PolarX Limited
(formerly Coventry Resources Limited)
ABN 76 161 615 783
Annual Report
30 June 2017
PolarX Limited (formerly Coventry Resources Limited)
CONTENTS
Page No
Corporate Directory
Review of Operations
Directors’ Report
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Cash Flows
Statement of Changes in Equity
Notes to the Financial Statements
Directors’ Declaration
Auditor’s Independence Declaration
Independent Audit Report
Additional ASX Information
2
3
17
27
28
29
30
31
64
65
66
70
PolarX Limited
2017 Annual Report
Review of Operations
CORPORATE DIRECTORY
Directors
Mr. Mark Bojanjac
Dr. Frazer Tabeart
Dr. Jason Berton
Mr. Michael Fowler
Mr. Robert Boaz
Company Secretary
Mr. Ian Cunningham
Executive Chairman
Managing Director
Executive Director
Non-Executive Director
Non-Executive Director
Registered Office and Principal Place of Business
Suite 9
5 Centro Avenue
Subiaco WA 6008
Australia
Telephone:
Facsimile:
(+61 8) 9226 5566
(+61 8) 9226 2027
Share Register
Computershare Investor Services Pty Ltd
Level 11
172 St Georges Terrace
Perth WA 6000 Australia
Telephone: 1300 787 272
International: (61 8) 9323 2000
(61 8) 9323 2033
Facsimile:
Stock Exchange Listing
Australian Securities Exchange
ASX Code: PXX
Auditors
Stantons International Audit and Consulting Pty Ltd
Level 2, 1 Walker Avenue
West Perth WA 6005
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REVIEW OF OPERATIONS
SUMMARY
PolarX Limited (formerly Coventry Resources Limited) (PolarX or the Company) combines the assets of Coventry
Resources Ltd and Vista Minerals Pty Ltd to create a well-funded company with a new management team and a series of
high-grade copper and copper-gold projects along a 35km long mineralised belt in the southern Alaska Ranges, USA.
The Company’s core assets include the Caribou Dome Copper Project and the adjacent Stellar Copper Gold Project (Figure
1), both of which contain known high-grade deposits of copper (Caribou Dome itself) and copper-gold (Zackly), plus multiple
targets for additional mineralisation which are being readied for drill testing. Pre-feasibility studies are scheduled to
commence at Caribou Dome and Zackly in 2018, and baseline environmental studies have commenced at both sites.
Alaska is a stable, pro-mining jurisdiction. Approximately 80% of the state’s GDP comes from mining, oil and gas, with six
large-scale mines currently in production. Alaska’s largest alluvial gold field, Valdez Creek, is ~15km from the Caribou
Dome Project, and operates all-year round.
Figure 1 Location map of the Company's core assets at Caribou Dome and Stellar
Illustrating copper anomalism along a 35km strike-length
CARIBOU DOME COPPER PROJECT, ALASKA USA
The Caribou Dome Copper Project (Caribou Dome Project) is located approximately 250km northeast of Anchorage in
Alaska, USA. It is readily accessible by road – the Denali Highway passes within 20 kilometres of the Project and from there
a purpose-built road provides direct access to the historic underground development at the Project. The Caribou Dome
Project comprises 203 State Mining Claims covering approximately 26,600 acres (10,765 hectares).
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Mineralisation was discovered at the Caribou Dome Project in 1963. From 1963-1970 nine lenses of sediment-hosted
copper mineralisation were delineated over approximately 700 metres of strike. 95 diamond core holes were drilled during
this period, from surface and underground. This drilling was concentrated primarily on just 250 metres of strike, at Lenses 4,
5 and 6.
On 25 February 2015, PolarX secured the right to acquire an 80% interest in the Caribou Dome Project by meeting certain
expenditure obligations and annual cash payments (refer further Note 28 to the financial statements for a summary of
acquisition terms). Very limited exploration had been undertaken since 1970, until PolarX secured the rights to explore and
develop the project in February 2015. It compiled all historic technical information, prioritised targets arising, completed a
ground geophysics (induced polarisation) survey, and completed 4,300 metres of diamond core drilling. Confirmatory drilling
rapidly validated previous work and the Company’s initial results from work undertaken to further expand the resources at
the Caribou Dome Project have been very promising. All drilling (prior to 2016) was within a 700m long corridor, with
mineralisation remaining open in both directions along strike and at depth. Significant intersections prior to the 2017
financial year (FY2017) included:
51.1m* at 5.3% Cu from 4.4m
18.1m at 9.3% Cu from 22.7m
14.1m at 9.9% Cu from 134.6m
18.4m at 6.3% Cu from 31.4m
15.4m at 7.0% Cu (U/G drill hole)
10.4m at 7.9% Cu from 14.0m
12.8m at 5.8% Cu (U/G drill hole)
13.0m at 4.9% Cu (U/G drill hole)
10.1m at 7.1% Cu from 39.0m
9.1m at 7.0% Cu from 28.7m
10.2m at 6.2% Cu from 46.6m
12.2m at 5.0% Cu from 27.1m
* True width estimated to be approximately 25m
Multiple high-priority targets remain undrilled. With >18km of the stratigraphic horizon that hosts the mineralisation evident
within the Company’s project area, there is considerable potential to discover additional high-grade mineralisation and to
continue to expand the resource base at the Project.
FY2017 Exploration Program
Diamond Core Drilling Program
From June to early October 2016, 22 diamond core holes were drilled at the Caribou Dome Project for a total of 6,520m. The
objectives of the drilling program were to: (i) increase the potential resource base at the Caribou Dome Project; and (ii) to
improve the understanding of the grade, thickness and distribution of the shallow mineralisation so that development of a
potential initial starter high-grade open pit operation can be assessed with greater confidence.
Results from the drilling program are summarised below:
6 holes at the NE end of the Caribou Dome Deposit to test for extensions of the mineralisation along strike and at depth
(CD16-001, CD16-003, CD16-005, CD16-006, CD16-007 and CD16-009). Very significant high-grade mineralisation
was intersected in 3 of the holes drilled at the NE end of the Caribou Dome Deposit, including:
‐
‐
‐
4.3m at 5.2% Cu from 220.5m, 2.2m at 1.0% Cu from 243.8m and 0.6m at 9.1% Cu from 250.1m (CD16-009)
1.1m at 5.5% Cu from 532.1m (including 0.45m at 13.6% Cu) at the target contact between volcanic and
sedimentary rocks (CD16-005)
3m at 1.8% Cu from 487.7m and 1.0m at 2.0% Cu from 507.6m (CD16-007)
2 holes to evaluate the poorly-drilled corridor of mineralisation in the central portion of the Caribou Dome Deposit
(CD16-002 and CD16-004B). Moderate intersections of high-grade mineralisation were returned from holes CD16-002
and CD16-004B, both of which were drilled to test for continuity of mineralisation in the poorly-drilled corridor in the
central portion of the Caribou Dome Deposit, including:
‐
0.3m at 2.65% Cu from 104.2m and CD16-004B intersected 0.4m at 3.6% Cu from 115.2m (CD16-002)
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1 hole to better define the NE extent of mineralisation at Lenses 4 and 6. CD16-008 was drilled to better define the
extents, thickness, geometry and tenor of mineralisation at the NE end of Lenses 4 and 6 – where the majority of
currently delineated shallow, potentially open-pittable, mineralisation is located. CD16-008 intersected:
‐
3.5m at 11.5% Cu from 49.2m and a further 0.4m at 2.4% Cu from 103.1m
Drilling in the Central Portion of the Caribou Dome Deposit - 5 holes were drilled to better define the shallow
mineralisation in and around the central portion of the Caribou Dome Deposit (around Lenses 4, 5 and 6) where the
majority of shallow, potentially open-pittable mineralisation is located (CD16-014, CD16-015, CD16-016, CD16-019 and
CD16-022). Assay results included:
‐
‐
‐
‐
‐
11.4m @ 6.7% Cu from 70.2m
5.7m @ 7.3% Cu from 92.4m
4.0m @ 6.4% Cu from 156.1m
4.2m @ 4.3% Cu from 91.7m, and
5.3m @ 1.8% Cu from 165m
These holes provide much better understanding on the distribution of mineralisation at central portion of the Deposit
where the majority of shallow, potentially open-pittable mineralisation is located.
Drilling at the NE end of the Caribou Dome Deposit - 3 holes were drilled at the NE end of the Caribou Dome Deposit
to begin to test for extensions of mineralisation up-dip from the mineralisation intersected at depth in CD16-005 and
CD16-007 (CD16-010, CD16-011 and CD16-012 – see Figure 1). Significant results included:
‐
‐
‐
‐
‐
‐
4.3m @ 5.2% Cu from 220.5m
1.1m @ 5.5% Cu from 532.1m
0.6m @ 9.1% Cu from 528.7m
0.4m @ 6.8% Cu from 192.6m, and
2.2m @ 1.0% Cu from 243.8m
2.9m @ 2.4% Cu from 193.4m
All of the holes in this area were inclined holes drilled in the same orientation as down-slope topography – hence the
actual depth of mineralisation below surface is considerably less than the apparent depth of reported mineralisation
intersected down hole.
Drilling between Lense 2 and Lense 6 - 2 holes were drilled to begin to evaluate a previously undrilled 100m long
corridor between Lenses 2 and 6, where mineralisation outcrops at surface, an area where any additional
mineralisation could positively impact the economics of developing an open pit (CD16-020 and CD16-021). Significant
mineralisation was intersected in both holes, with results including:
‐
‐
‐
‐
4.4m @ 1.2% Cu from 69.2m
0.5m @ 2.6% Cu from 53.3m
1.6m @ 0.9% Cu from 52.4m, and
0.3m @ 1.6% Cu from 59.9m
Drilling at the Western End of Lense 2 - a single hole (CD16-018) was drilled to evaluate a combination of the Lense 2
West IP Anomaly (see Figure 2) and the potential plunge position of the Lense 2 mineralisation. While this hole failed
to intersect significant mineralisation, important information on the structural controls of mineralisation were identified to
assist targeting extensions of mineralisation in this area in the future; and
Drilling at the Kopis IP Anomaly - two holes were completed at the Kopis IP Anomaly, approximately 1km from (NE of)
the closest previous drilling (see Figure 3). One of these holes (CD16-013) intersected a narrow interval of stock-
worked chalcopyrite veins in volcanic rocks, with best assay results comprising 0.5m @ 0.9% Cu from 131.9m. Neither
hole intersected the target sedimentary sequence. The presence of chalcopyrite coinciding with this >1,000m long IP
anomaly is very encouraging, and further drilling is planned for this highly prospective area.
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Figure 2. Drill hole traces and some of the significant intersections for the holes drilled during the Company’s 2016
diamond core drilling program at the Caribou Dome Deposit, together with the traces of all previous holes within
100m of surface and the extents of previously mapped outcropping mineralisation.
Ground Geophysical Surveying
During June-August 2016 a contract crew completed induced polarisation (IP) surveying over 7km of strike, centred on the
Caribou Dome Deposit itself; targeting the strike extensions of the prospective geological contact between sedimentary and
volcanic rocks (Figure 3).
A very strong IP anomaly was delineated over the deposit itself. Numerous very high-priority new targets have been
delineated along strike from the deposit, including the newly defined Kopis Anomaly which covers 1,100m of strike within the
same geological position as the Caribou Dome Deposit itself – namely at the contact between a sedimentary sequence and
the underlying volcanic sequence of rocks. The Kopis IP Anomaly coincides with a strong soil geochemistry anomaly and
extensive outcropping mineralisation.
Two holes were drilled during FY2017 to begin evaluation of the Kopis IP Anomaly (refer above). Although no sediments
were intersected in drilling, minor vein stockworks of chalcopyrite in volcanic rocks were intersected. Further exploratory
drilling is warranted.
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Figure 3. 125m depth slice of inverted IP data acquired during 2016 at the Caribou Dome Project.
There is a strong correlation between IP anomalism and known mineralisation. Numerous strong IP
anomalies are yet to be evaluated with drilling. Geology and geochemistry is being used to prioritise them.
Soil Sampling
During late June and early July 2016 approximately 800 soil samples were collected over more than 5km of strike over an
extension of the prospective sedimentary sequence in the far northeast of the project area, where, historically, outcropping-
sediment hosted copper mineralisation had been recorded. This new area is >11km NE of the Caribou Dome Deposit itself
(see Figure 4) and has been subject to very little previous exploration.
A 5km wide zone of highly anomalous copper in soils is evident in this new “Senator Prospect” area, with soil samples
assaying up to 0.17% copper (see Figure 4). The sampling team identified some exposed areas of outcropping sediment-
hosted mineralisation while they were collecting soil samples. Select rock chip samples from these areas have returned
assays up to 12.1% Cu, confirming significant potential for additional high-grade sediment-hosted copper mineralisation in
this sizeable new area.
As a result of this program, 26 new mineral claims were staked during FY2017 to secure the mineral rights over the new
anomalism and surrounding areas (for a total 4,160 acres or 16.8km2).
Further exploration work will be undertaken at the Senator Prospect as part of the 2017 exploration program (refer – FY2018
Exploration Program below).
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Figure 4. Image of copper soil geochemistry across the entire Caribou Dome Project, illustrating
the 5km-wide highly anomalous zone delineated during 2016 in the far northeast of the
Project – the “Senator Prospect”.
Mineral Resource Estimate
Following completion of the 2016 exploration program, in April 2017 the Company announced its initial mineral resource
estimate for the Caribou Dome Project of 2.8Mt @ 3.1% Cu (using 0.5% lower-cut) for contained copper metal of
approximately 86,000t (Resource Estimate). The Resource Estimate, which was prepared in accordance with the JORC
Code (2012), is summarised in Table 1 below (refer also ASX announcement of 6 April 2017).
