the date of this report, remain on care and maintenance;
Gold Division - comprising the Company’s 51% equity interest in Horizon Gold Limited (the parent entity of the
Gum Creek Gold Project);
Platinum Group Metals (PGM) Division - comprising the Thunder Bay North PGM Project and the Panton PGM
Project; and
Australian and Overseas Exploration Division - comprising greenfield exploration activities within the two
segments.
Operating and Financial Review
Operating Results for the Year
The Group recorded a loss after tax for the financial year ending 30 June 2017 of $4,770,000 (2016: $144,359,000).
2017 ANNUAL REPORT | PAGE 19
Directors' report
For the Financial Year ended 30 June 2017
Financial Performance
The Group's performance during the 2017 financial year and for the four previous financial years, are set out in
the table below. The financial results shown below were all prepared under International Financial Reporting
Standards (IFRS).
Year Ended 30 June
Revenue and other income ($'000)
2017
9,666
2016
93,441
2015
2014
2013
200,280
239,505
185,590
Cost of sales of goods ($'000)
(8,473)
(97,933)
(155,048)
(153,549)
(145,012)
Royalties ($'000)
Exploration and evaluation ($'000)
Care and maintenance expenses ($'000)
Other expenses ($'000)
EBITDA (before impairment) ($'000)
Depreciation and amortisation ($'000)
Reversal of / (impairment) of assets ($'000)
Finance costs ($'000)
(490)
(493)
(7,539)
(5,369)
(12,698)
(760)
9,178
(490)
(4,920)
(4,280)
(1,002)
(8,520)
(23,214)
(50,749)
(79,453)
(1,405)
(11,948)
(12,912)
(905)
(8,884)
10,583
(62,124)
11,864
(998)
Profit /(loss) before tax ($'000)
(4,770)
(154,821)
(40,675)
Income tax benefit (expense) ($'000)
-
10,462
11,827
Net profit/(loss) after tax ($'000)
(4,770)
(144,359)
(28,848)
Earnings/(loss) per share (cents)
(1.0)
(42.7)
-
-
-
-
(9.0)
1.0
-
Dividends per share (cents)
Dividends pay out ratio (%)
Market capitalisation ($'000)
(11,313)
(3,186)
(985)
(7,494)
62,978
(59,655)
(13,119)
(1,334)
(11,130)
1,808
(9,322)
(3.1)
2.0
-
(9,283)
(2,682)
(2,500)
(9,125)
16,988
(54,386)
(8,026)
(1,563)
(46,987)
15,302
(31,685)
(12.5)
1.0
-
94,285
57,857
149,462
267,489
52,135
Closing share price ($ per share)
Return on equity (%)
0.220
(2.8)
0.135
(88.0)
0.465
(18.1)
0.83
(6.2)
0.20
(22.9)
Note: EBITDA (before impairment) is not shown in the Consolidated Income Statement or the accompanying notes and as such
has not been reviewed by the Company's auditor, Ernst & Young (EY). The table above shows how it is reconciled to the
Consolidated Income Statement.
Revenue and Other Income
The Nickel Division generated $8,409,000 of sales revenue which was 91% down on the prior year as a result of
the cessation of production at the Savannah Nickel Project in May 2016. Other revenue comprised interest income
of $557,000. Other income of $700,000 was made up of (1) a gain on the re-estimation of the Lanfranchi and Gum
Creek site decommissioning and rehabilitation provisions ($198,000), (2) rental income from the leasing out of the
Lanfranchi village ($120,000) and (3) the sale of consumables and spare parts ($382,000).
Cost of Sales of Goods
The Nickel Division’s total aggregate cost of goods sold/produced of $8,473,000 were 91% lower than the previous
financial year and included port and shipping costs, assaying, payability deductions and other costs incurred from
the sale of 10,719 tonnes of Savannah concentrate that had remained unsold at the end of the previous financial
year.
PAGE 20 | 2017 ANNUAL REPORT
Directors' report
For the Financial Year ended 30 June 2017
Directors' report
For the Financial Year ended 30 June 2017
The Group's performance during the 2017 financial year and for the four previous financial years, are set out in
the table below. The financial results shown below were all prepared under International Financial Reporting
Financial Performance
Standards (IFRS).
Year Ended 30 June
Revenue and other income ($'000)
2017
9,666
2016
93,441
2015
2014
2013
200,280
239,505
185,590
Cost of sales of goods ($'000)
(8,473)
(97,933)
(155,048)
(153,549)
(145,012)
Royalties ($'000)
Exploration and evaluation ($'000)
Care and maintenance expenses ($'000)
Other expenses ($'000)
EBITDA (before impairment) ($'000)
Depreciation and amortisation ($'000)
Reversal of / (impairment) of assets ($'000)
Finance costs ($'000)
(490)
(493)
(7,539)
(5,369)
(12,698)
(760)
9,178
(490)
(4,920)
(4,280)
(1,002)
(8,520)
(23,214)
(50,749)
(79,453)
(1,405)
Profit /(loss) before tax ($'000)
(4,770)
(154,821)
(40,675)
Income tax benefit (expense) ($'000)
-
10,462
11,827
Net profit/(loss) after tax ($'000)
(4,770)
(144,359)
(28,848)
Earnings/(loss) per share (cents)
(1.0)
(42.7)
Dividends per share (cents)
Dividends pay out ratio (%)
Market capitalisation ($'000)
-
-
-
-
Closing share price ($ per share)
Return on equity (%)
0.220
(2.8)
0.135
(88.0)
0.465
(18.1)
(11,948)
(12,912)
(905)
(8,884)
10,583
(62,124)
11,864
(998)
(9.0)
1.0
-
(11,313)
(3,186)
(985)
(7,494)
62,978
(59,655)
(13,119)
(1,334)
(11,130)
1,808
(9,322)
(3.1)
2.0
-
0.83
(6.2)
(9,283)
(2,682)
(2,500)
(9,125)
16,988
(54,386)
(8,026)
(1,563)
(46,987)
15,302
(31,685)
(12.5)
1.0
-
0.20
(22.9)
94,285
57,857
149,462
267,489
52,135
Note: EBITDA (before impairment) is not shown in the Consolidated Income Statement or the accompanying notes and as such
has not been reviewed by the Company's auditor, Ernst & Young (EY). The table above shows how it is reconciled to the
Consolidated Income Statement.
Revenue and Other Income
The Nickel Division generated $8,409,000 of sales revenue which was 91% down on the prior year as a result of
the cessation of production at the Savannah Nickel Project in May 2016. Other revenue comprised interest income
of $557,000. Other income of $700,000 was made up of (1) a gain on the re-estimation of the Lanfranchi and Gum
Creek site decommissioning and rehabilitation provisions ($198,000), (2) rental income from the leasing out of the
Lanfranchi village ($120,000) and (3) the sale of consumables and spare parts ($382,000).
Cost of Sales of Goods
year.
The Nickel Division’s total aggregate cost of goods sold/produced of $8,473,000 were 91% lower than the previous
financial year and included port and shipping costs, assaying, payability deductions and other costs incurred from
the sale of 10,719 tonnes of Savannah concentrate that had remained unsold at the end of the previous financial
Care and Maintenance Costs
Care and maintenance costs totaling $7,539,000 were incurred by the Nickel Division and the Gum Creek Gold
Project during the period. These costs were significantly higher than the previous financial year ($1,002,000) due
to the costs of placing and maintaining the Savannah Nickel Project on full care and maintenance and the mine
closure and rehabilitation costs incurred at the Copernicus Nickel Project during the September 2016 quarter.
Corporate and Marketing Costs
Corporate and marketing costs of $5,369,000 were 20% lower than the previous reporting period as a result of the
reduction of corporate activity and lower employee costs following the termination and resignation of full-time staff
during the financial year.
Reversal of Impairment Loss
As a result of a review of the carrying value of the Gum Creek Gold Project during the Horizon Gold Limited initial
public offering (IPO) process, a reversal of a previous impairment loss of $8,995,000 was made against the carrying
values of the Project’s assets at 30 September 2016. The total impairment reversal made during the financial year
was $9,178,000.
Income Tax Benefit
There was no tax benefit booked on the consolidated entity’s loss for the financial year as the corresponding
equivalent deferred tax asset was not recognised in the consolidated statement of financial position at 30 June
2017.
Review of Financial Condition
Balance Sheet
Horizon Gold Limited
In recognition of the Company’s majority 51% shareholding in Horizon Gold Limited (Horizon) at balance date,
under AASB 10 Consolidated Financial Statements, the assets, liabilities, equity, income, expenses and cash flows
of Horizon are consolidated in the financial statements of the consolidated entity after attributing the profit or loss
and each component of other comprehensive income to the equity owners of the Company and to the non-
controlling interests (as described in note 28 of the “Notes to the Consolidated Financial Statements”).
For clarity, the Company has shown in Table A below, a non-AIFRS pro-forma consolidated balance sheet in which
the Company’s 51% shareholding in Horizon has been re-classified as an ”investment in subsidiary”. In this
presentation, the Company’s equity investment of 39,030,617 shares in Horizon is shown at fair value through profit
and loss measured using the quoted share price of Horizon at balance date, instead of the assets, liabilities, equity
and results of Horizon being separately consolidated as required under AASB10. The table also includes the
adjustments to reconcile the pro-forma balance sheet back to the consolidated balance sheet.
2017 ANNUAL REPORT | PAGE 21
Directors' report
For the Financial Year ended 30 June 2017
Table A: Pro-forma Consolidated Balance Sheet (51% equity interest in Horizon Gold Limited re-classified
as “Investment in Subsidiary”)
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Total Current Assets
Non-Current assets
Available-for-sale financial assets
Investment in subsidiary
Property, plant and equipment
Exploration and evaluation
Development properties
Mine properties
Other non-current assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Borrowings
Provisions
Total Current Liabilities
Non-Current Liabilities
Borrowings
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Liabilities
Equity
Contributed equity
Reserves
Accumulated losses
Non-controlling interests
Total Equity
30 June 2017
(Pro-forma)1
$’000
8,946
464
3
236
9,649
1,200
11,709
7,293
69,102
17,028
1,403
1,803
109,537
119,186
1,870
769
953
3,592
68
20,345
20,413
24,005
95,181
169,044
38,665
(112,528)
-
95,181
Adjustments
30 June 2017
$’000
11,704
71
-
-
11,775
-
(11,709)
4,263
22,670
-
-
-
15,224
26,999
663
-
18
681
-
9,377
9,377
10,058
16,941
-
3,903
(938)
13,976
16,941
(AIFRS)
$’000
20,650
535
3
236
21,424
1,200
-
11,555
91,772
17,028
1,403
1,803
124,761
146,185
2,533
769
971
4,273
68
29,722
29,790
34,063
112,122
169,044
42,568
(113,466)
13,976
112,122
1 The pro-forma balance sheet presentation of the de-consolidated 51% equity interest in Horizon Gold Limited is a non-AIFRS treatment of this
investment. The adjustments to the Pro-forma balance sheet are to comply with AIFRS.
2 The financial information presented above in Table A has not been audited or reviewed by the Company’s Auditor, Ernst & Young
(EY).
PAGE 22 | 2017 ANNUAL REPORT
Directors' report
For the Financial Year ended 30 June 2017
Directors' report
For the Financial Year ended 30 June 2017
Table A: Pro-forma Consolidated Balance Sheet (51% equity interest in Horizon Gold Limited re-classified
as “Investment in Subsidiary”)
30 June 2017
Adjustments
30 June 2017
(Pro-forma)1
$’000
$’000
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Total Current Assets
Non-Current assets
Available-for-sale financial assets
Investment in subsidiary
Property, plant and equipment
Exploration and evaluation
Development properties
Mine properties
Other non-current assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Borrowings
Provisions
Total Current Liabilities
Non-Current Liabilities
Borrowings
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Liabilities
Equity
Contributed equity
Reserves
Accumulated losses
Non-controlling interests
Total Equity
11,775
21,424
8,946
464
3
236
9,649
1,200
11,709
7,293
69,102
17,028
1,403
1,803
109,537
119,186
1,870
769
953
3,592
68
20,345
20,413
24,005
95,181
169,044
38,665
(112,528)
-
95,181
11,704
71
(11,709)
4,263
22,670
-
-
-
-
-
-
15,224
26,999
663
18
681
-
-
9,377
9,377
10,058
16,941
-
3,903
(938)
13,976
16,941
(AIFRS)
$’000
20,650
535
3
236
1,200
-
11,555
91,772
17,028
1,403
1,803
124,761
146,185
2,533
769
971
4,273
68
29,722
29,790
34,063
112,122
169,044
42,568
(113,466)
13,976
112,122
1 The pro-forma balance sheet presentation of the de-consolidated 51% equity interest in Horizon Gold Limited is a non-AIFRS treatment of this
investment. The adjustments to the Pro-forma balance sheet are to comply with AIFRS.
2 The financial information presented above in Table A has not been audited or reviewed by the Company’s Auditor, Ernst & Young
(EY).
Net Working Capital - current assets less current liabilities
The net working capital position of $17,151,000 was 20% lower than at the previous balance date. This position
excludes $1,803,000 which is cash backing the drawn amount on the Company’s performance bond facility (and
is classified as a non-current asset, as described in note 15 of the “Notes to the Consolidated Financial
Statements”).
The contribution of Horizon Gold Limited’s net assets to net working capital was $10,984,000.
The consolidated entity’s operating cash flows were materially impacted by the reduction in concentrate sales
revenue from the Savannah Nickel Project and the costs incurred to place the Savannah Nickel Project onto full
care and maintenance in the first half of the financial year. Trade and other payables decreased by 45% over the
reporting period as a direct result of the reduction in operational activity across the Nickel Division.
The operating activities of the consolidated entity (including royalty payments, greenfield exploration and net
corporate costs) generated a net cash outflow of $7,862,000.
Net cash outflow from investing activities of $4,219,000, included $4,955,000 expenditure on exploration and
evaluation activities at the Savannah Nickel Project and Gum Creek Gold Project.
Net Tax Balances
At balance date, the consolidated entity had a net deferred tax asset value of $44,540,000. Due to the Nickel
Division’s operations being on care and maintenance and the uncertain outlook in the US$ nickel price, this asset
was not recognised in the consolidated statement of financial position at 30 June 2017.
Net Assets/Equity
The net asset position of the consolidated entity increased 10% to $112,122,000 as a result of (1) the increase in
cash from the $15,000,000 before costs capital raising and listing on the Australian Securities Exchange (ASX) by
Horizon Gold Limited in December 2016, and (2) the increase in total non-current assets following the booking of
the reversal of the impairment loss against the assets of the Gum Creek Gold Project in the first half of the financial
year.
Capital Structure
The debt to equity ratio (borrowings on contributed equity) at 30 June 2017 was 0.5% (2016: 0.9%).
Business and Financial Risks
Exposure to movements in nickel, copper and cobalt prices and the Australian dollar exchange rate to the United
States dollar are significant business and financial risks in the Nickel Division when its operations are in production.
As a price-taker, the consolidated entity has no ability to control the global spot prices it receives for the sales of
nickel concentrate and nickel ore. Any negative commodity price movement directly impacts the business by
reducing the sales revenue the consolidated entity receives in United States dollars. Similarly, the conversion of
sales revenue received in United States dollars into Australian dollars exposes the consolidated entity to
movements in the foreign exchange rate between the Australian dollar and the United States dollar. If the Australian
dollar is strong relative to the United States dollar at the time of conversion, the consolidated entity will receive less
Australian dollar revenue.
Hedging Policy
The consolidated entity has an active policy of limiting the exposure to nickel price risk and currency risk through
limited hedging.
As at 30 June 2017, the consolidated entity had no nickel forward sales contracts and no nickel put options in
place.
As at 30 June 2017, the consolidated entity had no United States dollar denominated foreign exchange
derivatives in place.
Other business risks can have an impact on the profitability of the consolidated entity. The recognition,
management and control of these risks are key elements of the enterprise-wide risk management framework which
has been progressively developed and rolled-out across the Group, as detailed in the Corporate Governance
Statement on page 40.
2017 ANNUAL REPORT | PAGE 23
Directors' report
For the Financial Year ended 30 June 2017
Dividends
No final dividend has been declared for the financial year ended 30 June 2017.
2017
Review of Operations
Nickel Division
Savannah Nickel Project, (including the Copernicus Nickel Project), East Kimberley region, WA
Physicals
(i) Produced
Concentrate Produced (t)
Nickel in Concentrate (t)
Copper in Concentrate (t)
Cobalt in Concentrate (t)
(ii) Sold
Concentrate Sold (t)
Nickel in Concentrate (t)
Copper in Concentrate (t)
Cobalt in Concentrate (t)
124,962
9,316
5,728
436
131,789
9,845
6,011
476
10,719
929
520
44
2016
-
-
-
-
Due to the low US$ nickel price, the Project has been on care and maintenance since May 2016.
During the financial year, the Project shipped 10,719 tonnes of concentrate (2016: 124,962 tonnes) that had
remained unsold as at the end of the previous financial year.
2017
2016
Lanfranchi Nickel Project, South Kambalda, WA
Physicals
(i) Produced
Ore Mined (t)
Nickel in Ore (t)
Copper in Ore (t)
(ii) Sold
Ore Sold (t)
Nickel in Ore (t)
Copper in Ore (t)
43,692
1,019
79
46,279
1,051
83
-
-
-
-
-
-
Due to the low US$ nickel price, the Project has been on care and maintenance since November 2015.
Exploration and Development Projects
Nickel Division
During the financial year, the consolidated entity continued evaluation work on the Savannah North Project and
explored for new discoveries and extensions to existing resources.
In August 2016, the Company announced a material upgrade in the Savannah North Resource to 10.27 million
tonnes at a nickel grade of 1.70% for 175,100 tonnes of contained nickel (refer to the Company’s ASX
announcement of 24 August 2016 for further details).
PAGE 24 | 2017 ANNUAL REPORT
Directors' report
For the Financial Year ended 30 June 2017
Directors' report
For the Financial Year ended 30 June 2017
No final dividend has been declared for the financial year ended 30 June 2017.
Savannah Nickel Project, (including the Copernicus Nickel Project), East Kimberley region, WA
Dividends
Review of Operations
Nickel Division
Physicals
(i) Produced
Concentrate Produced (t)
Nickel in Concentrate (t)
Copper in Concentrate (t)
Cobalt in Concentrate (t)
(ii) Sold
Concentrate Sold (t)
Nickel in Concentrate (t)
Copper in Concentrate (t)
Cobalt in Concentrate (t)
Physicals
(i) Produced
Ore Mined (t)
Nickel in Ore (t)
Copper in Ore (t)
(ii) Sold
Ore Sold (t)
Nickel in Ore (t)
Copper in Ore (t)
2017
2016
131,789
9,845
6,011
476
10,719
124,962
929
520
44
9,316
5,728
436
43,692
1,019
79
46,279
1,051
83
-
-
-
-
-
-
-
-
-
-
Due to the low US$ nickel price, the Project has been on care and maintenance since May 2016.
During the financial year, the Project shipped 10,719 tonnes of concentrate (2016: 124,962 tonnes) that had
remained unsold as at the end of the previous financial year.
Lanfranchi Nickel Project, South Kambalda, WA
2017
2016
Due to the low US$ nickel price, the Project has been on care and maintenance since November 2015.
Exploration and Development Projects
Nickel Division
During the financial year, the consolidated entity continued evaluation work on the Savannah North Project and
explored for new discoveries and extensions to existing resources.
In August 2016, the Company announced a material upgrade in the Savannah North Resource to 10.27 million
tonnes at a nickel grade of 1.70% for 175,100 tonnes of contained nickel (refer to the Company’s ASX
announcement of 24 August 2016 for further details).
In February 2017, the Company announced and released the Savannah Project Feasibility Study which
demonstrated a ten year mine life at the Project by mining from firstly, the remaining Savannah Ore Reserve whilst
developing then mining from the Savannah North Ore Reserve. The Study is based on a combined Savannah
Nickel Project Ore Reserve of 8.21 million tonnes at a nickel grade of 1.37% for 112,600 tonnes of contained nickel,
a copper grade of 0.64% for 52,400 tonnes of contained copper and a cobalt grade of 0.09% for 7,600 tonnes of
contained cobalt. Twelve years of continuous operating experience at Savannah from 2004 to 2016 provided the
basis for the production and cost estimates used in the Study.
Note: the Study disclosed a life-of-mine nickel production target of 114,000 tonnes of contained nickel in ore. This
target included an additional 1,400 tonnes of contained nickel classified as Inferred Resource which, under the
2012 or 2004 editions of the JORC code, has a low level of geological confidence.
In July 2017, the Company released the Savannah Project Feasibility Study Optimisation based on an improved
mine plan, higher grade ore and lower input costs (refer to the Company’s ASX announcement of 20 July 2017 for
further details).
Gold Division
Gum Creek Gold Project, Murchison region, WA (previously known as the Gidgee Gold Project)
In June 2016, following the release of the updated March 2016 Scoping Study, exploration results, encouraging
metallurgical test work and the buoyant gold sector, the directors resolved to commence a process to divest the
Gum Creek Gold Project. On 21 October 2016, the Company entered into an agreement with the then wholly owned
subsidiaries, Horizon Gold Limited (Horizon) and Panoramic Gold Pty Ltd (Pan Gold) to sell Pan Gold (which owns
the Project) to Horizon subject to a capital raising and initial public offering (IPO) of Horizon (refer to the “Corporate”
section below for further details).
Platinum Group Metals (PGM) Division
Thunder Bay North PGM (TBN) Project, North-West Ontario, Canada
On 30 July 2014, the Company signed an Agreement with Rio Tinto Exploration Canada Inc. (RTEC) which allowed
RTEC to review all existing data on the TBN Project on an exclusive basis until December 2014. On 16 January
2015, the Company announced that RTEC had exercised its right under the Agreement by electing to spend up to
C$20 million (minimum spend of C$5 million before RTEC can withdraw) over the next five years to earn a 70%
interest in the Project. During this period, RTEC is responsible for managing the Project and ensuring the TBN
tenements are kept in good standing.
During the financial year, RTEC conducted various exploration activities on the TBN Project under the earn-in
arrangement of the Agreement. The three part-time employees of TBN assisted RTEC and undertook various
consulting work for locally based exploration companies to assist in offsetting the costs of running the Thunder Bay
Office.
In January 2017, RTEC confirmed that it had exceeded the minimum spend of C$5 million and began discussions
with the Company on the results of exploration and future plans and strategy for the Project. As at the date of this
report, these discussions are continuing.
Panton PGM Project, East Kimberley, WA
The Company continued its sponsorship of research by a post-graduate student of Curtin University into alternative
direct leaching technologies for smaller chromite rich PGM deposits. This research is due for completion in late
2018.
2017 ANNUAL REPORT | PAGE 25
Directors' report
For the Financial Year ended 30 June 2017
Corporate
The Company is limited by shares and is domiciled and incorporated in Australia.
Significant events of the consolidated entity during the financial period of a corporate nature were as follows:
Horizon Gold Initial Public Offer (IPO)
In June 2016, the directors agreed to divest the Gum Creek Gold Project by vending Panoramic Gold Pty Ltd (Pan
Gold), the entity which owns the project, into a new publicly listed company. In October 2016, the Company entered
into an agreement with Horizon Gold Limited (Horizon) and Pan Gold to sell Pan Gold to Horizon subject to the
completion of a capital raising and initial public offering (IPO) of Horizon. After successfully raising $15,000,000
before costs from existing Company shareholders and new investors, Horizon Gold listed on the Australian
Securities Exchange (ASX) on 21 December 2016 with a total of 76,530,617 shares on issue. At the IPO issue
price of $0.40 per share, the net assets of Horizon (including Panoramic Gold Pty Ltd) were valued at $30,612,000.
Except for the five shares issued to the Company on the incorporation of Horizon Gold (10 August 2016), the
Company’s retained 51% equity interest in Horizon of 39,030,617 shares are escrowed from trading on the ASX
until 21 December 2018.
Unmarketable Parcel (UMP) Sale Facility
On 24 April 2017, the Company announced that it had initiated an Unmarketable Parcel (UMP) Sale Facility to
provide eligible shareholders with the opportunity to sell their small shareholding in the Company without incurring
brokerage or handling costs. The UMP Sale Facility was open to eligible shareholders from 24 April 2017 to 5 June
2017.
As a result of the UMP Sale Facility, 754 shareholders holding a total of 673,886 UMP shares had their shares sold
on their behalf by the Company in June 2017. By directly reducing the number of shareholders holding UMP shares,
the Company has reduced the share registry costs associated with maintaining small unmarketable holdings.
Employees
At the end of the financial year, the Group had 20 permanent, full time employees (2016: 52).
Key Developments (Incorporating Significant Changes in the State of Affairs)
Significant changes in the state of affairs of the consolidated entity during the financial period were as follows:
• On 11 July 2016, the Company announced its intention to proceed with the partial divestment of the Gum Creek
Gold Project by way of an initial public offering (IPO) of a new listed entity on the Australian Securities Exchange
(ASX).
• On 24 August 2016, the Company announced a material upgrade in the Savannah North Resource to 10.27
million tonnes at a nickel grade of 1.70% for 175,100 tonnes of contained nickel.
• On 21 October 2016, the Company announced it had entered into an “Acquisition Agreement” with Horizon
Gold Limited (Horizon) and Panoramic Gold Pty Ltd (Pan Gold) in which Pan Gold and the Gum Creek Gold
Project would be acquired by Horizon in return for the Company being issued 39,030,612 shares, valued at
$15,612,000, in Horizon, conditional on Horizon raising $15,000,000 before costs by issuing 37,500,000 shares
in Horizon at $0.40 per share and receiving conditional admission approval to the ASX Official List.
• On 19 December 2016, the Company announced the successful divestment of a 49% interest in the Gum
Creek Gold Project following the completion of the $15,000,000 IPO of Horizon.
• On 2 February 2017, the Company released the Savannah Project Feasibility Study based on a total Savannah
Ore Reserve of 8.21 million tonnes at a nickel grade of 1.37% for 112,600 tonnes of contained nickel. Note:
approximately 1.1% in the production target (1,400 tonnes of contained nickel) was from material classified as
Inferred Resources. There is a low level of geological confidence associated with Inferred Mineral Resources
and there is no certainty that further exploration work will result in the determination of Indicated Mineral
Resources or that the production target itself will be realised.
• On 24 April 2017, the Company announced the establishment of an Unmarketable Parcel (UMP) Sale Facility,
open to eligible shareholders from 24 April 207 to 5 June 2017.
PAGE 26 | 2017 ANNUAL REPORT
Directors' report
For the Financial Year ended 30 June 2017
Corporate
The Company is limited by shares and is domiciled and incorporated in Australia.
Significant events of the consolidated entity during the financial period of a corporate nature were as follows:
Horizon Gold Initial Public Offer (IPO)
In June 2016, the directors agreed to divest the Gum Creek Gold Project by vending Panoramic Gold Pty Ltd (Pan
Gold), the entity which owns the project, into a new publicly listed company. In October 2016, the Company entered
into an agreement with Horizon Gold Limited (Horizon) and Pan Gold to sell Pan Gold to Horizon subject to the
completion of a capital raising and initial public offering (IPO) of Horizon. After successfully raising $15,000,000
before costs from existing Company shareholders and new investors, Horizon Gold listed on the Australian
Securities Exchange (ASX) on 21 December 2016 with a total of 76,530,617 shares on issue. At the IPO issue
price of $0.40 per share, the net assets of Horizon (including Panoramic Gold Pty Ltd) were valued at $30,612,000.
Except for the five shares issued to the Company on the incorporation of Horizon Gold (10 August 2016), the
Company’s retained 51% equity interest in Horizon of 39,030,617 shares are escrowed from trading on the ASX
until 21 December 2018.
Unmarketable Parcel (UMP) Sale Facility
On 24 April 2017, the Company announced that it had initiated an Unmarketable Parcel (UMP) Sale Facility to
provide eligible shareholders with the opportunity to sell their small shareholding in the Company without incurring
brokerage or handling costs. The UMP Sale Facility was open to eligible shareholders from 24 April 2017 to 5 June
As a result of the UMP Sale Facility, 754 shareholders holding a total of 673,886 UMP shares had their shares sold
on their behalf by the Company in June 2017. By directly reducing the number of shareholders holding UMP shares,
the Company has reduced the share registry costs associated with maintaining small unmarketable holdings.
At the end of the financial year, the Group had 20 permanent, full time employees (2016: 52).
Key Developments (Incorporating Significant Changes in the State of Affairs)
Significant changes in the state of affairs of the consolidated entity during the financial period were as follows:
• On 11 July 2016, the Company announced its intention to proceed with the partial divestment of the Gum Creek
Gold Project by way of an initial public offering (IPO) of a new listed entity on the Australian Securities Exchange
• On 24 August 2016, the Company announced a material upgrade in the Savannah North Resource to 10.27
million tonnes at a nickel grade of 1.70% for 175,100 tonnes of contained nickel.
• On 21 October 2016, the Company announced it had entered into an “Acquisition Agreement” with Horizon
Gold Limited (Horizon) and Panoramic Gold Pty Ltd (Pan Gold) in which Pan Gold and the Gum Creek Gold
Project would be acquired by Horizon in return for the Company being issued 39,030,612 shares, valued at
$15,612,000, in Horizon, conditional on Horizon raising $15,000,000 before costs by issuing 37,500,000 shares
in Horizon at $0.40 per share and receiving conditional admission approval to the ASX Official List.
• On 19 December 2016, the Company announced the successful divestment of a 49% interest in the Gum
Creek Gold Project following the completion of the $15,000,000 IPO of Horizon.
• On 2 February 2017, the Company released the Savannah Project Feasibility Study based on a total Savannah
Ore Reserve of 8.21 million tonnes at a nickel grade of 1.37% for 112,600 tonnes of contained nickel. Note:
approximately 1.1% in the production target (1,400 tonnes of contained nickel) was from material classified as
Inferred Resources. There is a low level of geological confidence associated with Inferred Mineral Resources
and there is no certainty that further exploration work will result in the determination of Indicated Mineral
Resources or that the production target itself will be realised.
• On 24 April 2017, the Company announced the establishment of an Unmarketable Parcel (UMP) Sale Facility,
open to eligible shareholders from 24 April 207 to 5 June 2017.
2017.
Employees
(ASX).
Directors' report
For the Financial Year ended 30 June 2017
Matters subsequent to the end of the financial year
Savannah Project Feasibility Study Optimisation
On 20 July 2017, the Company released the Savannah Project Feasibility Study Optimisation based on an
improved mine plan, higher grade ore, lower input costs and metallurgical performance as per historical Savannah
metallurgical results. In comparison to the February 2017 Savannah Project Feasibility Study, the life-of-mine all-
in sustaining cash costs (AISC), using spot commodity prices and A$:US$ foreign currency exchange rate of 30
June 2017, has reduced the ASIC by US$0.90 per pound to US$3.40 per pound of nickel (payable nickel after by-
product credits). As at the date of this report, further productivity improvements are being pursued targeting further
cost reductions (refer to the Company’s ASX announcement of 20 July 2017 for further details).
Vesting of FY2015 Performance Rights and issue of Ordinary Shares
On 1 August 2017, the Company issued 1,575,012 ordinary shares to executives of the Company following vesting
on 1 July 2017 of FY2015 Performance Rights. Following the issue of new shares for no consideration, the share
capital of the Company has increased to 430,142,283 ordinary shares.
In the interval between the end of the financial year and the date of this report, apart from the matter mentioned
above, there has not arisen any item, transaction or event of a material and unusual nature likely, in the opinion of
the directors of the Company, to affect significantly the operations of the consolidated entity, the results of those
operations, or the state of affairs of the consolidated entity, in future financial years.
Business Strategies and Prospects (Incorporating Likely developments and expected results)
The Company’s primary goal is to explore for, develop and mine its Resources profitably and return value to
shareholders through capital growth and dividends. The Company’s vision is to broaden its exploration and
production base, with the aim of becoming a major, diversified mining house in the S&P/ASX 100 Index.
The likely developments in each of the consolidated entity’s commodity divisions over the next 12 months are
highlighted below.
Nickel Division
Subject to funding, exploration activities will continue during the financial year to find new areas of mineralisation,
principally at and surrounding the Savannah Nickel Project where additional Resource definition and extensional
drilling will be undertaken on the Savannah North Mineral Resource.
In relation to the restart of the Savannah Nickel Project, the Company will:
(1) continue discussions with potential financiers including offtake partners, traditional resource project
financing banks and other resource financing organisations to determine the optimal funding quantum and
debt financing structure to fund the pre-production development of the Savannah Nickel Project restart;
(2) confirm that the treatment of Savannah North ore in the existing Savannah process plant will give
(3)
metallurgical results consistent with historical results; and
complete its review on further productivity improvements at the Savannah Nickel Project so that when
nickel prices have sufficiently recovered on a sustainable basis, the Savannah Nickel Project can restart
with a lower cost base.
The Company will continue to consider and review options to further unlock value at the Lanfranchi Nickel Project
and for its shareholders.
Gold Division
The consolidated entity will continue to provide technical, commercial, managerial and administrative services in
relation to the Gum Creek Gold Project and, such other assets of Horizon Gold Limited as appropriate, pursuant to
the Management Agreement dated 21 October 2016 between the Company and Horizon.
Platinum Group Metals (PGM) Division
The consolidated entity will continue evaluation activities on the Panton PGM Project in the East Kimberley region
of Western Australia and will monitor RTEC’s activities at the Thunder Bay North PGM Project in north-west
Ontario, Canada.
2017 ANNUAL REPORT | PAGE 27
Directors' report
For the Financial Year ended 30 June 2017
Further information about likely developments in the operations of the consolidated entity and the expected results
of those operations in the future financial years has not been included in this report because disclosure would be
likely to result in unreasonable prejudice to the consolidated entity.
Shares Options
At the date of signing, there are no unissued ordinary shares of the Company under Option (2016: nil).
Indemnification of Auditors
To the extent permitted by law, the Company has agreed to indemnify the auditors, Ernst & Young (EY), as part of
the terms of its audit engagement agreement against claims by third parties arising from the audit (for an
unspecified amount). No payments have been made to indemnify Ernst & Young (EY) during or since the financial
year.
Indemnification and Insurance of Directors and Officers
The Company has agreed to indemnify the directors and senior executives against all liabilities to another person
(other than the Company or a related body corporate) that may arise from their position as directors and officers of
the Company, except where the liability arises out of certain wrongful acts for which the Company has not agreed
to provide indemnity. The agreement stipulates that the Company will meet the full amount of any such liabilities
including costs and expenses.