Table 1: Caribou Dome Mineral Resource Estimate (March 2017)
Open Cut RL>=1300
Underground RL<1300
Total
Category
Tonnes
Grade
Cu (%)
Tonnes
Grade
Cu (%)
Tonnes
Grade
Cu (%)
Contained
Cu (t)
Measured
495,000
3.6
74,000
3.7
569,000
3.6
21,000
Indicated
480,000
2.2
113,000
2.3
593,000
2.2
13,000
Inferred
655,000
3.1
979,000
3.3
1,634,000
3.2
52,000
Total
Notes:
1,630,000
3.0
1,166,000
3.2
2,796,000
3.1
86,000
1. Numbers are presented at a 0.5% Cu cut-off grade and are rounded; and
2. Refer to the ASX announcement of 6 April 2017 for full details on the Mineral Resource Estimate, including the applicable
technical information and reporting criteria.
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The Company considers there is potential for a significant increase in the Mineral Resource Estimate from further drilling
along strike and down-dip, targeting both near surface and at depth extensions
Approximately 60% of the Mineral Resource, comprising 1.6Mt occurs within approximately 150m of surface at an average
grade of 3.0% copper. Within that domain, some 935,000t averages 4.4% copper at a 2% cut-off grade (refer ASX
announcement of 6 April 2017), and may potentially form part of an open-pit mine design.
The initial JORC Resource further demonstrates the project’s strong commercial potential and characterises the immediate
opportunity for significant upside.
The initial JORC Resource at this stage only considers:
approx. 800m of strike within 18km of largely untested sedimentary sequence on the Company’s tenure;
does not yet fully capture the obvious underground mining potential where the second deepest hole recorded
15.4m @ 7% copper; and
does not yet include any of the obvious additional potential along strike of the drilling to date.
The particularly high copper grade of Caribou Dome is most instrumental to future robust economics. Additional mineable
tonnage would add substantial tangible value.
More drilling is clearly warranted to enhance the resource model and better define the deeper material.
To begin to evaluate at a high-level the technical and potential economic viability of an open pit development, the Company
undertook a preliminary scoping study (PSS) based on using the near surface material for a low-capex open-pit starter
operation. The PSS has demonstrated the economic potential arising from the near surface high-grade material. A
preliminary open-pit mine design is also being examined which could form the starting basis of a future mine.
Deeper material below ~150m from surface has not yet been examined in the PSS, although it already comprises ~1.2Mt at
an average grade of 3.2% copper (using 0.5% lower cut) and contains approximately 40% of the total current resource
estimate.
Based on its preliminary optimisation studies, the Company identified the potential for an open-cut mining operation to
produce a copper concentrate.
Although no underground studies have yet been reported, PolarX is of the opinion that copper extraction from underground
operations could be viable beneath the assumed open-cut. All of the required infrastructure would already be in place
therefore no additional CAPEX would be required, with the exception of underground mining development. As such, below
1300mRL a reporting cut-off could be chosen to report copper in the range of 3.2 to 4% as being appropriate to include that
material which may be economic to mine in an underground scenario.
Metallurgical Testwork
Initial metallurgical test-work (in early 2016), focused on conventional flotation, achieved recoveries of >95% Cu, with
concentrates grading up to 24.5% Cu, from a composite sample from the Lense 4, 5 and 6 area (which averaged 5.03% Cu).
Subsequent testwork investigated whether metallurgical responses differ across the Deposit. This work was undertaken by
testing samples from discrete locations across the Deposit, rather than compositing samples. Accordingly, for the first time
metallurgical testwork was undertaken on a representative sample of mineralisation from the Lense 7/8 area (at the NE end
of the Deposit). The head grade of this sample was 7.4% Cu. During FY2017 the Company reported that excellent results
had been returned, with recoveries of >99% Cu achieved in all rougher flotation tests and concentrates grading up to 27.4%
Cu were produced during cleaner flotation tests.. This work is still at a relatively early stage and ongoing metallurgical
testwork is being undertaken to refine the optimal processing flowsheet for the Caribou Dome Project.
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ACQUISITION OF STELLAR PROJECT
In May 2017, the Company announced plans to significantly expand its highly prospective footprint in Alaska by acquiring
100% of the issued capital of Vista Minerals Pty Ltd (Vista), which holds a 100% interest in the Stellar Copper Gold Project
(Stellar Project). Subsequently on 26 July 2017 the Company announced that it had completed the acquisition of Vista
(Vista Acquisition).
The Stellar Project occurs on the southern flank of the Central Alaska Range and is contiguous with the north-eastern end of
the Caribou Dome Project. The Stellar Project occurs in a complex geological setting where multiple periods of intrusive
activity have led to the development of widespread magmatic-hydrothermal mineralisation containing varying amounts of
copper and gold.
The Stellar Project contains five main prospects: the Zackly Cu-Au skarn; the Jupiter, Mars and Gemini porphyry Cu-Au-Mo
targets, and the Au-only Moonwalk Prospect. Zackly is the only prospect to have been tested by drilling, undertaken
between 1981 and 1994. This drilling identified a mineralised skarn with average grades of 2.9% Cu and 4.51g/t Au along a
strike-length of ~800m. Potential exists to significantly increase the strike length of the mineralisation through further drilling
which could lead to the classification of a JORC resource.
The Stellar Project comprises 111 contiguous State Mining Claims in the Talkeetna District of Alaska (Figure 5). The claims
cover a total area of 17,760 acres (7,187 hectares) and are registered to Millrock Alaska LLC a wholly owned subsidiary of
Millrock Resources Inc. (“Millrock”). The Company has recently staked an additional 70 State Mining Claims to cover
obvious extensions of the copper and gold soil geochemical anomaly hosting the Zackly, Mars, Jupiter, Gemini and
Moonwalk prospects.
Figure 5: Geochemical map of the Stellar Project showing the location of the main prospects referred
to in the text
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Recent Exploration and Mineralisation
In 2010 and 2012 Millrock Alaska undertook a program of stream sediment sampling, rock-chip sampling and soil sampling
across the entire project. A total of 187 rock samples, 340 soil samples and 56 stream sediment samples were collected and
analysed for base and precious metals. The results of the soil sampling have delineated a series of high priority exploration
targets in addition to the known skarn mineralisation at Zackly (see Figure 6 below).
The Zackly Prospect is the most significant mineralisation identified to date on the Stellar Project. Five drilling campaigns
were undertaken by various companies between 1981 and 1994, with 99 holes for a total of 9,595m of core and 3,419m
reverse circulation percussion samples completed. These campaigns delineated a steeply south dipping copper-gold skarn
system associated with limestone, andesitic to basaltic volcanic rocks and dioritic intrusions. Mineralised zones vary from
0.5m true thickness to over 10m, averaging 3.0m.
Limited metallurgical test work in 1987 and 1992 on oxidised Zackly mineralisation from surface trenches focused on gold
recoveries and indicated that a combination of flotation cells (Cu-Au) and a gravity circuit (Au) should be further evaluated.
Significant drill intercepts from the Zackly Prospect include (all drilling intercepts greater than 0.1% Cu are contained in the
ASX announcement dated 24 May 2017):
11.58m @ 7.2% Cu, 16.1g/t Au from 151.79m (Z-04-81, Core)
7.92m @ 2.1% Cu, 2.55g/t Au from 171.30m (Z-02-81, Core)
10.36m @ 2.0% Cu, 2.3g/t Au from 99.36m (Z-07-81, Core)
12.19m @ 0.7% Cu, 16.1g/t Au from 21.33m (Z-05-81, Core)
6.71m @ 1.9% Cu, 4.1g/t Au from 79.24m (Z-01-81, Core)
0.91m @ 3.2% Cu, 14.5g/t Au from 167.64m (Z-08-81, Core)
3.05m @ 2.1% Cu, 4.1g/t Au from 71.93m (Z-12-81, Core)
3.47m @ 2.5% Cu, 7.6g/t Au from 190.19m (Z-31-82, Core)
9.15m @ 2.3% Cu, 5.5g/t Au from 6.10m (Z-50, RC)
9.14m @ 2.2% Cu, 2.7g/t Au from 3.05m (Z-48, RC)
5.43m @ 2.3% Cu, 5.1g/t Au from 23.92m (Z-86, Core)
6.10m @ 1.3% Cu, 6.8g/t Au from 0m (Z-78, RC)
13.72m @ 1.9% Cu, 2.1g/t Au from 82.29m (Z-55, RC)
4.57m @ 2.8% Cu, 5.3g/t Au from 106.68m (Z-49, RC)
The skarn mineralisation at the Zackly Prospect extends for over 2000m along strike, but the core zone, the Main Skarn is
approximately 800m long and focussed on the western/central area of drilling. Three historical (non-JORC compatible)
foreign mineral resource estimates were prepared for the Main Skarn in 1982, 1987 and 1993. The most recent of these,
prepared by Hemlo Gold in 1993 estimated that the Main Skarn contained 1.54 million tonnes @ 2.90% Cu and 4.51g/t Au*.
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Figure 6: Zackly Prospect showing historical and planned IP survey lines, historical drill hole collar locations, mapped faults
and the location of the surface projections of the known Main Skarn mineralisation and along-strike potential eastern and
western extensions
Two lines of IP surveying were undertaken to the west of the Main Skarn by Vista in late 2016. Strong chargeability
anomalies were identified in both IP lines, supporting the potential for up to 1500m additional mineralised strike-length to the
west of the Main Skarn. Furthermore, historical IP to the east of the Main Skarn supports a potential faulted offset of the
mineralisation with at least 650m of untested strike-length of strong chargeability anomalism (see Figure 6). Infill IP and
drilling is required at the Zackly Prospect to validate existing drill intercepts and seek extensions to the mineralisation,
ultimately leading to a JORC compatible resource estimate if the drilling is successful.
The Mars Prospect, 6km west of the Zackly Prospect, was first visited and sampled by Millrock Alaska in 2010. The main
Cu-Au geochemical anomaly is coincident with a strong circular magnetic anomaly, the centre of which is composed of
diorite with chalcopyrite veins. Significant geochemical results include a 1200m soil traverse averaging 462 ppm in Cu, a
950m soil traverse averaging 763 ppm Cu and a 900m soil traverse averaging 891 ppm Cu. A sample of altered diorite
collected from the centre of the magnetic anomaly returned 0.51% Cu, 0.21g/t Au and high grade rock samples of 7.4% Cu
and 1.79g/t Au were collected from float and a gossanous gully, respectively. No further work has been undertaken at Mars
Prospect.
The Jupiter Prospect occurs immediately north of the Zackly Prospect and comprises a 2000m long continuous Cu-Au
anomaly with average values in the soil samples of 914ppm Cu and 0.08g/t Au. Vista completed three lines of
reconnaissance IP surveying over the Jupiter Prospect in late 2016 which identified several poorly constrained chargeability
anomalies. Additional IP surveying and drilling is required at this prospect.
The Gemini Prospect occurs approximately 5km to the north of the Zackly Prospect and comprises a large co-incident Cu
and Au in soils anomaly some 2.0km x 2.0km in dimension, with peak values of 1,130ppm Cu and 0.25g/t Au. There has
been no detailed mapping, no geophysics and no drilling at the Gemini Prospect.
Finally, the Moonwalk Prospect occurs in the northern extremity of the claim block in a different geological terrane to the
mineralisation at the Zackly Prospect, the Mars Prospect and the Gemini Prospect. At the Moonwalk Prospect, a
granodiorite has been mapped intruding into a series of black shales and silty sediments. The granodiorite appears to be a
100m thick sill with a strike length of 700m, and locally contains quartz-sulphide veins which have assayed up to 30.45 g/t
Au in one grab sample. Soil samples within the granodiorite averaged 1.15g/t Au across 19 samples collected over a 700m x
500m area, with a high of 3.54 g/t Au. No geophysical surveys or drilling have been undertaken to date.
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PROPOSED 2017 EXPLORATION PROGRAM
Following completion of the Vista Acquisition, PolarX’s focus is now on the exploration and development of both the Caribou
Dome Project and new Stellar Project, which collectively form a contiguous package of claims with ~35km strike length.
Together, they deliver an exciting high-grade copper and copper-gold portfolio and provide a unique chance to build a
meaningful resource house at an opportune time in the market.
In August 2017, PolarX recommenced exploration activities in Alaska. Exploration activities for the remainder of the 2017
field season will be focussed on three prospects:
Diamond drilling and IP surveying at the Zackly Cu-Au skarn;
IP surveying, geological mapping and rock-chip sampling at the Mars Cu-Au target; and
IP surveying, geological mapping and rock-chip sampling at the Senator Cu target.
Zackly Cu-Au Skarn
Initial exploration programs for the 2018 financial year will focus on the Zackly high grade Cu-Au skarn deposit where
historic foreign resource estimates comprise 1.5Mt at 2.9% Cu and 4.51 g/t Au in the Zackly Main Skarn.
IP surveys conducted after the resource drilling in 1981, 1982 and 1987 have indicated the potential for along-strike
extensions of the Zackly Main skarn to the east and to the west (Figure 6 above).
One drill rig commenced in mid-August 2017 and will be used to evaluate these along strike extensions. Infill IP surveys
totalling 10.6 line-km have been undertaken across the Main Skarn (for orientation purposes), and along strike in both
directions to assist targeting drill hole collar locations. IP crews were mobilised in early August 2017.
A second drill rig has commenced a program of approximately 12 holes to twin existing drill intersections in the Zackly Main
Skarn and provide the basis for re-classifying this to JORC 2012 standard. Mineralised core from this program will be used
in metallurgical test-work to assess processing options for Zackly skarn mineralisation.