During the financial year, the Company has accrued and/or paid premiums of $25,775 (2016: $53,151) in respect
of contracts insuring all the directors and officers against legal costs incurred in defending proceedings. The
insurance premiums relate to:
(1) Costs and expenses incurred by the relevant officers in defending legal proceedings, both civil and
criminal and whatever the outcome; and
(2) Other liabilities that may arise from their position, with the exception of conduct involving a willful breach
of duty or improper use of information or position to gain a personal advantage.
2017 Remuneration Report (Audited)
This 2017 remuneration report outlines the remuneration arrangements in place for the directors and executives of
the Company and the Group in accordance with the Corporations Act 2001 and its Regulations (the Act). The
information provided in this remuneration report has been audited as required by section 308(3C) of the
Corporations Act 2001.
For the purposes of this report, Key Management Personnel (“KMP”) of the Group are defined as those persons
having authority and responsibility for planning, directing and controlling the major activities of the Company and
the Group, directly or indirectly, including any director (whether executive or otherwise) of the parent company.
For the purposes of this report, the term ‘executive’ encompasses the managing director, senior executives and
operations managers of the Company and the Group.
(a) Directors and Key Management Personnel disclosed in this Report
(i) Directors
Brian Phillips
Peter Harold
John Rowe
Peter Sullivan
Chairman (Non-Executive)
Managing Director
Director (Non-Executive)
Director (Non-executive)
(ii) Named Executives
Trevor Eton
Terry Strong
John Hicks
Tim Mason
Mark Recklies
Chief Financial Officer & Company Secretary
Chief Operating Officer (to 3 March 2017)
General Manager - Exploration
General Manager – Projects
Operations Manager – Savannah (to 30 December 2016)
PAGE 28 | 2017 ANNUAL REPORT
Directors' report
For the Financial Year ended 30 June 2017
Directors' report
For the Financial Year ended 30 June 2017
Further information about likely developments in the operations of the consolidated entity and the expected results
of those operations in the future financial years has not been included in this report because disclosure would be
likely to result in unreasonable prejudice to the consolidated entity.
At the date of signing, there are no unissued ordinary shares of the Company under Option (2016: nil).
Shares Options
Indemnification of Auditors
To the extent permitted by law, the Company has agreed to indemnify the auditors, Ernst & Young (EY), as part of
the terms of its audit engagement agreement against claims by third parties arising from the audit (for an
unspecified amount). No payments have been made to indemnify Ernst & Young (EY) during or since the financial
year.
Indemnification and Insurance of Directors and Officers
The Company has agreed to indemnify the directors and senior executives against all liabilities to another person
(other than the Company or a related body corporate) that may arise from their position as directors and officers of
the Company, except where the liability arises out of certain wrongful acts for which the Company has not agreed
to provide indemnity. The agreement stipulates that the Company will meet the full amount of any such liabilities
including costs and expenses.
During the financial year, the Company has accrued and/or paid premiums of $25,775 (2016: $53,151) in respect
of contracts insuring all the directors and officers against legal costs incurred in defending proceedings. The
insurance premiums relate to:
(1) Costs and expenses incurred by the relevant officers in defending legal proceedings, both civil and
criminal and whatever the outcome; and
(2) Other liabilities that may arise from their position, with the exception of conduct involving a willful breach
of duty or improper use of information or position to gain a personal advantage.
2017 Remuneration Report (Audited)
This 2017 remuneration report outlines the remuneration arrangements in place for the directors and executives of
the Company and the Group in accordance with the Corporations Act 2001 and its Regulations (the Act). The
information provided in this remuneration report has been audited as required by section 308(3C) of the
Corporations Act 2001.
For the purposes of this report, Key Management Personnel (“KMP”) of the Group are defined as those persons
having authority and responsibility for planning, directing and controlling the major activities of the Company and
the Group, directly or indirectly, including any director (whether executive or otherwise) of the parent company.
For the purposes of this report, the term ‘executive’ encompasses the managing director, senior executives and
operations managers of the Company and the Group.
(a) Directors and Key Management Personnel disclosed in this Report
(i) Directors
Brian Phillips
Peter Harold
John Rowe
Peter Sullivan
Trevor Eton
Terry Strong
John Hicks
Tim Mason
Mark Recklies
(ii) Named Executives
Chairman (Non-Executive)
Managing Director
Director (Non-Executive)
Director (Non-executive)
Chief Financial Officer & Company Secretary
Chief Operating Officer (to 3 March 2017)
General Manager - Exploration
General Manager – Projects
Operations Manager – Savannah (to 30 December 2016)
(b) Remuneration Philosophy
The performance of the Company depends upon the quality of its directors and executives. To prosper, the
Company must attract, motivate and retain highly skilled directors and executives.
To this end, the Company embodies the following principles in its remuneration framework:
• Provide competitive rewards to attract high calibre executives;
• Link executive rewards to shareholder value and company profits;
• Significant portion of executive remuneration 'at risk', dependent upon meeting pre-determined
performance benchmarks; and
• Establish appropriate and demanding performance hurdles in relation to variable executive
remuneration.
(c) Remuneration Committee
The Remuneration Committee of the Board of Directors of the Company is responsible for determining and
reviewing compensation arrangements for the Managing Director and the senior executive team.
The Remuneration Committee assess the appropriateness of the nature and amount of remuneration of
executives on a periodic basis by reference to relevant employment market conditions, with the overall objective
of ensuring maximum stakeholder benefit from the retention of a high quality, high performing and committed
senior executive team.
(d) Remuneration Structure
In accordance with best practice corporate governance, the remuneration structure of the non-executive
directors, and senior management, is separate and distinct.
(e) Use of remuneration consultants
Where appropriate, the Remuneration Committee and the Board seek advice from independent remuneration
consultants to ensure the remuneration paid to the non-executive directors and senior management is appropriate
and in line with the market. The Company did not receive independent remuneration advice during the financial
year as defined under the Corporations Amendment (Improving Accountability on Director and Executive
Remuneration).
(f) Non-executive director remuneration policy
(i) Fixed Remuneration
Objective
The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract
and retain directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
Structure
The Company's Constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive
directors shall be determined from time to time by a general meeting of shareholders. An amount not exceeding
the amount determined is then divided between the directors as agreed.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is
apportioned amongst directors is reviewed annually. The Board considers fees paid to non-executive directors of
comparable companies when undertaking the annual review process. Each director receives a fee for being a
director of the Company. This fee is inclusive for each Board committee on which a director sits.
In recognition of the significant operational changes made across the consolidated entity during the 2015/16
financial year, the Board reviewed the fees paid to non-executive directors on two separate occasions, in August
2015 and February 2016. As a result of these reviews, the non-executive directors agreed to accept a reduction in
fees paid to non-executive directors, with the Non-Executive Chairman’s annual remuneration being reduced to
$90,000 per annum and other non-executive director’s annual remuneration being reduced to $65,000 per annum.
The fees paid to non-executive directors for the period ending 30 June 2017 are detailed in Table 1 on pages 34
and 35 of this report. Fees for the non-executive directors are determined within an aggregate directors’ fee pool
limit of $600,000, which was last approved by shareholders on 20 November 2007.
2017 ANNUAL REPORT | PAGE 29
Directors' report
For the Financial Year ended 30 June 2017
(ii) Variable Remuneration
The Company does not reward non-executive directors with variable remuneration. Any shares in the Company
that are held by non-executive directors at the date of this report are separately purchased and held by each
director and have not been issued by the Company as part of each director’s remuneration package.
(g) Executive Remuneration
Objective
The Company aims to reward executives with a level and mix of remuneration commensurate with their position
and responsibilities within the Company so as to:
•
reward executives for Company, operating segment and individual performance against targets set by
reference to appropriate benchmarks;
• align the interests of executives with those of shareholders;
•
• ensure total remuneration is competitive by market standards.
link reward with the strategic goals and the performance of the Company; and
Structure
In determining the level and make-up of executive remuneration, the Remuneration Committee takes into
consideration the operational and economic circumstances the Company is facing and likely to face in the medium
term together with the current market levels of remuneration for comparable executive roles.
It is the Remuneration Committee’s policy that employment contracts are entered into with the Managing Director
and other key management personnel. Details of these KMP contracts are provided on pages 33 to 34.
Remuneration consists of the following key elements:
• Fixed Remuneration (base salary, superannuation and non-monetary benefits);
• Variable Remuneration:
- Short Term Incentive Bonus (‘STIB’); and
- Long Term Incentive (‘LTI’).
The proportion of fixed remuneration and variable remuneration (potential short term and long term incentives if
the Company’s operational and economic circumstances permit), is established for each senior executive by the
Remuneration Committee. Table 1 on page 34 and 35 details the variable component (%) of the Group’s KMP.
Where necessary, when the payment of superannuation on an individual’s STI Bonus would cause the amount of
superannuation in any financial year to exceed the applicable statutory concessional maximum superannuation
contribution limit, at the individual’s discretion, an equivalent amount of employer superannuation is added to the
executive’s base cash salary.
(i) Fixed Remuneration
Objective
The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to
the position and is competitive in the market. Fixed remuneration is reviewed annually by the Remuneration
Committee and the process consists of a review of Company-wide, business unit and individual performance, the
Company’s operational and economic circumstances, relevant comparative remuneration in the market and internal
and, when appropriate, external advice on policies and practices. As noted above, the Remuneration Committee
has access to external advice, independent of management.
Structure
Executives are given the opportunity to receive their fixed (primary) remuneration in a variety of forms including
cash and fringe benefits. It is intended that the manner of payment chosen will be optimal for the recipient without
creating undue cost for the Company.
In recognition of the significant operational changes that were made across the consolidated entity during the
2015/16 financial year, the Remuneration Committee reviewed all salaries resulting in senior executives, with a
base salary over $200,000 per annum, agreeing to accept a 10% reduction in base salary from 1 July 2016.
The fixed remuneration component of the Group’s key management personnel is detailed in Table 1 on page 34
and 35.
PAGE 30 | 2017 ANNUAL REPORT
(ii) Variable Remuneration
The Company does not reward non-executive directors with variable remuneration. Any shares in the Company
that are held by non-executive directors at the date of this report are separately purchased and held by each
director and have not been issued by the Company as part of each director’s remuneration package.
(g) Executive Remuneration
Objective
The Company aims to reward executives with a level and mix of remuneration commensurate with their position
and responsibilities within the Company so as to:
•
reward executives for Company, operating segment and individual performance against targets set by
reference to appropriate benchmarks;
• align the interests of executives with those of shareholders;
•
link reward with the strategic goals and the performance of the Company; and
• ensure total remuneration is competitive by market standards.
Structure
In determining the level and make-up of executive remuneration, the Remuneration Committee takes into
consideration the operational and economic circumstances the Company is facing and likely to face in the medium
term together with the current market levels of remuneration for comparable executive roles.
It is the Remuneration Committee’s policy that employment contracts are entered into with the Managing Director
and other key management personnel. Details of these KMP contracts are provided on pages 33 to 34.
Remuneration consists of the following key elements:
• Fixed Remuneration (base salary, superannuation and non-monetary benefits);
• Variable Remuneration:
- Short Term Incentive Bonus (‘STIB’); and
- Long Term Incentive (‘LTI’).
The proportion of fixed remuneration and variable remuneration (potential short term and long term incentives if
the Company’s operational and economic circumstances permit), is established for each senior executive by the
Remuneration Committee. Table 1 on page 34 and 35 details the variable component (%) of the Group’s KMP.
Where necessary, when the payment of superannuation on an individual’s STI Bonus would cause the amount of
superannuation in any financial year to exceed the applicable statutory concessional maximum superannuation
contribution limit, at the individual’s discretion, an equivalent amount of employer superannuation is added to the
executive’s base cash salary.
(i) Fixed Remuneration
Objective
The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to
the position and is competitive in the market. Fixed remuneration is reviewed annually by the Remuneration
Committee and the process consists of a review of Company-wide, business unit and individual performance, the
Company’s operational and economic circumstances, relevant comparative remuneration in the market and internal
and, when appropriate, external advice on policies and practices. As noted above, the Remuneration Committee
has access to external advice, independent of management.
Structure
Executives are given the opportunity to receive their fixed (primary) remuneration in a variety of forms including
cash and fringe benefits. It is intended that the manner of payment chosen will be optimal for the recipient without
creating undue cost for the Company.
In recognition of the significant operational changes that were made across the consolidated entity during the
2015/16 financial year, the Remuneration Committee reviewed all salaries resulting in senior executives, with a
base salary over $200,000 per annum, agreeing to accept a 10% reduction in base salary from 1 July 2016.
The fixed remuneration component of the Group’s key management personnel is detailed in Table 1 on page 34
and 35.
Directors' report
For the Financial Year ended 30 June 2017
Directors' report
For the Financial Year ended 30 June 2017
(ii) Variable Remuneration - Short-term Incentive Bonus (STIB)
Objective
The objective and intention of the executive STIB scheme, when the Company’s operational and economic
circumstances permit, is to encourage and provide a further incentive to executives to:
(a) Maximise the financial performance of the Company on a regular and consistent basis that is also
consistent with the Company’s Core Values; and
(b) create and maintain a culture within all levels of the Company and Group such that the Company’s Core
Values are accepted, supported and actively promoted by all the employees of the Company and Group.
The STIB scheme has, in the past, been designed so as to provide sufficient incentive to the executives such that
the cost to the Company is reasonable in the circumstances.
In light of the Nickel Division operations being on care and maintenance during the financial year as a result of the
low, albeit unsustainable, nickel price, the Remuneration Committee has put on hold the current STIB scheme that
commenced from 1 January 2010. It is likely that a new STIB Scheme will be put in place for when the Company’s
operational and economic circumstances allow for such payments of short-term incentive bonuses to senior
executives. It should be noted that the Managing Director has a separate right to receive STIB payments, subject
to certain performance conditions, under his employment contract.
(iii) Variable Remuneration - Long Term Incentive (LTI)
Objective
The objective of a LTI program is to reward and incentivise executives in a manner which aligns this element of
remuneration with the creation of shareholder wealth.
The Company’s performance during the 2017 financial year and for the previous four financial years, and its impact
on shareholder wealth, is summarised in the table below.
Year Ended 30 June
Revenue and other income ($'000)
2017
9,666
2016
93,441
2015
2014
2013
200,280
239,505
185,590
Cost of sales of goods ($'000)
(8,473)
(97,933)
(155,048)
(153,549)
(145,012)
Royalties ($'000)
Exploration and evaluation ($'000)
Care and maintenance expenses ($'000)
Other expenses ($'000)
EBITDA (before impairment) ($'000)
Depreciation and amortisation ($'000)
Reversal of / (impairment) of assets ($'000)
Finance costs ($'000)
(490)
(493)
(7,539)
(5,369)
(12,698)
(760)
9,178
(490)
(4,920)
(4,280)
(1,002)
(8,520)
(23,214)
(50,749)
(79,453)
(1,405)
(11,948)
(12,912)
(905)
(8,884)
10,583
(62,124)
11,864
(998)
Profit /(loss) before tax ($'000)
(4,770)
(154,821)
(40,675)
Income tax benefit (expense) ($'000)
-
10,462
11,827
Net profit/(loss) after tax ($'000)
(4,770)
(144,359)
(28,848)
Earnings/(loss) per share (cents)
(1.0)
(42.7)
-
-
-
-
(9.0)
1.0
-
Dividends per share (cents)
Dividends pay out ratio (%)
Market capitalisation ($'000)
(11,313)
(3,186)
(985)
(7,494)
62,978
(59,655)
(13,119)
(1,334)
(11,130)
1,808
(9,322)
(3.1)
2.0
-
(9,283)
(2,682)
(2,500)
(9,125)
16,988
(54,386)
(8,026)
(1,563)
(46,987)
15,302
(31,685)
(12.5)
1.0
-
94,285
57,857
149,462
267,489
52,135
Closing share price ($ per share)
Return on equity (%)
0.220
(2.8)
0.135
(88.0)
0.465
(18.1)
0.83
(6.2)
0.20
(22.9)
2017 ANNUAL REPORT | PAGE 31
Directors' report
For the Financial Year ended 30 June 2017
From 1 July 2014, LTI grants to executives were delivered in the form of performance rights to shares issued under
the 2010 Panoramic Resources Limited Employee Share Plan (“2010 ES Plan”), which was re-approved by the
Company’s shareholders on 30 July 2014 under ASX Listing Rule purposes for three years, until 30 July 2017.
In light of the Nickel Division operations being on care and maintenance during the financial year as a result of the
low, albeit unsustainable, nickel price, the Remuneration Committee has put on hold the granting of new
performance rights to shares to employees. In addition, the three year shareholder approval period of the 2010 ES
Plan has now expired (on 30 July 2017), meaning a new Employee Share Plan (“Plan”), under ASX Listing Rules,
would need to have obtained shareholder approval before new performance rights to shares can be granted to
executives and other senior employees under a new Plan.
2010 Panoramic Resources Limited Employee Share Plan (“2010 ES Plan”)
Under the structure of the 2010 ES Plan, executives and senior employees were invited, subject to the Company’s
operational and economic circumstances, to receive a new grant of performance rights to shares, such that the LTI
grant formed a key component of their remuneration package. The LTI dollar value that senior executives and other
senior employees were entitled to be received was set at a fixed percentage of their annual Fixed Remuneration
(base salary plus statutory superannuation) ranging from 17% to 100% of Fixed Remuneration depending on level
and seniority and market conditions. The number of performance rights to shares to be granted was determined
by dividing the LTI dollar value by the fair value (“FV”) of one performance right (as determined by an independent
valuer).
For the FY2015 grant of performance rights, the FV at 1 July 2014 was externally determined at $0.67. The vesting
day of the FY2015 Performance Rights was 1 July 2017. On 1 August 2017, the Company issued 1,575,012
ordinary shares to senior executives and other senior managers upon the satisfaction of the performance and three
year time based vesting hurdles. A balance of 525,017 FY2015 Performance Rights did not satisfy the relative total
shareholder return (“TSR”) performance hurdle and lapsed.
For the FY2016 grant of performance rights, the FV at 1 July 2015 was externally determined at $0.208. The vesting
day of the FY2016 Performance Rights is 1 July 2018.
Performance Conditions
FY2015 Performance Rights and FY2016 Performance Rights will vest subject to meeting service and performance
conditions as defined below:
• 75% of the performance rights will be performance tested against the relative total shareholder return (“TSR”)
measure over a three year period; and
• 25% of the performance rights will be performance tested against the reserve/resource growth over a three
year period.
The performance conditions above that were endorsed by the Board and subsequently approved by shareholders
on 30 July 2014, were chosen as they matched similar split performance conditions used in LTI Plans of other
ASX listed resource companies.
The Company’s TSR will be measured at the end of each financial year against a customised peer group, which
for the FY2016 grant of performance rights for the three year period commencing 1 July 2015, comprised the
following companies:
- Altona Mining Limited
- Aurelia Metals Limited
- CuDeco Limited
- Heron Resources Limited
- Hillgrove Resources Limited
- Hot Chili Ltd
- Independence Group NL
- Mincor Resources NL
- Rex Minerals Limited
- Sandfire Resources NL
- Poseidon Nickel Limited
- Western Areas Ltd
PAGE 32 | 2017 ANNUAL REPORT
From 1 July 2014, LTI grants to executives were delivered in the form of performance rights to shares issued under
the 2010 Panoramic Resources Limited Employee Share Plan (“2010 ES Plan”), which was re-approved by the
Company’s shareholders on 30 July 2014 under ASX Listing Rule purposes for three years, until 30 July 2017.
In light of the Nickel Division operations being on care and maintenance during the financial year as a result of the
low, albeit unsustainable, nickel price, the Remuneration Committee has put on hold the granting of new
performance rights to shares to employees. In addition, the three year shareholder approval period of the 2010 ES
Plan has now expired (on 30 July 2017), meaning a new Employee Share Plan (“Plan”), under ASX Listing Rules,
would need to have obtained shareholder approval before new performance rights to shares can be granted to
executives and other senior employees under a new Plan.
2010 Panoramic Resources Limited Employee Share Plan (“2010 ES Plan”)
Under the structure of the 2010 ES Plan, executives and senior employees were invited, subject to the Company’s
operational and economic circumstances, to receive a new grant of performance rights to shares, such that the LTI
grant formed a key component of their remuneration package. The LTI dollar value that senior executives and other
senior employees were entitled to be received was set at a fixed percentage of their annual Fixed Remuneration
(base salary plus statutory superannuation) ranging from 17% to 100% of Fixed Remuneration depending on level
and seniority and market conditions. The number of performance rights to shares to be granted was determined
by dividing the LTI dollar value by the fair value (“FV”) of one performance right (as determined by an independent
valuer).
For the FY2015 grant of performance rights, the FV at 1 July 2014 was externally determined at $0.67. The vesting
day of the FY2015 Performance Rights was 1 July 2017. On 1 August 2017, the Company issued 1,575,012
ordinary shares to senior executives and other senior managers upon the satisfaction of the performance and three
year time based vesting hurdles. A balance of 525,017 FY2015 Performance Rights did not satisfy the relative total
shareholder return (“TSR”) performance hurdle and lapsed.
For the FY2016 grant of performance rights, the FV at 1 July 2015 was externally determined at $0.208. The vesting
day of the FY2016 Performance Rights is 1 July 2018.
Performance Conditions
conditions as defined below:
FY2015 Performance Rights and FY2016 Performance Rights will vest subject to meeting service and performance
• 75% of the performance rights will be performance tested against the relative total shareholder return (“TSR”)
measure over a three year period; and
• 25% of the performance rights will be performance tested against the reserve/resource growth over a three
year period.
The performance conditions above that were endorsed by the Board and subsequently approved by shareholders
on 30 July 2014, were chosen as they matched similar split performance conditions used in LTI Plans of other
ASX listed resource companies.
The Company’s TSR will be measured at the end of each financial year against a customised peer group, which
for the FY2016 grant of performance rights for the three year period commencing 1 July 2015, comprised the
following companies:
- Altona Mining Limited
- Aurelia Metals Limited
- CuDeco Limited
- Heron Resources Limited
- Hillgrove Resources Limited
- Hot Chili Ltd
- Independence Group NL
- Mincor Resources NL
- Rex Minerals Limited
- Sandfire Resources NL
- Poseidon Nickel Limited
- Western Areas Ltd
Directors' report
For the Financial Year ended 30 June 2017
Directors' report
For the Financial Year ended 30 June 2017
(iii) Variable Remuneration - Long Term Incentive (LTI) (continued)
The following table sets out the vesting outcome based on the Company’s relative TSR performance:
Relative TSR Rank
Below 50% percentile
At or above the 50th percentile but below the 75th
percentile
At or above 75th percentile
The second performance hurdle is the Company’s metal reserve/resource growth net of depletion. Broadly, the
quantum of the increase in reserves/resources will determine the number of performances rights to vest.
% of Performance Rights
No Performance Rights vesting
50% to 99% vesting (pro-rata on a straight–line basis) of
the Performance Rights
100% of Performance Rights vesting
The following table sets out the vesting outcome based on the Company’s metal reserve/resource growth
performance:
Reserves and Resources Growth Performance
Reserves and Resources depleted
Reserves and Resources maintained
Reserves and Resources grown by up to 30%
% of Performance Rights vesting
No Performance Rights vesting
50% vesting of the Performance Rights
Between 50% and 100% vesting (pro-rata on a straight–
line basis) of the Performance Rights
100% of Performance Rights vesting
Reserves and Reserves grown by 30% or more
There will be no retesting of performance hurdles. It is only if one or both of these performance hurdles are passed
and the three year service condition is met that the performance rights can be exercised into Shares.
No Hedging Contracts on LTI Grants
The Company does not permit executives to enter into contracts to hedge their exposure to options or performance
rights to shares granted as part of their remuneration package. This policy is strictly enforced by the Managing
Director under the Company’s Share Trading Policy detailed in the Corporate Governance Statement on page 43.
Table 3 on page 36 and 37 provides details of FY2015 Performance Rights and FY2016 Performance Rights
granted as compensation to the Managing Director and the named executives.
(h) Employment contracts
(i) Non-Executive Chairman
The Non-Executive Chairman, Brian Phillips, commenced in his role on 17 November 2011 under the following
terms:
• Brian Phillips may resign from his position and thus terminate his directorship on written notice.
• The Company must provide 6 months written notice or provide payment in lieu of the notice period ($45,000),
based on the fixed component of Brian Phillips’ remuneration if termination is initiated by the Company,
except where termination is from serious misconduct.
• The Company may terminate his directorship at any time without notice if serious misconduct has occurred.
In this situation, the Non-Executive Chairman is only entitled to that portion of remuneration which is fixed,
and only up to the date of termination.
(ii) Non-Executive Directors
All other non-executive directors conduct their duties under the following terms:
• A non-executive director may resign from his position and thus terminate his contract on written notice.
• The Company may terminate a directorship by providing 6 months’ written notice or provide payment in lieu of
the notice period (based on the fixed component of the non-executive director’s remuneration) if termination is
initiated by the Company, except where termination is from serious misconduct.
Non-Executive Director
John Rowe
Peter Sullivan
Amount payable on
termination
$32,500
$32,500
• The Company may terminate a directorship at any time without notice if serious misconduct has occurred.
Where termination with such cause occurs the non-executive director is only entitled to that portion of
remuneration which is fixed, and only up to the date of termination.
2017 ANNUAL REPORT | PAGE 33
Directors' report
For the Financial Year ended 30 June 2017
(iii) Managing Director
The Managing Director, Peter Harold, is employed under a contract that commenced on 1 January 2010. The key
features of his employment contract (Contract) are:
• The term of the Contract was initially for a minimum of 12 months, and is now able to be terminated on 6 months
notice from Peter Harold, and on 12 months notice from the Company. Termination is immediate (with no
payment in lieu of notice) under certain events. Since 1 January 2011, the fixed remuneration per annum of
Peter Harold’s Contract is subject to review on an annual basis.
• The Company may make STIB payments to Peter Harold, firstly, up to a maximum of 75% of Peter Harold’s
fixed remuneration per annum under the First Part (Financial Performance), and secondly, up to a maximum
of 25% of Peter Harold’s fixed remuneration per annum under the discretionary Second Part (Core Values).
The Cash bonus under the First Part (Financial Performance) will be calculated at the end of the Relevant
Financial Year using figures obtained from the audited consolidated financial statements of the Company for
the Relevant Financial Year, in accordance with the following formula:
CPH = the Cash bonus to be paid to Peter Harold for the Relevant Financial Year;
CPH = [P - (E x 15%)] x 2.5%, where
P = Earnings Before Interest and Tax (“EBIT”) of the Company (on a consolidated basis) for the Relevant
Financial Year;
E = the average of (1) the “Total Assets” line item of the audited consolidated balance sheet of the Company
(on a consolidated basis) for the Relevant Financial Year and (2) the “Total Assets” line item of the audited
consolidated balance sheet of the Company for the year immediately preceding the Relevant Financial Year.
“Total Assets” includes current and non-current assets.
• Peter Harold may resign from his position and thus terminate the Contract by giving 6 months written notice. Any
vested unlisted options not exercised, if applicable, will be forfeited 4 weeks after notice of resignation. Peter Harold
will not receive any accrued benefits of the executive STIB scheme in the event that he gives notice.
•
•
• Peter Harold accrues 5 weeks of annual leave entitlements per year and 13 weeks of long service leave entitlements
for every 10 years of service.
If the Company terminates Peter Harold’s Contract, other than lawfully in accordance with its terms, Peter Harold will
be entitled to be paid his accrued First Part (Financial Performance) at the time notice of the termination is given
based on the calculated STIB at the end of the previous quarter in the Relevant Financial Year, up to the maximum
of 75% of Peter Harold’s fixed remuneration per annum. Any payment of a Cash bonus under the Second Part (Core
Values) will be at the discretion of the Remuneration Committee. If Peter Harold works out the whole or any part of
his notice period, he will be entitled to his accrued First Part (Financial Performance) during the period after the notice
is given until such time as he stops working.
If there is a Change of Control Event, Peter Harold will be entitled to be paid his accrued First Part (Financial
Performance) at the time of the Change of Control based on the calculated STIB at the end of the previous quarter
in the Relevant Financial Year, up to the maximum of 75% of Peter Harold’s fixed remuneration per annum. Any
payment of a Cash bonus under the Second Part (Core Values) will be at the discretion of the Board. If the Board is
unable to determine for any reason the accrued and discretionary benefits to Peter Harold, Peter Harold will be
entitled to be paid an accrued STIB based on 100% of Peter Harold’s fixed remuneration per annum.
• From 1 July 2014 until 30 July 2017, for the granting of performance rights to shares at zero cost under the 2010 ES
Plan, Peter Harold was entitled to receive up to 100% of his annual Fixed Remuneration in performance rights to
shares. On 20 November 2015 at a General Meeting of shareholders, Peter Harold was granted 1,450,000 FY2016
performance rights at zero cost under the 2010 ES Plan. The FV of each performance right on 20 November 2015
was externally determined at $0.208. On 30 July 2014 at a General Meeting of shareholders, Peter Harold was
granted 904,601 FY2015 performance rights at zero cost under the 2010 ES Plan. The FV of each performance right
on 30 July 2014 was externally determined at $0.71.
If Peter Harold’s employment contract is terminated after a Change of Control of the Company, other than lawfully in
accordance with its terms, then, the Company may determine in its sole and absolute discretion, the manner in which
granted performance rights will be dealt with, including (but not limited to) allowing Peter Harold to exercise all or a
proportion of their performance rights within such time as determined, after which the performance rights will lapse
and be cancelled.
•
• The principal terms and conditions of the performance rights granted under the 2010 ES Plan are provided in pages
31 and 32.
PAGE 34 | 2017 ANNUAL REPORT
Directors' report
For the Financial Year ended 30 June 2017
(iii) Managing Director
The Managing Director, Peter Harold, is employed under a contract that commenced on 1 January 2010. The key
features of his employment contract (Contract) are:
• The term of the Contract was initially for a minimum of 12 months, and is now able to be terminated on 6 months
notice from Peter Harold, and on 12 months notice from the Company. Termination is immediate (with no
payment in lieu of notice) under certain events. Since 1 January 2011, the fixed remuneration per annum of
Peter Harold’s Contract is subject to review on an annual basis.
• The Company may make STIB payments to Peter Harold, firstly, up to a maximum of 75% of Peter Harold’s
fixed remuneration per annum under the First Part (Financial Performance), and secondly, up to a maximum
of 25% of Peter Harold’s fixed remuneration per annum under the discretionary Second Part (Core Values).
The Cash bonus under the First Part (Financial Performance) will be calculated at the end of the Relevant
Financial Year using figures obtained from the audited consolidated financial statements of the Company for
the Relevant Financial Year, in accordance with the following formula:
CPH = the Cash bonus to be paid to Peter Harold for the Relevant Financial Year;
CPH = [P - (E x 15%)] x 2.5%, where
P = Earnings Before Interest and Tax (“EBIT”) of the Company (on a consolidated basis) for the Relevant
Financial Year;
E = the average of (1) the “Total Assets” line item of the audited consolidated balance sheet of the Company
(on a consolidated basis) for the Relevant Financial Year and (2) the “Total Assets” line item of the audited
consolidated balance sheet of the Company for the year immediately preceding the Relevant Financial Year.
“Total Assets” includes current and non-current assets.
•
•
• Peter Harold may resign from his position and thus terminate the Contract by giving 6 months written notice. Any
vested unlisted options not exercised, if applicable, will be forfeited 4 weeks after notice of resignation. Peter Harold
will not receive any accrued benefits of the executive STIB scheme in the event that he gives notice.
• Peter Harold accrues 5 weeks of annual leave entitlements per year and 13 weeks of long service leave entitlements
for every 10 years of service.
If the Company terminates Peter Harold’s Contract, other than lawfully in accordance with its terms, Peter Harold will
be entitled to be paid his accrued First Part (Financial Performance) at the time notice of the termination is given
based on the calculated STIB at the end of the previous quarter in the Relevant Financial Year, up to the maximum
of 75% of Peter Harold’s fixed remuneration per annum. Any payment of a Cash bonus under the Second Part (Core
Values) will be at the discretion of the Remuneration Committee. If Peter Harold works out the whole or any part of
his notice period, he will be entitled to his accrued First Part (Financial Performance) during the period after the notice
is given until such time as he stops working.
If there is a Change of Control Event, Peter Harold will be entitled to be paid his accrued First Part (Financial
Performance) at the time of the Change of Control based on the calculated STIB at the end of the previous quarter
in the Relevant Financial Year, up to the maximum of 75% of Peter Harold’s fixed remuneration per annum. Any
payment of a Cash bonus under the Second Part (Core Values) will be at the discretion of the Board. If the Board is
unable to determine for any reason the accrued and discretionary benefits to Peter Harold, Peter Harold will be
entitled to be paid an accrued STIB based on 100% of Peter Harold’s fixed remuneration per annum.
• From 1 July 2014 until 30 July 2017, for the granting of performance rights to shares at zero cost under the 2010 ES
Plan, Peter Harold was entitled to receive up to 100% of his annual Fixed Remuneration in performance rights to
shares. On 20 November 2015 at a General Meeting of shareholders, Peter Harold was granted 1,450,000 FY2016
performance rights at zero cost under the 2010 ES Plan. The FV of each performance right on 20 November 2015
was externally determined at $0.208. On 30 July 2014 at a General Meeting of shareholders, Peter Harold was
granted 904,601 FY2015 performance rights at zero cost under the 2010 ES Plan. The FV of each performance right
on 30 July 2014 was externally determined at $0.71.
•
If Peter Harold’s employment contract is terminated after a Change of Control of the Company, other than lawfully in
accordance with its terms, then, the Company may determine in its sole and absolute discretion, the manner in which
granted performance rights will be dealt with, including (but not limited to) allowing Peter Harold to exercise all or a
proportion of their performance rights within such time as determined, after which the performance rights will lapse
• The principal terms and conditions of the performance rights granted under the 2010 ES Plan are provided in pages
and be cancelled.
31 and 32.