Mars Cu-Au target
The Mars target contains soil and rock-chip anomalism permissive of a large porphyry copper-gold system. A total of 53 soil
samples were collected across the Mars prospect as part of regional sampling undertaken in 2012 and 2013 by Millrock
Alaska. Of these samples, 12 returned assay values exceeding 0.1g/t Au, and 21 returned assay values exceeding 500ppm
Cu.
A total of 35 rock samples were collected in 2012, mainly from talus slopes and outcrops. Variably iron stained and locally
carbonate +/- epidote +/- chlorite altered dioritic intrusions, andesitic volcanic rocks and gabbroic rocks were sampled, some
of which were quartz veined or brecciated and in places gossanous. 10 of the rock samples returned assay values
exceeding 0.25g/t Au, with a peak value of 1.79g/t Au. 10 of the samples were also highly anomalous in copper (>0.5% Cu),
with a peak value of 7.4% Cu.
Four lines of IP surveying (6.8km in total) will be collected across the Mars prospect in late 2017, with results to be used to
plan a drilling program to evaluate the potential of this prospect (Figure 7)
PolarX Limited
13
2017 Annual Report
Review of Operations
Figure 7: Surface geochemistry and planned IP lines at the Mars Cu-Au prospect
Senator Cu target
The Senator copper prospect was discovered through a soil sampling program undertaken by the Company in 2016 (refer
above). This highlighted an area covering approximately 5km x 2.5km with elevated copper in soils (>100ppm Cu) and
sporadic outcrop. Recent site visits have highlighted the potential of this area having identified intense iron alteration
(jarosite and hematite) and the presence of copper oxides on fracture surfaces (see Figure 8 below).
Figure 8: Widespread iron oxide alteration (jarosite and hematite) at the Senator copper prospect.
Note helicopter in central left of photograph for scale.
PolarX Limited
14
2017 Annual Report
Review of Operations
Geological mapping, rock-chip sampling and IP surveying (approximately 11 line-km), and if warranted, drill testing is being
undertaken at Senator during the 2018 financial year.
UNCLE SAM GOLD PROJECT, ALASKA USA
The Uncle Sam Project is located 75 kilometres southeast of the City of Fairbanks in Alaska. Intrusion-related gold is being
targeted, in a similar age of intrusive rocks to those which host the Pogo Gold Mine approximately 60 kilometres to the east
of the Uncle Sam Project.
The Company secured the rights to the Project on 15 December 2010 when it entered into an option agreement, as
subsequently amended on 22 December 2011, with Millrock Resources Inc. and Millrock Alaska LLC pursuant to which the
Company was granted the right to earn a 100% interest in the Uncle Sam Project (the Uncle Sam Option). In April 2013,
the Company exercised the Uncle Sam Option (refer further Note 29 to the financial statements for key terms).
On 27 July 2015, the Company entered into a mineral lease and purchase agreement with Great American Minerals
Exploration Inc. (GAME), pursuant to which GAME agreed to lease the Uncle Sam Project for 10 years with an option to
purchase the property outright at any time during the lease period (refer further Note 29 to the financial statements for key
terms).
There were no further developments in relation to the Uncle Sam Project during.
CORPORATE
On 1 September 2016, the Company completed a placement of 56,473,750 Shares at an issue price of $0.032 per Share for
gross proceeds of $1,807,160 to institutional and sophisticated investors. Net funds raised pursuant to the September
placement were for the purposes of continuing to advance the development of the Caribou Dome Project and for general
working capital purposes.
On 29 April 2017, the Company entered into a $200,000 convertible note facility with Vista, of which $100,000 was drawn
down as at balance date. Following the acquisition of Vista in July 2017 (refer below) the facility was repaid.
On 24 May 2017, the Company announced the proposed Vista Acquisition and proposed financing, both of which were
subject to shareholder approval which was received on 30 June 2017. Subsequently, on 26 July 2017 the Company
announced that it had (i) completed the acquisition of Vista and (ii) raised approximately $5.5 million via the issue of
274,750,000 ordinary shares at an issue price of $0.02 per Share (refer further Note 18 to the financial statements). The
July placement was a condition precedent to completion of the Vista Acquisition. The net proceeds from the July placement
will be used for exploration and development activities on the Caribou Dome Project and the Stellar Project and for general
working capital.
Following the acquisition of Vista, Dr Frazer Tabeart and Dr Jason Berton were appointed as directors of the Company, with
Dr Tabeart appointed as Managing Director/CEO.
On 7 August 2017, the Company completed a 1 for 5 security consolidation and on 15 September 2017 changed its name to
PolarX Limited (refer further Note 18 to the financial statements).
PolarX Limited
15
2017 Annual Report
Review of Operations
Notes to the Review of Operations
Qualified and Competent Persons Statements
The 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code)
sets out minimum standards, recommendations and guidelines for Public Reporting in Australasia of Exploration Results, Mineral Resources
and Ore Reserves. The information contained in this announcement has been presented in accordance with the JORC Code and references
to “Measured Resources”, “Inferred Resources” and “Indicated Resources” are to those terms as defined in the JORC Code.
The information in this announcement that relates to Mineral Resource estimation for the Caribou Dome Project is based on information
compiled by Mr Peter Ball who is a Member of The Australasian Mining and Metallurgy. Mr Ball has sufficient experience which is relevant
to the style of mineralisation and type of deposit under consideration and the activity he is undertaking to qualify as a Competent Person as
defined in the JORC Code. Mr Ball consents to the inclusion in the report of the matters based on the information in the form and context in
which it appears.
The information in this announcement that relates to mineralisation interpretation and database quality used in the Mineral Resource
Estimation and exploration and metallurgical testwork results for the Caribou Dome Project, is based on information compiled by Mr Ben
Vallerine, who is a consultant to the Company and holds an indirect shareholding in the Company. Mr Vallerine is a Member of the
Australian Institute of Geoscientists. Mr Vallerine has sufficient experience which is relevant to the style of mineralisation and type of
deposit under consideration and the activity he is undertaking to qualify as a Competent Person as defined in the JORC Code. Mr Vallerine
all consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.
All other information in this report relating to exploration results, mineral Resources or ore Reserves is based on information compiled by Dr
Frazer Tabeart (an employee of PolarX Limited) who is a member of The Australian Institute of Geoscientists. Dr Tabeart has sufficient
experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking
to qualify as a Competent Person under the JORC Code. Dr Tabeart consents to the inclusion of the data in the form and context in which it
appears.
*Foreign Historic Mineral Resource Estimate for the Zackly Main Skarn in the Stellar Project:
(i)
(ii)
Readers are referred to the Company's initial market release dated 24 May 2017 which provides supporting information on these
historical foreign resource estimates.
The Company confirms that the supporting information disclosed in the initial market announcement continue to apply and have not
materially changed.
(iii) Readers are cautioned that that this estimate is a "foreign estimate" under ASX Listing Rule 5.12 and is not reported in accordance
with the JORC Code.
(iv) A Competent Person has not yet undertaken sufficient work to classify the foreign estimate as mineral resources or ore reserves in
accordance with the JORC Code.
(v)
It is uncertain that, following evaluation and/or further exploration work, it will be possible to report this foreign estimate as mineral
resources or ore reserves in accordance with the JORC Code.
Forward Looking Statements
Any forward-looking information contained in this report is made as of the date of this report. Except as required under applicable securities
legislation, PolarX does not intend, and does not assume any obligation, to update this forward-looking information.
Any forward-looking information contained in this report is based on numerous assumptions and is subject to all of the risks and
uncertainties inherent in the Company’s business, including risks inherent in resource exploration and development. As a result, actual
results may vary materially from those described in the forward-looking information. Readers are cautioned not to place undue reliance on
forward-looking information due to the inherent uncertainty thereof.
PolarX Limited
16
2017 Annual Report
Directors’ Report
The Directors present their report for PolarX Limited (formerly Coventry Resources Limited) (PolarX or the Company) and
its subsidiaries (the Group) for the year ended 30 June 2017.
The Company changed its name to PolarX Limited on 15 September 2017. The Company also completed a 1 for 5 security
consolidation on 7 August 2017 (the Consolidation). Accordingly, references to shares and options throughout this
Directors’ Report are on a post-Consolidation basis, unless otherwise advised. Whilst references to the Company’s shares
and options on issue in the notes to the financial statements are on a pre-Consolidation basis, unless otherwise stated,
given the Consolidation took effect after the reporting date. Further details on these events are set out in Note 18 to the
financial statements.
DIRECTORS
The names, qualifications and experience of the Directors in office during the period and until the date of this report are as
follows. Directors were in office for this entire period unless otherwise stated.
Mark Bojanjac
Executive Chairman (appointed 13 December 2016, formerly Non-Executive Chairman)
Qualifications
BCom, ICAA
Experience
Mr Bojanjac is a Chartered Accountant with over 25 years’ experience in developing resource
companies. Mr Bojanjac was a founding director of Gilt-Edged Mining Limited which discovered
one of Australia’s highest grade gold mines and was managing director of a public company
which successfully developed and financed a 2.4m oz gold resource in Mongolia. He also co-
founded a 3 million oz gold project in China.
Mr Bojanjac was most recently Chief Executive Officer of Adamus Resources Limited and
oversaw its advancement from an early stage exploration project through its definitive feasibility
studies and managed the debt and equity financing of its successful Ghanaian gold mine.
Interest in shares
and options
2,000,000 unlisted options exercisable at $0.0715 on or before 19 February 2020
Other Directorships
Director of Geopacific Resources Limited (since 28 March 2013)
Frazer Tabeart
Managing Director (appointed 26 July 2017)
Qualifications
Ph.D, B.Sc (Hons), ARSM, MAIG
Experience
Dr. Tabeart is a geologist with 30-years international experience in exploration and project
development, with strong technical background in porphyry copper-gold systems in SE Asia, SW
Pacific, the American Cordillera and central and northern Asia. After spending 16 years with WMC
Resources and managing exploration portfolios in the Philippines, Mongolia and Africa, he left to
join the Mitchell River Group.
Interest in shares
and options
Other Directorships
Dr. Tabeart has served on ASX-listed Company Boards at Executive level over last 10 years.
4,103,273 ordinary shares
Dr. Tabeart is a Director and Principal at Mitchell River Group, and current Managing Director at
African Energy Resources Limited (since 1 November 2007) and Non-Executive Director at
Segue Resources Limited (since 1 September 2014).
Jason Berton
Executive Director (appointed 26 July 2017)
Qualifications
Ph.D, B.Sc (Hons), MAusIMM
Experience
Dr. Berton is a geologist with over 16 years’ mining and exploration experience including working
for Homestake, Barrick and BHP Billiton and SRK Consulting. Dr Berton has also previously
spent two years in private equity investment and four years as Managing Director of ASX- listed
Estrella Resources.
Dr Berton holds two Degrees, a Bachelor of Economics and a Bachelor of Science (Hons) plus a
PhD in Structural Geology, all from Macquarie University.
PolarX Limited
17
2017 Annual Report
Directors’ Report
Interest in shares
and options
13,631,832 ordinary shares
Other Directorships
None
Michael Fowler
Independent Non-Executive Director
Qualifications
BSc, MSc, MAusIMM
Experience
Interest in shares
and options
Mr Fowler is a geologist with 25 years’ experience in the resources industry. He graduated from
Curtin University in 1988 with a Bachelor of Applied Science degree majoring in geology and in
1999 received a Master of Science majoring in Ore Deposit Geology from the University of
Western Australia. On graduating he explored for gold and base metals for Dominion Mining in
the Murchison, Gascoyne and Eastern Goldfields regions of Western Australia. In 1996, Mr
Fowler joined Croesus Mining NL and was made Exploration Manager in 1997. He oversaw all
exploration for Croesus until June 2004 and was then appointed Business Development Manager
and subsequently Managing Director in October 2005.
Mr Fowler has overseen the discovery and development of several significant gold deposits. He
has intimately involved in a number of significant acquisitions and project reviews.
1,000,000 unlisted options exercisable at $0.0715 on or before 19 February 2020
Other Directorships
Director of Genesis Minerals Limited (since 16 April 2007)
Robert Boaz
Independent Non-Executive Director
Qualifications
Honors B.A., M.A. Economics
Experience
Interest in shares
and options
Other Directorships
Mr Boaz graduated with honours from McMaster University of Hamilton, Ontario with a Bachelor
of Arts in Economics and has a Masters Degree in Economics from York University in Toronto.
He is a highly respected financial and economic strategist in Canadian bond and equity markets
with experience related to equity research, portfolio management, institutional sales and
investment banking.
Mr Boaz has over 20 years’ experience in the finance industry, most recently as Managing
Director, Investment Banking with Raymond James Ltd and Vice-President, Head of Research
and in-house portfolio strategist for Dundee Securities Corporation.
Mr Boaz is currently President & CEO of Aura Silver Resources Inc.
1,000,000 unlisted options exercisable at $0.0715 on or before 19 February 2020
Aura Silver Resources Inc. (since 2008)
Renaissance Gold Inc. (since 2010)
Caracara Silver Inc. (since 2011)
Michael Haynes
Managing Director (resigned 13 December 2016)
Qualifications
BSc (Hons.)
Experience
Mr. Haynes has more than 22 years’ experience in the mining industry. Mr. Haynes graduated
from the University of Western Australia with an honours degree in geology and geophysics. He
has been intimately involved in the exploration and development of resource projects, targeting a
wide variety of commodities, throughout Australia and extensively in Southeast and Central Asia,
Africa, North and South America, and Europe.
Mr. Haynes has held technical positions with both BHP Minerals Limited and Billiton plc. He ran
his own successful consulting business for a number of years providing professional geophysical
and exploration services to both junior and major resource companies. He has worked
extensively on project generation and acquisition throughout his career. Over the past eleven
years he has been intimately involved in the incorporation, ongoing financing and management of
numerous resources companies.
Interest in shares
and options
4,700,787 ordinary shares*
*as at the date of his resignation on 13 December 2016
PolarX Limited
18
2017 Annual Report
Directors’ Report
Other Directorships
Director of Overland Resources Limited (from 9 May 2005 to 23 June 2017)
Director of Black Range Minerals Limited (from 27 June 2005 to 11 November 2015)
Ian Cunningham
Executive Director, Chief Financial Officer and Company Secretary (resigned as Executive
Director on 13 December 2016)
Qualifications
BCom, LLB, ICAA, FGIA
Experience
Mr. Cunningham is a Chartered Accountant and Chartered Secretary and holds a Bachelor of
Commerce degree and Bachelor of Laws degree from the University of Western Australia. He
also holds a Graduate Diploma in Applied Corporate Governance from the Governance Institute of
Australia and a Graduate Diploma of Applied Finance and Investment from the Securities Institute
of Australia.
Mr. Cunningham has more than 12 years’ experience in the resources industry in executive and
senior management roles, including most recently with Adamus Resources Limited, during which
time Adamus developed the Nzema Gold Mine (Ghana) and subsequently merged with
Endeavour Mining Corporation.
Prior to that he worked in the Financial Advisory division of Deloitte in both Australia and the UK.
Interest in shares
and options
3,720,931 ordinary shares
Other Directorships
None
RESULTS OF OPERATIONS
The Group’s total comprehensive loss after taxation attributable to the members for the year was $1,056,489 (2016:
$1,131,643).
DIVIDENDS
No dividend was paid or declared by the Group in the year and up to the date of this report.
CORPORATE STRUCTURE
PolarX Limited is an Australian registered public company limited by shares.
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
During the financial year, the Group’s principal activity was mineral exploration. The Group currently holds interests in
copper and gold exploration projects in Alaska USA. During the 2017 financial year there were no changes in the principal
activities from the prior financial year.
EMPLOYEES
The Group had one employee at 30 June 2017 (2016: one employee).
REVIEW OF OPERATIONS
A detailed summary of the Group’s operations during the year, including significant changes in the state of affairs, are
detailed in the Review of Operations.
SIGNIFICANT EVENTS AFTER THE REPORTING DATE
On 26 July 2017, the Company acquired Vista Minerals Pty Ltd. (Vista) in exchange for 459,821,368 pre-Consolidation
shares (Vista Acquisition). Vista holds a 100% interest in the Stellar Copper Gold Project (Stellar Project) in Alaska via its
wholly owned subsidiary, Vista Minerals (Alaska) Inc. For further details on the Stellar Project refer to the Review of
Operations.
PolarX Limited
19
2017 Annual Report
Directors’ Report
On 26 July 2017, concurrent with the Vista Acquisition, the Company completed a private placement of 274,750,000 pre-
Consolidation shares at an issue price of $0.02 per share for gross proceeds of $5.495 million to institutional and
sophisticated investors.
On 7 August 2017, the Company completed a 1 for 5 security consolidation. As a result, there were 238,897,103 shares on
issue and 5,172,370 options outstanding after the Consolidation.
On 17 August 2017, 226,170 options with an exercise price of C$0.25 lapsed.
On 15 September 2017, the Company changed its name to PolarX Limited.
On 19 September 2017, the Company issued 400,000 options, each exercisable at $0.12 on or before 18 September 2020,
in lieu of cash consideration for consulting services provided since 1 July 2017.
No other significant events have occurred subsequent to the balance sheet date but prior to the date of this report that would
have a material impact on the consolidated financial statements.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Group will continue to carry out its business plan, by:
continuing to explore the Caribou Dome Project and Stellar Project and advance these projects towards
development;
continuing to meet its commitments relating to exploration tenements and carrying out further exploration, permitting
activities and project development; and
prudently managing the Group’s cash to be able to take advantage of any future opportunities that may arise to add
value to the business.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Group carries out operations that are subject to environmental regulations under Federal, Territorial and Provincial
legislation in the USA. The Group has procedures in place to ensure regulations are adhered to. The Group is not aware of
any breaches in relation to environmental matters.
SHARE OPTIONS
As at the date of this report, there were 5,346,200 (post-Consolidation) options over ordinary shares. The details of the
options on issue at the date of this report are as follows:
Number
Exercise Price
Expiry Date
146,200
4,000,000
400,000
400,000
400,000
$0.13
$0.0715
$0.175
$0.195
$0.12
30 June 2018
19 February 2020
17 June 2020
30 August 2019
18 September 2020
No option holder has any right under the options to participate in any other share issue of the Company or any other entity.
Balance Date (pre-Consolidation)
There were 25,861,850 options (pre-Consolidation basis) on issue at the balance date. On 31 August 2016, the Company
issued 2,000,000 options (pre-Consolidation basis), each exercisable at $0.039 on or before 30 August 2019, in lieu of cash
consideration for consulting services.
PolarX Limited
20
2017 Annual Report
Directors’ Report
During the 2017 financial year, 4,983,450 options (pre-Consolidation basis) expired. No options were exercised during the
financial year.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has made agreements indemnifying all the Directors and Officers of the Company against all losses or
liabilities incurred by each Director or Officer in their capacity as Directors or Officers of the Company to the extent permitted
by the Corporations Act 2001. The indemnification specifically excludes wilful acts of negligence. The Company paid
insurance premiums in respect of Directors’ and Officers’ Liability Insurance contracts for current Officers of the Company,
including Officers of the Company’s controlled entities. The liabilities insured are damages and legal costs that may be
incurred in defending civil or criminal proceedings that may be brought against the Officers in their capacity as officers of
entities in the Group. The total amount of insurance premiums paid has not been disclosed due to confidentiality reasons.
DIRECTORS’ MEETINGS
During the financial year, in addition to regular informal Board discussions and decisions made via circulating resolutions,
the number of Directors’ meetings held during the year, and the number of meetings attended by each Director were as
follows:
Name
Mark Bojanjac
Michael Fowler
Robert Boaz
Michael Haynes
Ian Cunningham
Number of Meetings
Eligible to Attend
Number of Meetings
Attended
4
4
4
2
2
4
4
4
2
2
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any proceedings to
which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those
proceedings. The Company was not a party to any such proceedings during the year.
CORPORATE GOVERNANCE
The Board of Directors is responsible for the overall strategy, governance and performance of the Company. The Board has
adopted a corporate governance framework which it considers to be suitable given the size, nature of operations and
strategy of the Company. To the extent that they are applicable, and given its circumstances, the Company adopts the eight
essential Corporate Governance Principles and Best Practice Recommendations ('Recommendations') published by the
Corporate Governance Council of the ASX. The Company’s Corporate Governance Statement and Appendix 4G, both of
which have been lodged with ASX, are available on the Company’s website: www.polarx.com.au.
AUDITOR’S INDEPENDENCE AND NON-AUDIT SERVICES
Section 307C of the Corporations Act 2001 requires the Group’s auditors to provide the Directors of Coventry with an
Independence Declaration in relation to the audit of the full-year financial report. A copy of that declaration is included at
page 65 of this report. There were no non-audit services provided by the Company’s auditor.
REMUNERATION REPORT (AUDITED)
This report outlines the remuneration arrangements in place for Directors and other key management personnel of Coventry
Resources Limited in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purpose
of this report, Key Management Personnel (KMP) 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 entity.
PolarX Limited
21
2017 Annual Report
Directors’ Report
Details of Directors and Key Management Personnel
Non-Executive Directors
Mr. Mark Bojanjac
Mr. Michael Fowler
Mr. Robert Boaz
Chairman (appointed as Executive Chairman on 13 December 2016)
Non-Executive Director
Non-Executive Director
Executive Directors (KMP)
Mr. Mark Bojanjac
Mr. Michael Haynes
Dr. Frazer Tabeart
Dr. Jason Berton
Mr. Ian Cunningham
Executive Chairman (appointed 13 December 2016)
Managing Director (resigned 13 December 2016)
Managing Director (appointed 26 July 2017)
Executive Director (appointed 26 July 2017)
Executive Director / Chief Financial Officer / Company Secretary (resigned as Executive Director
13 December 2016)
Remuneration Policy
The Board is responsible for determining and reviewing compensation arrangements for the Directors and management.
The Board assesses the appropriateness of the nature and amount of emoluments of such officers 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 board and executive team. The Company does not link the nature and amount of the
emoluments of such officers to the Group’s financial or operational performance. The lack of a performance link at this time
is not considered to have a negative impact on retaining and motivating Directors.
The rewards for Directors’ have no set or pre-determined performance conditions or key performance indicators as part of
their remuneration due to the current nature of the business operations. The Board will determine appropriate levels of
performance rewards as and when they consider rewards are warranted.
The table below shows the performance of the Group as measured by earnings / (loss) per share for the previous five years:
As at 30 June 2017
2017
2016
2015
Loss per share (cents)
Share price at reporting date (cents)
*Presented on a pre-Consolidation basis
$0.21
1.6
$0.39
6.2
$0.48
3.5
2014
$30.69
0.5
2013
$9.61
8.0
PolarX Limited
22
2017 Annual Report
Directors’ Report
Details of the nature and amount of each element of the emolument of Directors and KMP of the Company for the financial
year are as follows:
Short Term Benefits
Base Salary
$
Director Fees
$
Consulting
Fees
$
Super-
annuation
$
Share
Based
Payments –
Options
$
-
-
-
-
-
-
-
-
-
-
-
-
18,265
20,000
10,464
-
-
48,729
55,771
20,000
20,032
-
-
95,803
-
-
97,500
79,030
140,000
316,530
-
-
-
132,498
115,000
247,498
1,735
-
995
-
-
2,730
-
-
-
-
-
-
7,171
7,171
14,341
-
-
28,683
48,978
24,489
24,489
-
-
97,956
Total
$
27,171
27,171
123,300
79,030
140,000
396,672
104,749
44,489
44,521
132,498
115,000
441,257
Director
2017
Non-Executive Directors
Michael Fowler
Robert Boaz
Executive Directors (KMP)4
Mark Bojanjac1
Michael Haynes2
Ian Cunningham3
2016
Non-Executive Directors
Mark Bojanjac
Michael Fowler
Robert Boaz
Executive Directors (KMP)
Michael Haynes
Ian Cunningham
Notes:
1. Mark Bojanjac was appointed as Executive Chairman on 13 December 2016;
2. Michael Haynes resigned as Managing Director on 13 December 2016; and
3.
Ian Cunningham resigned as Executive Director on 13 December 2016, but continued in the roles of Chief Financial Officer and
Company Secretary.
4. Frazer Tabeart and Jason Berton were appointed as directors on 26 July 2017.
There were no other key management personnel of the Company during the financial years ended 30 June 2017 and 30
June 2016.
The share options issued as part of the remuneration to Non-Executive Directors were subject to vesting conditions,
designed to secure their ongoing commitment to the Company.
The terms and conditions of each grant of options affecting remuneration in the previous, this or future reporting periods are
as follows (pre-Consolidation basis):
Name
Grant
Date
Grant
Number
Second
Vesting
Date)
Expiry
Date /
Last
Exercise
Date
Mark Bojanjac*
20/02/15
10,000,000
20/02/17
19/02/20
Average
Fair
Value per
Option at
Grant
Date
$0.0092
Exercise
Price per
Option
Total
Value
Granted
$
Vested
%
Vested
$0.0143
$92,393
10,000,000
Michael Fowler*
20/02/15
5,000,000
20/02/17
19/02/20
$0.0092
$0.0143
$46,197
5,000,000
Robert Boaz*
20/02/15
5,000,000
20/02/17
19/02/20
$0.0092
$0.0143
$46,197
5,000,000
100
100
100
*Options were granted for no consideration with 50% vesting on 20 February 2016 (fair value per option $0.0091) and the remaining 50% vested on 20 February
2017 (fair value per option $0.0093).
There were no alterations to the terms and conditions of options granted as remuneration since their grant date. There were
no forfeitures during the year. No remuneration options were exercised during the year ended 30 June 2017 (2016: Nil).
Options were granted as part of the recipient’s remuneration package. On resignation, any unvested options will be
forfeited.
PolarX Limited
23
2017 Annual Report
Directors’ Report
Shareholdings of Directors and Key Management Personnel
The number of shares (pre Consolidation basis) in the Company held during the financial year by Directors and Key
Management Personnel of the Group, including their personally related parties, is set out below (shown on a pre-
Consolidation basis).
Balance at the
start of the year
Granted as
compensation
Received on
exercise of
options
Balance on
resignation
date / Other
Balance at
the end of the
year
30 June 2017
Non-Executive Directors
Michael Fowler
Robert Boaz
Executive Directors (KMP)4
Mark Bojanjac1
Michael Haynes2
Ian Cunningham3
30 June 2016
Non-Executive Directors
Mark Bojanjac1
Michael Fowler1
Robert Boaz
Executive Directors (KMP)
Michael Haynes
Ian Cunningham
Notes:
-
-
-
23,503,930
18,604,651
-
-
-
23,503,930
18,604,651
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(23,503,930)
-
-
-
-
-
18,604,651
-
-
-
-
-
-
-
-
23,503,930
18,604,651
1. Mark Bojanjac was appointed as Executive Chairman on 13 December 2016;
2. Michael Haynes resigned as Managing Director on 13 December 2016; and
3.
Ian Cunningham resigned as Executive Director on 13 December 2016, but continued in the roles of Chief Financial Officer and
Company Secretary.