Directors' report
For the Financial Year ended 30 June 2017
(iv) Other Named Executives
All other named executives are employed under individual open common law employment contracts. These
executives and the commencement date of their contracts are as follows:
Named Executive
Trevor Eton
Terry Strong#
John Hicks
Tim Mason
Mark Recklies#
Date of Current
Employment Contract
8 January 2013
6 February 2013
14 March 2014
1 December 2015
23 January 2013
Position
Chief Financial Officer & Company Secretary
Chief Operating Officer
General Manager - Exploration
Manager – Special Projects
Operations Manager - Savannah Project
# the named executive’s employment contract was terminated during the financial year
Employment Contracts
The common key features of the above named executives’ employment contracts are:
• Each named executive may resign from their position and thus terminate their contract by giving 3 months
written notice. Any vested unlisted options not exercised will be forfeited 4 weeks from the date of resignation.
• The Company may terminate a named executive’s employment contract by providing 4 months written notice
or provide payment based on each named executive’s fixed remuneration per annum in lieu of the notice period.
In the event of a termination in employment through a Change in Control of the Company, the Company will
provide 6 months written notice or provide payment based on each named executive’s fixed remuneration per
annum in lieu of notice.
• The Company may terminate the contract at any time without notice if serious misconduct has occurred. When
termination with such cause occurs, the named executive is only entitled to that portion of remuneration which
is fixed, and only up to the date that notice of termination is given. On termination with such cause, any unvested
options or LTI grants in the form of performance rights will immediately be forfeited. Any vested unlisted options
not exercised within 4 weeks of such notice of termination will be forfeited.
If a named executive’s employment contract is terminated after a Change of Control of the Company, other
than lawfully in accordance with its terms, then, the Company may determine in its sole and absolute discretion,
the manner in which granted performance rights will be dealt with, including (but not limited to) allowing the
named executive to exercise all or a proportion of their performance rights within such time as determined,
after which the performance rights will lapse and be cancelled.
•
• Each named executive accrues 4 weeks of annual leave entitlements per year and 13 weeks of long service
leave entitlements for every 10 years of service.
• From 1 July 2014 until 30 July 2017, for the granting of performance rights to shares at zero cost under the
2010 ES Plan, each named executive, depending on level and seniority, were entitled to receive 17% to 75%
of their annual Fixed Remuneration in performance rights. Each of the named executives were granted FY2015
performance rights and/or FY2016 performance rights at zero cost under the 2010 ES Plan, as shown in Table
3 on page 36 and 37. The main terms and conditions of performance rights granted under the 2010 ES Plan
are provided in pages 31 and 32:
(i) Details of Remuneration
Table 1: Remuneration of Directors and Executive Officers
The remuneration in Table 1 of each named person is the total of fixed remuneration (base salary,
superannuation and non-monetary benefits) and variable remuneration (short term and long term incentives).
Excluding the cash component of remuneration, the total remuneration shown is the amount expensed by the
Company and does not, in every case, represent what each named individual ultimately received in cash.
2017 ANNUAL REPORT | PAGE 35
65,000
65,000
90,000
498,150
Name
Non-executive directors
J Rowe
P R Sullivan
B M Phillips
Executive directors
P J Harold
Executives
T R Eton
T J Strong (c)
J D Hicks
M A Recklies (d)
T S Mason
Directors' report
For the Financial Year ended 30 June 2017
2017
Short-term benefits
Cash
salary
and fees Bonus(a) Other
Post
employment
benefits
Long-
term
benefits
Super-
annuation
Long Service
Leave
Share
based
payments
Rights to
shares
(a)(b)
Termination /
Resignation
payments
Total
Performance
related
-
-
-
-
3,851
3,851
3,851
-
-
-
-
-
-
-
-
-
13,467
47,324
12,454
318,088
-
-
-
-
68,851
68,851
93,851
-
-
-
889,483
36
270,540
186,778
207,000
126,968
198,000
1,707,436
25,701
17,744
19,665
12,062
18,810
141,306
Includes the non-cash amortisation expense of the FY2015 and/or FY2016 LTI performance rights to shares over the period
For individuals who left the Company during the period, the total accumulated amortisation expense up to the date of departure has been
reversed
442,817
215,483
309,058
454,532
287,950
2,830,876
127,768
(172,787)
65,173
(99,820)
62,340
300,762
-
176,004
-
410,125
-
586,129
12,044
2,595
12,045
1,931
3,851
57,486
6,764
5,149
5,175
3,266
4,949
-
-
-
-
-
-
37,757
29
-
21
-
22
11
(a)
(b)
(c) Mr. T J Strong left the Company on 3 March 2017
(d) Mr. M A Recklies left the Company on 30 December 2016
2016
Short-term benefits
Cash
salary
and fees Bonus(a) Other
Post
employment
benefits
Super-
annuation
Long
Term
benefits
Long
Service
Leave
Share
based
payments
Rights to
shares
(a)(b)
Termination /
Resignation
payments
Total
Performance
related
Name
Non-executive directors
C D J Langdon (c)
J Rowe
P R Sullivan (d)
B M Phillips
Executive directors
P J Harold
Executives
T R Eton
C J Williams (e)
T J Strong
J D Hicks
M A Recklies
T S Mason
A S Thomson (f)
T M Ram (g)
91,491
91,491
63,333
128,733
553,500
-
-
-
-
-
4,085
4,085
3,055
4,085
-
-
-
-
-
-
-
-
-
-
-
-
12,035
52,583
13,838
270,635
-
-
-
-
-
95,576
95,576
66,388
132,818
902,591
28,557
12,448
29,070
21,850
24,819
21,838
2,325
19,898
213,388
Includes the non-cash amortisation expense of the FY2015 and/or FY2016 LTI performance rights to shares over the period
300,600
131,031
306,000
230,000
261,250
229,872
24,474
179,808
2,591,583
108,347
(42,623)
108,853
55,267
62,776
52,864
(48,919)
(16,874)
550,326
-
299,131
-
-
-
-
167,227
110,738
577,096
12,035
1,779
4,085
12,035
4,085
4,085
1,319
12,035
78,803
457,054
405,040
455,658
324,902
359,461
314,159
147,056
309,855
4,066,134
7,515
3,274
7,650
5,750
6,531
5,500
630
4,250
-
-
-
-
-
-
-
-
-
54,938
(a)
(b) For individuals who left the Company during the period, the total accumulated amortisation expense up to the date of departure has been
-
-
-
-
30
24
-
24
17
18
17
-
-
14
reversed
(c) Mr. C D J Langdon retired as a director on 30 June 2016
(d) Mr. P R Sullivan was appointed a director on 1 October 2015
(e) Mr. C J Williams left the Company on 7 December 2015
(f) Mr. A S Thomson left the Company on 10 August 2015
(g) Ms. T M Ram left the Company on 30 June 2016
PAGE 36 | 2017 ANNUAL REPORT
Directors' report
For the Financial Year ended 30 June 2017
2017
Short-term benefits
Post
employment
benefits
Long-
term
benefits
Share
based
payments
Rights to
Termination /
Name
and fees Bonus(a) Other
Super-
annuation
Long Service
shares
Leave
(a)(b)
Resignation
payments
Total
Performance
related
3,851
3,851
3,851
-
-
-
-
-
-
-
-
-
498,150
13,467
47,324
12,454
318,088
12,044
2,595
12,045
1,931
3,851
25,701
17,744
19,665
12,062
18,810
6,764
5,149
5,175
3,266
4,949
127,768
65,173
62,340
(172,787)
176,004
(99,820)
410,125
68,851
68,851
93,851
889,483
442,817
215,483
309,058
454,532
287,950
1,707,436
57,486
141,306
37,757
300,762
586,129
2,830,876
(a)
(b)
Includes the non-cash amortisation expense of the FY2015 and/or FY2016 LTI performance rights to shares over the period
For individuals who left the Company during the period, the total accumulated amortisation expense up to the date of departure has been
reversed
(c) Mr. T J Strong left the Company on 3 March 2017
(d) Mr. M A Recklies left the Company on 30 December 2016
2016
Short-term benefits
Name
and fees Bonus(a) Other
Post
employment
benefits
Super-
annuation
Long
Term
benefits
Long
Service
Leave
Share
based
payments
Rights to
Termination /
shares
(a)(b)
Resignation
payments
Total
Performance
related
Cash
salary
65,000
65,000
90,000
270,540
186,778
207,000
126,968
198,000
Non-executive directors
J Rowe
P R Sullivan
B M Phillips
Executive directors
P J Harold
Executives
T R Eton
T J Strong (c)
J D Hicks
M A Recklies (d)
T S Mason
Cash
salary
91,491
91,491
63,333
128,733
553,500
300,600
131,031
306,000
230,000
261,250
229,872
24,474
179,808
Non-executive directors
C D J Langdon (c)
J Rowe
P R Sullivan (d)
B M Phillips
Executive directors
P J Harold
Executives
T R Eton
C J Williams (e)
T J Strong
J D Hicks
M A Recklies
T S Mason
A S Thomson (f)
T M Ram (g)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,085
4,085
3,055
4,085
-
-
-
-
-
-
-
-
-
-
-
-
12,035
52,583
13,838
270,635
12,035
1,779
4,085
12,035
4,085
4,085
1,319
12,035
28,557
12,448
29,070
21,850
24,819
21,838
2,325
19,898
7,515
3,274
7,650
5,750
6,531
5,500
630
4,250
108,347
108,853
55,267
62,776
52,864
(48,919)
(16,874)
(42,623)
299,131
167,227
110,738
95,576
95,576
66,388
132,818
902,591
457,054
405,040
455,658
324,902
359,461
314,159
147,056
309,855
-
-
-
36
29
21
-
-
22
11
-
-
-
-
30
24
-
24
17
18
17
-
-
14
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,591,583
78,803
213,388
54,938
550,326
577,096
4,066,134
(a)
Includes the non-cash amortisation expense of the FY2015 and/or FY2016 LTI performance rights to shares over the period
(b) For individuals who left the Company during the period, the total accumulated amortisation expense up to the date of departure has been
reversed
(c) Mr. C D J Langdon retired as a director on 30 June 2016
(d) Mr. P R Sullivan was appointed a director on 1 October 2015
(e) Mr. C J Williams left the Company on 7 December 2015
(f) Mr. A S Thomson left the Company on 10 August 2015
(g) Ms. T M Ram left the Company on 30 June 2016
Directors' report
For the Financial Year ended 30 June 2017
Table 2: Securities granted as part of remuneration during the year
Options - 2016/17
No options were granted during 2016/17.
Performance Rights to Shares - 2016/17
No performance rights to shares were granted as compensation to key management personnel during 2016/17.
Options - 2015/16
No options were granted during 2015/16.
Performance Rights to Shares - 2015/16
Performance rights to shares granted as compensation to key management personnel are shown in Table 3 on
page 37.
The fair value of one performance right is determined using a Binomial valuation model (for non-market vesting
conditions) and a Monte Carlo simulation model (for market vesting conditions), that takes into account the share
price at grant date and expected price volatility of the underlying Share, the expected dividend yield and the risk-
free rate for the term of the right at the date of grant
There were no ordinary shares issued to key management personnel on the exercise of securities during the
financial year. There have been 1,230,580 ordinary shares issued to key management personnel on the exercise
of securities (FY2015 Performance Rights) since 30 June 2017.
(a) Equity instrument disclosures relating to key management personnel
Securities provided as remuneration
Details of securities provided as remuneration are shown in Table 3. The terms and conditions of the securities are
provided in pages 31 and 32.
Security holdings
The number of securities over ordinary shares in the Company held during the financial year by the Managing
Director of Panoramic Resources Limited and other key management personnel of the Group, including their
personally related parties are provided in the following table. In the table provided, performance rights to shares
are separately identified.
Table 3: Securities holdings of managing director and specified executives
Balance at
start of the
year
Granted as
compen-
sation
Exercised
Other
changes#
Balance at
end of the
year
Vested and
exercisable Unvested
2017
Performance Rights
Managing director of Panoramic
Resources Limited
P J Harold
2,354,601
-
-
-
2,354,601
Other key management personnel
of the Group
T R Eton
T J Strong
J D Hicks
M A Recklies
T S Mason
961,891
972,552
490,652
557,317
469,319
5,806,332
# Other changes relate to performance rights forfeited due to termination of employment
-
(972,552)
-
(557,317)
-
(1,529,869)
-
-
-
-
-
-
-
-
-
-
-
-
961,891
-
490,652
-
469,319
4,276,463
2017 ANNUAL REPORT | PAGE 37
-
-
-
-
-
-
-
2,354,601
961,891
-
490,652
-
469,319
4,276,463
Directors' report
For the Financial Year ended 30 June 2017
Balance at
start of the
year
Granted as
compen-
sation
Exercised
Other
changes#
Balance at
end of the
year
Vested and
exercisable Unvested
904,601
1,450,000
-
-
2,354,601
2016
Performance Rights
Managing director of Panoramic
Resources Limited
P J Harold
Other key management personnel
of the Group
T R Eton
T J Strong
C J Williams
J D Hicks
M A Recklies
T S Mason
A S Thomson
T M Ram
368,459
368,459
245,640
187,948
213,484
179,776
281,922
97,243
2,847,532
# Other changes relate to performance rights forfeited due to termination of employment
593,432
604,093
-
302,704
343,833
289,543
-
156,617
3,740,222
-
-
(245,640)
-
-
-
(281,922)
(253,860)
(781,422)
-
-
-
-
-
-
-
-
-
961,891
972,552
-
490,652
557,317
469,319
-
-
5,806,332
-
-
-
-
-
-
-
-
-
-
2,354,601
961,891
972,552
-
490,652
557,317
469,319
-
-
5,806,332
Share holdings
The numbers of shares in the Company held during the financial year by each director of Panoramic Resources Limited
and other key management personnel of the Group, including their personally related parties, are set out below. There
were no shares granted during the reporting period as remuneration.
2017
Name
Directors of Panoramic Resources Limited
Ordinary shares
P J Harold
J Rowe
P R Sullivan
B M Philips
Balance at
the start of
the year
4,567,714
87,407
-
287,407
Other key management personnel of the Group
Ordinary shares
T R Eton
T J Strong
J D Hicks
M A Recklies
T S Mason
70,000
282,001
306,751
100,000
2,340
5,703,620
2016
Name
Directors of Panoramic Resources Limited
Ordinary shares
P J Harold
C D J Langdon
J Rowe
P R Sullivan
B M Philips
Balance at
the start of
the year
3,490,785
43,518
65,555
-
65,555
Other key management personnel of the Group
Ordinary shares
T R Eton
T J Strong
A S Thomson
C J Williams
J D Hicks
T M Ram
M A Recklies
T S Mason
50,000
188,000
-
155,000
204,500
-
100,000
1,560
4,364,473
Received during
the year on the
exercise of
options
Received on
vesting of rights
to deferred shares
Other
changes
during the
year
Balance at end
of the year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Received during
the year on the
exercise of options
Received on
vesting of rights to
deferred shares
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(282,001)
-
(100,000)
-
(382,001)
Other
changes
during the
year
1,076,929
14,506
21,852
-
221,852,
20,000
94,001
-
(155,000)
102,251
-
-
780
1,397,171
4,567,714
87,407
-
287,407
70,000
-
306,751
-
2,340
5,321,619
Balance at end of
the year
4,567,714
58,024
87,407
-
287,407
70,000
282,001
-
-
306,751
-
100,000
2,340
5,761,644
PAGE 38 | 2017 ANNUAL REPORT
2016
Performance Rights
Resources Limited
P J Harold
Managing director of Panoramic
Other key management personnel
Balance at
start of the
year
Granted as
compen-
sation
Other
Balance at
end of the
Vested and
Exercised
changes#
year
exercisable Unvested
904,601
1,450,000
2,354,601
2,354,601
368,459
368,459
245,640
187,948
213,484
179,776
281,922
97,243
593,432
604,093
-
-
302,704
343,833
289,543
156,617
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(245,640)
(281,922)
(253,860)
(781,422)
961,891
972,552
490,652
557,317
469,319
-
-
-
-
-
-
-
-
-
-
-
-
-
961,891
972,552
490,652
557,317
469,319
-
-
-
# Other changes relate to performance rights forfeited due to termination of employment
2,847,532
3,740,222
5,806,332
5,806,332
The numbers of shares in the Company held during the financial year by each director of Panoramic Resources Limited
and other key management personnel of the Group, including their personally related parties, are set out below. There
were no shares granted during the reporting period as remuneration.
Directors of Panoramic Resources Limited
Balance at
the start of
the year
Received during
the year on the
Received on
Other
changes
exercise of
options
vesting of rights
during the
Balance at end
to deferred shares
year
of the year
Other key management personnel of the Group
Directors of Panoramic Resources Limited
Other key management personnel of the Group
4,567,714
87,407
-
287,407
70,000
282,001
306,751
100,000
2,340
5,703,620
3,490,785
43,518
65,555
65,555
50,000
188,000
155,000
204,500
100,000
1,560
4,364,473
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(282,001)
(100,000)
(382,001)
Other
changes
-
-
-
-
20,000
94,001
(155,000)
102,251
780
1,397,171
-
-
-
-
-
-
-
4,567,714
87,407
287,407
70,000
306,751
2,340
5,321,619
70,000
282,001
306,751
100,000
2,340
5,761,644
of the Group
T R Eton
T J Strong
C J Williams
J D Hicks
M A Recklies
T S Mason
A S Thomson
T M Ram
Share holdings
2017
Name
Ordinary shares
P J Harold
J Rowe
P R Sullivan
B M Philips
Ordinary shares
T R Eton
T J Strong
J D Hicks
M A Recklies
T S Mason
2016
Name
Ordinary shares
P J Harold
C D J Langdon
J Rowe
P R Sullivan
B M Philips
Ordinary shares
T R Eton
T J Strong
A S Thomson
C J Williams
J D Hicks
T M Ram
M A Recklies
T S Mason
Directors' report
For the Financial Year ended 30 June 2017
Directors' report
For the Financial Year ended 30 June 2017
All equity transactions with key management personnel other than those arising from the exercise of performance
rights to shares have been entered into on terms and conditions no more favourable than those the Group would
have adopted if dealing at arm's length.
Securities granted and exercised as part of remuneration for the year ended 30 June 2017 and 30 June
2016
2017
Value of securities
granted during the
year
$
Value of securities
exercised during the
year
$
Value of securities
cancelled during the
year #
$
(i) Performance Rights
-
P J Harold
-
T R Eton
-
T J Strong
-
J D Hicks
-
M A Recklies
T S Mason
-
# Refer to Table 3 on page 36 for the number of performance rights to shares cancelled
-
-
-
-
-
-
-
-
259,123
-
136,732
-
2016
Value of securities
granted during the
year
$
Value of securities
exercised during the
year
$
Value of securities
cancelled during the
year #
$
(i) Performance Rights
P J Harold
T R Eton
T J Strong
C J Williams
J D Hicks
M A Recklies
A S Thomson
T S Mason
T M Ram
Note: the value for each performance right to a share granted in 2015/16 to P J. Harold and the other named executives is
$0.208 (the fair value (FV) determined on 20 November 2015).
-
-
-
149,840
-
-
171,972
-
91,894
301,600
123,434
125,651
-
62,963
71,517
-
60,225
32,576
-
-
-
-
-
-
-
-
-
Balance at
the start of
Received during
Received on
the year on the
vesting of rights to
during the
Balance at end of
the year
exercise of options
deferred shares
year
the year
There were performance rights to shares that were cancelled on the date of the named executive’s termination, as
detailed in Table 3 of the remuneration report.
# Refer to Table 3 on page 37 for the number of performance rights to shares cancelled
There were no alterations to the terms and conditions of securities granted as remuneration since their grant date.
1,076,929
14,506
21,852
4,567,714
58,024
87,407
221,852,
287,407
There were no loans to directors or other key management personnel at any time during the year ended 30 June
2017. There were no transactions involving key management personnel other than compensation and transaction
concerning shares and performance rights to shares as discussed in the remuneration report.
This marks the end of the 2017 Remuneration Report.
2017 ANNUAL REPORT | PAGE 39
Directors' report
For the Financial Year ended 30 June 2017
Environmental regulation
The Group’s operations are subject to significant environmental regulations under both Commonwealth and State
legislation in relation to its mining and exploration activities. The Group’s management monitors compliance with
the relevant environmental legislation. The directors are not aware of any breaches of the legislation during the
period covered by this report.
Rounding of Amounts
The amounts contained in this report and in the financial report have been rounded to the nearest $1,000 (where
rounding is applicable) under the option available to the Company under Australian Securities and Investments
Commission Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, dated 24 March 2016.
Auditor's Independence Declaration
Section 307C of the Corporations Act 2001 requires our auditors, Ernst & Young (EY), to provide the directors of
Panoramic Resources Limited with an Independence Declaration in relation to the audit of the financial report for
the year ended 30 June 2017. This Independence Declaration is attached to the Directors’ Report and forms a part
of the Directors’ Report.
Non-audit Services
The following non-audit services were provided by the entity’s auditor, Ernst & Young (EY). The directors are
satisfied that the provision of non-audit services is compatible with the general standard of independence for
auditors imposed by the Corporations Act. The nature and scope of each type of non-audit service provided means
that auditor independence was not compromised.
Ernst & Young (EY) received or are due to receive the following amounts for the provision of non-audit services:
Tax Compliance and other services of $92,560.
Signed in accordance with a resolution of the directors.
Peter Harold
Managing Director
Perth, 30 August 2017
Competent Person
Information in this report relating to Ore Reserves has been compiled by or reviewed by Lilong Chen (MAusIMM).
The aforementioned is a full-time employee of Panoramic Resources Limited. The aforementioned has sufficient
experience that 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 Australiasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves. The aforementioned consents to the
inclusion in the release of the matters based on his information in the form and context in which it appears.
PAGE 40 | 2017 ANNUAL REPORT
Directors' report
For the Financial Year ended 30 June 2017
The Group’s operations are subject to significant environmental regulations under both Commonwealth and State
legislation in relation to its mining and exploration activities. The Group’s management monitors compliance with
the relevant environmental legislation. The directors are not aware of any breaches of the legislation during the
Environmental regulation
period covered by this report.
Rounding of Amounts
The amounts contained in this report and in the financial report have been rounded to the nearest $1,000 (where
rounding is applicable) under the option available to the Company under Australian Securities and Investments
Commission Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, dated 24 March 2016.
Auditor's Independence Declaration
Section 307C of the Corporations Act 2001 requires our auditors, Ernst & Young (EY), to provide the directors of
Panoramic Resources Limited with an Independence Declaration in relation to the audit of the financial report for
the year ended 30 June 2017. This Independence Declaration is attached to the Directors’ Report and forms a part
of the Directors’ Report.
Non-audit Services
The following non-audit services were provided by the entity’s auditor, Ernst & Young (EY). The directors are
satisfied that the provision of non-audit services is compatible with the general standard of independence for
auditors imposed by the Corporations Act. The nature and scope of each type of non-audit service provided means
that auditor independence was not compromised.
Ernst & Young (EY) received or are due to receive the following amounts for the provision of non-audit services:
Tax Compliance and other services of $92,560.
Signed in accordance with a resolution of the directors.
Peter Harold
Managing Director
Perth, 30 August 2017
Competent Person
Information in this report relating to Ore Reserves has been compiled by or reviewed by Lilong Chen (MAusIMM).
The aforementioned is a full-time employee of Panoramic Resources Limited. The aforementioned has sufficient
experience that 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 Australiasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves. The aforementioned consents to the
inclusion in the release of the matters based on his information in the form and context in which it appears.
Corporate Governance Statement
The Board of Directors of Panoramic Resources Limited (“the Board”) is responsible for the corporate governance
of the Company. The Board guides and monitors the business and affairs of Panoramic Resources Limited on
behalf of the shareholders by whom they are elected and to whom they are accountable. The Company’s Corporate
Governance Statement (“Statement”) outlines the main corporate governance practices in place throughout the
financial year, which comply with the Australian Securities Exchange (“ASX”) Corporate Governance Council’s
(“CGC”) Third Edition (March 2014) of the “Corporate Governance Principles and Recommendations (“the
Recommendations”), unless otherwise stated.
As required under ASX Listing Rule 4.10.3, the Company makes the following Board approved disclosures in
relation to each of the Recommendations as at 30 June 2017.
Principle 1: Lay Foundations for Management and Oversight
Primary Role of the Board
The Board’s primary role is the protection and enhancement of long-term shareholder value.
Board Operation
To ensure the Board is well equipped to discharge its responsibilities, as substitute for a Board Charter it has
established written guidelines for the operation of the Board. A written guide on the roles of the Board and
committees sets out the overriding functions and responsibility of the Board, while a second guide sets out more
specific guidelines on the statutory roles and on the separate duties of the Managing Director to the rest of the
Board. In addition, Article 11 of the Company’s Constitution (November 2008) (“Constitution”) details the specific
powers and duties of directors as empowered on them by the Company’s shareholders. All these documents can
be accessed on the Company’s website at www.panoramicresources.com under the Corporate Governance
section.
Board Processes
The Board is responsible for the overall Corporate Governance of the Company including the strategic direction,
establishing goals for executive management and monitoring the achievement of these goals. The Board has
established a framework for the management of the Company and its controlled entities, a framework which divides
the functions of running the Company between the Board, the Managing Director and the senior executives. The
Board has put in place a system of internal control, a pro-active business risk management process, and has the
task of monitoring financial performance and the establishment of appropriate ethical standards. The agenda for
meetings of the Board is prepared by the Managing Director. Standard items include the project reports, financial
reports, strategic matters, governance and compliance. Submissions are circulated in advance. Senior executives
are regularly involved in Board discussions.
The Company Secretary of the Company is directly accountable to the Board, through the Chairman, on all matters
to do with the proper functioning of the Board.
Roles of Management and the Evaluation of Management Performance
The Managing Director and the senior executives are ultimately responsible and accountable for the day to day
running of the Company and for implementing the strategic objectives and operating within the risk appetite set by
the Board. The Board regularly reviews the division of functions between the Board and the senior executives. The
Board has in place a performance appraisal and remuneration system for the Managing Director and senior
executives designed to enhance performance and Management performance is reviewed on an annual basis at
the end of each calendar year and as appropriate. The last performance appraisal of the Managing Director and
senior executives was undertaken by the Remuneration Committee in July 2017. The criterion for the evaluation of
the Managing Director and of each executive is their performance against key performance indicators, behavior
and effectiveness in role. In addition, the Board monitors and evaluates the performance of the Managing Director
and senior executives as appropriate.
Appointment of Directors and Management
The Company has in place an appropriate organisational and management structure to ensure the day to day
running of the Company is undertaken in an effective and efficient manner and to ensure the Company has the
right mix of skills and resources to implement and achieve the Board’s corporate and strategic objectives. The
Board and the Managing Director regularly reviews this structure to determine that it is appropriate and “fit for
purpose” and if necessary make changes in the number of roles and personnel.
The directors and senior executives have a clear understanding of their duties, roles and responsibilities and of the
expectations of them, as contained within a written agreement agreed and signed by the Company and each
director and senior executive.
2017 ANNUAL REPORT | PAGE 41
Corporate Governance Statement
The Board reviews its composition as required to ensure that the Board has the appropriate mix of commercial,
financial and mining skills, technical expertise, industry experience, and diversity (including, but not limited to
gender and age) for which the Board is looking to achieve in its membership. When a vacancy exists, for whatever
reason, or where it is considered that the Board would benefit from the services of a new director with particular
skills, candidates with the appropriate experience, expertise and diversity are considered. Under the direction and
supervision of the Chair, appropriate background checks are undertaken of each candidate as to the person’s
character, experience, education, criminal record and bankruptcy history. Each incumbent director is encouraged,
and given the opportunity to meet with each candidate on a one to one basis. The full Board then appoints the most
suitable candidate who must stand for election at the next general meeting of shareholders. For the meeting,
shareholders are given sufficient information of the new director, including but not limited to biographical details,
other listed directorships currently held and in the case of a director standing for election for the first time, advice
that appropriate background checks have been undertaken.
Diversity Policy
The Company has in place a Diversity Policy which provides the written framework and objectives for achieving a
work environment that values and utilises the contributions of employees with diverse backgrounds, experiences,
and perspectives, irrespective of gender, age, ethnicity and cultural background. The Board is responsible for
developing, where possible, measurable objectives and strategies to support the framework and objectives of the
Diversity Policy. The Remuneration Committee is responsible for monitoring the progress of the measurable
objectives through various monitoring, evaluation and reporting mechanisms.
Apart from participation rates established for indigenous employment at the Savannah nickel project prescribed
under the 2007 Savannah Co-Existence Agreement (and as reported below), the Board has not determined
measurable objectives on gender diversity across the workplace and at the Board level. In the coming financial
year, the Board is to continue to oversee the development of new programs to achieve a broader pool of skilled
and experienced senior management and Board candidates, and if deemed appropriate, identify future and
targeted measurable objectives and strategies on gender diversity.
Pursuant to Recommendation 1.5 of the Recommendations, the Company discloses the following information as
at the date of this report:
• Percentage of women and men employed within the Group - women: 10%; men: 90%;
• Percentage of women and men employed as a senior executive - women: nil; men: 100%;
• Percentage of women and men employed at the Board level - women: nil; men: 100%; and
• Percentage of indigenous employees at the Savannah Nickel Project – nil.
The Company has defined an employee who is a senior executive as a person who is a “senior manager” as
defined in Section 9 (Definitions) of the Corporations Act 2001, namely a person who is at the highest management
level of the Company who “makes, or participates in making decisions that affect the whole, or a substantial part,
of the business of the corporation; or has the capacity to affect significantly the corporation’s financial standing”.
The performance appraisal of a senior executive is performed by the Managing Director and the Remuneration
Committee.
The Diversity Policy can be accessed on the Company’s website at www.panoramicresources.com under the
Corporate Governance section.
Performance Assessment of the Board, its Committees and Individual Directors
Currently, there is no formal annual performance appraisal system in place for Board performance on a director by
director basis. The last performance appraisal was conducted at a meeting of directors in June 2016, where time
was set aside in which each director gave a performance appraisal on the Board as a whole and on themselves.
The Board has agreed to conduct these performance appraisals on a regular basis while the search for a suitable
formal performance appraisal system is undertaken. Membership of the Audit Committee by non-executive
directors is initially for a three year period, with an annual renewal review thereafter with performance being one
criteria in order to retain office.
Principle 2: Structure the Board to Add Value
Board Composition
The composition of the Board is determined using the following principles:
• The Board currently comprises four directors. Under Article 10 of the Company’s Constitution, this number
may be increased to a maximum of ten directors where it is required due to a commercial alliance, or felt that
additional expertise is required in specific areas, or when an outstanding candidate is identified;
• The Board should comprise directors with a broad range of expertise with an emphasis on commercial,
exploration, mining and project development related experience; and
• Directors appointed by the Board are subject to election by shareholders at the following annual general
meeting and thereafter directors (other than the Managing Director) are subject to re-election at least every
three years. The tenure of executive directors is linked to their holding of executive office.
PAGE 42 | 2017 ANNUAL REPORT
The Board reviews its composition as required to ensure that the Board has the appropriate mix of commercial,
financial and mining skills, technical expertise, industry experience, and diversity (including, but not limited to
gender and age) for which the Board is looking to achieve in its membership. When a vacancy exists, for whatever
reason, or where it is considered that the Board would benefit from the services of a new director with particular
skills, candidates with the appropriate experience, expertise and diversity are considered. Under the direction and
supervision of the Chair, appropriate background checks are undertaken of each candidate as to the person’s
character, experience, education, criminal record and bankruptcy history. Each incumbent director is encouraged,
and given the opportunity to meet with each candidate on a one to one basis. The full Board then appoints the most
suitable candidate who must stand for election at the next general meeting of shareholders. For the meeting,
shareholders are given sufficient information of the new director, including but not limited to biographical details,
other listed directorships currently held and in the case of a director standing for election for the first time, advice
that appropriate background checks have been undertaken.
Diversity Policy
The Company has in place a Diversity Policy which provides the written framework and objectives for achieving a
work environment that values and utilises the contributions of employees with diverse backgrounds, experiences,
and perspectives, irrespective of gender, age, ethnicity and cultural background. The Board is responsible for
developing, where possible, measurable objectives and strategies to support the framework and objectives of the
Diversity Policy. The Remuneration Committee is responsible for monitoring the progress of the measurable
objectives through various monitoring, evaluation and reporting mechanisms.
Apart from participation rates established for indigenous employment at the Savannah nickel project prescribed
under the 2007 Savannah Co-Existence Agreement (and as reported below), the Board has not determined
measurable objectives on gender diversity across the workplace and at the Board level. In the coming financial
year, the Board is to continue to oversee the development of new programs to achieve a broader pool of skilled
and experienced senior management and Board candidates, and if deemed appropriate, identify future and
targeted measurable objectives and strategies on gender diversity.
Pursuant to Recommendation 1.5 of the Recommendations, the Company discloses the following information as
at the date of this report:
• Percentage of women and men employed within the Group - women: 10%; men: 90%;
• Percentage of women and men employed as a senior executive - women: nil; men: 100%;
• Percentage of women and men employed at the Board level - women: nil; men: 100%; and
• Percentage of indigenous employees at the Savannah Nickel Project – nil.
The Company has defined an employee who is a senior executive as a person who is a “senior manager” as
defined in Section 9 (Definitions) of the Corporations Act 2001, namely a person who is at the highest management
level of the Company who “makes, or participates in making decisions that affect the whole, or a substantial part,
of the business of the corporation; or has the capacity to affect significantly the corporation’s financial standing”.
The performance appraisal of a senior executive is performed by the Managing Director and the Remuneration
Committee.
Corporate Governance section.
The Diversity Policy can be accessed on the Company’s website at www.panoramicresources.com under the
Performance Assessment of the Board, its Committees and Individual Directors
Currently, there is no formal annual performance appraisal system in place for Board performance on a director by
director basis. The last performance appraisal was conducted at a meeting of directors in June 2016, where time
was set aside in which each director gave a performance appraisal on the Board as a whole and on themselves.
The Board has agreed to conduct these performance appraisals on a regular basis while the search for a suitable
formal performance appraisal system is undertaken. Membership of the Audit Committee by non-executive
directors is initially for a three year period, with an annual renewal review thereafter with performance being one
criteria in order to retain office.
Principle 2: Structure the Board to Add Value
Board Composition
The composition of the Board is determined using the following principles:
• The Board currently comprises four directors. Under Article 10 of the Company’s Constitution, this number
may be increased to a maximum of ten directors where it is required due to a commercial alliance, or felt that
additional expertise is required in specific areas, or when an outstanding candidate is identified;
• The Board should comprise directors with a broad range of expertise with an emphasis on commercial,
exploration, mining and project development related experience; and
• Directors appointed by the Board are subject to election by shareholders at the following annual general
meeting and thereafter directors (other than the Managing Director) are subject to re-election at least every
three years. The tenure of executive directors is linked to their holding of executive office.
Corporate Governance Statement
Corporate Governance Statement
The name, position, independence classification, qualification, skills and length of service of each director of the
Company in office at the date of the Statement is:
Independence
Classification
Independent
n/a, Executive
Qualification/Skills
Mining Engineer, general mining
Process Engineer, project
development
Service
(yrs)
10
16
Name
Brian M Phillips
Position
Chairman
Peter J Harold
Managing Director
Non-Executive
Director
Non-Executive
Director
John Rowe
Independent
Non
Independent
Peter R Sullivan #
# Peter R Sullivan is a non-executive director of a substantial shareholder holding more than 5% of the ordinary shares in the Company and as a
consequence has been assessed as not being independent under the independence criteria detailed in Recommendation 2.3 of the
Recommendations.
Nomination committee
Due to the size of the Board and the small senior executive team, the Board has determined there is no benefit, at
this time, of establishing a nomination committee. The functions of the nomination committee are performed by the
Board as a whole, when required, using the principles for setting the composition of the Board.
Geologist, general mining
Engineer,
corporate and project developmen
11
1
Directors' Independence
The composition of the Board is considered to be appropriate for a Company that had and subject to a recovery in
base metal prices, will, in all likelihood, again have a sustainable producing business. In addition, the Company
remains active in reviewing, acquiring and developing new projects. As at the date of this Statement, the majority
of non-executive directors, including the Chairman, are considered independent of management, have no interest,
position, association or relationship that would compromise their independence and directly or indirectly,
individually hold less than 5% of the issued ordinary shares of the Company. A review of the independence criteria
detailed in Recommendation 2.3 of the Recommendations in relation to each non-executive director is made on a
regular basis and when appropriate.
Director Education
The non-executive directors are given every opportunity to gain a better understanding of the business, the industry,
and the environment within which the Company operates, and are given access to continuing education
opportunities to update and enhance their skills and knowledge. Directors visit each mining operation at least once
a year, and meet with executives on a regular basis to enable directors to maintain an understanding of the roles
and responsibilities of executives and of the culture and values within the Company.
Conflict of Interest
In accordance with Section 191 of the Corporations Act 2001 and Article 10.13 of the Company’s Constitution,
directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those
of the Company. Where the Board believes that a significant conflict exists, the director concerned does not receive
the relevant board papers and is not present at the meeting whilst the item is considered.
Independent professional advice
Each director has the right of access to all relevant Company information and to the Company’s executives and,
subject to prior consultation with the Chairman, may seek independent professional advice at the Company’s
expense. A copy of the advice received by the director is made available to all other members of the Board.
Board Committees
To facilitate the execution of its responsibilities, the Board’s Committees provide a forum for a more detailed
analysis of key issues. Each Committee is entitled to the resources and information it requires to carry out its
duties, including direct access to advisors and employees. Membership of the current Committees of the
Panoramic Board and the number of times each Committee met during the financial year are set out in the
Directors’ Report. The names and functions of each Committee is set out below:
• Audit Committee
The Audit Committee consists of all non-executive directors and is chaired by an independent director who is not
the Chairman of the Board. The Audit Committee is to oversee the financial reporting process to ensure the
balance, transparency and integrity of published financial information. The Audit Committee is also to review: the
effectiveness of internal controls, recommendation and the appointment and assessing the performance of the
external auditor; the Company’s process for monitoring compliance with laws and regulations affecting financial
reporting and, if applicable, its code of business conduct. The Audit Committee operates under an Audit
Committee Charter that is reviewed by the Committee and is re-approved or changed by the full Board on a bi-
annual basis.
2017 ANNUAL REPORT | PAGE 43
Corporate Governance Statement
• Remuneration Committee
The Remuneration Committee consists of all non-executive directors and is chaired by an independent director.
The role of the Remuneration Committee is to review remuneration packages and policies applicable to the
Managing Director, other executive directors (if applicable) and senior executives and to monitor the scope and
currency of the Company’s Diversity Policy. The remuneration of executive directors is determined by reference to
relevant employment market conditions and of the attainment of defined Company goals. The remuneration of
senior executives is determined by the Remuneration Committee based on recommendations provided by the
Managing Director. Remuneration levels are competitively set to attract the most qualified and experienced
directors and senior executives. The Remuneration Committee obtains independent advice on the appropriateness
of remuneration packages.
There is increased transparency and accountability in remuneration matters as required in the Improving
Accountability on Director and Executive Remuneration Bill 2011. There are now rules for engaging remuneration
consultants and on reporting specific information about remuneration consultants in the audited Remuneration
Report in the Directors’ Report. The Company’s audited 2017 Remuneration Report includes these reporting
obligations.
Further details on the Committee and of remuneration arrangements in place for the directors and executives are
set out in the Directors’ Report.
• Environment, Safety and Risk Committee
The Environment, Safety and Risk Committee consist of all directors and is chaired by an independent director.
The role of the Environment, Safety and Risk Committee is to oversee and monitor the effectiveness of the Group’s
strategies and systems to ensure that the Company complies with external and internally accepted standards for
the impact of business activities on the environment, the safety and well being of employees, and on the control
and management of the key risks facing the business. Where possible, the Committee meets during Board visits
to the mining operations whereby the members of the Committee are able to directly inter face with the senior
managers responsible for environmental issues, occupational health and safety and the control and mitigation of
non-financial risks. The Committee also nominates a non-executive director to attend and be actively involved in
the Group’s safety conferences. The Committee operates under an Environment, Safety and Risk Committee
Charter that is reviewed by the committee and is re-approved or changed by the full Board on a bi-annual basis.
The Committee Charter can be accessed on the Company’s website at www.panoramicresources.com under the
Corporate Governance section.
As a consequence of the Company’s operations being put on care and maintenance in the previous financial year,
the Committee did not hold a meeting during the financial year.
Principle 3: Act Ethically and Responsibly
All directors, executives, managers and employees are expected to act with the utmost integrity, honesty and
objectivity, striving at all times to enhance the performance and reputation of the Company and its controlled
entities.
Code of Conduct
The Company has established a written Code of Conduct which outlines the culture, practices, expected conduct,
values and behaviour to be displayed by all employees in upholding the integrity, reputation and accountability of
the Company and its controlled entities in the work environment and in the interactions with the Company’s various
stakeholders. Certain practices are necessary to comply with Federal and Western Australian State industrial
legislation and the Corporations Law. The Code of Conduct has a clear responsibility and accountability of
employees for reporting and investigating reports of unethical practices by reference to specific rules and policies
such as the rules for trading in the Company securities, and the policy on discrimination, harassment and bullying.
This code can be accessed on the Company’s website at www.panoramicresources.com under the Corporate
Governance section.
Trading in Company securities by directors, officers and employees
The Company has in place a fit-for-purpose Share Trading Policy for the trading in Company securities by
directors, key management personnel, officers and employees as required under ASX Listing Rule 12.12. The
Policy is worded to ensure compliance with Section 1043A of the Corporations Law (on insider trading), Part 2D.1
of the Corporations Act 2001 (on the proper duties in relation to the use of inside information), and ASX Listing
Rules 3.19A, 12.9, 12.10, and 12.11 and updated Guidance Note 27 (January 2015).
PAGE 44 | 2017 ANNUAL REPORT
Corporate Governance Statement
• Remuneration Committee
The Remuneration Committee consists of all non-executive directors and is chaired by an independent director.
The role of the Remuneration Committee is to review remuneration packages and policies applicable to the
Managing Director, other executive directors (if applicable) and senior executives and to monitor the scope and
currency of the Company’s Diversity Policy. The remuneration of executive directors is determined by reference to
relevant employment market conditions and of the attainment of defined Company goals. The remuneration of
senior executives is determined by the Remuneration Committee based on recommendations provided by the
Managing Director. Remuneration levels are competitively set to attract the most qualified and experienced
directors and senior executives. The Remuneration Committee obtains independent advice on the appropriateness
of remuneration packages.
There is increased transparency and accountability in remuneration matters as required in the Improving
Accountability on Director and Executive Remuneration Bill 2011. There are now rules for engaging remuneration
consultants and on reporting specific information about remuneration consultants in the audited Remuneration
Report in the Directors’ Report. The Company’s audited 2017 Remuneration Report includes these reporting
obligations.
Further details on the Committee and of remuneration arrangements in place for the directors and executives are
set out in the Directors’ Report.
• Environment, Safety and Risk Committee
The Environment, Safety and Risk Committee consist of all directors and is chaired by an independent director.
The role of the Environment, Safety and Risk Committee is to oversee and monitor the effectiveness of the Group’s
strategies and systems to ensure that the Company complies with external and internally accepted standards for
the impact of business activities on the environment, the safety and well being of employees, and on the control
and management of the key risks facing the business. Where possible, the Committee meets during Board visits
to the mining operations whereby the members of the Committee are able to directly inter face with the senior
managers responsible for environmental issues, occupational health and safety and the control and mitigation of
non-financial risks. The Committee also nominates a non-executive director to attend and be actively involved in
the Group’s safety conferences. The Committee operates under an Environment, Safety and Risk Committee
Charter that is reviewed by the committee and is re-approved or changed by the full Board on a bi-annual basis.
The Committee Charter can be accessed on the Company’s website at www.panoramicresources.com under the
Corporate Governance section.
As a consequence of the Company’s operations being put on care and maintenance in the previous financial year,
the Committee did not hold a meeting during the financial year.
Principle 3: Act Ethically and Responsibly
All directors, executives, managers and employees are expected to act with the utmost integrity, honesty and
objectivity, striving at all times to enhance the performance and reputation of the Company and its controlled
entities.
Code of Conduct
The Company has established a written Code of Conduct which outlines the culture, practices, expected conduct,
values and behaviour to be displayed by all employees in upholding the integrity, reputation and accountability of
the Company and its controlled entities in the work environment and in the interactions with the Company’s various
stakeholders. Certain practices are necessary to comply with Federal and Western Australian State industrial
legislation and the Corporations Law. The Code of Conduct has a clear responsibility and accountability of
employees for reporting and investigating reports of unethical practices by reference to specific rules and policies
such as the rules for trading in the Company securities, and the policy on discrimination, harassment and bullying.
This code can be accessed on the Company’s website at www.panoramicresources.com under the Corporate
Governance section.
Trading in Company securities by directors, officers and employees
The Company has in place a fit-for-purpose Share Trading Policy for the trading in Company securities by
directors, key management personnel, officers and employees as required under ASX Listing Rule 12.12. The
Policy is worded to ensure compliance with Section 1043A of the Corporations Law (on insider trading), Part 2D.1
of the Corporations Act 2001 (on the proper duties in relation to the use of inside information), and ASX Listing
Rules 3.19A, 12.9, 12.10, and 12.11 and updated Guidance Note 27 (January 2015).
Corporate Governance Statement
The Managing Director and the Company Secretary have been appointed to ensure that the following rules for
the trading in Company’s securities are strictly adhered to:
• Trading in Company securities is only permitted following the notification of the intention to trade by submitting
a Notification Form with the Managing Director and dealing is not to occur until a receipt of confirmation is
received from the Managing Director or, in the case of the Managing Director, from the Chairman;
• Trading in Company securities is prohibited at any time when in possession of unpublished information, which if
generally available, might materially affect the price or value of those securities;
• Trading in Company securities is prohibited during specified prohibited periods, known as black-out periods;
• Active trading in Company securities, which involves frequent and regular trading in those securities with a view
to derive profit related income from that activity, is prohibited;
• The entering into contracts to hedge exposure to equity-based remuneration, is prohibited; and
• Only in exceptional circumstances, can approval be obtained in advance from the Managing Director, or in the
case of a director, from the other directors, to trade outside the specified prohibited periods.
On an annual basis in December, the Company Secretary circulates to all employees via email, the start and finish
dates for the next calendar year’s black-out periods. To monitor compliance with the policy and to give assurance
to the Board on compliance with the rules of the Share Trading Policy, the Company Secretary keeps records of
the confirmations permitting a trade in the Company’s securities in strict adherence with the rules.
This Share Trading Policy can be accessed on the Company’s website at www.panoramicresources.com under
the Corporate Governance section.
Discrimination, Harassment and Bullying Policy
The Company is committed to providing a work environment that is safe, fair and free from discrimination,
harassment and bullying for all employees of the Company. All employees are encouraged to follow adopted
procedures allowing concerns or instances of illegal conduct or malpractice to be raised in good faith without being
subjected to victimisation, harassment or discriminatory treatment, and to have such concerns or instances properly
investigated. The Policy provides a mechanism by which all employees can confidentially report improper conduct
without fear of discrimination. This policy document can be accessed on the Company's website at
www.panoramicresources.com under the Corporate Governance section.
Privacy Policy
The Company has in place a Privacy Policy which deals with the collection, use, storage and disclosure of
information of personal information about an individual who can be identified or who may be reasonably identified
by the information. Where sensitive information is collected and stored, the information must not be collected unless
the individual consents to collection and the Company is authorised to collect the information by law. The Policy
sets out the obligations surrounding the integrity of personal information, security measures, how an individual can
access their information and seek correction to it, and make complaint to if necessary.
This Privacy Policy can be accessed on the Company’s website at www.panoramicresources.com under the
Corporate Governance section.
Principle 4: Safeguard Integrity in Corporate Reporting
The Managing Director and Chief Financial Officer are required to state in writing to the Audit Committee and the
Board that the Company’s and Group’s financial reports present a true and fair view, in all material aspects, of the
Company’s and Group’s financial condition and that operational results are in accordance with relevant accounting
standards. Pursuant to Section 295A of the Corporations Act 2001, the Managing Director and the Chief Financial
Officer are required to provide written certification to the Board, at both the end of the Half-Year and the Full-Year
reporting periods, that the Company’s financial reports are based on a sound system of risk management and
internal control and that the system is operating effectively.
The Audit Committee reviews all final draft external financial reports with the external auditor and makes
recommendations on their adequacy to the Board prior to their release to shareholders, investors and other public
forums. There is regular communication between the Audit Committee, management and external auditor. In
accordance with Section 324DA of the Corporations Act 2001, the audit partner of the external auditor is required
to be rotated after five successive financial years. It is the role of the Audit Committee to select the new audit
engagement partner as nominated by the external partner after considering each nominated individual’s
experience, reputation and independence.
2017 ANNUAL REPORT | PAGE 45
Corporate Governance Statement
In addition, in the absence of an internal audit function, the Audit Committee reviews, assists and assesses the
adequacy of the Company’s internal control and financial risk management systems, accounting and business
policies.
Principle 5: Make Timely and Balanced Disclosure
Continuous Disclosure and Shareholder Communication
The Company is committed to providing relevant up to date information to its shareholders and the broader
investment community in accordance with the continuous disclosure requirements under the ASX Listing Rules
and the Corporations Law.
The Company has a Continuous Disclosure Policy that all shareholders and investors have equal access to the
Company's information. This policy has been updated and approved by the full Board to comply with the May 2013
amendments to ASX Listing Rule 3.1 and updated Guidance Note 8 (August 2015) of the Recommendations. This
document and all material announcements provided to the ASX can be accessed on the Company’s website at
www.panoramicresources.com.
The Company has appointed the Company Secretary to oversee the continuous disclosure practices of the
Company and its controlled entities. His responsibilities include:
• Reviewing all statutory regulatory or tender reports submitted to or made by the Company and its controlled
entities, and to report or recommend to the Board as appropriate;
• Ensuring compliance with continuous disclosure requirements;
• Overseeing and coordinating the disclosure of information to the ASX, analysts, brokers, shareholders, the
media and public; and
• Educating directors and staff of the Company’s and Group’s disclosure policies and procedures and raising
awareness of the principles of the underlying continuous disclosure.
Principle 6: Respect the Rights of Security Holders
Continuous Disclosure and Shareholder Communication
The Board in adopting a Continuous Disclosure Policy ensures that shareholders are provided with up to date
Company information. Communication to shareholders is facilitated by the production of the annual report, quarterly
reports, public announcements, and the posting of policies, and ASX releases immediately after their disclosure to
the ASX, on the Company’s website. All shareholders are given the option to receive communications from, and
send communications to, the Company and Share Registry electronically. In addition, all shareholders are
encouraged to attend the Annual General Meeting and use the opportunity to ask questions to management
following the Managing Director’s presentation. The Company makes every endeavour to respond to the most
commonly asked questions. The external auditor attends the meeting and is available to answer questions in
relation to the conduct of the audit.
Principle 7: Recognise and Manage Risk
The Board believes that risk management and compliance are fundamental to sound management and that
oversight of such matters is an important responsibility of the Board. The Company has significantly changed the
risk management framework through the progressive development of an enterprise-wide software database on
the inherent risks and risk mitigation strategies identified across all functions of the business, including
occupational, health, safety and environment (OHS&E). This Board sanctioned approach is in accordance with
Australian/New Zealand Standard for Risk Management (AS/NZS 4360 2004) and is aligned to the control
framework for enterprise risk management prepared by the Committee of Sponsoring Organisations of the
Treadway Commission (COSO) in 2001. The framework involved the Company undertaking a comprehensive
review in 2011/12 of the different elements across the various financial, administrative and operational functions
at the Company’s mine sites and Perth office and in identifying the risks inherent in each element and the
appropriate risk management internal controls, systems and response procedures to mitigate their impact on
strategic, operational and financial performance.
customer declaration of force majeure;
For example, there are a number of risks the Company’s sites are exposed to, principally when in production, that
are both common to the mining industry and unique due to location such as, but not limited to:
• exposure to fluctuations in commodity prices and the United States currency foreign exchange rate;
•
• health, safety, industrial and environment matters;
• production capacity;
•
•
future delivery against committed financial derivatives; and
regulatory constraints, compliance, the impact of climate change and natural disasters.
PAGE 46 | 2017 ANNUAL REPORT
In addition, in the absence of an internal audit function, the Audit Committee reviews, assists and assesses the
adequacy of the Company’s internal control and financial risk management systems, accounting and business
policies.
Principle 5: Make Timely and Balanced Disclosure
Continuous Disclosure and Shareholder Communication
The Company is committed to providing relevant up to date information to its shareholders and the broader
investment community in accordance with the continuous disclosure requirements under the ASX Listing Rules
and the Corporations Law.
The Company has a Continuous Disclosure Policy that all shareholders and investors have equal access to the
Company's information. This policy has been updated and approved by the full Board to comply with the May 2013
amendments to ASX Listing Rule 3.1 and updated Guidance Note 8 (August 2015) of the Recommendations. This
document and all material announcements provided to the ASX can be accessed on the Company’s website at
www.panoramicresources.com.
The Company has appointed the Company Secretary to oversee the continuous disclosure practices of the
Company and its controlled entities. His responsibilities include:
• Reviewing all statutory regulatory or tender reports submitted to or made by the Company and its controlled
entities, and to report or recommend to the Board as appropriate;
• Ensuring compliance with continuous disclosure requirements;
• Overseeing and coordinating the disclosure of information to the ASX, analysts, brokers, shareholders, the
media and public; and
• Educating directors and staff of the Company’s and Group’s disclosure policies and procedures and raising
awareness of the principles of the underlying continuous disclosure.
Principle 6: Respect the Rights of Security Holders
Continuous Disclosure and Shareholder Communication
The Board in adopting a Continuous Disclosure Policy ensures that shareholders are provided with up to date
Company information. Communication to shareholders is facilitated by the production of the annual report, quarterly
reports, public announcements, and the posting of policies, and ASX releases immediately after their disclosure to
the ASX, on the Company’s website. All shareholders are given the option to receive communications from, and
send communications to, the Company and Share Registry electronically. In addition, all shareholders are
encouraged to attend the Annual General Meeting and use the opportunity to ask questions to management
following the Managing Director’s presentation. The Company makes every endeavour to respond to the most
commonly asked questions. The external auditor attends the meeting and is available to answer questions in
relation to the conduct of the audit.
Principle 7: Recognise and Manage Risk
The Board believes that risk management and compliance are fundamental to sound management and that
oversight of such matters is an important responsibility of the Board. The Company has significantly changed the
risk management framework through the progressive development of an enterprise-wide software database on
the inherent risks and risk mitigation strategies identified across all functions of the business, including
occupational, health, safety and environment (OHS&E). This Board sanctioned approach is in accordance with
Australian/New Zealand Standard for Risk Management (AS/NZS 4360 2004) and is aligned to the control
framework for enterprise risk management prepared by the Committee of Sponsoring Organisations of the
Treadway Commission (COSO) in 2001. The framework involved the Company undertaking a comprehensive
review in 2011/12 of the different elements across the various financial, administrative and operational functions
at the Company’s mine sites and Perth office and in identifying the risks inherent in each element and the
appropriate risk management internal controls, systems and response procedures to mitigate their impact on
strategic, operational and financial performance.
For example, there are a number of risks the Company’s sites are exposed to, principally when in production, that
are both common to the mining industry and unique due to location such as, but not limited to:
• exposure to fluctuations in commodity prices and the United States currency foreign exchange rate;
•
customer declaration of force majeure;
• health, safety, industrial and environment matters;
• production capacity;
•
•
future delivery against committed financial derivatives; and
regulatory constraints, compliance, the impact of climate change and natural disasters.
Corporate Governance Statement
Corporate Governance Statement
The 2011/12 review also examined the effectiveness of internal controls, systems and response procedures that
were in place in previous years. This comprehensive review on each element and function across the Group,
including the setting of various risk appetite tolerance thresholds by senior management was completed in mid-
2012, followed by approval by the full Board of the Risk Management Guideline (August 2012) which detailed on
the enterprise wide risk management framework and the process, roles and responsibilities for conducting each
new comprehensive review.
In 2014/15, the Company conducted a new comprehensive review using the procedures set down in the Risk
Management Guideline, including the re-setting of various risk appetite tolerance thresholds by senior
management, which resulted in the production of new Risk Appetite Statements (May 2015), Risk Management
Policy (May 2015) and an updated Risk Management Guideline (“Guideline”) that was approved by the full Board
in June 2015. A condensed version of
the Company’s website at
www.panoramicresources.com.
is available on
the Guideline
The Board has established a committee of the Board, the Environment, Safety and Risk Committee, which is
chaired by an independent director. All directors of the Board are also members of the Committee. The number of
times the Committee met during the financial year is contained in the Directors’ Report. The Committee’s Charter
(November 2015) states that the Committee will oversee the Company’s management of financial and non-financial
risks at the operations in accordance with the established risk management framework while always taking into
account the Company’s legal obligations set by the Federal and State statutory law makers on, but not limited to,
environment, employment and occupational health and safety. As a consequence of the Company’s operations
being put on care and maintenance in the previous financial year, the Committee did not hold a meeting during the
financial year.
There are strict Company-wide compliance reporting requirements under the Guideline that require each
department head/function manager on an annual basis to review their risk registers to determine the level of
compliance (from zero to 100%) using a risk matrix score for impact, tolerance and opportunity, thereby ensuring
that either a risk(s) has not developed a higher risk profile, or outlining monitoring and corrective measures to
reduce the risk(s) to an acceptable level. Using this information, each operations manager is required to complete
and provide a Project Risk Summary and Compliance Report during the Full-Year audit process.
In 2015/16 and again in 2016/17, the compliance reporting requirements detailed above were undertaken on a
more limited basis as a consequence of the operations being on care and maintenance.
The reporting and control mechanisms, in the absence of an internal audit function, support the written
certification at the end of the Half-Year and Full-Year reporting periods, in accordance with Section 295A of the
Corporations Act 2001 given by the Managing Director and the Chief Financial Officer to the Board certifying that
the Company’s financial reports are based on a sound system of risk management and internal control and that
the system is operating effectively.
Principle 8: Remunerate Fairly and Responsibly
Board Remuneration
The total annual remuneration paid to non-executive directors may not exceed the limit set by the shareholders at
an annual general meeting (currently $600,000). The remuneration of the non-executive directors is fixed rather
than variable.
Executive Remuneration
The Board has established a committee of the Board, the Remuneration Committee. The Remuneration Committee
provides recommendations and direction for the Company’s remuneration practices. Subject always to the
Company’s operational and economic circumstances, the Committee ensures that a significant proportion of each
executive’s remuneration is linked to his or her performance and the Company’s performance. Performance
reviews are conducted regularly to determine the proportion of remuneration that will be at ‘risk’ for the upcoming
year. Until recently, the Company’s executives were able to participate in a performance share rights plan that was
linked to the Company’s performance (on both a relative share price and resources and reserves growth basis)
against its peers in the resources industry. However, in light of the Nickel Division operations being on care and
maintenance as a result of the low, albeit unsustainable, nickel price, the Remuneration Committee has put on hold
the granting of new performance rights to shares to employees. The Committee also ensures that there is no
discrimination on remuneration in respect to gender.
Further details in relation to director and executive remuneration are set out in the 2017 Remuneration Report on
pages 27 to 38.
2017 ANNUAL REPORT | PAGE 47
Directors’ declaration
30 June 2017
In accordance with a resolution of the directors of Panoramic Resources Limited, I state that:
1. In the directors' opinion:
(a)
the financial statements and notes set out on pages 54 to 113 are in accordance with the Corporations Act
2001, including:
(i)
giving a true and fair view of the Consolidated entity’s financial position as at 30 June 2017 and of
its performance for the year ended on that date; and
complying with Accounting Standards (including the Australian Accounting Interpretations) and
Corporations Regulations 2001.
(ii)
(b)
subject to the achievement of the matters set out in Note 1(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 sections 295A of the Corporations Act 2001 for the financial period ending 30 June 2017.
3. In the opinion of the directors, as at the date of this declaration, there are reasonable grounds to believe that the
members of the Closed Group identified in note 30, subject to the achievement of the matters set out in Note 1(b),
will be able to meet any obligations or liabilities to which they are or may become subject, by virtue of the Deed of
Cross Guarantee.
On behalf of the Board
Peter Harold
Managing Director
Perth, 30 August 2017
PAGE 48 | 2017 ANNUAL REPORT
Directors’ declaration
30 June 2017
Independent Auditors Report
In accordance with a resolution of the directors of Panoramic Resources Limited, I state that:
1. In the directors' opinion:
2001, including:
(a)
(b)
(i)
(ii)
the financial statements and notes set out on pages 54 to 113 are in accordance with the Corporations Act
giving a true and fair view of the Consolidated entity’s financial position as at 30 June 2017 and of
its performance for the year ended on that date; and
complying with Accounting Standards (including the Australian Accounting Interpretations) and
Corporations Regulations 2001.
subject to the achievement of the matters set out in Note 1(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 sections 295A of the Corporations Act 2001 for the financial period ending 30 June 2017.
3. In the opinion of the directors, as at the date of this declaration, there are reasonable grounds to believe that the
members of the Closed Group identified in note 30, subject to the achievement of the matters set out in Note 1(b),
will be able to meet any obligations or liabilities to which they are or may become subject, by virtue of the Deed of
Cross Guarantee.
On behalf of the Board
Peter Harold
Managing Director
Perth, 30 August 2017
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 Panoramic Resources
Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Panoramic Resources Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated balance sheet as at 30 June 2017, the
consolidated income statement, consolidated statement of 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, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a)
b)
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2017
and of its consolidated financial performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report
section of our report. We are independent of the Group in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional
and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Material uncertainty related to going concern
Without qualifying our opinion, we draw attention to Note 1(b) Going concern basis in the financial report.
These conditions indicate the existence of a material uncertainty that may cast significant doubt about
the Group’s ability to continue as a going concern and therefore, the Group may be unable to realise its
assets and discharge its liabilities in the normal course of business.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, 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. For each matter below, our description of how our audit addressed the matter
is provided in that context. In addition to the matter described in the Material Uncertainty Related to
A member firm of Ernst & Young Global Limited
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2017 ANNUAL REPORT | PAGE 49
Independent Auditors Report
Going Concern section, we have determined the matters described below to be the key audit matters to
be communicated in our report.
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. Carrying value of non-current assets
Why significant
How our audit addressed the key audit matter
As at 30 June 2017 the Group had non-current assets totaling
$121.8 million comprising development properties, mine
properties , property, plant and equipment and capitalised
exploration and evaluation expenditure (refer to notes 12 and
14). The Group recorded an impairment reversal of 9,178,000
as described in note 12.
At the end of each reporting period, the directors exercise
judgment in determining whether there is any indication of
impairment or indication that an impairment loss recognised in
prior periods may no longer exist or may have decreased. If
any such indication exists, the Group estimates the recoverable
amount of that asset. As detailed in notes 12 and 14, it was
determined that the recoverable amount, based on fair value
less costs of disposal (FVLCD) value of the Projects
approximated its carrying value at 30 June 2017.
We focused on this matter because of the:
►
►
Significant judgment involved in considering if there was
an indicator of impairment or indicator that an
impairment loss recognised in prior periods may no
longer exist or may have decreased.
Significant judgment and estimates such as underlying
reserves and resources, as well as resource multiples
based on comparable transactions are involved in the
determination of recoverable amount.
Our audit procedures included the following:
► We assessed the appropriateness of the Group’s
identification of indications of impairment loss recognised
in prior periods may no longer exist or may have
decreased.
►
►
For recoverable amounts determined by the Group, in
conjunction with our valuation specialists we assessed
the key assumptions in the Group’s recoverability
assessments, including assessing resource multiples and
performing comparable transaction analysis using
external data where available.
For recoverable amounts determined by external
independent experts engaged by the Group, we involved
our valuation specialists to assess the valuation report
provided by the Group’s experts including assessing:
►
►
►
The independence, objectivity and capability of the
expert used by the Group.
The methodology and valuation method adopted.
The assumptions applied by the Group’s
independent valuer providing the report as detailed
in notes 12 and 14.
► We also considered the adequacy of the Group’s
disclosures with respect to the degree of estimation
involved in the determination of the recoverable amount
and the reversal of the impairment loss.
2. Rehabilitation and restoration provisions
Why significant
How our audit addressed the key audit matter
As a consequence of its operations the Group incurs
obligations to rehabilitate and restore mine sites.
Rehabilitation and restoration activities are governed by local
legislative requirements. As at 30 June 2017 the Group’s
consolidated balance sheet includes provisions of $29.8 million
in respect of such obligations.
Estimating the costs associated with these future activities
requires considerable judgment in relation to factors such as
timing of when rehabilitation will take place, the time period for
the rehabilitation to be effective, the costs associated with the
rehabilitation and restoration activities and economic
assumptions such as inflation rates and discount rates (refer to
note 21).
We evaluated the assumptions, methodologies and conclusions
determined by the Group. We assessed the Group’s
methodology in conjunction with re-performing related
calculations. We assessed the qualifications, experience and
independence (for external experts) of both management’s
internal and external experts that formed the basis of the
Group’s costs estimate. We evaluated the adequacy of the
Group’s disclosures relating to rehabilitation obligations; and
considered the treatment applied to changes in the
rehabilitation and restoration provision from prior year.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
PT:RH:PANORAMIC:006
PAGE 50 | 2017 ANNUAL REPORT
Independent Auditors Report
Independent Auditors Report
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.
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.
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
judgment 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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
PT:RH:PANORAMIC:006
2017 ANNUAL REPORT | PAGE 51
Independent Auditors Report
►
►
►
►
►
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.
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 Panoramic Resources Limited for the year ended 30 June
2017, complies with section 300A of the Corporations Act 2001.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
PT:RH:PANORAMIC:006
PAGE 52 | 2017 ANNUAL REPORT
Independent Auditors Report
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
P Teale
Partner
Perth
30 August 2017
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
PT:RH:PANORAMIC:006
2017 ANNUAL REPORT | PAGE 53
Auditors Independent Declaration
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 Panoramic
Resources Limited
As lead auditor for the audit of Panoramic Resources Limited for the financial 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 audit; and
b. no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Panoramic Resources Limited and the entities it controlled during the
financial year ended 30 June 2017.
Ernst & Young
Philip Teale
Partner
30 August 2017
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
PT:RH:PANORAMIC:008
PAGE 54 | 2017 ANNUAL REPORT
FINANCIAL REPORT
2017 ANNUAL REPORT | PAGE 55
Consolidated income statement
For the year ended 30 June 2017
Revenue
Cost of sales of goods
Gross margin on sale of goods
Other income
Care and maintenance expenses
Corporate and marketing costs
Exploration and evaluation expenditure
Exploration expenditure written-off
Mark to market of derivatives
Impairment loss
Reversal of impairment loss
Share based payments
Other expenses
Finance costs
Loss before income tax
Income tax benefit
Loss for the year
Loss for the year is attributable to:
Owners of Panoramic Resources Limited
Non-controlling interests
Notes
3
5
4
5
12, 14
5
5
6
Loss per share attributable to the ordinary equity holders of the
Company:
Basic loss per share
Diluted loss per share
34
34
2017
$'000
8,966
(8,963)
3
700
(7,539)
(5,365)
(493)
-
-
-
9,178
(473)
(291)
(490)
(4,770)
-
(4,770)
(4,241)
(529)
(4,770)
2016
$'000
92,136
(153,252)
(61,116)
1,305
(1,002)
(6,729)
(2,358)
(1,924)
(623)
(79,453)
-
(624)
(892)
(1,405)
(154,821)
10,462
(144,359)
(144,359)
-
(144,359)
Cents
Cents
(1.0)
(1.0)
(42.7)
(42.7)
The above consolidated income statement should be read in conjunction with the accompanying notes.
PAGE 56 | 2017 ANNUAL REPORT
Consolidated statement of comprehensive income
For the year ended 30 June 2017
Loss for the year
Other comprehensive income
Items that may reclassified to profit or loss
Changes in fair value of available-for-sale financial assets, net of tax
Exchange differences on translation of foreign operations
Blank
Items that will not be reclassified to profit or loss
Impairment of assets charged against revaluation reserve, net of tax
Other comprehensive loss for the year, net of tax
Total comprehensive loss for the year
Total comprehensive loss for the year is attributable to:
Owners of Panoramic Resources Limited
Non-controlling interests
2017
$'000
2016
$'000
(4,770)
(144,359)
528
(324)
(90)
(489)
-
204
(4,566)
(4,037)
(529)
(4,566)
(3,272)
(3,851)
(148,210)
(148,210)
-
(148,210)
The above consolidated statement of comprehensive income should be read in conjunction with the
accompanying notes.