4. Frazer Tabeart and Jason Berton were appointed as directors on 26 July 2017.
PolarX Limited
24
2017 Annual Report
Directors’ Report
Option holdings of Directors and Key Management Personnel
The numbers of options (pre-Consolidation basis) over ordinary shares in the Company held during the financial year by
Directors and Key Management Personnel of the Group, including their personally related parties, are set out below (shown
on a pre-Consolidation basis):
Balance at the
start of the year
Granted as
compensation
Exercised
during the year
Balance on
resignation
date / Other
Balance at
the end of the
year
30 June 2017
Non-Executive Directors
Michael Fowler
Robert Boaz
Executive Directors (KMP)5
Mark Bojanjac2
Michael Haynes3
Ian Cunningham4
30 June 2016
Non-Executive Directors
Mark Bojanjac
Michael Fowler
Robert Boaz
Executive Directors (KMP)
Michael Haynes
Ian Cunningham
Notes:
5,000,000
5,350,000
10,000,000
978,250
-
10,000,000
5,000,000
5,350,000
978,250
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,000,000
(350,000) 1
5,000,000
-
10,000,000
(978,250)
-
-
-
-
-
-
-
-
10,000,000
5,000,000
5,350,000
978,250
-
1. Expired on 28 November 2016
2. Mark Bojanjac was appointed as Executive Chairman on 13 December 2016; and
3. Michael Haynes resigned as Managing Director on 13 December 2016. Prior to his resignation, 350,000 options expired on 28
4.
November 2016 and the balance of 628,250 expired on 1 December 2016.
Ian Cunningham resigned as Executive Director on 13 December 2016, but continued in the roles of Chief Financial Officer and
Company Secretary.
5. Frazer Tabeart and Jason Berton were appointed as directors on 26 July 2017.
Executive Directors and Key Management Personnel
The Managing Director / CEO, Mr. Michael Haynes (resigned 13 December 2016) consulted to the Company for the period
up to the date of his resignation and was remunerated on a monthly basis at a rate of $14,583.33 per month (excluding
GST).
The Executive Chairman, Mr. Bojanjac, consulted to the Company from 13 December 2016 to balance date and during that
period was remunerated on a monthly basis at a rate of $15,000.00 per month (excluding GST). Mr. Bojanjac is not entitled
to any termination benefits.
The Company Secretary / Chief Financial Officer, Mr. Ian Cunningham consults to the Company and is remunerated on a
monthly basis at a rate of $11,666 per month (excluding GST). Mr. Cunningham is not entitled to any termination benefits.
Non-Executive Directors
Mark Bojanjac (up until the date of his appointment as Executive Chairman on 13 December 2016), Michael Fowler and
Robert Boaz are paid Director’s fees on a monthly basis. No notice period is required should a non-executive director elect
to resign.
PolarX Limited
25
2017 Annual Report
Directors’ Report
Service Agreements
The Company entered into a one-year service agreement, commencing 1 July 2016, for certain administrative services and
office space, at a combined cost of $6,000 per month, with MQB Ventures Pty Ltd, a company of which Mr. Haynes is a
Director.
END OF REMUNERATION REPORT
Signed on behalf of the board in accordance with a resolution of the Directors.
Mark Bojanjac
Executive Chairman
28 September 2017
PolarX Limited
26
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June
2017
Interest Revenue & Other Income
27,471 11,440
Notes
Consolidated
2017
$
2016
$
Public company costs
Consulting and directors fees
Share-based compensation
Legal fees
Staff costs
Serviced office and outgoings
Interest and penalties
Investor relations
Travel expenses
Foreign exchange loss
Other expenses
Loss from operations
Income tax expense
Loss after Income tax
50,825 79,187
390,214
306,081
15, 24
28,683
142,970
62,419 59,230
50,390 49,270
72,000 72,200
1,763 -
47,098 78,125
75,953 98,736
31,187 31,437
6
141,415
174,368
951,947
1,091,604
(924,476) (1,080,164)
7
- -
(924,476) (1,080,164)
Other comprehensive loss
Items that may be reclassified to profit and loss in subsequent
periods
Foreign currency translation
Other comprehensive loss for the year
15
(132,013) (51,479)
(132,013) (51,479)
Total comprehensive loss for the year
(1,056,489) (1,131,643)
Loss per share:
Basic and diluted loss per share (cents per share)
19
(0.21) (0.39)
Weighted Average Number of Shares:
Basic and diluted number of shares
19
450,165,841 278,351,052
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
PolarX Limited
27
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Statement of Financial Position as at 30 June 2017
Current Assets
Cash and cash equivalents
Other receivables and prepayments
Total current assets
Non-Current Assets
Property, plant and equipment
Exploration and evaluation assets
Total Non-Current Assets
Total Assets
Current liabilities
Trade and other payables
Convertible note
Total Current Liabilities
Total Liabilities
NET ASSETS
Equity
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
Notes
Consolidated
As at
June 30
2017
$
June 30
2016
$
16(a)
8
54,856 2,137,481
263,133
35,612
90,468 2,400,614
9
11
12,165
17,902
6,031,415 3,794,242
6,043,580 3,812,144
6,134,048 6,212,758
12
5, 12
993,990
123,934
108,863 -
232,797
993,990
232,797
993,990
5,901,251 5,218,768
13
15
14
61,123,936 59,462,844
5,153,880 5,208,013
(60,376,565) (59,452,089)
5,901,251 5,218,768
The above statement of financial position should be read in conjunction with the accompanying notes.
PolarX Limited
28
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Statement of Cash Flows for the year ended 30 June 2017
Cash flows from Operating activities
Payments to suppliers and employees
Interest received and other income
Notes
Consolidated
2017
$
2016
$
(988,502) (909,056)
41,260
11,440
Net cash flows used in operating activities
16
(947,242) (897,616)
Cash flows from investing activities
Purchase of property, plant and equipment
Payments for expenditure on exploration
Net cash flows used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue costs
Convertible note
Proceeds from exercise of options
Net cash flows from financing activities
- (17,649)
(2,889,506) (2,149,537)
(2,889,506) (2,167,186)
13 (c)
1,807,160 4,710,792
5
(146,068) (427,701)
-
100,000
- 3,354
1,761,092 4,286,445
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Foreign exchange variances on cash
Cash and cash equivalents at end of year
(2,075,656)
1,221,643
2,137,481
(6,969)
894,351
21,487
54,856 2,137,481
The above statement of cash flows should be read in conjunction with the accompanying notes.
PolarX Limited
29
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Statement of Changes in Equity for the year ended 30 June 2017
Consolidated
At 1 July 2016
Loss for the period
Other comprehensive loss
Total comprehensive loss for the
period
Transactions with owners in their
capacity as owners
Shares issued
Share issue costs
Notes
Number of
Shares
Issued Capital
Accumulated
Losses
Foreign
Currency
Translation
Reserves
Warrant
Reserves
Share Based
Payment
Reserves
Option
Premium
Reserve
Total
403,439,615
59,462,844 (59,452,089) (83,965)
1,190,098
4,098,880
3,000
5,218,768
- - (924,476)
-
-
-
- (924,476)
- -
- (132,013)
-
-
- (132,013)
- - (924,476) (132,013)
-
-
- (1,056,489)
13 (b)
56,473,750
1,807,160
-
-
-
-
-
1,807,160
- (146,068)
-
-
-
-
- (146,068)
Options issued to consultants
Share-based compensation
15, 24
15, 24
- -
-
-
- 49,197
-
49,197
- -
-
-
- 28,683
-
28,683
Balance at 30 June 2017
459,913,365 61,123,936
(60,376,565) (215,978)
1,190,098
4,176,760
3,000
5,901,251
Consolidated
At 1 July 2015
Loss for the year
Other comprehensive loss
Total comprehensive loss for the
year
capacity as owners
Shares issued
Share issue costs
Options exercised
Notes
Number of
Shares
Issued Capital
Accumulated
Losses
Foreign
Currency
Translation
Reserves
Warrant
Reserves
Share Based
Payment
Reserves
Option
Premium
Reserve
Total
231,273,112
55,175,883 (58,371,925) (32,486)
1,190,098
3,956,426
3,000
1,920,996
- - (1,080,164)
-
-
-
- (1,080,164)
- -
- (51,479)
-
-
- (51,479)
- - (1,080,164) (51,479)
-
-
- (1,131,643)
13 (b)
172,037,503
4,710,792
-
-
-
-
-
4,710,792
- (427,701)
-
-
-
-
- (427,701)
129,000
3,870
-
-
- (516)
-
3,354
Share-based compensation
15, 24
- -
-
-
- 142,970
-
142,970
Balance at 30 June 2016
403,439,615 59,462,844
(59,452,089) (83,965)
1,190,098
4,098,880
3,000
5,218,768
The above statement of changes in equity should be read in conjunction with the accompanying notes.
PolarX Limited
30
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
1.
Corporate Information
The financial report of PolarX Limited (formerly Coventry Resources Limited) (PolarX 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 28 September 2017.
PolarX Limited is a public company limited by shares incorporated and domiciled in Australia whose shares are publicly
traded on the Australian Securities Exchange. It is a “for profit” entity. The Company changed its name to PolarX Limited
(formerly Coventry Resources Limited) on 15 September 2017.
The nature of the operations and principal activities of the Group are described in the Directors’ report.
References throughout the financial statements and notes to the financial statements to shares and options are on a pre-
Consolidation basis (refer further Note 18).
2.
Going Concern
The financial report has been prepared on the going concern basis, which contemplates continuity of normal business
activities and realisation of assets and settlement of liabilities in the ordinary course of business.
For the year ended 30 June 2017, the Group incurred a loss from operations of $924,476 (2016: $1,080,164) and incurred
net cash outflows of $2,075,656 (2016: inflows of $1,221,643)). At 30 June 2017, the Group had net current liabilities of
$142,329 (2016: net current assets $1,406,624).
The Group’s ability to continue as a going concern is dependent upon it maintaining sufficient funds for its operations and
commitments. The Directors continue to be focused on meeting the Group’s business objectives and is mindful of the
funding requirements to meet these objectives. The Directors consider the basis of going concern to be appropriate for the
following reasons:
the current cash balance of the Group relative to its fixed and discretionary commitments;
given the Company’s market capitalisation and the underlying prospects for the Group to raise further funds from
the capital markets; and
the fact that future exploration and evaluation expenditure are generally discretionary in nature (i.e. at the
discretion of the Directors having regard to an assessment of the Group’s eligible expenditure to date and the
timing and quantum of its remaining earn-in expenditure requirements). Subject to meeting certain minimum
expenditure commitments, further exploration activities may be slowed or suspended as part of the management
of the Group’s working capital.
The Directors are confident that the Group can continue as a going concern and as such are of the opinion that the
financial report has been appropriately prepared on a going concern basis. However, should the Group be unable to raise
further required financing, there is uncertainty which may cast doubt as to whether or not the Group will be able to continue
as a going concern and whether it will realise its assets and extinguish its liabilities in the normal course of business and at
the amounts stated in the financial statements.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset
amounts nor to the amounts and classification of liabilities that might be necessary should the Group not continue as a
going concern.
3.
Summary of Significant Accounting Policies
Basis of Preparation
The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of
the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian
Accounting Standards Board. The financial report has also been prepared on a historical cost basis.
PolarX Limited
31
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
The financial report is presented in Australian dollars. The change in presentation currency for the 2016 financial year,
from the Canadian dollar to the Australian dollar, was required following the Australian Continuance on 25 May 2016. As a
result of the change, the Company performed a retrospective restatement beginning 30 June 2014 and accordingly, the
comparative periods presented have also been adjusted to reflect the change in the Company’s presentation currency.
(a)
Compliance Statement
The financial report complies with Australian Accounting Standards as issued by the Australian Accounting Standards
Board and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.
(b)
New accounting standards and interpretations
New and revised accounting requirement applicable to the current reporting period
The Group has adopted the following new standards and amendments to standards, including any consequential
amendments to other standards, with a date of initial application of 1 July 2016 and that are applicable to the Group.
(i) AASB 1057 Application of Australian Accounting Standards
In May 2015, the AASB decided to revise Australian Accounting Standards that incorporate IFRSs to minimise
Australian-specific wording even further. The AASB noted that IFRSs do not contain application paragraphs that
identify the entities and financial reports to which the Standards (and Interpretations) apply. As a result, the AASB
decided to move the application paragraphs previously contained in each Australian Accounting Standard (or
Interpretation), unchanged, into a new Standard AASB 1057 Application of Australian Accounting Standards.
AASB 1057 is applicable to annual reporting periods beginning on or after 1 January 2016.
The adoption of these amendments has not had a material impact on the Group as they are largely of the nature of
clarification of existing requirements.
(ii) AASB 2014-1 Amendments to Australian Accounting Standards (Part D: Consequential Amendments arising from
AASB 14)
Part D of AASB 2014-1 makes consequential amendments arising from the issuance of AASB 14.
AASB 2014-1 is applicable to annual reporting periods beginning on or after 1 January 2016.
The adoption of these amendments has not had a material impact on the Group as they are largely of the nature of
clarification of existing requirements.
(iii) AASB 2014-3 Amendments to Australian Accounting Standards – Accounting for Acquisitions of Interests in Joint
Operations
The amendments to AASB 11 state that an acquirer of an interest in a joint operation in which the activity of the joint
operation constitutes a ‘business’, as defined in AASB 3 Business Combinations, should:
apply all of the principles on business combinations accounting in AASB 3 and other Australian Accounting
Standards except principles that conflict with the guidance of AASB 11. This requirement also applies to the
acquisition of additional interests in an existing joint operation that results in the acquirer retaining joint control
of the joint operation (note that this requirement applies to the additional interest only, i.e., the existing interest
is not remeasured) and to the formation of a joint operation when an existing business is contributed to the
joint operation by one of the parties that participate in the joint operation; and provide disclosures for business
combinations as required by AASB 3 and other Australian Accounting Standards.