2017 ANNUAL REPORT | PAGE 57
Consolidated balance sheet
As at 30 June 2017
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Total current assets
Non-current assets
Available-for-sale financial assets
Exploration and evaluation
Development properties
Mine properties
Property, plant and equipment
Other non-current assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Non-controlling interests
Total equity
Notes
7
8
9
10
11
14
14
14
12
15
16
17
18
19
21
2017
$'000
20,650
535
3
236
21,424
1,200
91,772
17,028
1,403
11,555
1,803
124,761
146,185
2,533
769
971
4,273
68
29,722
29,790
34,063
2016
$'000
19,437
797
8,480
302
29,016
677
80,201
18,019
1,403
9,523
1,803
111,626
140,642
4,638
728
2,242
7,608
876
30,002
30,878
38,486
22
23(a)
112,122
102,156
169,044
42,568
169,044
42,337
(113,466)
(109,225)
13,976
-
112,122
102,156
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
PAGE 58 | 2017 ANNUAL REPORT
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Consolidated statement of cash flows
For the year ended 30 June 2017
Notes
2017
$'000
2016
$'000
32
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)
Payments to suppliers and employees (inclusive of goods and services tax)
Interest paid
Income tax refund
Payments for exploration and evaluation expense
Net cash (outflow) from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payment of development costs
Exploration and evaluation expenditure
Payments for cash backed bonds
Proceeds from sale of property, plant and equipment
Proceeds from sale of available-for-sale financial assets
Interest received
Net cash (outflow) inflow from investing activities
Cash flows from financing activities
Proceeds from issues of shares (net of cost)
Proceeds from partial sale of subsidiary
Repayment of borrowings
Net cash inflow from financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at end of year
7
8,782
(16,098)
(53)
-
(493)
(7,862)
(249)
(265)
(4,955)
-
693
-
557
(4,219)
102,470
(143,400)
(160)
613
(2,345)
(42,822)
(1,867)
(7,526)
(5,553)
(1,803)
180
17,811
495
1,737
-
10,103
14,055
(761)
13,294
1,213
19,437
20,650
-
(3,636)
6,467
(34,618)
54,055
19,437
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
PAGE 60 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
1 Summary of significant accounting policies
The financial report of Panoramic Resources Limited (the Parent or the Company) and its subsidiaries (the Group)
for the year ended 30 June 2017 was authorised for issue in accordance with a resolution of the directors on 30
August 2017.
Panoramic Resources Limited (the Parent) is a for profit Company limited by shares incorporated and domiciled in
Australia whose shares are publicly traded on the Australian Securities Exchange. The Group's principal place of
business is Level 9, 553 Hay Street, Perth WA 6000.
The principal activities of the Group during the course of the financial year consisted of exploration, evaluation,
development, and production of mineral deposits.
(a) Basis of preparation
The financial report is a general purpose financial report, which has been prepared in accordance with the
requirements of the Corporations Act 2001 and Australian Accounting Standards. The financial report has also
been prepared on a historical cost basis, except for derivative financial instruments, trade receivables and
available-for-sale investments, which have been measured at fair value. The financial report complies with
Australian Accounting Standards and International Financial Reporting Standards (IFRS) as issued by International
Accounting Standards Board.
(b) Going concern basis
These financial statements have been prepared on a going concern basis which assumes that the Group will be
able to meet its liabilities as they fall due for the foreseeable future.
Both the Savannah and Lanfranchi nickel mine were placed onto care and maintenance in 2016 and continued to
be on care and maintenance during the financial year due to weak nickel prices. The Group experienced net cash
outflows from operating activities of $7.9 million for the year ended 30 June 2017. In addition, the Group incurred
a net loss of $4.8 million for the year ended 30 June 2017. At 30 June 2017, the Group had cash and cash
equivalents of $20.6 million, which includes $11.7 million held by Horizon Gold Limited (a subsidiary of Panoramic
Resources Limited).
On the basis that global nickel prices remain weak for a sustained period, the directors are cognisant that there will
need to be additional staffing changes and cuts to operational and corporate costs, notwithstanding there may be
a need to raise additional funds via equity raisings from existing or new shareholders or to put in place borrowing
facilities in order to fund future programs on its growth assets and for general working capital requirements during
the period the Group’s income producing assets remain on care and maintenance. The Board is satisfied that the
Company will be able to raise additional capital (via equity, debt or a combination) as and when required and as a
result, it is appropriate to prepare the financial statements on a going concern basis.
Should the Group not achieve the funding outcomes 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 report. No adjustments have been made
relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might
be necessary should the Company not continue as a going concern.
2017 ANNUAL REPORT | PAGE 61
Notes to the consolidated financial statements
30 June 2017
(c) Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 30
June 2017. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns through its power over the investee. Specifically, the
Group controls an investee if and only if the Group has:
• Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the
investee)
• Exposure, or rights, to variable returns from its involvement with the investee, and
• The ability to use its power over the investee to affect its returns
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all
relevant facts and circumstances in assessing whether it has power over an investee, including:
• The contractual arrangement with the other vote holders of the investee
• Rights arising from other contractual arrangements
• The Group’s voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities,
income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of
comprehensive income from the date the Group gains control until the date the Group ceases to control the
subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the
parent of the Group and to the non-controlling interests, even if this results in the noncontrolling interests having a
deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their
accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity,
income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on
consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity
transaction. If the Group loses control over a subsidiary, it:
• De-recognises the assets (including goodwill) and liabilities of the subsidiary
• De-recognises the carrying amount of any non-controlling interests
• De-recognises the cumulative translation differences recorded in equity
• Recognises the fair value of the consideration received
• Recognises the fair value of any investment retained
• Recognises any surplus or deficit in profit or loss
• Reclassifies the parent’s share of components previously recognised in OCI to profit or loss or retained earnings,
as appropriate, as would be required if the Group had directly disposed of the related assets or liabilities
(d) New accounting standards and interpretations
Refer to Appendix A on page 109.
(e) Significant accounting judgements, estimates and assumptions
In the process of applying the Group's accounting policies, management has made the following judgements, and
estimations which have the most significant effect on the amounts recognised in the financial statements.
PAGE 62 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
(e) Significant accounting judgements, estimates and assumptions (continued)
(i) Determination of mineral resources and ore reserves
The Group estimates its mineral resources and ore reserves in accordance with the Australian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves (the ‘JORC code’) as a minimum standard. The
information on mineral resources and ore reserves were prepared by or under the supervision of Competent
Persons as defined in the JORC code. The amounts presented are based on the mineral resources and ore
reserves determined either under the 2012 or 2004 editions of the JORC code.
There are numerous uncertainties inherent in estimating mineral resources and ore reserves and assumptions that
are valid at the time of estimation may change significantly when new information becomes available. Significant
judgement is required in assessing the available reserves. Factors that must be considered in determining reserves
and resources are the Company's history of converting resources to reserves and the relevant time frame, market
and future developments.
Changes in the forecast prices of commodities, foreign currency exchange rates, production costs or recovery rates
may change the economic status of reserves and may ultimately result in the reserves being restated. Such
changes in reserves could impact on depreciation and amortisation rates, asset carrying values and provisions for
decommissioning and restoration.
(ii) Impairment of capitalised exploration and evaluation expenditure
The Group assesses impairment of all assets at each reporting date by evaluating conditions specific to the Group
and to the particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of
the asset is determined. The future recoverability of capitalised exploration and evaluation expenditure is
dependent on a number of 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 and probable reserves and 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 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.
In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet
reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable
reserves. To the extent that it is determined in the future that this capitalised expenditure should be written off, this
will reduce profits and net assets in the period in which this determination is made.
Capitalised exploration and evaluation expenditure that suffered an impairment are tested for possible reversal of
the impairment whenever events or changes in circumstances indicate that the impairment may have reversed.
(iii) Impairment of capitalised mine development expenditure and mine properties
The Group assesses impairment of all assets at each reporting date by evaluating conditions specific to the Group
and to the particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of
the asset is determined. The future recoverability of capitalised mine development expenditure and mine properties
is dependent on a number of factors, including 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 mine development expenditure and mine properties 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.
2017 ANNUAL REPORT | PAGE 63
Notes to the consolidated financial statements
30 June 2017
(e) Significant accounting judgements, estimates and assumptions (continued)
(iv) Impairment of property, plant and equipment
The Group assesses impairment of all assets at each reporting date by evaluating conditions specific to the Group
and to the particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of
the asset is determined. 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’.
In determining value in use, future cash flows are based on:
• Estimates of the quantities of ore reserves and mineral resources for which there is a high degree of confidence
of economic extraction;
• Future production levels;
• Future commodity prices; and
• Future cash costs of production and capital expenditure.
Variations to the expected future cash flows, and the timing thereof, could result in significant changes to any
impairment losses recognised, if any, which could in turn impact future financial results.
Property, plant and equipment that suffered an impairment are tested for possible reversal of the impairment
whenever events or changes in circumstances indicate that the impairment may have reversed. Refer to Note12 :
Non-current assets - Property, plant and equipment for further information.
(v) Provision for decommissioning and rehabilitation
Decommissioning and restoration costs are a normal consequence of mining, and the majority 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, discount rates
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.
The carrying amount of the provision as at 30 June 2017 was $29.715 million (2016: $29.883 million). The Group
estimates that the costs would be realised towards the end of the respective mine lives and calculates the provision
using the discounted cash flow method based on expected costs to be incurred to rehabilitate the disturbed area.
These costs are discounted at 2.03% (2016: 3.50%).
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.
(vi) Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by a Monte Carlo model and
a Binomial model, using the assumptions detailed in note 35.
(f) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured. Revenue is measured at consideration received or receivable. The following
specific recognition criteria must also be met before revenue is recognised:
(i) Sale of concentrates/ore
A sale is recorded when risk and reward of ownership of the concentrates/ore has passed to the buyer.
PAGE 64 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
(f) Revenue recognition (continued)
(ii) Interest income
Revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective
interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to the net carrying amount of the financial asset.
(iii) Dividends
Dividends are recognised as revenue when the right to receive payment is established.
(g) Borrowing costs
Borrowing costs include interest, amortisation of discounts or premiums relating to borrowings, amortisation of
ancillary costs incurred in connection with arrangement of borrowings, finance charges in respect of finance leases
and foreign currency exchange differences net of the effect of hedges of borrowings.
Borrowing costs are expensed as incurred unless they relate to qualifying assets. Qualifying assets are assets that
take more than twelve months to get ready for their intended use or sale. In these circumstances, borrowing costs
are capitalised to the costs of the assets. Where funds are borrowed specifically for the acquisition, construction or
production of a qualifying asset, the amount of borrowing costs capitalised is those incurred in relation to that
borrowing, net of any interest earned on those borrowings. Where funds are borrowed generally, borrowing costs
are capitalised using a weighted average capitalisation rate to the extent that they relate to the qualifying asset.
Exploration and evaluation expenditure carried forward relating to areas of interest which have not reached a stage
permitting reliable assessment of economic benefits are not qualifying assets.
(h) Leases
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the
leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the
present value of the minimum lease payments.
Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve
a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against
income.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease
term.
Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the
lease term.
(i) Cash and cash equivalents
Cash on hand and in banks and short-term deposits are stated at nominal value.
For the purpose of the Statement of Cash Flows, cash includes cash on hand and in the banks short-term deposits
with an original maturity not exceeding three months and if greater than three months, principal amounts can be
redeemed in full with interest payable at the same cash rate from inception as per the agreement with each bank,
net of bank overdrafts.
(j) Term deposits
Term deposits are stated at nominal value. These deposits have original maturity of three months or more.
2017 ANNUAL REPORT | PAGE 65
Notes to the consolidated financial statements
30 June 2017
(k) Trade receivables
(i) Nickel concentrate
Mining revenue from nickel concentrate sales exported from the Savannah Nickel Project is recognised at its
provisional price on the day the product has been shipped from port. 100% of the provisional value is payable in
approximately 7 working days from the issue of a provisional invoice. At each reporting date, provisional priced
nickel is marked to market based on the forward selling price for the quotational period stipulated in the contract
until the quotational period expires and change in fair value is recognised as revenue. Increments and decrements
in the final measured contained nickel in nickel concentrate delivered to the customer are brought to account upon
presentation of the final invoice. Receivables are carried at fair value.
(ii) Nickel ore
Mining revenue from Lanfranchi nickel ore delivered to the Kambalda concentrator is recognised at its provisional
price net of the amount goods and services tax (GST) payable to the taxation authority. 70% of the provisional
invoice is payable one month after issue. Revenue is recognised based on the estimated fair value of the
consideration receivable. At each reporting date, provisional priced nickel is marked to market based on the forward
selling price for the quotational period (QP) stipulated in the contract until the QP expires and change in fair value
is recognised as revenue. Receivables are carried at fair value.
(iii) Other receivables
Receivables from related parties are recognised and carried at the nominal amount due. Interest is taken up as
income on an accrual basis.
(l) Inventories
(i) Raw materials and stores, work in progress and finished goods
Inventories are valued at the lower of cost (determined based on weighted average cost) and net realisable value.
Costs incurred in bringing inventory to its present location and condition are accounted for as follows:
• ore stocks - cost of direct mining and a proportion of site overheads; and
• concentrates and work in progress - cost of direct mining, processing, transport and labour and a proportion of
site overheads.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make the sale. Cost of parts and consumables is accounted for
using average cost.
(ii) Spares for production
Inventories of consumable supplies and spare parts expected to be used in production are valued at weighted
average cost. Obsolete or damaged inventories of such items are valued at net realisable value.
(m) Derivative financial instruments and hedging
The Group uses derivatives such as United States dollar nickel and copper forward sales contracts, United States
dollar nickel options, United States denominated currency options and United States denominated forward currency
sales contracts to manage its risks associated with foreign currencies and commodity prices fluctuations. These
derivative financial instruments are stated at fair value.
Derivatives are not held for speculative purposes.
PAGE 66 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
(m) Derivative financial instruments and hedging (continued)
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in profit
or loss immediately unless the derivative is designated and effective as a cash flow hedging instrument, in which
event, the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A hedge of the foreign currency risk and commodity price risk of a firm commitment is accounted for as a cash flow
hedge.
At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to
which the Group wishes to apply hedge accounting and the risk management objective and strategy for undertaking
the hedge. The documentation includes identification of the hedging instrument, the hedged item or transaction,
the nature of the risk being hedged and how the entity will assess the hedging instrument’s effectiveness in
offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable to the hedged risk.
Such hedges are expected to be highly effective in achieving offsetting changes in the fair value or cash flows and
are assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial
reporting periods for which they were designated.
The hedges that meet the strict criteria for hedge accounting are accounted for as follows:
(i) Cash flow hedges
Cash flow hedges are hedges of the Group’s exposure to variability in cash flows that is attributable to a particular
risk associated with a highly probable forecast transaction and that could affect profit and loss. The effective portion
of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are deferred in
equity. The gain or loss relating to the ineffective portion is recognised immediately in the income statement.
Amounts deferred in equity are recycled in the income statement in the periods when the hedged item is recognised
in the income statement.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no
longer qualifies for hedge accounting. At that time, any cumulative gain or loss deferred in equity at that time
remains in equity and is recognised when the forecast transaction is ultimately recognised in the income statement.
When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was deferred in equity
is recognised immediately in the income statement.
The Group tests each of the designated cash flow hedges for effectiveness at the inception of the hedge and then
at each reporting date both prospectively and retrospectively using the dollar offset method. This is done by
comparing the changes in the present value of the cash flow arising from hedged forecast sale at the forward rate,
compared to changes in the fair value of the forward contract. Measurement of the cash flow changes is based on
the respective forward curve over the hedge horizon.
At each balance sheet date, the Group measures ineffectiveness using the ratio offset method. For cash flow
hedges if the risk is over-hedged, the ineffective portion is taken immediately to the income/expense in the income
statement.
(ii) Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative
instruments that do not qualify for hedge accounting are recognised immediately in the income statement.
(n) Foreign currency translation
Both the functional and presentation currency of Panoramic Resources Limited and its Australian subsidiaries is
Australian dollars (A$).
2017 ANNUAL REPORT | PAGE 67
Notes to the consolidated financial statements
30 June 2017
(n) Foreign currency translation (continued)
Transactions and balances
Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional
currency spot rates at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot
rates of exchange at the reporting date.
Differences arising on settlement or translation of monetary items are recognised in profit or loss with the exception
of monetary items that are designated as part of the hedge of the Group’s net investment of a foreign operation.
These are recognised in other comprehensive income until the net investment is disposed of, at which time, the
cumulative amount is reclassified to profit or loss. Tax charges and credits attributable to exchange differences on
those monetary items are also recorded in other comprehensive income.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss
arising on translation of non-monetary items measured at fair value is treated in line with the recognition of gain or
loss on change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is
recognised in other comprehensive income or profit or loss are also recognised in other comprehensive income or
profit or loss, respectively).
Group companies
On consolidation, the assets and liabilities of foreign operations are translated into dollars at the rate of exchange
prevailing at the reporting date and their statements of profit or loss are translated at exchange rates prevailing at
the dates of the transactions. The exchange differences arising on translation for consolidation are recognised in
other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income
relating to that particular foreign operation is recognised in profit or loss.
(o) Investments and other financial assets
(i) Available-for-sale financial assets
After initial recognition available-for-sale investments are measured at fair value with gains or losses being
recognised as a separate component of equity until the investment is derecognised or until the investment is
determined to be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in
profit or loss.
The fair value of investments that are actively traded in organised financial markets is determined by reference to
quoted market bid prices at the close of business on the balance sheet date.
Investments which are not classified as held for trading or held to maturity are treated as available-for-sale financial
assets.
(p) Income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted by the balance sheet date.
Deferred income tax is provided on all temporary differences at the balance sheet 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:
PAGE 68 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
(p) Income tax (continued)
• except where the deferred income tax liability arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss; and
• in respect of deductible temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, except where the timing of the reversal of the temporary differences can be controlled
and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised:
• except where the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; and
• in respect of deductible temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary
differences will reverse in the foreseeable future and taxable profit will be available against which the temporary
differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
income tax asset to be utilised.
Unrecognised deferred tax assets and liabilities are reassessed at each balance sheet date and reduced to the
extent that it is no longer probable that future taxable profit will allow the deferred tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance sheet date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity
and the same taxation authority.
Tax consolidation legislation
Panoramic Resources Limited and its wholly-owned Australian controlled entities have implemented the tax
consolidation legislation.
The head entity, Panoramic Resources Limited, and the controlled entities in the tax consolidated group account
for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax
consolidated group continues to be a stand alone taxpayer in its own right.
In addition to its own current and deferred tax amounts, Panoramic Resources Limited also recognises the current
tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed
from controlled entities in the tax consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as
amounts receivable from or payable to other entities in the Company.
Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement
are recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.
2017 ANNUAL REPORT | PAGE 69
Notes to the consolidated financial statements
30 June 2017
(q) Other taxes
Revenue, expenses and assets are recognised net of the amount of GST except:
• where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in
which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as
applicable; and
• receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the balance sheet.
Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows
arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are
classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
(r) Property, plant and equipment
Items of plant and equipment are stated at cost less accumulated depreciation and any impairment in value. The
cost of plant and equipment constructed for and by the consolidated entity, where applicable, includes the cost of
materials and direct labour. The proportion of overheads and other incidental costs directly attributable to its
construction are also capitalised to the cost of plant and equipment.
Costs incurred on plant and equipment subsequent to initial acquisition are capitalised when it is probable that
future economic benefits, in excess of the originally assessed performance of the asset will flow to the consolidated
entity in future years. Where these costs represent separate components of a complex asset, they are accounted
for as separate assets and are separately depreciated over their useful lives. Costs incurred on plant and equipment
that do not meet the criteria for capitalisation are expensed as incurred.
Depreciation and amortisation
Depreciation and amortisation is calculated on a straight line basis over the estimated useful lives of the asset. The
estimated useful lives used for each class of asset are as follows:
Office equipment
Office furniture and fittings
Plant and equipment under hire purchase
Plant and equipment under finance lease
Process plant and buildings
3 - 4 years
5 years
over the lease term
over the lease term
lesser of life of mine and life of asset
Impairment
The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances
indicate the carrying value may not be recoverable.
If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets
or cash-generating units are written down to their recoverable amount.
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for
the cash-generating unit to which the asset belongs.
PAGE 70 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
(r) Property, plant and equipment (continued)
The recoverable amount of plant and equipment is the greater of fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset.
Property, plant and equipment that suffered an impairment are tested for possible reversal of the impairment
whenever events or changes in circumstances indicate that the impairment may have reversed.
Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic
benefits are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between net disposal proceeds
and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.
(s) Exploration, evaluation, development, mine properties and rehabilitation expenditure
(i) Exploration and evaluation expenditure
Expenditure on exploration and evaluation is accounted for in accordance with the ‘area of interest’ method.
Exploration and evaluation in the area of interest that have not at the reporting date reached a stage which permits
a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and
significant operations in, or relating to, the area of interest are expensed as incurred.
Exploration and evaluation expenditure is capitalised provided the rights to tenure of the area of interest is current
and the exploration and evaluation activities are expected to be recouped through successful development and
exploitation of the area or, alternatively, by its sale.
When the technical feasibility and commercial viability of extracting a mineral resource have been demonstrated
then any capitalised exploration and evaluation expenditure is reclassified as capitalised mine development. Prior
to reclassification, capitalised exploration and evaluation is assessed for impairment.
Impairment
The carrying value of capitalised exploration expenditure is assessed for impairment at the cash-generating unit
level 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. In assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset.
For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the
cash-generating unit in which the asset belongs, unless the asset’s value in use can be estimated to be close to its
fair value.
An impairment 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 the income statement.
Capitalised exploration and evaluation expenditure that suffered an impairment are tested for possible reversal of
the impairment whenever events or changes in circumstances indicate that the impairment may have reversed.
2017 ANNUAL REPORT | PAGE 71
Notes to the consolidated financial statements
30 June 2017
(ii) Mine development expenditure
Mine development expenditure represents the costs incurred in preparing mines for production, and includes
stripping and waste removal costs incurred before production commences. These costs are capitalised to the extent
they are expected to be recouped through successful exploitation of the related mining leases. Once production
commences, these costs are amortised using the units of production method based on the estimated economically
recoverable reserves to which they relate or are written off if the mine property is abandoned.
Impairment
The carrying value of capitalised mine development 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 mine development expenditure is the higher of fair value less costs to sell
and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset.
For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the
cash-generating unit in which the asset belongs, unless the asset’s value in use can be estimated to be close to its
fair value.
An impairment 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 the income statement.
Capitalised mine development expenditure that suffered an impairment are tested for possible reversal of the
impairment whenever events or changes in circumstances indicate that the impairment may have reversed.
(iii) Mine properties
Mine properties expenditure represents the cost incurred in the acquisition of a mining lease, and represents the
excess of the cost of acquisition over the fair value of the net identifiable assets of the acquired mining lease at the
date of acquisition. These costs are capitalised to the extent they are expected to be recouped through successful
exploitation of the related mining leases Once production commences, these costs are amortised using the units
of production method based on the estimated economically recoverable reserves to which they relate or are written
off if the mine property is abandoned.
Impairment
The carrying value of capitalised mine properties 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 mine properties expenditure is the higher of fair value less costs to sell and
value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset.
For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the
cash-generating unit in which the asset belongs, unless the asset’s value in use can be estimated to be close to its
fair value.
An impairment 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 the income statement.
Mine property expenditure that suffered an impairment are tested for possible reversal of the impairment whenever
events or changes in circumstances indicate that the impairment may have reversed.
PAGE 72 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
(iv) Provision for decommissioning and rehabilitation
The Group is required to decommission and rehabilitate mines and processing sites at the end of their producing
lives to a condition acceptable to the relevant authorities.
The expected cost of any approved decommissioning or rehabilitation program, discounted to its net present value,
is provided in the period in which obligation arise. The cost is capitalised when it gives rise to future benefits,
whether the rehabilitation activity is expected to occur over the life of the operation or at the time of closure. Over
time, the liability is increased for the change in net present value based on a risk adjusted pre-tax discount rate
appropriate to the risk inherent in the liability. The unwinding of the discount is included in financing cost. Expected
decommissioning and rehabilitation costs are based on the discounted value of the estimated future cost of detailed
plans prepared for each site. Where there is a change in the expected decommissioning and rehabilitation costs,
the value of the provision and any related asset are adjusted and the effect is recognised in the income statement
on a prospective basis over the remaining life of the operation.
(t) Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any
such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of
the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and
its value in use and determined for an individual asset, unless the asset does not generate cash inflows that are
largely independent of those from other assets or groups of assets and the asset’s value in use cannot be estimated
to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to
which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount,
the asset or cash-generating unit is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent
with the function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment
loss is treated as a revaluation decrease).
An assessment is also made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount
is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates
used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case
the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the
carrying amount that would be determined, net of depreciation, had no impairment loss been recognised for the
asset in prior years. Such reversal is recognised in profit and loss unless the asset is carried at revalued amount,
in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is
adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic
basis over its remaining useful life.
Non-financial assets that suffered an impairment are tested for possible reversal of the impairment whenever
events or changes in circumstances indicate that the impairment may have reversed.
(u) Trade and other payables
Trade payables and other payables are carried at amortised costs 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.
(v) Interest-bearing 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.
2017 ANNUAL REPORT | PAGE 73
Notes to the consolidated financial statements
30 June 2017
(v) Interest-bearing loans and borrowings (continued)
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 income statement when the liabilities are derecognised and as well as
through the amortisation process.
(w) Provisions
Provisions are recognised when the economic entity has a present obligation (legal or constructive) to make a
future sacrifice of economic benefits to other entities as a result of past transactions or other past events, it is
probable that a future sacrifice of economic benefits will be required and a reliable estimate can be made of the
amount of the obligation.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense
relating to any provision is presented in the income statement net of any reimbursement.
The effect of the time value of money is material and provisions are determined by discounting the expected future
cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where
appropriate, the risks specific to the liability.
Where discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing
cost.
(x) Employee benefits
(i) Short term benefits
Liabilities for short term benefits expected to be wholly settled within 12 months of the reporting date are recognised
in other payables in respect of employees services up to the reporting date. They are measured at the amounts
expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when
the leave is taken and are measured at the rates paid or payable.
(ii) Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present
value of expected future payments to be made in respect of services provided by employees up to the reporting
date using the projected unit credit method. Consideration is given to expected future wage and salary levels,
experience of employee departures, and periods of service. Expected future payments are discounted using market
yields at the reporting date of corporate bond rate with terms of maturity and currencies that match, as closely as
possible, the estimated future cash outflows.
(iii) Share-based payments
Equity-settled transactions
The Group provides benefits to employees (including executive directors) of the Group in the form of share based
payment transactions, whereby employees render services in exchange for rights over shares (‘equity-settled
transactions’).
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date
at which they are granted. The fair value is determined using a Monte-Carlo simulation model or binomial model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions
linked to the price of shares of Panoramic Resources Limited if applicable.
PAGE 74 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
(x) Employee benefits (continued)
The cost of equity-settled transactions is recognised, together with the corresponding increase in reserve, over the
period in which the performance conditions are fulfilled, ending on the date on which the relevant employees
become fully entitled to the award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects
(i) the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the
directors of the Group, will ultimately vest. This opinion is formed based on the best available information at balance
date. No adjustment is made for the likelihood of market performance conditions being met as the effect of these
conditions is included in the determination of fair value at grant date. The income statement charge or credit for a
period represents the movement in cumulative expense recognised as at the beginning and end of that period.
There is a corresponding entry to equity.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional
upon a market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had
not been modified. In addition, an expense is recognised for any modification that increases the total fair value of
the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of
modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled
award and designated as a replacement award on the date that it is granted, the cancelled and new award are
treated as if they were a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of
earnings per share.
(iv) Bonus plans
The Company recognises a liability and an expense for bonuses based on a formula that takes into consideration
the profit attributable to the Company's shareholders after certain adjustments. The Company recognises a
provision where contractually obliged or where there is a past practice that has created a constructive obligation.
(y) Contributed equity
Incremental costs directly attributable to the issue of new shares for the acquisition of a business are deducted
from equity and not expensed as an acquisition related cost.
(z) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the
discretion of the entity, on or before the end of the financial year but not distributed at balance date.
(aa) Earnings per share
Basic earnings per share is calculated as net profit attributable to members of the Parent, adjusted to exclude any
costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average
number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members of the Parent, adjusted for:
• costs of servicing equity (other than dividends) and preference share dividends;
• other non-discretionary changes in revenues or expenses during the period that would result from the dilution of
potential ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any
bonus element.
2017 ANNUAL REPORT | PAGE 75
Notes to the consolidated financial statements
30 June 2017
(ab) Business combinations
Business combinations are accounted for using the acquisition method. The consideration transferred in a business
combination shall be measured at fair value, which shall be calculated as the sum of the acquisition date fair values
of the assets transferred by the acquirer, the liabilities incurred by the acquirer to former owners of the acquiree
and the equity issued by the acquirer, and the amount of any non-controlling interest in the acquiree. For each
business combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at
the proportionate share of the acquiree's identifiable net assets. Acquisition-related costs are expensed as incurred.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, the Group’s operating
or accounting policies and other pertinent conditions as at the acquisition date. This includes the separation of
embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer's previously held
equity interest in the acquiree is remeasured at fair value as at the acquisition date through profit or loss.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition
date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or
liability will be recognised in accordance with AASB 139 either in profit or loss or in other comprehensive income.
If the contingent consideration is classified as equity, it shall not be remeasured.
Business combinations prior to 1 July 2009 were accounted for using the purchase method.
(ac) 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.
(ad) Joint Operations
The Group’s recognises its interest in joint operations:
- Assets, including its share of any assets held jointly
- Liabilities, including its share of any liabilities incurred jointly
- Revenue from the sale of its share of the output arising from the joint operation
- Share of the revenue from the sale of the output by the joint operation
- Expenses, including its share of any expenses incurred jointly
2 Segment information
(a) Business segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the
executive management team (the chief operating decision makers) in assessing performance and in determining
the allocation of resources.
The reportable segments are based on aggregated operating segments determined by the similarity of the products
produced and sold, as these are the sources of the Group's major risks and have the most effect on the rates of
return.
The Group has identified five operating segments being: (1) Nickel, the aggregation of the Savannah Nickel Project,
Lanfranchi Nickel Project and Copernicus Nickel Project; (2) Gold, the Gum Creek Gold Project; (3) Platinum Group
Metals, the Thunder Bay North PGM Project and Panton PGM Project; (4) Australian Exploration; and (5) Overseas
Exploration.
PAGE 76 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
Nickel
The Savannah Nickel Project, the Copernicus Nickel Project and the Lanfranchi Nickel Project all mine nickel ore.
As mentioned in Note 1(b), the Lanfranchi Nickel Project was placed onto care and maintenance in November 2015
and the Savannah Nickel Project was placed onto care and maintenance in May 2016.
At the Savannah Nickel Project and the Copernicus Nickel Project, nickel concentrate was produced and sold to
the one customer Sino Nickel Pty Ltd (a company owned by the Jinchuan Group Limited (60%) and Sino Mining
International Limited (40%)). At the Lanfranchi Nickel Project, nickel ore was delivered and sold to the one customer
BHP Billiton Nickel West Pty Ltd.
Gold
The Gum Creek Gold Project (formerly Gidgee Gold) is located 640kms northeast of Perth in Western Australia,
and was purchased by the Company in January 2011. The Company refurbished the site’s village and
administration areas and commenced exploration and evaluation activities from July 2011.
In May 2012, the Company acquired the Wilsons Gold Project from Apex Minerals Limited. The Wilsons Gold
Project is within trucking distance of the existing Gum Creek processing facility which is under care and
maintenance. The Wilsons Gold Project acquisition forms part of the Gum Creek Gold Project.
Platinum Group Metals (PGM)
In July 2012, the Company finalised the acquisition of Magma Metals Limited by way of an off market takeover bid.
Magma’s principal project, the Thunder Bay North PGM Project, is located in northwest Ontario, Canada. Since
acquisition, the Company has commenced evaluation studies to re-optimise the mining method and mineral
processing route contained in the previous 2011 Preliminary Economic Assessment (PEA). In January 2015, Rio
Exploration Canada Inc. (RTEC), having completed its review of all existing data on TBN, exercised a right under
the "Earn In with Option to Joint Venture Agreement (July 2014)" by electing to proceed into the Earn-In option
phase.
In May 2012, the Company executed an agreement with Platinum Australia Limited to purchase the Panton PGM
Project. The Panton Project is located 60km north of Halls Creek, in the East Kimberley Region of Western
Australia. The Company will continue to develop the asset through the optimisation of the project’s mining and
processing options.
Australian and Overseas Exploration
The Group's primary exploration and evaluation activities cover the regional areas of Western Australia. The Group
also undertakes exploration and evaluation activities in overseas jurisdictions from time to time.
(a) Business segments (continued)
The Group's Exploration Manager is responsible for budgets and expenditure by the Group's exploration team. The
exploration division does not normally derive any income. Should a project generated by the exploration division
commence generating income or lead to the construction or acquisition of a mining operation, that operation would
then be disaggregated from the exploration and become a separate reportable segment.
Accounting policies
Segment information is prepared in conformity with the accounting policies of the entity as disclosed in note 1 and
Accounting Standard AASB 8 Operating Segments.
Segment revenues, expenses, assets and liabilities are those that are directly attributable to a segment and the
relevant portion that can be allocated to the segment on a reasonable basis. Segment assets include all assets
used by a segment and consist primarily of operating cash, receivables, inventories, derivative financial
instruments, property, plant and equipment and development and mine properties. Segment liabilities consist
primarily of trade and other creditors, employee benefits, derivative financial instruments, finance leases and
borrowings and provision for rehabilitation
2017 ANNUAL REPORT | PAGE 77
Notes to the consolidated financial statements
30 June 2017
(b) Operating business segments
2017
Sales to external customers
Other revenue
Total segment revenue
Total segment results
Total segment assets
Total segment liabilities
Reversal of impairment loss
Depreciation and amortisation
Interest expense
Interest income
2016
Sales to external customers
Other revenue
Total segment revenue
Total segment results
Total segment assets
Total segment liabilities
Impairment of assets
Depreciation and amortisation
Mark to market of derivatives
Exploration and evaluation written off
Interest expense
Interest income
Nickel
$'000
Gold
$'000
Platinum
Group
Metals
$'000
Australian
Exploration
$'000
Overseas
Exploration
$'000
Total
$'000
8,409
139
8,548
(6,447)
29,337
22,431
-
450
351
(139)
-
186
186
7,371
38,709
10,059
(9,178)
-
139
(186)
-
1
1
(31)
42,828
80
-
-
-
(1)
-
-
-
(84)
26,465
7
-
-
-
-
-
-
-
(132)
2
-
-
-
-
-
8,409
326
8,735
677
137,341
32,577
(9,178)
450
490
(326)
Nickel
$'000
Gold
$'000
Platinum
Group
Metals
$'000
Australian
Exploration
$'000
Overseas
Exploration
$'000
Total
$'000
91,641
269
91,910
(101,271)
43,810
27,342
(61,791)
37,616
50,399
623
-
643
(268)
-
2
2
(43,998)
15,452
9,638
18,906
41,837
-
-
128
753
(2)
-
12
12
(142)
42,898
83
(42,851)
-
-
-
-
-
(12)
-
-
-
(1,885)
24,294
(1)
(22,408)
-
-
-
1,796
-
-
-
-
-
280
2
(11)
(271)
-
-
-
-
-
-
91,641
283
91,924
(147,016)
126,456
37,051
(108,415)
79,453
50,399
623
1,924
1,396
(282)
(c) Other segment information
(i) Segment revenue
Segment revenue reconciles to total revenue from continuing operations as follows:
Total segment revenue
Unallocated revenue
Consolidated revenue (note 3)
2017
$'000
8,735
231
8,966
2016
$'000
91,924
212
92,136
PAGE 78 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
(c) Other segment information (continued)
The amount of its revenue from external customers in Australia is nil (2016: $86.799 million), and the total revenue
from external customers in China is $8.409 million (2016: $4.842 million).
Segment revenues are allocated based on the country in which the customer is located. Sales to external
customers exclude hedging gains and losses, transport, port and shipping charges, and therefore the amounts will
not agree to the revenue from continuing operations as shown in the consolidated income statement.
The Group had two customers to which it delivered nickel concentrate. The Group's most significant client
accounted for $4.351 million (2016: $86.799 million) of external revenue. The next most significant client accounted
for $4.058 million (2016: $4.842 million) of revenue.
(ii) Segment results
A reconciliation of segment results to loss for the year is provided as follows:
Segment results
Corporate charges
Income tax benefit
Loss for the year
(iii) Segment assets
Reportable segments' assets are reconciled to total assets as follows:
Segment assets
Intersegment eliminations
Unallocated assets
Total assets as per the consolidated balance sheet
2017
$'000
677
(5,447)
-
(4,770)
2016
$'000
(147,016)
(7,805)
10,462
(144,359)
2017
$'000
137,341
118
8,726
146,185
2016
$'000
126,457
113
14,073
140,643
Total non-current assets located in Australia is $109.746 million (2016: $103.955 million), and the total of these
non-current assets located in Canada is $36.439 million (2016: $36.687 million). Non-current assets for this
purpose consist of property, plant and equipment, exploration and evaluation, development and mine properties.
(iv) Segment liabilities
Reportable segments' liabilities are reconciled to total liabilities as follows:
Segment liabilities
Intersegment eliminations
Unallocated liabilities
Total liabilities as per the consolidated balance sheet
2017
$'000
32,577
118
1,368
34,063
2016
$'000
37,051
117
1,318
38,486
2017 ANNUAL REPORT | PAGE 79
Notes to the consolidated financial statements
30 June 2017
3 Revenue
Sales revenue
Sale of goods
Other revenue
Interest income
4 Other income
Gain on disposal of exploration and evaluation asset
Gain on measurement of rehabilitation liability
Sundry income
5 Expenses
Loss before income tax includes the following specific
expenses:
Cost of sales of goods
Cost of goods sold/produced
Royalties
Depreciation - property, plant and equipment
Amortisation - deferred development costs
Amortisation - mine properties
Finance costs
Interest and finance charges paid/payable
Unwinding of discount - rehabilitation
Rental expense relating to operating leases
Minimum lease payments
Derivative financial instruments
Mark to market of derivatives instruments which are not in an effective hedge
relationship
Other
Net (gain)/loss on disposal of property, plant and equipment
Net foreign currency exchange loss/(gain)
Loss on sale of available-for-sale financial assets
(Reversal of writedown) / write down on inventory
Depreciation - property, plant and equipment not used in production
Depreciation - finance lease and hire purchase assets not used in production
Breakdown of employee benefits expenses
Salaries and wages
Payroll tax
Superannuation
Redundancies
Others
Share based payments expense
PAGE 80 | 2017 ANNUAL REPORT
2017
$'000
8,409
557
8,966
-
198
502
700
8,473
490
-
-
-
8,963
53
437
490
1,578
1,578
-
-
(150)
62
-
(433)
735
25
239
3,791
317
390
1,300
271
473
6,542
2016
$'000
91,641
495
92,136
651
433
221
1,305
97,933
4,920
13,255
31,804
5,340
153,252
169
1,236
1,405
1,517
1,517
623
623
-
(292)
839
5,726
317
33
6,623
27,436
2,128
2,696
10,814
907
624
44,605
Notes to the consolidated financial statements
30 June 2017
6
Income tax benefit
(a) Income tax benefit
Relating to origination and reversal of temporary differences in current year
Adjustments in relation to prior years
Deferred tax asset not recognised
Utilisation of unrecognised deferred tax asset
Deferred tax asset de-recognised
(b) Numerical reconciliation of income tax benefit to prima facie tax
Loss from continuing operations before income tax benefit
Tax benefit at the Australian tax rate of 30.0% (2016 - 30.0%)
Tax effect of amounts which are not deductible (taxable) in calculating
taxable income:
Entertainment expense
Share based payments
Adjustments in relation to research and development
Tax (profit)/ losses relating to foreign subsidiary not booked
Other
Utilisation of unrecognised deferred tax asset
Deferred tax asset de-recognised
Income tax benefit
(c) Amounts recognised through other comprehensive income
Relating to equity securities available for sale
Relating to asset revaluation reserve
(d) Amounts recognised directly in equity
Relating to capital raising
(e) Tax losses
Unused tax losses for which no deferred tax asset has been recognised
Capital losses
Income tax losses transferred to Panoramic Resources Limited from Magma Metals
Limited on tax consolidation
Foreign tax losses
Income tax losses of Panoramic Resources Limited
Potential tax benefit @ 30%
2017
$'000
(3,422)
-
2,967
455
-
-
2016
$'000
(46,409)
57
-
-
35,890
(10,462)
(4,770)
(1,431)
(154,821)
(46,446)
1
142
62
-
771
455
-
-
3
156
57
39
(161)
-
35,890
(10,462)
4,770
165,283
-
-
-
-
1,789
23,695
878
121,006
44,210
39
(918)
(879)
(1)
1,789
23,695
877
80,767
32,138
2017 ANNUAL REPORT | PAGE 81
Notes to the consolidated financial statements
30 June 2017
7 Current assets - Cash and cash equivalents
Cash at bank and in hand
Deposits at call
2017
$'000
1,860
18,790
2016
$'000
7,254
12,183
(a) Reconciliation to cash at the end of the year
The above figures are reconciled to cash and cash equivalents at the end of the financial year as shown in the
statement of cash flows as follows:
20,650
19,437
Cash at bank and in hand and deposits at call
2017
$'000
20,650
2016
$'000
19,437
(b) Cash at bank and on hand
Cash at bank earns interest at floating rates based on daily bank deposit rates. The weighted average interest rate
achieved for the year was 1.84% (2016: 1.4%).
(c) Deposits at call
Short term deposits are made of varying maturities not exceeding three months and earn interest at the respective
short term deposit rates. If short term deposits have original maturity greater than three months, principal amounts
can be redeemed in full with interest payable at the same cash rate from inception as per the agreement with each
bank, net of bank overdrafts. The weighted average interest rate achieved for the year was 2.5% (2016: 2.6%).
(d) Fair value
The carrying amount for cash and cash equivalents equals the fair value.
8 Current assets - Trade and other receivables
Other receivables
2017
$'000
535
2016
$'000
797
(a) Other receivables
These amounts relate to receivables for goods and services tax, diesel fuel rebates and sundry items. Interest may
be charged at commercial rates where the terms of repayments exceed six months. Collateral is not normally
obtained.
(b) Fair value and credit risk
Information on credit risk is provided in note 37.
9 Current assets - Inventories
Spares for production
- at cost
Nickel ore stocks on hand
Concentrate stocks on hand
- at net realiseable value
2017
$'000
3
-
3
2016
$'000
-
8,480
8,480
PAGE 82 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
10 Current assets - Prepayments
Prepayments
11 Non-current assets - Available-for-sale financial assets
Available-for-sale financial assets include the following classes of financial assets:
Listed securities
Equity securities
At beginning of year
Additions
Disposal proceeds
Net loss on sale
Fair value gain/(loss) recognised in other comprehensive income
At end of year
2017
$'000
236
2016
$'000
302
2017
$'000
1,200
2017
$'000
677
-
-
-
523
1,200
2016
$'000
677
2016
$'000
858
18,650
(17,811)
(840)
(180)
677
Available-for-sale investments consist of investments in ordinary shares, and therefore have no fixed maturity date
or coupon rate.
The fair value of listed available for sale investments has been determined directly by reference to published price
quotations in an active market.
12 Non-current assets - Property, plant and equipment
Plant and equipment
Deemed cost
Accumulated depreciation and impairment
Leased plant & equipment
Cost
Accumulated depreciation
Construction in progress
Cost
Accumulated impairment
2017
$'000
2016
$'000
203,873
(192,575)
11,298
206,491
(197,236)
9,255
7,316
(7,257)
7,316
(7,193)
59
176
22
198
123
123
22
145
11,555
9,523
2017 ANNUAL REPORT | PAGE 83
Notes to the consolidated financial statements
30 June 2017
Year ended 30 June 2017
Opening net book amount
Disposals
Additions
Depreciation charge
Reversal of impairment loss
Foreign currency exchange adjustments
Closing net book amount
At 30 June 2017
Deemed cost
Accumulated depreciation and impairment
Net book amount
Year ended 30 June 2016
Opening net book amount
Exchange differences
Transfer (to) from other asset class
Disposals
Depreciation charge
Impairment loss
Foreign currency exchange adjustments
Closing net book amount
At 30 June 2016
Deemed cost
Accumulated depreciation
Net book amount
(a) Impairment of assets
Nickel Division
Plant and
equipment
$'000
Leased plant and
equipment
$'000
Construction
in progress
$'000
Total
$'000
9,255
(543)
199
(696)
3,084
(1)
11,298
203,873
(192,575)
11,298
35,996
78
7,483
(371)
(12,690)
(21,211)
(30)
9,255
206,491
(197,236)
9,255
123
-
-
(64)
-
-
59
7,316
(7,257)
59
1,600
-
-
-
(916)
(561)
-
123
7,316
(7,193)
123
145
-
53
-
-
-
198
9,523
(543)
252
(760)
3,084
(1)
11,555
176
22
198
211,365
(199,810)
11,555
14,210
4,645
(7,777)
-
-
(10,933)
-
145
51,806
4,723
(294)
(371)
(13,606)
(32,705)
(30)
9,523
123
22
145
213,930
(204,407)
9,523
In the previous financial period, the decline in commodity prices and the deficiency in market capitalisation
compared to net assets during the year ended 30 June 2016 led to the Group to make an assessment of the
recoverability of the carrying value of its assets at 30 June 2016 under AASB 136 Impairment of Assets. An external
party was engaged to determine the fair value less costs to dispose (FVLCD) of the Nickel Division assets
(Lanfranchi Nickel Project and the Savannah Nickel Project). The FVLCD were then compared against the carrying
value and as a result of the impairment test, an impairment loss of $42.290 million was recognised to reduce the
carrying amount of the exploration and evaluation properties, plant and equipment, mine development and the
mine properties to their recoverable amount. Of this amount, $37.616 million has been recognised in the income
statement and $4.674 million has been recognised in the mineral properties revaluation reserve ($3.272 million net
of tax). The mineral property revaluation reserve account was created when the Group increased its holding in
Lanfranchi from 75% to 100% in 2009 which required a revaluation of the original asset in accordance with the
purchase method of accounting to business combination applied at the time.
In accordance with AASAB 136: Impairment of Assets ("AASB 136"), at 30 June 2017, the carrying value of the
Nickel Division assets were assessed to ensure that they were being carried at the lower of its carrying value
(adjusted for depreciation and amortisation) and FVLCD. It was determined that the fair value less cost of disposal
(FVLCD) value of the Projects approximated its carrying value.
The fair value less cost to dispose of the Nickel Division assets were determined by a combination of valuation
performed by an external party (based on comparable market transactions) and management's internal
assessment of FVLCD (based on comparable market transactions). The fair value methodology adopted is
categorised as Level 3 in the fair value hierarchy. In determining the FVLCD, estimates are made in relation to the
underlying resources/reserves and the valuation multiple. Any change in these estimates could impact the FVLCD
of the underlying CGU.
PAGE 84 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
Gum Creek Gold Project
On 3 August 2015, Panoramic announced the decision by its directors to divest the Gum Creek Gold Project.
Accordingly, the Project was classified as an asset held for sale under AASB 5: Non-Current Assets Held for Sale
and Discontinued Operations (“AASB 5”).
In accordance with AASB 5, immediately before the classification of Gum Creek as assets held for sale, the carrying
value of Gum Creek was assessed to ensure that it was being carried at the lower of its carrying value and “fair
value less cost to dispose” (FVLCD). Accordingly, at 31 December 2015, an impairment loss of $41.837 million
was recognised to reduce the carrying values of Gum Creek to its FVLCD.
In June 2016, the directors resolved to divest the Gum Creek Gold Project by way of an initial public offering (IPO)
of the project on the ASX. As a result, at 30 June 2016, the Project (which was previously classified as asset held
for sale) was re-classified into its respective asset categories.
Prior to reclassification out of the held for sale category, the carrying value of Gum Creek was assessed to ensure
that it was being carried at the lower of its carrying value (adjusted for depreciation and amortisation) and FVLCD.
It was determined that the FVLCD value of the Project approximated its carrying value at 30 June 2016.
During the IPO process and accordance with AASB 136: Impairment of Assets (“AASB 136”), the carrying value of
the Gum Creek Project was reviewed for indicators of impairment or indicators of reversal of impairment loss to
determine whether impairment loss recognised during the year ended 30 June 2016 may no longer exist or may
have decreased. As indicators of impairment reversal were identified, management determined the recoverable
amount of the Project. The FVLCD of Gum Creek was determined to be $25.042 million (30 June 2016: $15.864
million) and accordingly an impairment loss of $9.178 million was reversed during the period.
A further review was undertaken at 30 June 2017 to ensure that it was being carried at the lower of its carrying
value (adjusted for depreciation and amortisation) and FVLCD. It was determined that the FVLCD value of the
Project approximated its carrying value at 30 June 2017.
The FVLCD of the Gum Creek Gold Project has been determined based on comparable market transactions. The
fair value methodology adopted is categorised as Level 3 in the fair value hierarchy. In determining the FVLCD,
estimates were made in relation to the underlying resources/reserves and the valuation multiple. Any change in
these estimates could impact the FVLCD of the underlying “cash generating unit” (CGU).
As at 30 June 2016, a total Group impairment loss of $32.705 million was recognised to decrease the carrying
amount of plant and equipment to their recoverable amount. This has been recognised in the income statement.
(b) Non-current assets pledged as security
Lease liabilities are effectively secured as the rights to the leased assets recognised in the financial statements
revert to the lessor in the event of default. The carrying amounts of assets pledged as security for current and non-
current borrowings are $0.059 million (2016: $0.123 million).
13 Non-current assets - Deferred tax assets
The balance comprises temporary differences attributable to:
Tax losses
Employee benefits
Provisions
Trading stock
Sundry temporary differences
Research and development tax offset
Business related costs
Deferred tax asset not recognised
Set-off of deferred tax liabilities pursuant to set-off provisions (note 20)
Net deferred tax assets
2017
$'000
36,302
293
8,915
-
53
4,091
(57)
(44,540)
5,057
(5,057)
-
2016
$'000
24,230
1,506
9,459
492
501
4,091
213
(35,890)
4,602
(4,602)
-
2017 ANNUAL REPORT | PAGE 85
Notes to the consolidated financial statements
30 June 2017
14 Non-current assets - Exploration and evaluation, development and mine properties
Mine development expenditure
Deemed cost
Accumulated amortisation and impairment
Exploration and evaluation
Deemed cost
Accumulated impairment
Mine (mineral) properties
Deemed cost
Accumulated amortisation and impairment
Year ended 30 June 2017
Opening net book amount
Remeasurement of rehab provision
Expenditure incurred
Reversal of impairment loss (net)
Foreign currency exchange adjustments
Closing net book amount
At 30 June 2017
Deemed cost
Accumulated amortisation and impairment
Net book amount
Year ended 30 June 2016
Opening net book amount
Transfer to/(from) other asset class
Amortisation charge
Expenditure incurred
Exchange differences
Impairment loss
Written off to profit and loss
Closing net book amount
At 30 June 2016
Deemed cost
Accumulated depreciation
Net book amount
2017
$'000
2016
$'000
349,963
(332,935)
17,028
121,910
(30,138)
91,772
89,703
(88,300)
1,403
110,203
350,509
(332,490)
18,019
117,282
(37,081)
80,201
Blank
89,703
(88,300)
1,403
99,623
Mine
Development
Expenditure
$'000
Exploration
and
Evaluation
$'000
Mine (Mineral)
Properties
$'000
Total
$'000
18,019
(403)
262
(850)
-
17,028
349,963
(332,935)
17,028
53,564
-
(31,806)
5,801
-
(9,540)
-
18,019
350,509
(332,490)
18,019
80,201
-
5,075
6,943
(447)
91,772
121,910
(30,138)
91,772
113,794
294
-
5,638
(520)
(37,081)
(1,924)
80,201
117,282
(37,081)
80,201
1,403
-
-
-
-
1,403
99,623
(403)
5,337
6,093
(447)
110,203
89,703
(88,300)
1,403
561,576
(451,373)
110,203
11,542
-
(5,338)
-
-
(4,801)
-
1,403
178,900
294
(37,144)
11,439
(520)
(51,422)
(1,924)
99,623
89,703
(88,300)
1,403
557,494
(457,871)
99,623
The ultimate recoupment of costs carried forward for exploration and evaluation expenditure is dependent on the
successful development and commercial exploitation or the sale of the respective mining areas.
PAGE 86 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
(a) Impairment of assets
Nickel Division
In the previous financial year, the decline in commodity prices and the deficiency in market capitalisation compared
to net assets during the year ended 30 June 2016 led to the Group to make an assessment of the recoverability of
the carrying value of its assets at 30 June 2016 under AASB 136 Impairment of Assets. An external party was
engaged to determine the fair value less costs to dispose (FVLCD) of the Nickel Division assets.The FVLCD were
then compared against the carrying value and as a result of the impairment test, an impairment loss of $42.290
million was recognised to reduce the carrying amount of the exploration and evaluation properties, plant and
equipment, mine development and the mine properties to their recoverable amount. Of this amount, $37.616 million
has been recognised in the income statement and $4.674 million has been recognised in the mineral properties
revaluation reserve ($3.272 million net of tax). The mineral property revaluation reserve account was created when
the Group increased its holding in Lanfranchi from 75% to 100% in 2009 which required a revaluation of the original
asset in accordance with the purchase method of accounting to business combination applied at the time.
In accordance with AASAB 136: Impairment of Assets ("AASB 136"), at 30 June 2017, the carrying value of the
Nickel Division assets were assessed to ensure that they were being carried at the lower of its carrying value
(adjusted for depreciation and amortisation) and FVLCD. It was determined that the fair value less cost of disposal
(FVLCD) value of the Projects approximated its carrying value.
The fair value less cost to dispose of the Nickel Division assets were determined by a combination of valuation
performed by an external party (based on comparable market transactions) and management's internal
assessment of FVLCD (based on comparable market transactions). The fair value methodology adopted is
categorised as Level 3 in the fair value hierarchy. In determining the FVLCD, estimates are made in relation to the
underlying resources/reserves and the valuation multiple. Any change in these estimates could impact the FVLCD
of the underlying CGU.
Gum Creek Gold Project
On 3 August 2015, Panoramic announced the decision by its directors to divest the Gum Creek Gold Project.
Accordingly, the Project was classified as an asset held for sale under AASB 5: Non-Current Assets Held for Sale
and Discontinued Operations (“AASB 5”).
In accordance with AASB 5, immediately before the classification of Gum Creek as assets held for sale, the carrying
value of Gum Creek was assessed to ensure that it was being carried at the lower of its carrying value and “fair
value less cost to dispose” (FVLCD). Accordingly, at 31 December 2015, an impairment loss of $41.837 million
was recognised to reduce the carrying values of Gum Creek to its FVLCD.
In June 2016, the directors resolved to divest the Gum Creek Gold Project by way of an initial public offering (IPO)
of the project on the ASX. As a result, at 30 June 2016, the Project (which was previously classified as asset held
for sale) was re-classified into its respective asset categories.
Prior to reclassification out of the held for sale category, the carrying value of Gum Creek was assessed to ensure
that it was being carried at the lower of its carrying value (adjusted for depreciation and amortisation) and FVLCD.
It was determined that the FVLCD value of the Project approximated its carrying value at 30 June 2016.
2017 ANNUAL REPORT | PAGE 87
Notes to the consolidated financial statements
30 June 2017
During the IPO process and accordance with AASB 136: Impairment of Assets (“AASB 136”), the carrying value of
the Gum Creek Project was reviewed for indicators of impairment or indicators of reversal of impairment loss to
determine whether impairment loss recognised during the year ended 30 June 2016 may no longer exist or may
have decreased. As indicators of impairment reversal were identified, management determined the recoverable
amount of the Project. The FVLCD of Gum Creek was determined to be $25.042 million (30 June 2016: $15.864
million) and accordingly an impairment loss of $9.178 million was reversed during the period.
A further review was undertaken at 30 June 2017 to ensure that it was being carried at the lower of its carrying
value (adjusted for depreciation and amortisation) and FVLCD. It was determined that the FVLCD value of the
Project approximated its carrying value at 30 June 2017.
The FVLCD of the Gum Creek Gold Project has been determined based on comparable market transactions. The
fair value methodology adopted is categorised as Level 3 in the fair value hierarchy. In determining the FVLCD,
estimates were made in relation to the underlying resources/reserves and the valuation multiple. Any change in
these estimates could impact the FVLCD of the underlying “cash generating unit” (CGU).
As at 30 June 2016, a total Group impairment loss of $51.422 million was recognised to decrease the carrying
amount of exploration and evaluation properties, mine development and mine properties to their recoverable
amount. Of this amount, $46.748 million has been recognised in the income statement and $4.674 million has been
recognised in the mineral properties revaluation reserve.
15 Non-current assets - Other non-current assets
Others
2017
$'000
1,803
2016
$'000
1,803
1,803
At 30 June 2017, $1.803 million (2016: $1.803 million) is cash backed against the drawn amount on the Company's
performance bond facility.
1,803
16 Current liabilities - Trade and other payables
Trade payables
Accrued expenses
Amounts owing on estimated final customer invoices
2017
$'000
1,674
859
-
2016
$'000
2,243
2,092
303
Trade payables are non interest bearing and are normally settled on 30 day terms.
Due to the short term nature of these payables, their carrying value is assumed to approximate their fair value.
2,533
4,638
17 Current liabilities - Borrowings
2017
$'000
2016
$'000
Secured
Lease liabilities (note 27)
Total secured current borrowings
(a) Risk exposures
Details of the Group's exposure to risks arising from current and non-current borrowings are set out in note 37.
769
769
728
728
PAGE 88 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
(b) Fair value disclosures
Details of the fair value of borrowings for the Group are set out in note 37.
(c) Security and fair value disclosures
Details the Group's security relating to non-current borrowings are set out in note 19.
18 Current liabilities - Provisions
Employee benefits - long service leave
Employee benefits - annual leave
2017
$'000
510
461
971
2016
$'000
957
1,285
2,242
The current provision for long service leave includes all unconditional entitlements where employees have
completed the required period of service. Where employees have not yet completed the required period of service,
their pro rata entitlement is recognised as a non-current provision for long service leave.
19 Non-current liabilities - Borrowings
Secured
Lease liabilities (note 27)
2017
$'000
68
2016
$'000
876
(a) Assets pledged as security
Finance lease liabilities are effectively secured as the rights to the leased assets recognised in the financial
statements revert to the lessor in the event of default.
The carrying amounts of assets pledged as security for current and non-current borrowings are $0.059 million
(2016: $0.123 million).
(b) Other loans
Finance lease liabilities
Finance lease liabilities have an average term of 3 years (2016: 3 years). The average interest rate implicit in the
hire purchase liability is 4.59% (2016: 4.59%). Secured finance lease liabilities are secured by a charge over the
asset.
Financing facilities available
At reporting date, there is a performance bond facility available. The performance bond facility is $2.0 million (2016:
$2.0 million) with a drawdown amount at reporting date of $1.8 million (2016: $1.8 million) and $0.2 million (2016:
$0.2 million) available to be used. The $1.8 million drawn amount is cash-backed with a financial institution (note
15).
2017 ANNUAL REPORT | PAGE 89
Notes to the consolidated financial statements
30 June 2017
(c) Interest rate risk exposures
The following table sets out the Company's exposure to interest rate risk, including the contractual repricing dates
and the effective weighted average interest rate by maturity periods.
2017
Fixed interest rate
Trade and other payables (note 16)
Lease liabilities (notes 17 and 19)
Weighted average interest rate
Floating
interest
rate
$'000
1 year or
less
$'000
Over 1 to
2 years
$'000
Over 2 to
3 years
$'000
Over 3 to
4 years
$'000
-
-
-
-
-
769
769
-
68
68
4.59%
4.60%
-
-
-
-
-
-
-
-
Non
interest
bearing Total
$'000
$'000
2,533
837
2,533
-
2,533
3,370
N/A
19 Non-current liabilities - Borrowings (continued)
(c) Interest rate risk exposures (continued)
2016
Floating
interest
rate
1 year or
less
Trade and other payables (note 16)
Lease liabilities (notes 17 and 19)
Weighted average interest rate
$'000
-
-
-
-
Fixed interest rate
Over 1 to
2 years
$'000
-
803
Over 2 to
3 years
$'000
-
73
Over 3 to
4 years
$'000
-
-
803
73
$'000
-
728
728
4.59%
4.60%
4.60%
Non
interest
bearing Total
$'000
4,638
1,604
$'000
4,638
-
4,638
6,242
N/A
-
-
(d) Fair value
The carrying amounts and fair values of borrowings at balance date are:
On-balance sheet (i)
Non-traded financial liabilities
Lease liabilities
2017
Carrying
amount
$'000
Fair value
$'000
2016
Carrying
amount
$'000
Fair value
$'000
837
837
837
837
1,604
1,604
1,604
1,604
(i) On-balance sheet
The fair value of borrowings is based upon market prices where a market exists or by discounting the expected
future cash flows by the current interest rates for liabilities with similar risk profiles
PAGE 90 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
20 Non-current liabilities - Deferred tax liabilities
The balance comprises temporary differences attributable to:
Financial instruments at fair value
Inventories
Borrowing costs capitalised
Accrued income
Exploration and evaluation, development expenditure and mine properties
Quotational period (QP) commodity pricing
Foreign exchange
Set-off of deferred tax liabilities pursuant to set-off provisions (note 13)
Net deferred tax liabilities
Movements:
Opening balance
Charged/credited:
- profit or loss
- directly to statement of comprehensive income
21 Non-current liabilities - Provisions
Employee benefits - long service leave
Rehabilitation
2017
$'000
256
-
3
3
4,637
-
158
5,057
(5,057)
-
4,602
455
-
5,057
2017
$'000
7
29,715
29,722
2016
$'000
1,078
2,490
3
2
747
120
162
4,602
(4,602)
-
45,076
(39,595)
(879)
4,602
2016
$'000
119
29,883
30,002
A provision for rehabilitation is recognised in relation to the mining activities for costs such as reclamation, waste
site closure, plant closure and other costs associated with the rehabilitation of a mining site. Estimates of the
rehabilitation are based on the anticipated technology and legal requirements and future costs, which have been
discounted to their present value. In determining the restoration provision, the entity has assumed no significant
changes will occur in the relevant Federal and State legislations in relation to rehabilitation of such mines in the
future. Refer to note1(e)(v) for inputs used in determining the provision for rehabilitation.
(a) Movements in provisions
Movements in each class of provision during the financial year, other than employee benefits, are set out below:
2017
Carrying amount at start of year
- unwinding of discount
- reversal of unutilised provisions
Carrying amount at end of year
2016
Carrying amount at start of year
- unwinding of discount
- reversal of unutilised provisions
Carrying amount at end of year
Rehabilitation
$'000
29,883
437
(605)
29,715
Rehabilitation
$'000
30,184
1,236
(1,537)
29,883
2017 ANNUAL REPORT | PAGE 91
Notes to the consolidated financial statements
30 June 2017
22 Contributed equity
(a) Share capital
Ordinary shares
Ordinary shares - fully paid
(b) Movements in ordinary share capital
Date
Details
1 July 2015
3 May 2016
30 June 2016
1 July 2016
30 June 2017
Opening balance
Share Issue
Transaction costs, net of tax
Balance
Opening balance
Balance
2017
Shares
2016
Shares
2017
$'000
2016
$'000
428,567,271
428,567,271
169,044
169,044
Number of
shares
Issue /
Redemption
price
$'000
321,424,015
107,143,256
-
428,567,271
428,567,271
428,567,271
$0.10
158,941
10,714
(611)
169,044
169,044
169,044
(c) Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in
proportion to the number of and amounts paid on the shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
(d) Capital management
When managing capital, management's objective is to ensure the entity continues as a going concern as well as
to maintain optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain
a capital structure that ensures the lowest cost of capital available to the entity.
Management are constantly adjusting the capital structure to take advantage of favourable costs of capital or high
returns on assets. As the market is constantly changing, management may change the amount of dividends to be
paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
Management monitor capital through the gearing ratio (total borrowings / contributed equity). The debt to equity
ratio (borrowings on equity interest in shareholders’ equity) at 30 June 2017 was 0.50% (2016: 0.95%).
The Group has put in place a Group Cash Management Policy to ensure that up to 180 days (2016: 180 days)
excess cash holdings are invested with a range of institutions that have sufficient financial strength to ensure the
security of the investment. (Refer to note Financial risk management)
The Group is not subject to any externally imposed capital requirements.
Management consider that the total equity of the Group (contributed equity, reserves and retained earnings) plus
borrowings (current and non-current) is what it manages as capital. At 30 June 2017 this was $112,959,000 (2016:
$103,760,000).
PAGE 92 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
23 Reserves
(a) Reserves
Mineral properties revaluation reserve
Available-for-sale financial assets
Share-based payments
Foreign currency translation
Other reserves
2017
$'000
19,845
852
21,556
761
(446)
2016
$'000
19,845
324
21,083
1,085
-
42,568
42,337
(b) Nature and purpose of reserves
(i) Mineral properties revaluation reserve
In 2009, the Company increased the Group's interest in the Lanfranchi Project from 75% to 100%. This required a
revaluation of the original interest in the project when acquired in 2004. The asset revaluation reserve resulted from
the increase in the fair value of the original interest.
(ii) Share-based payments reserve
The share based payments reserve is used to record the value of share based payments provided to employees
as part of their remuneration. The reserve is also used to record share based payments provided to third parties
as part of the acquisition of an entity or asset.
(iii) Available-for-sale investments revaluation reserve
This reserve comprises the cumulative net change in the fair value of available for sale financial assets until the
investment is derecognised or impaired.
(iv) Foreign currency translation
The foreign currency translation reserve is used to record exchange differences arising from the translation of the
financial statements of foreign subsidiaries.
24 Dividends
(a) Ordinary shares
No final dividend was paid for the year ended 30 June 2017.
No interim dividend was paid for the half year ended 31 December 2016.
(b) Dividends not recognised at the end of the reporting period
No dividend has been declared since the end of the reporting period.
(c) Franking credits
Franking credits available for subsequent reporting periods
The tax rate at which paid dividends have been franked is 30% (2016: 30%).
Consolidated entity
2017
$'000
10,503
2016
$'000
10,503
2017 ANNUAL REPORT | PAGE 93
Notes to the consolidated financial statements
30 June 2017
25 Remuneration of auditors
Amounts received or due and receivable by Ernst & Young for:
Audit and review of financial statements
Other services in relation to the Company and other entity of the consolidated entity:
Tax compliance and other services
26 Guarantees and contingencies
2017
$
2016
$
66,744
155,000
-
-
92,560
159,304
103,750
258,750
(a) Guarantees
At 30 June 2017, the Company had bank guarantees with a financial institution with a face value of $0.709 million
(2016: $0.709 million) in respect to the leasing of the office space in the Perth CBD.
Controlled entities
Under the terms of Deeds of Cross Guarantee with several finance institutions, the Company has agreed to become
a covenantor with Savannah Nickel Mines Pty, Cherish Metals Pty Ltd and Donegal Resource Pty Ltd in regards
to indebtedness and liabilities resulting from the lease and hire purchase of mobile equipment and mine buildings.
As at reporting date, the Closed Group has lease liabilities amounting to $0.837 million (2016: $1.604 million).
The Company has guaranteed the bank facilities of controlled entities.
(b) Contingent assets
In the directors' opinion there are no contingent assets as at the date of signing this report.
(c) Contingent liabilities
Power Purchase Agreement
The Company and a supplier are in discussions over the termination date in relation to the supply of electricity to
the Lanfranchi Nickel Project. Additional demand charges of $585,000 may be payable by the Company if a
termination date of 1 July 2016 applies. It is the Company’s opinion that the contract to supply electricity to the
project terminated on 15 December 2015.
In addition, the same supplier has claimed that due to its administrative error, the Company has been undercharged
$422,000 in energy charges for 2014/15 and 2015/16. It is the Company’s opinion that the back-charges cannot
be claimed on a retrospective basis in accordance with the Power Purchase Agreement.