AASB 2014-3 is applicable to annual reporting periods beginning on or after 1 January 2016.
The adoption of these amendments has not had a material impact on the Group.
PolarX Limited
32
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
(iv) AASB 2014-4 Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of Depreciation
and Amortisation
The amendments to AASB 116 prohibit the use of a revenue-based depreciation method for property, plant and
equipment. Additionally, the amendments provide guidance in the application of the diminishing balance method for
property, plant and equipment.
The amendments to AASB 138 present a rebuttable presumption that a revenue-based amortisation method for
intangible assets is inappropriate. This rebuttable presumption can be overcome (i.e., a revenue-based amortisation
method might be appropriate) only in two (2) limited circumstances:
The intangible asset is expressed as a measure of revenue, for example when the predominant limiting factor
inherent in an intangible asset is the achievement of a revenue threshold (for instance, the right to operate a
toll road could be based on a fixed total amount of revenue to be generated from cumulative tolls charged); or
When it can be demonstrated that revenue and the consumption of the economic benefits of the intangible
asset are highly correlated.AASB 2014-1 is applicable to annual reporting periods beginning on or after 1
January 2016.
AASB 2014-4 is applicable to annual reporting periods beginning on or after 1 January 2016.
The adoption of these amendments has not had a material impact on the Group as they are largely of the nature of
clarification of existing requirements.
(v) AASB 2014-9 Amendments to Australian Accounting Standards – Equity Method in Separate Financial Statements
The amendments introduce the equity method of accounting as one of the options to account for an entity’s
investments in subsidiaries, joint ventures and associates in the entity’s separate financial statements.
AASB 2014-9 is applicable to annual reporting periods beginning on or after 1 January 2016.
The adoption of these amendments has not had a material impact on the Group.
(vi) AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture
The amendments address a current inconsistency between AASB 10 Consolidated Financial Statements and AASB
128 Investments in Associates and Joint Ventures.
The amendments clarify that, on a sale or contribution of assets to a joint venture or associate or on a loss of control
when joint control or significant influence is retained in a transaction involving an associate or a joint venture, any
gain or loss recognised will depend on whether the assets or subsidiary constitute a business, as defined in AASB 3
Business Combinations. Full gain or loss is recognised when the assets or subsidiary constitute a business, whereas
gain or loss attributable to other investors’ interests is recognised when the assets or subsidiary do not constitute a
business.
This amendment effectively introduces an exception to the general requirement in AASB 10 to recognise full gain or
loss on the loss of control over a subsidiary. The exception only applies to the loss of control over a subsidiary that
does not contain a business, if the loss of control is the result of a transaction involving an associate or a joint venture
that is accounted for using the equity method. Corresponding amendments have also been made to AASB 128.
AASB 2014-10 is applicable to annual reporting periods beginning on or after 1 January 2016.
The adoption of these amendments has not had a material impact on the Group.
PolarX Limited
33
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
(vii) AASB 2015-1 Amendments to Australian Accounting Standards – Annual Improvements to Australian Accounting
Standards 2012-2014 Cycle
These amendments arise from the issuance of Annual Improvements to IFRSs 2012-2014 Cycle in September 2014
by the IASB.
Among other improvements, the amendments clarify that when an entity reclassifies an asset (or disposal group)
directly from being held for sale to being held for distribution (or vice-versa), the accounting guidance in paragraphs
27-29 of AASB 5 Non-current Assets Held for Sale and Discontinued Operations does not apply. The amendments
also state that when an entity determines that the asset (or disposal group) is no longer available for immediate
distribution or that the distribution is no longer highly probable, it should cease held-for-distribution accounting and
apply the guidance in paragraphs 27-29 of AASB 5.
AASB 2015-1 is applicable to annual reporting periods beginning on or after 1 January 2016.
The adoption of these amendments has not had a material impact on the Group as they are largely of the nature of
clarification of existing requirements.
(viii) AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101
The amendments:
clarify the materiality requirements in AASB 101, including an emphasis on the potentially detrimental effect of
obscuring useful information with immaterial information
clarify that AASB 101’s specified line items in the statement(s) of profit or loss and other comprehensive income
and the statement of financial position can be disaggregated
add requirements for how an entity should present subtotals in the statement(s) of profit and loss and other
comprehensive income and the statement of financial position
clarify that entities have flexibility as to the order in which they present the notes, but also emphasise that
understandability and comparability should be considered by an entity when deciding that order
remove potentially unhelpful guidance in IAS 1 for identifying a significant accounting policy.
AASB 2015-2 is applicable to annual reporting periods beginning on or after 1 January 2016.
The adoption of these amendments has not had a material impact on the Group as they are largely of the nature of
clarification of existing requirements.
New accounting standards and interpretations issued but not yet effective
The following applicable accounting standards and interpretations have been issued or amended but are not yet effective.
The Company has not elected to early adopt any new Standards or Interpretations. The adoption of the Standards or
Interpretations are not expected to have material impact on the financial statements of the Group.
PolarX Limited
34
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
Reference
Title
Summary
AASB 139
Financial
Instruments:
Recognition and
Measurement
9:
AASB
Financial
Instruments
and
associated
Amending
Standards
below)
for
The Standard will be applicable retrospectively
(subject to the provisions on hedge accounting
revised
and
outlined
requirements
and
the
measurement of financial instruments, revised
recognition and derecognition requirements for
financial instruments and simplified requirements
for hedge accounting.
includes
classification
Application
Application
date
of
date
for
Standard*
Group*
1 January 2018
1 July 2018
the classification of
The key changes that may affect the Group on
initial application include certain simplifications
to
financial assets,
simplifications to the accounting of embedded
for expected
derivatives, upfront accounting
credit loss, and the irrevocable election to
recognise gains and losses on investments in
equity instruments that are not held for trading in
other comprehensive income. AASB 9 also
introduces a new model for hedge accounting
that will allow greater flexibility in the ability to
hedge risk, particularly with respect to hedges of
non-financial items. Should the entity elect to
change its hedge policies in line with the new
hedge accounting requirements of the Standard,
the application of such accounting would be
largely prospective.
The directors anticipate that the adoption of
AASB 9 will not have a material impact on the
Group’s financial instruments.
PolarX Limited
35
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
AASB 15
Revenue from
Contracts with
Customers
AASB 118:
Revenue,
AASB 111
Construction
Contracts
When effective, this Standard will replace the
current accounting requirements applicable to
revenue with a single, principles-based model.
Apart from a limited number of exceptions,
including leases, the new revenue model in
AASB 15 will apply
to all contracts with
customers as well as non-monetary exchanges
between entities in the same line of business to
facilitate sales
to customers and potential
customers.
1 January 2018
1 July 2018
to depict
The core principle of the Standard is that an
the
entity will recognise revenue
to
transfer of promised goods or services
the
customers
consideration to which the entity expects to be
entitled in exchange for the goods or services.
To achieve this objective, AASB 15 provides the
following five-step process:
in an amount
that reflects
identify the contract(s) with a customer;
identify the performance obligations in the
contract(s);
determine the transaction price;
allocate the transaction price to the
performance obligations in the contract(s);
and
recognise revenue when (or as) the
performance obligations are satisfied.
This Standard will
retrospective
restatement, as well as enhanced disclosures
regarding revenue.
require
The directors anticipate that the adoption of
AASB 15 will not have a material impact on the
Group’s revenue recognition and disclosures.
PolarX Limited
36
2017 Annual Report
1 January 2019
1 July 2020
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
AASB
Leases
16
AASB 117
Leases
Int. 4
Determining
whether an
Arrangement
contains a
Lease
Int. 115
Operating
Leases—Lease
Incentives
Int. 127
Evaluating the
Substance of
Transactions
Involving the
Legal Form of a
Lease
When effective, this Standard will replace the
current accounting requirements applicable to
leases
in AASB 117: Leases and related
interpretations. AASB 16 introduces a single
lessee accounting model that eliminates the
requirement for leases to be classified as either
operating
leases. Lessor
accounting remains similar to current practice.
leases or
finance
The main changes
Standard are as follows:
introduced by
the new
recognition of the right-to-use asset and
liability for all leases (excluding short term
leases with less than 12 months of tenure
and leases relating to low value assets);
depreciating the right-to-use assets in line
with AASB 116: Property, Plant and
Equipment in profit or loss and unwinding of
the liability in principal and interest
components;
inclusion of variable lease payments that
depend on an index or a rate in the initial
measurement of the lease liability using the
index or rate at the commencement date;
application of a practical expedient to permit
a lessee to elect not to separate non-lease
components and instead account for all
components as a lease; and
additional disclosure requirements.
to either
retrospectively apply
The transitional provisions of AASB 16 allow a
lease
the
Standard to comparatives in line with AASB 108
or
of
retrospective application as an adjustment to
opening equity at the date of initial application.
cumulative
recognise
effect
the
The directors anticipate that the adoption of
AASB 16 will not have a material impact on the
Group’s recognition of leases and disclosures.
PolarX Limited
37
2017 Annual Report
1 January 2018
1 July 2018
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
None
2014-
AASB
10:
Amendments
to Australian
Accounting
–
Standards
Sale
or
Contribution of
Assets
an
between
Investor
and
its Associate
or
Joint
Venture
AASB 2014-10: Amendments
to Australian
Accounting Standards – Sale or Contribution of
Assets between an Investor and its Associate or
Joint Venture (applicable to annual reporting
periods commencing on or after 1 January
2018).
This Standard amends AASB 10: Consolidated
Financial Statements with regards to a parent
losing control over a subsidiary that is not a
“business” as defined in AASB 3: Business
Combinations to an associate or joint venture
and requires that:
a gain or loss (including any amounts in
other comprehensive income (OCI)) be
recognised only to the extent of the
unrelated investor’s interest in that associate
or joint venture;
the remaining gain or loss be eliminated
against the carrying amount of the
investment in that associate or joint venture;
and
any gain or loss from remeasuring the
remaining investment in the former
subsidiary at fair value also be recognised
only to the extent of the unrelated investor’s
interest in the associate or joint venture. The
remaining gain or loss should be eliminated
against the carrying amount of the remaining
investment.
The directors anticipate that the adoption of
AASB 2014-10 will not have a material impact
on the Group's financial statements.
*Designates the beginning of the applicable annual reporting period unless otherwise stated
(c)
Basis of Consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent (PolarX Limited) and
all of the subsidiaries. Subsidiaries are entities the parent controls. The parent controls an entity when it is exposed to, or
has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. A list of the subsidiaries is provided in Note 10.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group from
the date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the date that
control ceases. Intercompany transactions, balances and unrealised gains or losses on transactions between Group
entities are fully eliminated on consolidation. Accounting policies of subsidiaries have been changed and adjustments
made where necessary to ensure uniformity of the accounting policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “non-controlling
interests". The Group initially recognises non-controlling interests that are present ownership interests in subsidiaries and
are entitled to a proportionate share of the subsidiary's net assets on liquidation at either fair value or at the non-controlling
interests' proportionate share of the subsidiary's net assets. Subsequent to initial recognition, non-controlling interests are
attributed their share of profit or loss and each component of other comprehensive income. Non-controlling interests are
shown separately within the equity section of the statement of financial position and statement of comprehensive income.
PolarX Limited
38
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
(d)
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 date.
Deferred income tax is provided for on all temporary differences at balance date between the tax base of assets and
liabilities and their carrying amounts for financial reporting purposes.
No deferred income tax will be recognised from the initial recognition of goodwill or of an asset or liability, excluding a
business combination, where there is no effect on accounting or taxable profit or loss.
No deferred income tax will be recognised in respect of temporary differences associated with investments in subsidiaries
if the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary differences
will not reverse in the near future.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is
settled. Deferred tax is credited to Profit or Loss except where it relates to items that may be credited directly to equity, in
which case the deferred tax is adjusted directly against equity.
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 future tax profits will be available against which deductible
temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on tax rates (and tax laws) that
have been enacted or substantially enacted at the balance date and the anticipation that the Group will derive sufficient
future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by
the law. The carrying amount of deferred tax assets is reviewed at each balance date and only recognised to the extent
that sufficient future assessable income is expected to be obtained.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the Statement of profit or
loss.
(e)
Cash and cash equivalents
Cash and cash equivalents in the Statement of Financial Position include cash on hand, deposits held at call with banks
and other short term highly liquid investments with original maturities of three months or less. Bank overdrafts are shown
as current liabilities in the Statement of Financial Position. For the purpose of the Statement of Cash Flows, cash and cash
equivalents consist of cash and cash equivalents as described above, net of outstanding bank overdrafts.
(f)
Trade and other receivables
Trade receivables, which generally have 30-90 day terms, are recognised and carried at original invoice amount less an
allowance for any uncollectible amounts.
Collectability of trade receivables is reviewed on an ongoing basis. Individual debts that are known to be uncollectible are
written off when identified. An impairment provision is recognised when there is objective evidence that the Group will not
be able to collect the receivable. Financial difficulties of the debtor, default payments or debts more than 60 days overdue
are considered objective evidence of impairment. The amount of the impairment loss is the receivable carrying amount
compared to the present value of estimated future cash flows, discounted at the original effective interest rate.
(g)
Property, plant and equipment
Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation and
impairment losses.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can
PolarX Limited
39
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
be measured reliably. Repairs and maintenance expenditure is charged to Profit or Loss during the financial period in
which it is incurred.
Depreciation
The depreciable amount of most of the fixed assets are depreciated on a diminishing balance method and some of the
fixed assets are depreciated on a straight line basis over their useful lives to the Group commencing from the time the
asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Depreciation Rate
Plant and equipment
10 % to 30 %
Computer Equipment
Furniture and Fittings
Camp Buildings
33 %
20 %
10 %
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
Derecognition
Additions of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are
expected from its use or disposal.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses
are recognised in the Profit or Loss.