PAGE 94 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
27 Commitments
(a) Capital commitments
Capital expenditure contracted for at the reporting date but not recognised as liabilities is as follows:
Mineral tenements expenditure commitments
Not later than one year
Later than one year but not later than five years
Later than five years
2017
$'000
3,815
11,794
32,237
47,846
2016
$'000
4,078
13,563
35,311
52,952
(b) Lease commitments: group as lessee
(i) Finance leases
Future minimum lease payments under finance leases together with the present value of the net minimum lease
payments are as follows:
Commitments in relation to finance leases are payable as follows:
Within one year
Later than one year but not later than five years
Less future finance lease charges
Present value of minimum lease payments
Representing lease liabilities:
Current (note 17)
Non-current (note 19)
(c) Operating lease commitments as lessee
(i) Corporate office
2017
$'000
825
34
859
(22)
837
769
68
837
2016
$'000
825
859
1,684
(80)
1,604
728
876
1,604
The Group has a commercial lease on its corporate office premises. This is a non-cancellable lease expiring on 28
February 2019.
Future minimum rentals payable under the non-cancellable operating leases at 30 June 2017 are as follows:
Within one year
Later than one year and not later than five years
2017
$'000
1,701
1,168
2,869
2016
$'000
1,628
2,869
4,497
2017 ANNUAL REPORT | PAGE 95
Notes to the consolidated financial statements
30 June 2017
(c) Operating lease commitments as lessee (continued)
(ii) Drill rig
The Group had a drill rig on hire under a non-cancellable lease that expired on 13 December 2016.
Future minimum rentals payable under the non-cancellable operating leases at 30 June 2017 are as follows:
Within one year
(d) Operating lease commitments as lessor
(i) Corporate office
2017
$'000
-
2016
$'000
330
The Group sub-leases its excess corporate office space to third parties under non-cancellable operating leases
expiring within two to five years.
Future minimum rentals receivable under the non-cancellable operating leases at 30 June 2017 are as follows:
Commitments for minimum lease receipts in relation to non-cancellable operating
leases are as follows:
Within one year
Later than one year but not later than five years
(e) Remuneration commitments
Commitments for the payment of salaries and other remuneration under long-term
employment contracts in existence at the reporting date but not recognised as
liabilities, payable:
Within one year
28 Related party transactions
2017
$'000
347
210
557
2016
$'000
368
557
925
2017
$'000
2016
$'000
629
824
(a) Compensation of key management personnel of the Group
The aggregate compensation made to directors and other members of key management personnel of the Group
is set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Termination/resignation benefits
Share-based payments
2017
$'000
1,764,922
141,306
37,757
586,129
300,762
2,830,876
2016
$'000
2,670,386
213,388
54,938
577,096
550,326
4,066,134
The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related
to key management personnel.
PAGE 96 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
29 Subsidiaries and transactions with non-controlling interests
(a) Significant investments in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following principal
subsidiaries in accordance with the accounting policy described in note 1(c):
Name of entity
Country of
incorporation Class of shares
Equity holding
Cherish Metals Pty Ltd *
Pindan Exploration Company Pty Ltd
SMY Copernicus Pty Ltd**
Copernicus Nickel Mine Pty Ltd
Donegal Resources Pty Ltd
Donegal Lanfranchi Pty Ltd
Lanfranchi Nickel Mine Pty Ltd
Pindan (USA) Inc. ***
Pindan (Finland) Exploration Ltd
Panoramic Copper Pty Ltd
Panton Sill Pty Ltd (formerly Panoramic Precious
Metals Pty Ltd)
Mt Henry Gold Pty Ltd
Mt Henry Mines Pty Ltd
Magma Metals Pty Limited
Greenstone Metals Ltd
Panoramic PGM's (Canada) Ltd (formerly
Magma Metals (Canada) Ltd)
Panoramic Nickel Pty Ltd
Panoramic PGMs Pty Ltd
Horizon Gold Limited ****
Panoramic Gold Pty Ltd ****
Australia
Australia
Australia
Australia
Australia
Australia
Australia
USA
Finland
Australia
Australia
Australia
Australia
Australia
Australia
Canada
Australia
Australia
Australia
Australia
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
2017
%
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
51
51
2016
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
*
**
***
****
Cherish Metals Pty Ltd is the holder of 100 shares (of 100 shares) in Lanfranchi Nickel Mines Pty Ltd (LNM) at a cost
of $0.10 per share. LNM is incorporated in Australia and acts as the Operator of the Lanfranchi Nickel Project
(formerly known as the Lanfranchi Joint Venture). For further information refer to note 30.
SMY Copernicus Pty Ltd is the holder of 10 shares in Copernicus Nickel Mines Pty Ltd (CNM) at a cost of $0.10 per
share. CNM is incorporated in Australia.
Pindan (USA) Inc. was deregistered on 7 July 2016.
See Note 29(b).
Refer to note 30 for details on deed of cross guarantee signed between certain subsidiaries and Panoramic
Resources Limited.
(b) Non-controlling interests (NCI)
In December 2016, the Company divested of its Gum Creek Gold Project by way of an initial public offering (IPO)
and listing of subsidiary, Horizon Gold Limited ("Horizon"), on the Australian Securitites Exchange (ASX). In
October 2016, the Company entered into an Acquisition Agreement with Horizon and Panoramic Gold Pty Ltd ("Pan
Gold"), which owns the Gum Creek Gold Project, in which on completion of the capital raising, the Company sold
Pan Gold to Horizon and the Company would be issued 39,030,612 shares in Horizon as consideration.
In the IPO, Horizon raised $15,000,000 before costs in new equity and issued 37,500,000 shares at $0.40 per
share. Following completion of the capital raising by Horizon, the Company's interest in Horizon has been diluted
from 100% to 51%. The shares in Horizon held by the Company are held in escrow until 18 December 2018.
2017 ANNUAL REPORT | PAGE 97
Notes to the consolidated financial statements
30 June 2017
The financial information of Horizon in which material non-control interest now exist is provided below:
Summarised statement of financial position for the period:
Cash and bank balances (current)
Trade and other receivables
Intercompany payables (current)
Trade and other payables (current)
Provisions (current)
Current net assets
Property, plant and equipment (non-current)
Exploration and evaluation (non-current)
Provisions (non-current)
Non-current net assets
Net assets
Accumulated balances of non-controlling interest (NCI)
Summarised statement of profit and loss for the period:
Other income
Care and maintenance expenses
IPO expenses
Corporate and administration
Reversal of impairment loss
Finance costs
Profit before tax
Income tax benefit
Total comprehensive income
< blank header row >
Profit/(loss) allocated to NCI
< blank header row >
(b) Non-controlling interests (NCI) (continued)
Summarised cashflow information for the period:
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increases in cash and cash equivalents
30 June
2017
$000
30 June
2016
$000
11,704
71
(116)
(650)
(25)
10,984
4,263
22,670
(9,395)
17,538
28,522
13,976
30 June
2017
$000
30 June
2016
$000
344
(1,424)
(444)
(286)
9,178
(138)
7,230
1,714
8,944
(529)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30 June
2017
$000
(1,433)
(2,287)
15,424
11,704
30 June
2016
$000
-
-
-
-
Comparative financial information of Horizon has not been disclosed as Horizon (which now owns Pan Gold) was
incorporated on 10 August 2016.
30 Deed of cross guarantee
Pursuant to ASIC Corporations (wholly-owned companies) Instrument 2016/785, relief has been granted to
Savannah Nickel Mines Pty Ltd, Cherish Metals Pty Ltd and Donegal Resources Pty Ltd from the Corporations Act
2001 requirements for preparation, audit and lodgement of its financial report.
.
PAGE 98 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
As a condition of the ASIC Corporations (wholly-owned companies) Instrument 2016/785, Panoramic Resources
Limited and Savannah Nickel Mines Pty Ltd (the "Closed Group"), entered into a Deed of Cross Guarantee on 29
June 2005. The effect of the deed is that Panoramic Resources Limited has guaranteed to pay any deficiency in
the event of winding up of its controlled entity or if it does not meet its obligation under the terms of overdrafts,
loans, leases or other liabilities subject to the guarantee. The controlled entity has also given a similar guarantee
in the event that Panoramic Resources Limited is wound up or it does not meet its obligation under the terms of
overdrafts, loans, leases or other liabilities subject to the guarantee.
On 23 June 2009, Cherish Metals Pty Ltd and Donegal Resources Pty Ltd joined as parties to the Deed of Cross
Guarantee. As at reporting date, the "Closed Group" comprised Panoramic Resources Limited, Savannah Nickel
Mines Pty Ltd, Cherish Metals Pty Ltd and Donegal Resources Pty Ltd.
(a) Consolidated income statement and summary of movements in consolidated retained earnings
Set out below is a consolidated income statement and a summary of movements in consolidated retained earnings
for the year ended 30 June 2017 of the Closed Group (consisting of Panoramic Resources Limited, Savannah
Nickel Mines Pty Ltd, Cherish Metals Pty Ltd and Donegal Resources Pty Ltd).
Loss before income tax includes the following specific items:
Revenue
Other income
Finance cost
Impairment loss
2017
$'000
8,778
470
(351)
2016
$'000
91,910
587
(651)
-
(37,880)
(a) Consolidated income statement and summary of movements in consolidated retained earnings
(continued)
Consolidated income statement
Loss before income tax
Income tax (expense) / benefit
Loss for the year
Consolidated statement of comprehensive income
Other comprehensive income
Loss for the year
Items that may be reclassified to profit or loss
Changes in fair value of available-for-sale financial assets, net of tax
Items that will not be reclassified to profit or loss
Impairment of assets charged against revaluation reserve, net of tax
Other comprehensive loss for the period, net of tax
Total comprehensive loss for the year
(Accumulated losses)/retained earnings at the beginning of the financial
year
Loss for the year
Accumulated losses at the end of the financial year
2017
$'000
(11,667)
-
(11,667)
2016
$'000
(111,480)
(8,657)
(120,137)
(11,667)
(120,137)
(536)
106
-
(536)
(12,203)
2017
$'000
(3,272)
(3,166)
(123,303)
2016
$'000
(88,784)
(11,667)
(100,451)
31,353
(120,137)
(88,784)
2017 ANNUAL REPORT | PAGE 99
Notes to the consolidated financial statements
30 June 2017
(b) Consolidated balance sheet
Set out below is a consolidated balance sheet as at 30 June 2017 of the Closed Group (consisting of Panoramic
Resources Limited, Savannah Nickel Mines Pty Ltd, Cherish Metals Pty Ltd and Donegal Resources Pty Ltd).
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Derivatives
Total current assets
Non-current assets
Receivables
Available-for-sale investments
Property, plant and equipment
Deferred exploration and evaluation expenditure
Development properties
Other non-current asset
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Interest-bearing loans and borrowings
Derivatives
Provisions
Total current liabilities
Non-current liabilities
Interest-bearing loans and borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained earnings
Total equity
2017
$'000
8,883
494
3
-
9,380
69,995
1,176
7,185
26,440
18,430
1,803
125,029
134,409
1,486
769
-
883
3,138
68
20,345
20,413
23,551
110,858
169,044
42,265
(100,451)
110,858
2016
$'000
19,356
800
8,480
178
28,814
68,034
627
8,236
24,245
18,389
1,803
121,334
150,148
4,309
728
178
2,143
7,358
876
20,423
21,299
28,657
121,491
169,044
41,231
(88,784)
121,491
PAGE 100 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
31 Events occurring after the reporting period
Savannah Project Feasibility Study Optimisation
On 20 July 2017, the Company released the Savannah Project Feasibility Study Optimisation based on an
improved mine plan, higher grade ore, lower input costs and metallurgical performance as per historical Savannah
metallurgical results. In comparison to the February 2017 Savannah Project Feasibility Study, the life-of-mine all-
in sustaining cash costs (AISC), using spot commodity prices and A$:US$ foreign currency exchange rate of 30
June 2017, has reduced the ASIC by US$0.90 per pound to US$3.40 per pound of nickel (payable nickel after by-
product credits). As at the date of this report, further productivity improvements are being pursued targeting further
cost reductions (refer to the Company’s ASX announcement of 20 July 2017 for further details).
In the interval between the end of the financial year and the date of this report, apart from the matter mentioned
above, there has not arisen any item, transaction or event of a material and unusual nature likely, in the opinion of
the directors of the Company, to affect significantly the operations of the consolidated entity, the results of those
operations, or the state of affairs of the consolidated entity, in future financial years.
Vesting of FY2015 Performance Rights and issue of Ordinary Shares
On 1 August 2017, the Company issued 1,575,012 ordinary shares to executives of the Company following vesting
on 1 July 2017 of FY2015 Performance Rights. Following the issue of new shares for no consideration, the share
capital of the Company has increased to 430,142,283 ordinary shares.
32 Reconciliation of loss for the year to net cash inflow (outflow) from operating
activities
Loss for the year
Depreciation and amortisation of property, plant and equipment
Amortisation of development costs
Amortisation of mine properties
(Reversal of) / impairment of assets
Net gain on sale on investment
Net gain on sale of non-current assets
Share based payments
Interest income
Exploration and evaluation written off
Gain on remeasurement of liability
Change in operating assets and liabilities:
(Increase)/decrease in trade debtors and others
Decrease in prepayments
Increase in trade creditors
Decrease in inventories
Decrease in other assets
Decrease in derivative financial instruments
Increase in provisions
Decrease in deferred tax assets
(Decrease) in deferred tax liabilities
Net cash (outflow) from operating activities
33 Non-cash investing and financing activities
Acquisition of plant and equipment by means of finance leases
2017
$'000
(4,770)
760
-
-
(9,178)
-
(150)
473
(557)
-
(198)
(50)
75
(2,615)
8,470
-
-
(122)
-
-
(7,862)
2017
$'000
-
2016
$'000
(144,359)
13,606
31,806
5,338
79,453
840
(651)
624
(500)
1,924
(433)
10,764
885
(35,267)
4,413
36
178
(1,629)
1,493
(11,343)
(42,822)
2016
$'000
2,317
2017 ANNUAL REPORT | PAGE 101
Notes to the consolidated financial statements
30 June 2017
34 Loss per share
(a) Basic loss per share
From continuing operations attributable to the ordinary equity holders of the
Company
Total basic loss per share attributable to the ordinary equity holders of the
Company
(b) Diluted loss per share
From continuing operations attributable to the ordinary equity holders of the
Company
Total diluted loss per share attributable to the ordinary equity holders of the
Company
(c) Reconciliation of loss used in calculating loss per share
Basic loss per share
Loss from continuing operations
Loss attributable to the ordinary equity holders of the Company used in
calculating basic loss per share
Diluted loss per share
Loss from continuing operations
Loss attributable to the ordinary equity holders of the Company used in
calculating diluted loss per share
(d) Weighted average number of shares used as denominator
Weighted average number of ordinary shares used as the denominator in
calculating basic and diluted loss per share
2017
Cents
(1.0)
(1.0)
2017
Cents
(1.0)
(1.0)
2017
$'000
2016
Cents
(42.7)
(42.7)
2016
Cents
(42.7)
(42.7)
2016
$'000
(4,241)
(144,359)
(4,241)
(144,359)
(4,241)
(144,359)
(4,241)
(144,359)
2017
Number
2016
Number
428,567,271
338,449,518
Performance rights on issue are not considered in the calculation of diluted loss per share as they are considered
to be contingently issuable.
(a) Performance Rights
Employee Share Plan (ESP)
On 30 July 2014, the Company’s shareholders approved a three year exemption to ASX Listing Rule 7.1 [Issues
exceeding 15% of Capital] on the annual grant of performance rights and the issue of shares on the exercise of
those performance rights under the 2010 Panoramic Resources Limited Employee Share Plan (“2010 ES Plan”).
From 1 July 2014 until the expiry of the three year exemption on 30 July 2017, executives and senior employees
were invited to receive a new grant of performance rights under the 2010 ES Plan. The number of performance
rights granted each year was determined by dividing the LTI dollar by the fair value (FV) of one performance right
on 1 July (as determined by an independent valuer).
PAGE 102 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
35 Share-based payments
Each grant of performance rights will vest subject to meeting service and performance conditions as defined below:
- 75% of the performance rights will be performance tested against the relative total shareholder return (TSR) of a
customised peer group over a 3 year period; and
- 25% of the performance rights will be performance tested against the reserve/resource growth over a 3 year
period, net of depletion.
For FY2017, no performance rights were granted to key management personnel (KMP) and executives.
Grant
date
Vesting
date
Expiry
date
Balance at
start of the
year
Balance at
the end of
the year
Number Number Number Number Number Number
Forfeited
during the
year
Expired
during the
year
Exercised
during
the year
Granted
during
the year
Vested and
exercisable
at end of the
year
Number
Consolidated 2017
27/11/15 30/06/18 01/07/18 4,467,896
12/09/14 30/06/17 01/07/17 1,777,371
01/07/14 30/06/17 01/07/17
904,601
Total
7,149,868
Weighted average exercise
price
$-
-
-
-
-
$-
-
-
-
-
$-
(947,926) 3,519,970
-
(581,943) 1,195,428
-
904,601
-
-
- (1,529,869) 5,619,999
$-
$-
$-
-
-
-
-
$-
For FY2016, a total of 4,624,513 performance rights were calculated to be granted to executives and senior
employees. To determine the number of FY2016 performance grants at 27 November 2015, a weighted average
FV of $0.2080 was externally determined using a Monte-Carlo simulation pricing model for the first TSR
performance condition and a binomial pricing model was used for the second reserve/resource growth test. The
FY2016 performance rights were subsequently granted on two different dates and a new FV was externally
determined using the same pricing methodology described above on each date to calculate the fair value to be
expensed over a 3 year performance period from 27 November 2015:
Grant
date
Vesting
date
Expiry
date
Consolidated 2016
Balance at
start of the
year
Balance at
the end of
the year
Number Number Number Number Number Number
Expired
during the
year
Forfeited
during the
year
Exercised
during
the year
Granted
during
the year
Vested and
exercisable
at end of the
year
Number
27/11/15 30/06/18 01/07/18
12/09/14 30/06/17 01/07/17 2,402,176
01/07/14 30/06/17 01/07/17
904601
Total
-
4,624,513
-
-
3,306,777 4,624,513
Weighted average exercise
price
$-
$-
-
-
-
-
$-
-
-
-
-
$-
(156,617) 4,467,896
(624,805) 1,777,371
904,601
-
(781,422) 7,149,868
$-
$-
-
-
-
$-
The weighted average remaining contractual life of performance rights outstanding at the end of the period was 1
year (2016: 1.63 years).
2017 ANNUAL REPORT | PAGE 103
Notes to the consolidated financial statements
30 June 2017
Fair value of Performance Rights
The fair value of each performance rights was estimated on the grant date utilising the assumptions underlying the
Black Scholes methodology to produce a Monte Carlo simulation model which allowed for the incorporation of the
Total Shareholder Return (TSR) hurdles that was to be met before the Share Based Payment vest in the holder.
Rights issued under the plan
Grant date
Vesting date
Share price at grant date
Risk free rate
Dividend yield
Volatility
Fair value - TRS
Fair value - Reserve/Resource
Growth
FY2016 Performance Rights
4,624,513
27/11/2015
01/07/2018
$0.275
2.11%
2% pa in year 1 and 4% pa thereafter
75%
$0.191
$0.259
(b) Expenses arising from share-based payment transactions
The cost of equity-settled transactions is recognised, together with the corresponding increase in reserve, over the
period in which performance conditions are fulfilled, ending on the date on which the relevant employees become
fully entitled to the performance right (‘vesting date’).
The cumulative expense recognised for equity settled transactions at each reporting date until vesting date reflects:
(i)
(ii)
the extent to which the vesting period has expired; and
the number of performance rights that, in opinion of the directors of the consolidated entity, will ultimately
vest. This opinion is formed based on the best available information at balance date. No adjustment is
made for the likelihood of market performance conditions being met as the effect of these conditions is
included in the determination of fair value at grant date.
No expense is recognised for performance rights that do not ultimately vest, except for performance rights where
vesting is conditional upon a market condition.
The dilutive effect, if any, of outstanding performance rights is not reflected as additional share dilution in the
computation of earnings per share.
Total expenses arising from share based payment transactions recognised during the period as part of employee
benefit expense were as follows:
(i) Performance rights under employee share plan amount to $0.473 million (2016: $0.624 million).
PAGE 104 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
36 Parent entity financial information
(a) Summary financial information
The individual financial statements for the Parent entity show the following aggregate amounts:
Balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Shareholders' equity
Contributed equity
Reserves
Retained earnings
2017
$'000
7,286
11,987
19,273
1,298
7
1,305
2016
$'000
13,008
11,098
24,106
1,257
65
1,322
(56,514)
(70,996)
171,174
22,419
(175,625)
171,174
21,386
(169,776)
Capital and reserves attributable to owners of Panoramic Resources Limited
Loss for the year
Total comprehensive income
17,968
5,849
5,849
22,784
90,653
90,653
(b) Guarantees entered into by the parent entity
The parent entity has given financial guarantees in respect of:
(i) leases of subsidiaries amounting to $0.837 million (2016: $1.604 million);
(ii) the bank facilities of a subsidiary amounting to $0.250 million (2016: $0.250 million); and
(iii) a rehabilitation bank guarantee of a subsidiary amounting to $2 million (2016: $2 million).
No liability was recognised by the parent entity or the consolidated entity in relation to these guarantees, as the fair
value of the guarantees is immaterial.
There are cross guarantees given by Panoramic Resources Limited, Savannah Nickel Mines Pty Ltd, Cherish
Metals Pty Ltd and Donegal Resources Pty Ltd as described in note 30. No deficiencies of assets exist in any of
these companies.
No liability was recognised by the parent entity or the Group in relation to the cross guarantees.
(c) Contingent liabilities of the parent entity
The parent entity and Group had contingent liabilities at 30 June 2017 in respect of a bank guarantee put in place
with a financial institution with a face value of $0.709 million (2016: $0.709 million) in respect to the leasing of the
office space in Perth CBD.
2017 ANNUAL REPORT | PAGE 105
Notes to the consolidated financial statements
30 June 2017
37 Financial risk management
The Group’s principal financial instruments comprise receivables, payables, finance leases, hire purchase
contracts, cash and derivatives.
The Group manages its exposure to key financial risks, including interest rate and currency risk in accordance with
the Group’s financial risk management policy. The objective of the policy is to support the delivery of the Group’s
financial targets whilst protecting future financial security.
To manage exposure to commodity prices and exchange rates the Group used derivative instruments, principally
forward sales contracts and put and call options. The purpose was to manage the commodity price and currency
rate risks arising from the Group’s operations. These derivatives provided economic hedges and qualified for hedge
accounting and are based on limits set by the Board. The main risks arising from the Group's financial instruments
are foreign currency risk, interest rate risk, commodity price risk, credit risk and liquidity risk. The Group uses
different methods to measure and manage different types of risks to which it is exposed. These include monitoring
levels of exposure to commodity prices, interest rate and foreign currency exchange risk and assessments of
market forecasts for commodity prices and foreign exchange. Ageing analyses and monitoring of specific credit
allowances are undertaken to manage credit risk. Liquidity risk is monitored through the development of future
rolling cash flow forecasts.
The Board reviews and agrees policies for managing each of these risks as summarised below.
Primary responsibility for the identification and control of financial risks rests with the Audit Committee under the
authority of the Board. The Board reviews and agrees policies for managing each of the risks identified below,
including the setting of limits for hedging cover of commodity prices, foreign currency and interest rate risk, credit
allowances and future cash flow forecast projections.
(a) Foreign currency exchange rate risk
The Group has transactional currency exposures. Such exposure arises from sales or purchases in a currency
other than the entity’s functional currency. Approximately 100% of the Group’s sales were denominated in United
States Dollars, whilst most of the costs are denominated in Australian Dollars. The Group’s functional currency is
Australian Dollars.
The Group’s profit and loss and balance sheet can be affected significantly by movements in the USD/AUD
exchange rate. The Group seeks to mitigate the effect of its net foreign currency exposure by using derivative
instruments, principally forward foreign currency exchange rate contracts and put and call options.
It is the Group’s policy to enter into derivative instruments to hedge foreign currency exposure once the likelihood
of such exposure is highly probable and to negotiate the terms of the hedge derivatives to exactly match the terms
of the hedged item to maximise hedge effectiveness. The Group will follow its current policy of matching and
hedging up to 80% of sales revenues in USD.
As 30 June 2017, the Group had the following exposure to USD foreign currency that is not designated in cashflow
hedges.
Cash at bank
Trade payables
Net exposure
Sensitivity
2017
$'000
21
-
21
2016
$'000
591
(302)
289
The following sensitivity is based on the foreign currency risk exposures in existence at the balance sheet date.
The +/- 5% (2016: +/- 5%) sensitivity is based on reasonably possible changes, over a financial year, using an
observed range of actual historical rates, for the Australian dollar to the US dollar, for the preceding 5 years and
management's expectation of future movements.
PAGE 106 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
At 30 June 2017, had the US dollar moved, as illustrated in the table below, with all other variables held constant,
post tax profit and equity would have been affected as follows:
Judgements of reasonably possible movements
Impact on post-tax profit
Impact on other equity
AUD to USD +5% (2016: +5%)
AUD to USD -5% (2016: -5%)
2017
$'000
1
(1)
2016
$'000
15
(14)
2017
$'000
-
-
2016
$'000
-
-
Management believes the balance sheet date risk exposures are representative of the risk inherent in the financial
instruments.
(b) Interest rate risk
The Group has put in place a Cash Management Policy to ensure that up to 180 days (2016: 180 days) excess
cash holdings are invested with a range of institutions that have sufficient financial strength to ensure the security
of the investments. The Group policy is to reduce and manage cash flow interest rate risk by ensuing a timely
reduction in debt obligations through scheduled debt repayments and non-scheduled debt repayments when
excess cash is available.
Cash at bank and in hand
2017
2016
Weighted
average
interest rate
%
2.5%
Balance
$'000
1,860
Weighted
average
interest rate
%
2.6%
Balance
$'000
7,254
The following sensitivity is based on the interest rate risk exposures in existence at the balance sheet date. The
sensitivity used is +/- 25 basis points (2016: +/- 25) which is based on reasonably, possible changes, over a financial
year, using the observed range of actual historical Australian short-term deposit rate movements over the last 3
years and management's expectation of future movements.
Sensitivity
At 30 June 2017
Financial assets
Cash and cash equivalents
Total increase/
(decrease)
At 30 June 2016
Financial assets
Cash and cash equivalents
Total increase/
(decrease)
Interest rate risk
-0.25%
+0.25%
Carrying
amount
$'000
Profit
$'000
Equity
$'000
Profit
$'000
Equity
$'000
20,445
(15)
(15)
-
-
15
15
-
-
Interest rate risk
-0.25%
+0.25%
Carrying
amount
$'000
7,254
Profit
$'000
Equity
$'000
Profit
$'000
Equity
$'000
(4)
(4)
-
-
4
4
-
-
2017 ANNUAL REPORT | PAGE 107
Notes to the consolidated financial statements
30 June 2017
(c) Fair value measurements
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes.
Disclosure of fair value measurements is by level of the following fair value measurement hierarchy:
(a) quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
(b) valuation techniques for which the lowest level input that is significant to the fair value measurement is
(c) valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable, and
unobservable.
At 30 June 2017 the Group does not have any level 3 instruments.
The following table presents the fair value measurement hierarchy of the Group's assets and liabilities at 30 June
2017 and 30 June 2016:
At 30 June 2017
Assets
Equity securities
Total assets
Liabilities
Financial liabilities for which fair values are disclosed:
- Lease liabilities
Total liabilities
At 30 June 2016
Assets
Equity securities
Total assets
Liabilities
Financial liabilities for which fair values are
disclosed:
- Lease liabilities
Total liabilities
Level 1
$'000
1,200
1,200
-
-
Level 1
$'000
677
677
Level 2
$'000
Level 3
$'000
-
-
837
837
-
-
-
-
Level 2
$'000
Level 3
$'000
-
-
-
-
-
-
-
-
1,604
1,604
Total
$'000
1,200
1,200
837
837
Total
$'000
677
677
1,604
1,604
The available-for-sale financial assets are traded in active markets. Their fair value is based on quoted market
prices at the end of the reporting period. These instruments are included in level 1.
The fair value of derivative financial instruments that are not traded in an active market (for example, over-the-
counter derivatives) is determined using valuation techniques. The Company uses a variety of methods and makes
assumptions that are based on market conditions existing at the end of each reporting period. These techniques
include comparing contracted rates to market rates with the same length of maturity to determine the value of
forward contracts and use of option pricing models to value put options. These instruments are included in level 2.
In the circumstances where a valuation technique for these instruments is based on significant unobservable inputs,
such instruments are included in level 3.
The fair value of finance lease is estimated by discounting future cashflows using rates currently available to debt
on similar terms, credit risk and remaining maturities.
(d) Credit risk
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents, trade and
other receivables and derivative instruments.
The Group’s maximum exposures to credit risk at reporting date in relation to each class of recognised financial
assets, other than derivatives, is the carrying amount of these assets as indicated in the balance sheet.
PAGE 108 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
In relation to derivative financial instruments, credit risk arose from the potential failure of counterparties to meet
their obligations under the contract or arrangement. The Group‘s maximum credit risk exposure in relation to net
settled derivatives is the total mark to market gain, should counterparts not honour their obligations. In case of
gross-settled derivatives, the maximum exposure is the notional value. Gross-settled derivatives were held with
financial institutions with sound credit rating.
When in production, the Group had a concentration of credit risk in that it depends on two major customers for a
significant volume of revenue.
Under the Group's risk management framework, each customer is analysed individually for creditworthiness on an
ongoing basis in order to minimise the risk of default. The Group believes that both its customers are of sound
creditworthiness as evidenced by the compliance with the off-take agreement's payment terms over the life of each
project.
(e) Equity price risk
The Group is exposed to equity securities price risk. This arises from investments held by the Group and classified
on the balance sheet as available-for-sale. The fair value of these investments are based on quoted market prices.
The Group holds investments of shares in several listed entities who are joint venture partners or potential joint
venture partners. The Board has not reacted to short-term price fluctuations as it has a medium to long term view
on these investments. These investments represent less than 1% (2016: 1%) of total assets and have yet to
generate any revenue.
The following sensitivity is based on the equity price risk exposures in existence at the balance sheet date. The
sensitivity used is +/- 30% which is based on reasonably, possible changes, over a financial year, based on the
share price fluctuations of the last 12 months and management's expectation of future movements.
Sensitivity
Available-for-sale financial investment
+30% (2016: +30%)
Available-for-sale financial investment -
30% (2016: -30%)
(f) Liquidity risk
Impact on post-tax profit
Impact on equity
2017
$'000
-
-
2016
$'000
-
-
2017
$'000
360
(360)
2016
$'000
139
(139)
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of
funding when necessary and the ability to close-out market positions.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank
loans (when required), finance leases and committed available credit lines.
The Group monitors on a regular basis rolling forecasts of liquidity on the basis of expected cash flow.
The Group has put in place a Group Cash Management Policy to ensure that up to 180 days (2016: 180 days)
excess cash holdings are invested with a range of institutions that have sufficient financial strength to ensure the
security of the investment. This policy is reviewed and approved by the Board on a regular basis. When bank loans
are used the Group’s policy is to reduce and manage cash flow interest rate risk by ensuing a timely reduction in
debt obligations through scheduled debt repayments and non scheduled debt repayments when excess cash is
available.
Maturities of financial liabilities
The tables below analyse the Group’s financial liabilities, net and gross settled derivative financial instruments into
relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date.
The amounts disclosed in the table are the contractual undiscounted cash flows.
2017 ANNUAL REPORT | PAGE 109
Notes to the consolidated financial statements
30 June 2017
Contractual maturities of financial liabilities
At 30 June 2017
Non-derivatives
Trade payables
Finance lease liabilities
Total non-derivatives
Contractual maturities of financial liabilities
At 30 June 2016
Non-derivatives
Trade payables
Finance lease liabilities
Total non-derivatives
Appendix A
Less than
1 year
$'000
Between 1
and 5
years
$'000
Total
contrac-
tual
cash
flows
$'000
Carrying
amount
(assets)/
liabilities
$'000
2,533
825
3,358
-
34
34
2,533
859
3,392
2,533
837
3,370
Less than
1 year
$'000
Between
1 and 5
years
$'000
Total
contrac-
tual
cash
flows
$'000
Carrying
amount
(assets)/
liabilities
$'000
4,638
825
5,463
-
859
859
4,638
1,684
6,322
4,638
1,604
6,242
New accounting standards and interpretations
(i) Changes in accounting policies and disclosures
The accounting policies adopted are consistent with those of the previous financial year except as follows:
The Company has adopted the following new and amended Australian Accounting Standards and AASB interpretations as
of 1 July 2016:
• AASB 14, and relevant amending standard Regulatory Deferral Accounts
AASB 14 allows an entity, whose activities are subject to rate-regulation, to continue applying most of its existing accounting
policies for regulatory deferral account balances upon its first-time adoption of Australian Accounting Standards. The
Standard does not apply to existing Australian Accounting Standard preparers.
The adoption of AASB 14 had no effect on the financial position or performance of the Group.
• AASB 2014-3 Amendments to Australian Accounting Standards - Accounting for Acquisitions of Interests in Joint
Operations
The amendments require an entity acquiring an interest in a joint operation, in which the activity of the joint operation
constitutes a business, to apply, to the extent of its share, all of the principles in AASB 3 Business Combinations and other
Australian Accounting Standards that do not conflict with the requirements of AASB 11 Joint Arrangements.
The adoption of AASB 2014-3 had no effect on the financial position or performance of the Group.
• AASB 2014-4 Amendments to Australian Accounting Standards - Clarification of Acceptable Methods of Depreciation and
Amortisation
The amendments clarify the principle in AASB 116 Property, Plant and Equipment and AASB 138 Intangible Assets that
revenue reflects a pattern of economic benefits that are generated from operating a business (of which the asset is part)
rather than the economic benefits that are consumed through use of the asset. As a result, the ratio of revenue generated
to total revenue expected to be generated cannot be used to depreciate property, plant and equipment and may only be
used in very limited circumstances to amortise intangible assets.
The adoption of AASB 2014-4 had no effect on the financial position or performance of the Group.
PAGE 110 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
• AASB 2014-9 Amendments to Australian Accounting Standards - Equity Method in Separate Financial Statements
The amendments to AASB 127 Separate Financial Statements allow an entity to use the equity method as described in
AASB 128 to account for its investments in subsidiaries, joint ventures and associates in its separate financial statements.
The adoption of AASB 2014-9 had no effect on the financial position or performance of the Group.
• AASB 2015-1 Amendments to Australian Accounting Standards - Annual Improvements to Australian Accounting
Standards 2012-2014 Cycle
The amendments clarify certain requirements in:
► AASB 5 Non-current Assets Held for Sale and Discontinued Operations - Changes in methods of disposal
► AASB 7 Financial Instruments: Disclosures - servicing contracts; applicability of the amendments to AASB 7 to
condensed interim financial statements
► AASB 119 Employee Benefits - regional market issue regarding discount rate
► AASB 134 Interim Financial Reporting - disclosure of information ‘elsewhere in the interim financial report’
The adoption of AASB 2015-1 had no effect on the financial position or performance of the Group.
• AASB 2015-2 Amendments to Australian Accounting Standards - Disclosure Initiative: Amendments to AASB 101
This Standard amends AASB 101 Presentation of Financial Statements to clarify existing presentation and disclosure
requirements and to ensure entities are able to use judgement when applying the Standard in determining what information
to disclose, where and in what order information is presented in their financial statements. For example, the amendments
make clear that materiality applies to the whole of financial statements and that the inclusion of immaterial information can
inhibit the usefulness of financial disclosures.
The adoption of AASB 2015-2 had no effect on the financial position or performance of the Group.
• AASB 2015-5 Amendments to Australian Accounting Standards - Investment Entities: Applying the Consolidation Exception
This Standard amends AASB 10 Consolidated Financial Statements, AASB 12 Disclosure in Interests in Other Entities and
AASB 128 Investments in Associates and Joint Ventures to clarify how investment entities and their subsidiaries apply the
consolidation exception.
The adoption of AASB 2015-5 had no effect on the financial position or performance of the Group.
• AASB 2015-6 Amendments to Australian Accounting Standards - Extending Related Party Disclosures to Not-for-Profit
Public Sector Entities
This Standard makes amendments to AASB 124 Related Party Disclosures to extend the scope of that Standard to include
not-for-profit public sector entities.
The adoption of AASB 2015-6 had no effect on the financial position or performance of the Group.
• AASB 2016-1 Amendments to Australian Accounting Standards - Recognition of Deferred Tax Assets for Unrealised
Losses
This Standard makes amendments to AASB 112 Income Taxes to clarify the accounting for deferred tax assets for unrealised
losses on debt instruments measured at fair value.
The adoption of AASB 2016-1 had no effect on the financial position or performance of the Group.
2017 ANNUAL REPORT | PAGE 111
Notes to the consolidated financial statements
30 June 2017
• AASB 2016-2 Amendments to Australian Accounting Standards - Disclosure Initiative: Amendments to AASB 107
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 changes in an entity’s debt. The amendments require entities to provide disclosures
about changes in their liabilities arising from financing activities, including both changes arising from cash flows and non-
cash changes (such as foreign exchange gains or losses).
The adoption of AASB 2016-2 had no effect on the financial position or performance of the Group.
(i) Changes in accounting policies and disclosures (continued)
• AASB 2017-2 Amendments to Australian Accounting Standards - Further Annual Improvements 2014-2016 Cycle
This Standard clarifies the scope of AASB 12 Disclosure of Interests in Other Entities by specifying that the disclosure
requirements apply to an entity’s interests in other entities that are classified as held for sale or discontinued operations in
accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operations.
The adoption of AASB 2017-2 had no effect on the financial position or performance of the Group.
(ii) Accounting Standards and Interpretations issued but not yet effective
• AASB 9 Financial Instruments, effective 1 January 2018
AASB 9 replaces AASB 139 Financial Instruments: Recognition and Measurement.
Except for certain trade receivables, an entity initially measures a financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss, transaction costs.
Debt instruments are subsequently measured at fair value through profit or loss (FVTPL), amortised cost, or fair value
through other comprehensive income (FVOCI), on the basis of their contractual cash flows and the business model under
which the debt instruments are held.
There is a fair value option (FVO) that allows financial assets on initial recognition to be designated as FVTPL if that
eliminates or significantly reduces an accounting mismatch.
Equity instruments are generally measured at FVTPL. However, entities have an irrevocable option on an instrument-by-
instrument basis to present changes in the fair value of non-trading instruments in other comprehensive income (OCI)
without subsequent reclassification to profit or loss.
For financial liabilities designated as FVTPL using the FVO, the amount of change in the fair value of such financial liabilities
that is attributable to changes in credit risk must be presented in OCI. The remainder of the change in fair value is presented
in profit or loss, unless presentation in OCI of the fair value change in respect of the liability’s credit risk would create or
enlarge an accounting mismatch in profit or loss.
All other AASB 139 classification and measurement requirements for financial liabilities have been carried forward into
AASB 9, including the embedded derivative separation rules and the criteria for using the FVO.
The incurred credit loss model in AASB 139 has been replaced with an expected credit loss model in AASB 9.
The requirements for hedge accounting have been amended to more closely align hedge accounting with risk management,
establish a more principle-based approach to hedge accounting and address inconsistencies in the hedge accounting
model in AASB 139.
The new standard is not expected to significantly impact the recognition and measurement of financial instrument as the
Group does not have significant financial instruments.
PAGE 112 | 2017 ANNUAL REPORT
Notes to the consolidated financial statements
30 June 2017
• AASB 15 Revenue from Contracts with Customers, effective 1 January 2018
AASB 15 replaces all existing revenue requirements in Australian Accounting Standards (AASB 111 Construction
Contracts, AASB 118 Revenue, AASB Interpretation 13 Customer Loyalty Programmes, AASB Interpretation 15
Agreements for the Construction of Real Estate, AASB Interpretation 18 Transfers of Assets from Customers and AASB
Interpretation 131 Revenue - Barter Transactions Involving Advertising Services) and applies to all revenue arising from
contracts with customers, unless the contracts are in the scope of other standards, such as AASB 117 (or AASB 16 Leases,
once applied).
The new standard is not expected to impact the Group in the immediate future as the Group's operations are currently on
care and maintenance.
The core principle of AASB 15 is that an entity recognises revenue to depict the transfer of promised goods or services to
customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods
or services. An entity recognises revenue in accordance with the core principle by applying the following steps:
► Step 1: Identify the contract(s) with a customer
► Step 2: Identify the performance obligations in the contract
► Step 3: Determine the transaction price
► Step 4: Allocate the transaction price to the performance obligations in the contract
► Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation.
• AASB 2014-10 Amendments to Australian Accounting Standards - Sale or Contribution of Assets between an Investor and
its Associate or Joint Venture, effective 1 January 2018
The amendments clarify that a full gain or loss is recognised when a transfer to an associate or joint venture involves a
business as defined in AASB 3 Business Combinations. Any gain or loss resulting from the sale or contribution of assets
that does not constitute a business, however, is recognised only to the extent of unrelated investors’ interests in the
associate or joint venture.
AASB 2015-10 defers the mandatory effective date (application date) of AASB 2014-10 so that the amendments are
required to be applied for annual reporting periods beginning on or after 1 January 2018 instead of 1 January 2016.
The Company has decided not to early adopt any of the new and amended pronouncements. The Company is in the
process of evaluating the impact of the above standards.
• AASB 2016-5 Amendments to Australian Accounting Standards - Classification and Measurement of Share-based
Payment Transactions, effective 1 January 2018
This Standard amends AASB 2 Share-based Payment, clarifying how to account for certain types of share-based payment
transactions. The amendments provide requirements on the accounting for:
► The effects of vesting and non-vesting conditions on the measurement of cash-settled share-based payments
► Share-based payment transactions with a net settlement feature for withholding tax obligations
► A modification to the terms and conditions of a share-based payment that changes the classification of the transaction
from cash-settled to equity-settled.
The Company has decided not to early adopt any of the new and amended pronouncements. The Company is in the
process of evaluating the impact of the above standards.
2017 ANNUAL REPORT | PAGE 113
Notes to the consolidated financial statements
30 June 2017
• AASB 2017-1 Amendments to Australian Accounting Standards - Transfers of Investments Property, Annual Improvements
2014-2016 Cycle and Other Amendments, effective 1 January 2018
The amendments clarify certain requirements in:
► AASB 1 First-time Adoption of Australian Accounting Standards - deletion of exemptions for first-time adopters and
addition of an exemption arising from AASB Interpretation 22 Foreign Currency Transactions and Advance Consideration
► AASB 12 Disclosure of Interests in Other Entities - clarification of scope
► AASB 128 Investments in Associates and Joint Ventures - measuring an associate or joint venture at fair value
► AASB 140 Investment Property - change in use.
The Company has decided not to early adopt any of the new and amended pronouncements. The Company is in the
process of evaluating the impact of the above standards.
• AASB Interpretation 22 Foreign Currency Transactions and Advance Consideration, effective 1 January 2018
The Interpretation clarifies that in determining the spot exchange rate to use on initial recognition of the related asset,
expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance
consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or non-
monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the
entity must determine a date of the transactions for each payment or receipt of advance consideration.
• AASB 16 Leases, effective 1 January 2019
AASB 16 requires lessees to account for all leases under a single on-balance sheet model in a similar way to finance
leases under AASB 117 Leases. The standard includes two recognition exemptions for lessees - leases of ’low-value’
assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the
commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an
asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset).
Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense
on the right-of-use asset.
Lessees will be required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease
term, a change in future lease payments resulting from a change in an index or rate used to determine those payments).
The lessee will generally recognise the amount of the remeasurement of the lease liability as an adjustment to the right-of-
use asset.
Lessor accounting is substantially unchanged from today’s accounting under AASB 117. Lessors will continue to classify
all leases using the same classification principle as in AASB 117 and distinguish between two types of leases: operating
and finance leases.
The Company has decided not to early adopt any of the new and amended pronouncements. The Company is in the
process of evaluating the impact of the above standards.
• IFRIC 23 Uncertainty over Income Tax Treatments, effective 1 January 2019
The Interpretation clarifies the application of the recognition and measurement criteria in IAS 12 Income Taxes when there
is uncertainty over income tax treatments. The Interpretation specifically addresses the following:
► Whether an entity considers uncertain tax treatments separately
► The assumptions an entity makes about the examination of tax treatments by taxation authorities
► How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates
► How an entity considers changes in facts and circumstances.
The Company has decided not to early adopt any of the new and amended pronouncements. The Company is in the process
of evaluating the impact of the above standards.
PAGE 114 | 2017 ANNUAL REPORT
Additional Shareholder Information
As at 30 September 2017
Stock Exchange Listing
Panoramic Resources Limited shares are listed on the Australian Securities Exchange Limited. The Company’s ASX code
is PAN.
Substantial Shareholders (Holding Not Less Than 5%) in accordance with notices provided to the Company
As at 30 September 2017
Name of Shareholder
Zeta Resources Limited (including
UIL Limited, General Provincial Life
Pension Fund (L) Limited, Bermuda
Commercial Bank Limited and ICM
Limited)
Commonwealth Bank of Australia
ACN 123 123 124 (CBA) and its
related bodies
Total Number of Voting Shares in
Panoramic Resources Limited in
which the Substantial
Shareholders and its Associates
Hold Relevant Interests
Percentage of Total Number of
Voting Shares (%)
115,725,931
27.00%
23,694,488
5.51%
Class of Shares and Voting Rights
At 30 September 2017, there were 3,681 holders of 430,142,283 fully paid Ordinary shares of the Company. The voting
rights attaching to the Ordinary shares are in accordance with the Company’s Constitution being that:
a.
b.
c.
each Shareholder entitled to vote may vote in person or by proxy, attorney or Representative;
on a show of hands, every person present who is a Shareholder or a proxy, attorney or Representative of a
shareholder has one vote; and
on a poll, every person present who is a Shareholder or a proxy, attorney or Representative of a Shareholder shall, in
respect of each fully-paid share held by him, or in respect of which he is appointed a proxy, attorney or
Representative have one vote for the share, but in respect of partly-paid shares, shall have such number of votes as
bears the proportion which the paid amount (not credited) is of the total amounts paid and payable (excluding
amounts credited).
There are no voting rights attached to options or performance rights in the Company. Voting rights will be attached to the
issued Ordinary shares when options and/or performance rights have been exercised.
Unmarketable Shares
At 30 September 2017, the number of parcels of shares with a value of less than $500 was 273.
Distribution of Shareholders
As at 30 September 2017
Number of Shares Held
Number of Shareholders
Number of Fully Paid Shares
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
188
1,354
719
1,195
225
3,681
62,915
4,173,495
5,749,375
40,184,839
379,971,659
430,142,283
2017 ANNUAL REPORT | PAGE 115
Name of Ordinary Registered Shareholder
Number of Shares Held
Percentage of Shares
Held %
J P MORGAN NOMINEES AUSTRALIA LIMITED
145,244,640
33.77
Additional Shareholder Information
As at 30 September 2017
Listing of 20 Largest Shareholders
As at 30 September 2017
1.
2.
3.
4.
5.
6.
7.
8.
9.
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
ZETA RESOURCES LIMITED
NATIONAL NOMINEES LIMITED
UBS NOMINEES PTY LTD
BNP PARIBAS NOMS PTY LTD
MATSA RESOURCES LIMITED
3RD WAVE INVESTORS LTD
10.
MR DAVID NORMAN DEITCH
11.
MR KWOK LEUNG FUNG + MS YUEN MAN MOK
12.
PATINA RESOURCES PTY LTD
13.
ANGLO AMERICAN INVESTMENTS
14.
SANDHURST TRUSTEES LTD
15.
WINTON VALE PTY LTD
16.
MONEX BOOM SECURITIES (HK) LTD
17.
SPRINGWAY INVESTMENTS PTY LTD
18.
MRS SUE-ELLEN STUART
19.
BRISPOT NOMINEES PTY LTD
20.
MRS ELIZABETH ANNE FOGARTY + MISS CAITLYN ELIZABETH
FOGARTY
42,735,925
29,066,082
19,984,431
19,841,217
19,576,977
6,533,659
6,500,000
4,937,662
4,500,000
3,796,401
3,397,984
2,781,429
2,645,111
2,362,078
1,964,216
1,945,636
1,910,780
1,632,996
1,500,001
9.94
6.76
4.65
4.61
4.55
1.52
1.51
1.15
1.05
0.88
0.79
0.65
0.61
0.55
0.46
0.45
0.44
0.38
0.35
TOTAL
322,857,225
75.06
Unquoted Equity Securities
As at 30 September 2017
Securities
FY2016 Performance
Rights
Number of Securities
2,935,093
Exercise Price $
NIL
Expiry Date
30 June 2018
Number of Holders
6
PAGE 116 | 2017 ANNUAL REPORT
Schedule of Mining Tenements – 30 June 2017
Project
Tenement Status Area
Equity
Tenement
Manager
Panoramic
Commitment
Current Registered Holders
Copernicus
L80/52
Live
141
HA
100%
PanRes
Copernicus
L80/86
Copernicus
M80/540
East Kimberley
E80/4880
Live
Live
Live
East Kimberley
E80/5131
Pending
1
HA
100%
PanRes
129
HA
100%
PanRes
35
5
BL
BL
100%
PanRes
PanRes
100% of Commit,
Rent & Rates
100% of Commit,
Rent & Rates
100% of Commit,
Rent & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
East Kimberley
JV - Keller Creek
E80/4834
Live
15
BL
Lanfranchi
M15/1295
Pending
40
Lanfranchi
M15/473
Lanfranchi
ML15/346
Lanfranchi
ML15/347
Lanfranchi
ML15/367
Lanfranchi
ML15/368
Lanfranchi
ML15/369
Lanfranchi
ML15/370
Lanfranchi
ML15/371
Lanfranchi
ML15/372
Lanfranchi
ML15/375
Lanfranchi
ML15/376
Lanfranchi
ML15/377
Lanfranchi
ML15/378
Lanfranchi
ML15/379
Lanfranchi
ML15/380
Lanfranchi
ML15/381
Lanfranchi
ML15/382
Lanfranchi
ML15/383
Lanfranchi
ML15/384
Lanfranchi
ML15/385
Lanfranchi
ML15/386
Lanfranchi
ML15/387
Lanfranchi
ML15/388
Lanfranchi
ML15/389
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
982
120
120
120
120
120
120
120
120
121
121
121
121
120
120
121
120
121
120
121
121
120
120
121
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
100%
80% - THX
has 20%
free carried
interest
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
PanRes
100% of Commit,
Rents & Rates
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
SMY Copernicus Pty Ltd
SMY Copernicus Pty Ltd
SMY Copernicus Pty Ltd
Pindan Exploration
Company Pty Ltd
Pindan Exploration
Company Pty Ltd
Pindan Exploration
Company Pty Ltd 80/100 &
Thundelarra Exploration
Ltd 20/100
Cherish Metals Pty Ltd
72/96 & Donegal
Lanfranchi Pty Ltd 24/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
2017 ANNUAL REPORT | PAGE 117
Schedule of Mining Tenements – 30 June 2017
Equity
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
All rights
except Au
100% Ni-
Cu-PGM
100% Ni-
Cu-PGM
100% Ni-
Cu-PGM
100% Ni-
Cu-PGM
100% Ni-
Cu-PGM
100% Ni-
Cu-PGM
100% Ni-
Cu-PGM
100% Ni-
Cu-PGM
100% Ni-
Cu-PGM
100% Ni-
Cu-PGM
Project
Tenement
Status
Area
Lanfranchi
ML15/482
Lanfranchi
ML15/483
Lanfranchi
ML15/484
Lanfranchi
ML15/485
Lanfranchi
ML15/486
Lanfranchi
ML15/487
Lanfranchi
ML15/488
Lanfranchi
ML15/489
Lanfranchi
ML15/490
Lanfranchi
ML15/491
Lanfranchi
ML15/492
Lanfranchi
ML15/493
Lanfranchi
Laverton -
Focus JV
Laverton -
Focus JV
Laverton -
Focus JV
Laverton -
Focus JV
Laverton -
Focus JV
Laverton -
Focus JV
Laverton -
Focus JV
Laverton -
Focus JV
Laverton -
Focus JV
Laverton -
Focus JV
Panton
Panton
Panton
P15/3752
M38/101
M38/159
M38/342
M38/363
M38/364
M38/37
M38/38
M38/49
M38/535
M38/693
M80/103
M80/104
M80/105
Savannah
L80/64
Savannah
M80/179
Savannah
M80/180
Savannah
M80/181
Savannah
M80/182
Savannah
M80/183
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
121
121
121
120
121
121
120
73
121
120
120
121
40
584
598
317
6
19
650
281
946
465
49
860
571
829
311
242
961
960
590
968
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
HA
Tenement
Manager
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
PanRes
Panoramic
Commitment
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
PanRes
100% of Commit,
Rents & Rates
Focus
Focus
Focus
Focus
Focus
Focus
Focus
Focus
Focus
Focus
100%
PanRes
100%
PanRes
100%
PanRes
100%
PanRes
100%
PanRes
100%
PanRes
100%
PanRes
100%
PanRes
100%
PanRes
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
100% of Commit,
Rents & Rates
Current Registered Holders
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
96/96
Cherish Metals Pty Ltd
72/96 &
Donegal Lanfranchi Pty Ltd
24/96
Focus Minerals (Laverton)
Pty Limited
Focus Minerals (Laverton)
Pty Limited
Focus Minerals (Laverton)
Pty Limited
Focus Minerals (Laverton)
Pty Limited
Focus Minerals (Laverton)
Pty Limited
Focus Minerals (Laverton)
Pty Limited
Focus Minerals (Laverton)
Pty Limited
Focus Minerals (Laverton)
Pty Limited
Focus Minerals (Laverton)
Pty Limited
Focus Minerals (Laverton)
Pty Limited
Panton Sill Pty Ltd
Panton Sill Pty Ltd
Panton Sill Pty Ltd
Savannah Nickel Mines Pty
Ltd
Savannah Nickel Mines Pty
Ltd
Savannah Nickel Mines Pty
Ltd
Savannah Nickel Mines Pty
Ltd
Savannah Nickel Mines Pty
Ltd
Savannah Nickel Mines Pty
Ltd
PAGE 118 | 2017 ANNUAL REPORT
Resources and Reserves
NICKEL – MINERAL RESOURCES AS AT 30 JUNE 2017
Resource
Equity
Metal
JORC
Compliance
Measured
Indicated
Inferred
Total
Tonnes
(%)
Tonnes
(%)
Tonnes
(%)
Tonnes
(%)
Metal
Tonnes
Savannah Project
Savannah (above 900)
100%
Savannah (below 900)
100%
Savannah North (Upper)
100%
Savannah North (Lower)
100%
Savannah North (Other)
100%
Lanfranchi Project
Cruikshank
Deacon
Gigantus
Helmut South Ext
John
Lanfranchi
Martin
McComish
Metcalfe
Schmitz
Lower Schmitz
Winner
Total (Equity)
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Nickel
Copper
Cobalt
Nickel
Copper
Cobalt
Nickel
Copper
Cobalt
Nickel
Copper
Cobalt
Nickel
Copper
Cobalt
Nickel
Nickel
Nickel
Nickel
Nickel
Nickel
Nickel
Nickel
Nickel
Nickel
Nickel
Nickel
Nickel
Copper
Cobalt
2012
1,275,000
2012
780,000
2012
2012
2012
2004
2012
2004
2012
2004
2012
2012
2004
2012
2012
2012
2004
-
-
-
-
89,000
-
21,000
-
40,000
-
-
-
30,000
-
-
1.51
0.87
0.07
1.64
0.76
0.10
-
-
-
-
-
-
-
-
-
-
2.99
-
4.54
-
4.12
-
-
-
4.92
-
-
759,000
125,000
4,229,000
2,697,000
242,000
2,018,000
-
-
29,000
-
55,000
47,000
-
280,000
23,000
51,000
14,000
1.20
0.90
0.07
1.72
0.75
0.09
1.64
0.65
0.12
1.96
0.98
0.14
2.22
0.50
0.14
1.42
-
-
2.87
-
4.40
3.58
-
1.99
3.93
5.60
4.40
-
-
1,759,000
853,000
493,000
611,000
134,000
652,000
-
291,000
63,000
7,000
992,000
111,000
16,000
79,000
-
-
-
-
-
-
-
1.25
0.49
0.10
2.02
0.93
0.13
1.67
0.53
0.11
0.79
1.70
1.63
-
1.42
3.49
4.16
1.49
1.35
2.95
4.80
-
2,034,000
905,000
5,987,000
3,549,000
735,000
2,629,000
224,000
652,000
50,000
291,000
158,000
54,000
992,000
391,000
69,000
131,000
14,000
1.39
0.88
0.07
1.65
0.76
0.10
1.53
0.60
0.11
1.97
0.97
0.14
1.85
0.52
0.12
1.28
2.22
1.63
3.59
1.42
3.97
3.66
1.49
1.81
4.14
5.11
4.40
28,300
17,900
1,400
14,900
6,900
900
91,300
36,100
6,800
70,100
34,400
4,900
13,600
3,800
900
33,600
5,000
10,600
1,800
4,100
6,300
2,000
14,800
7,100
2,900
6,700
600
313,600
99,100
14,900
Notes:
• Figures have been rounded and therefore may not add up exactly to the reported totals
• All resources are inclusive of reserves
• Savannah Project Resource cutoff grade is 0.50% Ni
• Lanfranchi Project Resource cutoff grade is 1.00% Ni
Cross references to previous market announcements:
• Savannah (above 900) - refer ASX announcement dated 30 September 2016 titled "Mineral Resources and Ore Reserves at 30 June 2016”
• Savannah (below 900) - refer ASX announcement dated 30 September 2015 titled "Mineral Resources and Ore Reserves at 30 June 2015”
• Savannah North – refer ASX announcement dated 24 August 2016 titled “Major Resource Upgrade for Savannah North”
• Cruickshank - refer ASX announcement dated 28 April 2011 titled “Cruickshank Resource Upgraded 26% to 33,560t Ni”
• Deacon, Helmut South Ext, Lanfranchi, Metcalfe - refer ASX announcement dated 30 September 2016 titled "Mineral Resources and Ore Reserves at 30 June 2016”
• Gigantus, John, McComish, Winner - refer ASX announcement dated 12 October 2011 titled “Business Review 2011”
• Martin - refer ASX announcement dated 13 September 2013 titled “Resources and Reserves at 30 June 2013 and Exploration Update”
• Schmitz - refer ASX announcement dated 30 September 2015 titled "Mineral Resources and Ore Reserves at 30 June 2015”
• Lower Schmitz - refer ASX announcement dated 28 April 2016 titled "Quarterly Report for the period ending 31 March 2016”
No New Information or Data
The Mineral Resource estimates tabled above have been previously reported, and the relevant market announcements cross referenced. The Company confirms that it
is not aware of any new information or data that materially affects the information included in the relevant market announcements and, in the case of estimates of Mineral
Resources, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not
materially changed.
2017 ANNUAL REPORT | PAGE 119
Resources and Reserves
NICKEL – ORE RESERVE AS AT 30 JUNE 2017
Reserve
Equity Metal
JORC
Compliance
Proven
Probable
Total
Tonnes
(%)
Tonnes
(%)
Tonnes
(%)
Savannah Project
Above 900 Fault
100%
Savannah North
100%
Nickel
Copper
Cobalt
Nickel
Copper
Cobalt
2012
1,365,000
2012
-
194,000
6,650,000
1.15
0.66
0.06
-
-
-
Lanfranchi Project
Deacon
Metcalfe
Lanfranchi
Schmitz
Helmut Sth Ext
Total (Equity)
100%
100%
100%
100%
100%
Nickel
Nickel
Nickel
Nickel
Nickel
2012
2012
2012
2012
2012
Nickel
Copper
Cobalt
42,000
113,000
11,000
15,000
27,000
1.24
1.28
0.07
1.24
1.28
0.10
2.67
1.57
2.56
2.96
2.19
1,558,000
6,650,000
42,000
113,000
11,000
15,000
27,000
1.16
0.74
0.06
1.42
0.61
0.10
2.67
1.57
2.56
2.96
2.19
Metal
Tonnes
18,100
11,500
900
94,500
40,900
6,700
1,100
1,800
300
500
600
116,800
52,400
7,600
Notes:
• Figures have been rounded and therefore may not add up exactly to the reported totals
• Savannah Project Reserve cutoff grade is 0.80% Ni
• Lanfranchi Project Reserve cutoff grade is 1.00% Ni except for airleg mining which is 2.00% Ni
Cross references to previous market announcements:
•
•
refer to ASX announcement dated 30 September 2016 titled "Mineral Resources and Ore Reserves at 30 June 2016"
refer to ASX announcement dated 2 February 2017 titled "Savannah Feasibility Study. Ten-year life with minimal restart capital requirements"
No New Information or Data
The Nickel Ore Reserve estimates tabled above have been previously reported, and the relevant market announcements cross referenced. The
Company confirms that it is not aware of any new information or data that materially affects the information included in the relevant market
announcements and, in the case of the estimates of Ore Reserves, that all material assumptions and technical parameters underpinning the estimates
in the relevant market announcements continue to apply and have not materially changed
PAGE 120 | 2017 ANNUAL REPORT
Resources and Reserves
PLATINUM GROUP METALS – MINERAL RESOURCES AS AT 30 JUNE 2017
Resource
Equity
JORC
Compliance
Tonnage
Grade
Contained Metal
Pt
(g/t)
Pd
(g/t)
Rh
(g/t)
Au
(g/t)
Ag
(g/t)
Cu
(%)
Ni
(%)
Co
%
Pt-Eq
(g/t)
Pt
(oz ,000)
Pd
(oz ,000)
Thunder Bay North
100%
2004
Open Pit
Indicated
Inferred
8,460,000
53,000
1.04
0.96
0.98
0.89
Underground
100%
2004
Indicated
Inferred
1,369,000
472,000
1.65
1.32
Sub-total – Thunder Bay North (Equity) 10,354,000
1.13
100%
2012
Panton
Top Reef
Measured
Indicated
Inferred
Middle Reef
100%
2012
Measured
Indicated
Inferred
4,400,000
4,130,000
1,560,000
2,130,000
1,500,000
600,000
2.46
2.73
2.10
1.36
1.56
1.22
Sub-total – Panton (Equity)
14,320,000
2.19
Total - PGM (Equity)
1.54
1.25
1.07
2.83
3.21
2.35
1.09
1.28
1.07
2.39
0.04
0.04
0.08
0.06
-
-
-
-
-
-
0.07
0.07
0.11
0.09
0.42
0.38
0.38
0.10
0.10
0.10
1.50
1.60
2.60
2.10
-
-
-
-
-
-
0.25
0.22
0.43
0.36
0.08
0.09
0.13
0.03
0.04
0.05
0.18
0.18
0.014
0.014
2.13
2.00
0.24
0.19
0.016
0.011
3.67
2.97
0.28
0.31
0.36
0.18
0.19
0.19
-
-
-
-
-
-
-
-
-
-
-
-
283
2
73
20
377
348
363
105
93
75
24
267
2
68
19
355
400
426
118
75
62
21
1,008
1,102
1,385
1,456
Notes
Thunder Bay North Open Pit Resource: The open pit Mineral Resource is reported at a cut-off grade of 0.59 g/t Pt-Eq within a Lerchs-Grossman resource pit
shell optimized on Pt-Eq. The strip ratio (waste:ore) of this pit is 9.5:1. The platinum-equivalency formula is based on assumed metal prices and overall
recoveries. The Pt-Eq formula is: Pt-Eq g/t = Pt g/t + Pd g/t x 0.3204 + Au g/t x 0.6379 + Ag g/t x 0.0062 + Cu g/t x 0.00011 + Total Ni g/t x 0.000195 + Total Co
g/t x 0.000124 + Rh g/t x 2.1816. The conversion factor shown in the formula for each metal represents the conversion from each metal to platinum on a
recovered value basis. The assumed metal prices used in the Pt-Eq formula are: Pt US$1,595/oz, Pd US$512/oz, Au US$1,015/oz, Ag US$15.74/oz, Cu
US$2.20/lb, Ni US$7.71/lb, Co US$7.71/lb and Rh US$3,479/oz. The assumed combined flotation and PlatsolTM process recoveries used in the Pt-Eq formula
are: Pt 76%, Pd 75%, Au 76%, Ag 55%, Cu 86%, Ni 44%, Co 28% and Rh 76%. The assumed refinery payables are: Pt 98%, Pd 98%, Au 97%, Ag 85%, Cu
100%, Ni 100%, Co 100% and Rh 98%.
Thunder Bay North Underground Resource: The underground mineral resource is reported at a cut-off grade of 1.94g/t Pt-Eq. The Pt-Eq formula is: Pt-Eq g/t =
Pt g/t + Pd g/t x 0.2721 + Au g/t x 0.3968 + Ag g/t x 0.0084 + Cu g/t x 0.000118 + Sulphide Ni g/t x 0.000433 + Sulphide Co g/t x 0.000428 + Rh g/t x 2.7211.
The assumed metal prices used in the Pt-Eq formula are: Pt US$1,470/oz, Pd US$400/oz, Rh US$4,000/oz, Au US$875/oz, Ag US$14.30/oz, Cu US$2.10/lb,
Ni US$7.30/lb and Co US$13.00/lb. The assumed process recoveries used in the Pt-Eq formula are: Pt 75%, Pd 75%, Rh 75%, Au 50%, Ag 50%, Cu 90%, and
Ni and Co in sulphide 90%. The assumed smelter recoveries used in the Pt-Eq formula are Pt 85%, Pd 85%, Rh 85%, Au 85%, Ag 85%, Cu 85%, Ni 90% and
Co 50%. Ni and Co in sulphide were estimated by linear regression of MgO to total Ni and total Co respectively. The regression formula for Ni in sulphide (NiSx)
is: NiSx = Ni - (MgO% x 60.35 - 551.43). The regression formula for Co in sulphide (CoSx) is: CoSx = Co - (MgO% x 4.45 - 9.25).
Cross references to previous market announcements:
• Thunder Bay North Open Pit Resources – refer Magma Metals Limited (ASX:MMW) announcement dated 7 February 2011 titled “Positive Scoping Study for
Thunder Bay North Project”
• Thunder Bay North Underground Resources – refer Magma Metals Limited (ASX:MMW) announcement dated 23 February 2012 titled “Magma Metals
Increases Mineral Resources at TBN to 790,000 Platinum-Equivalent Ounces”
• Panton - refer ASX announcement dated 30 September 2015 titled “Mineral Resources and Ore Reserves at 30 June 2015”
No New Information or Data
The Mineral Resource estimates tabled above have been previously reported, and the relevant market announcements cross referenced. The Company
confirms that it is not aware of any new information or data that materially affects the information included in the relevant market announcements and, in the
case of estimates of Mineral Resources, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement
continue to apply and have not materially changed.
2017 ANNUAL REPORT | PAGE 121
Corporate Directory
BOARD OF DIRECTORS
REGISTERED OFFICE
Brian Phillips
Non-Executive Chairman
Level 9, 553 Hay Street
Perth, Western Australia, 6000
Peter Harold
Managing Director
John Rowe
Non-Executive Director
Peter Sullivan
Non-Executive Director
MANAGEMENT
Trevor Eton
Chief Financial Officer and Company
Secretary
John Hicks
General Manager Exploration
Tim Mason
General Manager Projects
Robert Parkinson
Manager Business Development
Tim Shervington
Commercial Manager
Andrew Math
Group Financial Controller
Jeremy Smith
Senior Systems Administrator
T: +61 8 6266 8600
F: +61 8 9421 1008
W: www.panoramicresources.com
AUSTRALIAN BUSINESS NUMBER
47 095 792 288
AUDITOR
Ernst & Young
Ernst & Young Building
11 Mounts Bay Road
Perth, Western Australia, 6000
BANKER
National Australia Bank
100 St Georges Terrace
Perth, Western Australia, 6000
SHARE REGISTRY
Computershare Investor Services
172 St Georges Terrace
Perth, Western Australia, 6000
TAX ADVISOR
Ernst & Young
Ernst & Young Building
11 Mounts Bay Road
Perth, Western Australia, 6000
PAGE 122 | 2017 ANNUAL REPORT
P
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Panoramic Resources Limited
Level 9, 553 Hay Street, Perth WA 6000
Postal Address
PO Box Z5487, Perth WA 6831
Telephone: +61 8 6266 8600
Facsimile: + 61 8 9421 1008
Email: info@panres.com
ABN: 47 095 792 288
www.panoramicresources.com