Impairment
Carrying values of plant and equipment are reviewed at each balance date to determine whether there are any objective
indicators of impairment that may indicate the carrying values may be impaired.
Where an asset does not generate cash flows that are largely independent it is assigned to a cash generating unit and the
recoverable amount test applied to the cash generating unit as a whole.
Recoverable amount is determined as the greater of fair value less costs to sell and value in use. The assessment of value
in use considers the present value of future cash flows discounted using an appropriate pre-tax discount rate reflecting the
current market assessments of the time value of money and risks specific to the asset. If the carrying value of the asset is
determined to be in excess of its recoverable amount, the asset or cash generating unit is written down to its recoverable
amount.
(h)
Exploration expenditure
Exploration and evaluation expenditure incurred by or on behalf of the Group is accumulated separately for each area of
interest. Such expenditure comprises net direct costs and an appropriate portion of related overhead expenditure, but
does not include general overheads or administrative expenditure not having a specific nexus with a particular area of
interest.
Each area of interest is limited to a size related to a known or probable mineral resource capable of supporting a mining
operation.
Exploration and evaluation expenditure for each area of interest is carried forward as an asset provided that one of the
following conditions is met:
such costs are expected to be recouped through successful development and exploitation of the area of interest or,
alternatively, by its sale; or
PolarX Limited
40
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
exploration and evaluation 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, and active and significant
operations in relation to the area are continuing.
Expenditure which fails to meet the conditions outlined above is written off, furthermore, the directors regularly review the
carrying value of exploration and evaluation expenditure and make write downs if the values are not expected to be
recoverable.
Identifiable exploration assets acquired are recognised as assets at their cost of acquisition, as determined by the
requirements of AASB 6 Exploration for and Evaluation of Mineral Resources. Exploration assets acquired are reassessed
on a regular basis and these costs are carried forward provided that at least one of the conditions referred to in AASB 6 is
met.
Exploration and evaluation expenditure incurred subsequent to acquisition in respect of an exploration asset acquired, is
accounted for in accordance with the policy outlined above for exploration expenditure incurred by or on behalf of the
entity.
Acquired exploration assets are not written down below acquisition cost until such time as the acquisition cost is not
expected to be recovered.
When an area of interest is abandoned, any expenditure carried forward in respect of that area is written off.
Expenditure is not carried forward in respect of any area of interest/mineral resource unless the Group’s rights of tenure to
that area of interest are current.
(i)
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
is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those
from other assets or categories 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 have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.
Such reversal is recognised in profit or 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.
(j)
Trade and other payables
Liabilities for trade creditors and other amounts are measured at amortised cost, which is the fair value of the consideration
to be paid in the future for goods and services received that are unpaid, whether or not billed to the Group.
PolarX Limited
41
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
(k)
Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new
shares or options, or for the acquisition of a business, are included in the cost of the acquisition as part of the purchase
consideration.
(l)
Revenue
Revenue is recognised and measured by the fair value of the consideration received or receivable to the extent that it is
probable that the economic benefits will flow to the Group and the revenue is capable of being reliably measured. The
following specific recognition criteria must also be met before revenue is recognised:
Interest income
Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts
estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the
financial asset.
(m) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Group, excluding any costs
of servicing equity other than dividends, by the weighted average number of ordinary shares, adjusted for any bonus
elements.
Diluted earnings per share
Diluted earnings per share is calculated as net profit attributable to members of the Group, adjusted for:
costs of servicing equity (other than dividends);
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses; and
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
elements.
(n)
Share based payment transactions
The Group provides benefits to individuals acting as, and providing services similar to employees (including Directors) of
the Group in the form of share based payment transactions, whereby individuals render services in exchange for shares or
rights over shares (‘equity settled transactions’).
There is currently an Employee Share Option Plan in place, which provides benefits to Directors and individuals providing
services similar to those provided by an employee.
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 by using the Black Scholes formula taking into account the terms and
conditions upon which the instruments were granted, as discussed in Note 24.
In valuing equity settled transactions, no account is taken of any performance conditions, other than conditions linked to
the price of the shares of PolarX Limited (‘market conditions’).
PolarX Limited
42
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
The cost of the equity settled transactions is recognised, together with a corresponding increase in equity, over the period
in which the performance conditions are fulfilled, ending on the date on which the 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 the market performance conditions being met as the effect of these conditions is included in the
determination of fair value at grant date. The profit or loss charge or credit for a period represents the movement in
cumulative expense recognised at the beginning and end of the period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a
market condition.
Where the terms of an equity settled award are modified, as a minimum an expense is recognised as if the terms had not
been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the
modification, as measured at the date of the modification.
Where an equity settled award is cancelled, it is treated as if it had vested on the date of the 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 in the computation of loss per share (see note 19).
(o)
Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is
not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense. Receivables and payables in the Statement of Financial
Position are shown inclusive of GST.
The net amount of GST recoverable from, or payable to, the Australian Tax Office is included as part of receivables or
payables in the Statement of Financial Position.
Cash flows are presented in the Statement of Cash Flows on a gross basis, except for the GST component of investing
and financing activities, which is receivable from or payable to the ATO, are disclosed as operating cash flows.
(p)
Investments in controlled entities
All investments are initially recognised at cost, being the fair value of the consideration given and including acquisition
charges associated with the investment. Subsequent to the initial measurement, investments in controlled entities are
carried at cost less accumulated impairment losses.
(q)
Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each entity within the Group are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The functional and presentation currency of
Coventry Resources Limited is Australian dollars.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised
in the profit or loss.
PolarX Limited
43
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
Group entities
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation currency are translated into the presentation currency as
follows:
assets and liabilities are translated at the closing rate at the date of that Statement of Financial Position;
income and expenses are translated at average exchange rates (unless this is not a reasonable approximation of the
rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the
transactions);
retained earnings are translated at the exchange rates prevailing at date of transaction; and
all resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of
borrowings and other financial instruments designated as hedges of such investments, are taken to shareholders’ equity.
When a foreign operation is sold the exchange differences relating to that entity are recognised in the profit or loss, as part
of the gain or loss on sale where applicable.
(r)
Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the
legal ownership, that are transferred to entities in the economic entity are classified as finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the
leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease
payments are allocated between the reduction of the lease liability and the lease interest expense for the period.
Leased assets are depreciated on a straight-line basis over their estimated useful lives where it is likely that the Group will
obtain ownership of the asset or over the term of the lease. Leases are classified as operating leases where substantially
all the risks and benefits remain with the lessor.
Payments in relation to operating leases are charged as expenses in the periods in which they are incurred. Lease
incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the
lease term.
(s)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Board of Directors of Coventry Resources Limited.
(t)
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
Where 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 profit or loss net of any reimbursement.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows
at a pre-tax rate that reflects current market assessments of the time value of money, and where appropriate, the risks
specific to the liability.
PolarX Limited
44
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
4. Critical accounting estimates and judgments
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under
the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Capitalised exploration and evaluation expenditure
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 size and composition of any future mineral resource and
ore reserve estimates, future technological changes which could impact the cost of mining, future legal changes (including
changes to environmental restoration obligations) and changes to commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, this
will reduce profits and net assets in the period in which this determination is made.
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.
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 using the Black Scholes formula taking
into account the terms and conditions upon which the instruments were granted, as discussed in Note 24.
Functional currency translation reserve
Under the Accounting Standards, each entity within the Group is required to determine its functional currency, which is the
currency of the primary economic environment in which the entity operates. Management considers the United States
subsidiary to be a foreign operation with United States dollars as the functional currency. In arriving at this determination,
management has given priority to the currency that influences the labour, materials and other costs of exploration activities
as they consider this to be a primary indicator of the functional currency.
5.
Convertible Note
On 29 April 2017, the Company entered into a convertible note deed (the Note) with Vista Minerals Pty Ltd (Noteholder)
to borrow up to $200,000. Under the terms of the Note, the funds could be withdrawn on the “liquidity date”, which was the
date the Company’s consolidated cash position was at or below $50,000. On 14 June 2014, the Company borrowed
$100,000 pursuant to the Note, which was repayable within twelve months. Interest accrued on the balance at 8% per
annum. At 30 June 2017, there was accrued interest of $351 and a loss on the change in the fair value of the convertible
note of $8,512.
The Noteholder had the option to convert the outstanding balance and accrued interest into shares of the Company. Upon
issue of a conversion notice, the Noteholder is entitled to receive that number of shares equal to the amount withdrawn
plus accrued interest divided by a 10% discount to the volume weighted average price of the closing price of the
Company’s Shares trading on the ASX for 30 trading days immediately prior to the date of the conversion notice. The
Company repaid the outstanding balance plus accrued interest on 2 August 2017.
PolarX Limited
45
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
6.
Other expenses
Accounting and audit fees
Bank fees
Computer expenses
Insurance
Printing and stationary
Postage
Subscriptions
Telephone
Depreciation
Others
7.
Income Tax
(a) Income tax expense
Current tax
Deferred tax
Consolidated
2017
$
52,195
7,834
5,236
34,657
5,139
2,852
400
3,688
216
29,198
141,415
2016
$
51,792
5,186
5,236
29,214
8,458
14,883
211
1,829
306
57,253
174,368
Consolidated
2017
$
-
-
-
2016
$
-
-
-
(b) Numerical reconciliation between aggregate tax expense
recognised in the statement of profit or loss and other
comprehensive income and tax expense calculated per the statutory
income tax rate
A reconciliation between tax expense and the product of accounting loss
before income tax multiplied by the Company’s applicable tax rate is as
follows:
(Loss)/Profit from operations before income tax expense
Tax at the company rate of 30% (2016: 30%)
Expense of remuneration options
Other non-deductible expenses
Income tax benefit not brought to account
Income tax expense
(924,476)
(277,342)
8,605
1,681
267,056
-
(1,080,164)
(324,049)
1,838
240,831
81,380
-
PolarX Limited
46
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
(c) Deferred tax
Statement of financial position
The following deferred tax balances have not been brought to account:
Deferred Tax Liabilities
Capitalised exploration and evaluation expenditure
Prepayments
Offset by deferred tax assets
Deferred tax liability not recognised
Assets
Foreign losses available to offset against future taxable income at 30%
(2016 – 30%)
Australian carry forward losses
Accrued expenses
Deferred tax assets offset against deferred tax liabilities
Deferred tax assets not brought to account as realisation is not
regarded as probable
Deferred tax asset recognised
-
-
-
-
161,923
369,655
7,630
539,208
-
-
2,776
-
2,776
4,455
118,348
7,500
130,303
-
(539,208)
(130,303)
-
-
The benefit for tax losses will only be obtained if:
(i)
the Company derives future assessable income in Australia of a nature and of an amount sufficient to enable the
benefit from the deductions for the losses to be realised, and
(ii)
the Company continues to comply with the conditions for deductibility imposed by tax legislation in Australia and
(iii) no changes in tax legislation in Australia, adversely affect the Company in realising the benefit from the
deductions for the losses.
(d) Tax consolidation
Coventry has not formed a tax consolidation group and there is no tax sharing agreement.
8.
Other Receivables and Prepayments –
Current
GST / VAT receivable
Prepayments
Consolidated
2017
$
18,101
17,511
35,612
2016
$
40,888
222,245
263,133
Trade debtors, other debtors and goods and services tax are non-interest bearing and generally receivable on 30 day
terms. They are neither past due nor impaired. The amount is fully collectible. Due to the short term nature of these
receivables, their carrying value is assumed to approximate their fair value.
PolarX Limited
47
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
9.
Property, Plant and Equipment
Plant and Equipment
Cost
Accumulated depreciation
Net carrying amount
Office Furniture and Fixtures
Cost
Accumulated depreciation
Net carrying amount
Computer Equipment
Cost
Accumulated depreciation
Net carrying amount
Total property, plant and equipment
Cost
Accumulated depreciation
Net carrying amount
Consolidated
2017
$
17,557
(5,958)
11,599
519
(266)
253
1,946
(1,633)
313
20,022
(7,857)
12,165
2016
$
17,557
(439)
17,118
519
(203)
316
1,946
(1,478)
468
20,022
(2,120)
17,902
Reconciliations of the carrying amounts of property, plant and equipment at the beginning and end of the current financial
year:
Consolidated
Plant and Equipment
Carrying amount at beginning of year
Additions
Depreciation expense
Net exchange differences on translation
Carrying amount at end of year
Office Furniture and Fixtures
Carrying amount at beginning of year
Additions
Depreciation expense
Net exchange differences on translation
Carrying amount at end of year
2017
$
17,118
-
(5,068)
(451)
11,599
316
-
(63)
-
253
2016
$
-
17,557
(439)
-
17,118
393
-
(79)
2
316
PolarX Limited
48
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
Computer Equipment
Carrying amount at beginning of year
Additions
Depreciation expense
Net exchange differences on translation
Carrying amount at end of year
468
-
(154)
(1)
313
702
-
(243)
9
468
Total property, plant and equipment
12,165
17,902
10.
Investments in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in Note 3. Details of subsidiaries are as follows:
Name
Country of incorporation
% Equity Interest
Coventry Minerals Pty Ltd
Australia
Crescent Resources (USA) Inc
USA
Aldevco Pty Ltd
Aldevco Inc.
Australia
USA
11.
Deferred Exploration and Evaluation Expenditure
Exploration and evaluation expenditure
At cost
Accumulated provision for impairment
Total exploration and evaluation
2017
100%
100%
100%
100%
2016
100%
100%
100%
100%
Consolidated
2017
$
2016
$
7,321,865
5,084,692
(1,290,450)
(1,290,450)
6,031,415
3,794,242
Consolidated
2017
$
2016
$
Carrying amount at beginning of the year
3,794,242
1,330,839
Acquisition cost
Exploration and evaluation expenditure during the year
Payment related to mineral lease agreement
Net exchange differences on translation
Carrying amount at end of year
-
2,410,010
(42,781)
(130,056)
6,031,415
-
2,523,436
(33,660)
(26,373)
3,794,242
PolarX Limited
49
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
The Directors’ assessment of the carrying amount for the Group’s exploration and development expenditure was after
consideration of prevailing market conditions; previous expenditure for exploration work carried out; and the potential for
mineralisation based on the Group’s independent geological reports. The recoverability of the carrying amount of the
deferred exploration and evaluation expenditure is dependent on successful development and commercial exploitation, or
alternatively the sale, of the respective areas of interest.
12.
Current Liabilities
Trade and other payables
Trade payables
Accruals
Convertible note
13.
Contributed Equity
Consolidated
2017
$
67,742
56,192
123,934
108,863
2016
$
634,622
359,368
993,990
-
232,797
993,990
(a) Issued and paid up capital
No. of shares
No. of shares
Ordinary shares fully paid
459,913,365
403,439,615
2017
2016
No. of shares
$
No. of shares
$
(b) Movements in ordinary shares on
issue
Balance at beginning of year
403,439,615
59,462,844
231,273,112
55,175,883
Share issue
Balance at end of year
(c) Ordinary shares
56,473,750
1,661,092
172,166,503
4,286,961
459,913,365
61,123,936
403,439,615
59,462,844
The Group does not have authorised capital nor par value in respect of its issued capital. Ordinary shares have the right to
receive dividends as declared and, in the event of a winding up of the Company, to participate in the proceeds from sale of
all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder
to one vote, either in person or proxy, at a meeting of the Company.
On 1 September 2016, the Company completed a placement consisting of 56,473,750 Shares at an issue price of $0.032
per Share for gross proceeds of $1,807,160 to institutional and sophisticated investors.
(d) Capital Risk Management
The Group’s capital comprises share capital, reserves less accumulated losses amounting to $5,901,251 at 30 June 2017
(2016: $5,218,768). The Group manages its capital to ensure its ability to continue as a going concern and to optimise
returns to its shareholders. The Group was ungeared at year end and not subject to any externally imposed capital
requirements. Refer to Note 23 for further information on the Group’s financial risk management policies.
PolarX Limited
50
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
(e) Share options
At 30 June 2017, there were 25,861,850 unissued ordinary shares under options (2016: 28,845,300 options).
On 31 August 2016, the Company issued 2,000,000 options, each exercisable at $0.039 on or before 30 August 2019, in
lieu of cash consideration for consulting services provided during the 2016 financial year. These expenses had been
accrued for at 30 June 2016.
During the financial year 4,983,450 options expired. No options were exercised during the financial year. Since the end of
the financial year, no options have been exercised and 1,130,850 options have expired. Refer Note 18 for details on
option issued since the end of the financial year.
No option holder has any right under the options to participate in any other share issue of the Company or any other entity.
Information relating to the Options granted by the Company, including details of options issued under the Plan, is set out in
Note 24.
14.
Accumulated losses
Movements in accumulated losses were as follows:
At 1 July
Loss for the year
At 30 June
15.
Reserves
Foreign currency translation reserve
Warrant reserves
Share based payments reserves
Option premium reserve
Movement in reserves:
Share based payments and option premium reserve
Balance at beginning of year
Options issued to agents
Options exercised
Equity benefits expense
Balance at end of year
Consolidated
2017
$
2016
$
59,452,089
924,476
60,376,565
2017
$
(215,978)
1,190,098
4,176,760
3,000
58,371,925
1,080,164
59,452,089
2016
$
(83,965)
1,190,098
4,098,880
3,000
5,153,880
5,208,013
Consolidated
2017
$
2016
$
4,101,880
49,197
-
28,683
4,179,760
3,959,426
-
(516)
142,970
4,101,880
The Share based payments and option premium reserve is used to record the value of equity benefits provided to
individuals acting as employees, directors as part of their remuneration, and consultants and for their services. Refer to
Note 24 for details of share based payments during the financial year and prior year.
PolarX Limited
51
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
Foreign currency translation reserve
At 1 July
Foreign currency translation
Balance at end of year
2017
$
(83,965)
(132,013)
(215,978)
2016
$
(32,486)
(51,479)
(83,965)
The foreign currency translation reserve is used to record the value of warrants provided to shareholders as part of capital
raising activities.
Warrant reserve
At 1 July
Warrants exercised
Balance at end of year
2017
$
2016
$
1,190,098
1,190,098
-
-
1,190,098
1,190,098
The warrant reserve is used to record the currency difference arising from the translation of the financial statements of the
foreign operation.
16.
Cash and Cash Equivalents
(a) Reconciliation of cash
Cash balance comprises:
Cash and cash equivalents
(b) Reconciliation of the net loss after tax to the net
cash flows from operations
Net loss after tax
Adjustments for:
Depreciation
Loss on convertible note
Share-based compensation
GAME lease payment
Changes in operating assets and liabilities:
(Decrease)/increase in other receivables/prepayments
(Decrease)/increase in trade and other payables
Net cash flow used in operating activities
17.
Expenditure commitments
(a)
Tenement expenditure commitments
Consolidated
2017
$
2016
$
54,856
2,137,481
(924,476)
(1,080,164)
216
8,512
28,683
13,792
23,009
(96,978)
(947,242)
306
-
142,970
-
(50,645)
89,917
(897,616)
Commitments related to mining taxes to keep claims/patents for the Uncle Sam Project at reporting date but not
recognized as liabilities are A$10,837 (US$8,330) per annum (refer further to Note 29).
PolarX Limited
52
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
Commitments related to the Caribou Dome Project at reporting date but not recognized as liabilities below include the
following (refer further Note 28):
(i)
maintaining the claims (licenses) at the Project in good standing, including making annual claim rental
payments and ensuring minimum expenditure commitments are met;
(ii)
expending a minimum of US$100,000 on the Project for the 12 month period ending 1 September 2017;
(iii)
expending a minimum of US$2,000,000 (inclusive of expenditure in (ii) above and prior year minimum
expenditure requirements) in each of the periods (i) 2 September 2014 to 1 September 2017; (ii) 2
September 2017 to 1 September 2020; and (iii) 2 September 2020 to 6 June 2023 (unless the Earn-in
deadline of 6 June 2023 is extended);
(iv)
expending a total of US$9,000,000 on the Project (inclusive of the payments in (ii) and (iii) above) or
completing a feasibility study on the Project by 6 June 2023 (unless the Earn-in deadline of 6 June 2023
is extended); and
(v)
making annual payments to the underlying vendors of the Project in the amounts of:
Due Date
6 June 2018
6 June 2019
6 June 2020
6 June 2021
6 June 2022
Earn-in deadline
(currently 6 June 2023)
Payment
US$100,000
US$100,000
US$100,000
US$100,000
US$100,000
US$1,360,000
(b)
Services agreement
Within one year
18.
Subsequent events
Consolidated
2017
$
-
-
2016
$
72,000
72,000
On 26 July 2017, the Company acquired Vista Minerals Pty Ltd. (Vista) in exchange for 459,821,368 shares (Vista
Acquisition). Vista holds a 100% interest in the Stellar Copper Gold Project (Stellar Project) in Alaska via its wholly
owned subsidiary, Vista Minerals (Alaska) Inc. For further details on the Stellar Project refer to the Review of Operations.
On 26 July 2017, concurrent with the Vista Acquisition, the Company completed a private placement of 274,750,000
shares at an issue price of $0.02 per share for gross proceeds of $5.495 million to institutional and sophisticated investors.
On 7 August 2017, the Company completed a 1 for 5 security consolidation. As a result, there were 238,897,103 shares
on issue and 5,172,370 options outstanding after the Consolidation.
On 17 August 2017, 226,170 (post-Consolidation basis) options with an exercise price of C$0.25 lapsed.
On 15 September 2017, the Company changed its name to PolarX Limited.
PolarX Limited
53
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
On 19 September 2017, the Company issued 400,000 (post-Consolidation basis) options, each exercisable at $0.12 on or
before 18 September 2020, in lieu of cash consideration for consulting services provided since 1 July 2017.
No other significant events have occurred subsequent to the balance sheet date but prior to the date of this report that
would have a material impact on the consolidated financial statements.
19.
Loss per share
Loss used in calculating basic and dilutive EPS
(924,476)
(1,080,164)
Consolidated
2017
$
2016
$
Number of Shares
2017
2016
Weighted average number of ordinary shares used in
calculating basic earnings / (loss) per share:
450,165,841
278,351,052
Effect of dilution:
Share options
Adjusted weighted average number of ordinary
shares used in calculating diluted loss per share:
Basic and Diluted loss per share (cents per share)
-
-
450,165,841
278,351,052
(0.21)
(0.39)
There is no impact from the 25,861,850 options outstanding at 30 June 2017 (2016: 28,845,300 options) on the loss per
share calculation because they are anti-dilutive. These options could potentially dilute basic EPS in the future.
20.
Auditor’s remuneration
During the financial year, the following audit fees were paid or payable:
Consolidated
2017
$
3,035
40,947
43,982
2016
$
6,817
25,000
31,817
BDO Canada LLP
Stantons International Audit and Consulting Pty Ltd.
21.
Key Management Personnel Disclosures
(a)
Details of Key Management Personnel
Mr. Mark Bojanjac
Chairman (appointed as Executive Chairman on 13 December 2016)
Mr. Michael Haynes
Managing Director (resigned 13 December 2016)
Mr. Ian Cunningham
Executive Director/Company Secretary/Chief Financial Officer
(resigned as Executive Director on 13 December 2016)
Mr. Michael Fowler
Non-Executive Director
Mr. Robert Boaz
Non-Executive Director
PolarX Limited
54
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
(b)
Remuneration of Key Management Personnel
Details of the nature and amount of each element of the emolument of each Director and Executive of the Group for the
financial year are as follows:
Consolidated
2017
$
2016
$
367,989 343,301
28,683
396,672
97,956
441,257
Consulting and director fees
Share-based compensation
Total remuneration
22.
Related Party Disclosures
The ultimate parent entity is PolarX Limited. Refer to Note 10 Investments in subsidiaries for a list of all subsidiaries.
MQB Ventures Pty Ltd, a Company of which Mr. Michael Haynes is a Director, provided the Company with a fully serviced
office including administration support for a fee totalling $33,000 up to the date of his resignation (2016: $72,000).
There were no other related party disclosures for the year ended 30 June 2017 (2016: Nil).
23.
Financial Instruments and Financial Risk Management
Exposure to interest rate, liquidity and credit risk arises in the normal course of the Group’s business. The Group does not
hold or issue derivative financial instruments.
The Company uses different methods as discussed below to manage risks that arise from financial instruments. The
objective is to support the delivery of the financial targets while protecting future financial security.
(a)
Liquidity Risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with financial liabilities.
The Group manages liquidity risk by maintaining sufficient cash facilities to meet the operating requirements of the
business and investing excess funds in highly liquid short term investments. The responsibility for liquidity risk
management rests with the Board of Directors.
Alternatives for sourcing our future capital needs include our cash position and the issue of equity instruments. These
alternatives are evaluated to determine the optimal mix of capital resources for our capital needs. We expect that, absent a
material adverse change in a combination of our sources of liquidity, present levels of liquidity will be adequate to meet our
expected capital needs.
PolarX Limited
55
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
Maturity analysis for financial liabilities
Financial liabilities of the Group comprise trade and other payables. As at 30 June 2017 and 30 June 2016, all financial
liabilities are contractually matured within 60 days.
(b)
Interest Rate Risk
Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair value of
financial instruments.
The Group’s exposure to market risk for changes to interest rate risk relates primarily to its earnings on cash and term
deposits. The Group manages the risk by investing in short term deposits.
Cash and cash equivalents
Interest rate sensitivity
Consolidated
2017
$
54,856
2016
$
2,137,481
The following table demonstrates the sensitivity of the Group’s statement of profit or loss and other comprehensive income
to a reasonably possible change in interest rates, with all other variables constant.
Consolidated
Change in Basis Points
Judgements of reasonably possible
movements
Increase 100 basis points
Decrease 100 basis points
Effect on Post Tax Loss
Effect on Equity
Increase/(Decrease)
including accumulated losses
2017
$
549
(549)
2015
$
21,375
(21,375)
Increase/(Decrease)
2017
$
549
(549)
2016
$
21,375
(21,375)
A sensitivity of 100 basis points has been used as this is considered reasonable given the current level of both short term
and long term interest rates. The change in basis points is derived from a review of historical movements and
management’s judgement of future trends. The analysis was performed on the same basis in 2016.
(c) Credit Risk Exposures
Credit risk represents the risk that the counterparty to the financial instrument will fail to discharge an obligation and cause
the Group to incur a financial loss. The Group’s maximum credit exposure is the carrying amounts on the statement of
financial position. The Group holds financial instruments with credit worthy third parties.
At 30 June 2017, the Group held cash deposits. Cash deposits were held with financial institutions with a rating from
Standard & Poors of A or above (long term). The Group has no past due or impaired debtors as at 30 June 2017 (2016:
Nil).
(d) Foreign Currency Risk Exposure
As a result of operations in the USA and expenditure in US dollars, the Group’s statement of financial position can be
affected by movements in the USD$/AUD$ exchange rates. The Group seeks to mitigate the effect of its foreign currency
exposure by holding cash in US dollars to match expenditure commitments.
PolarX Limited
56
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
Sensitivity analysis:
The table below summarises the fx exposure on the net monetary position of parent and the subsidiary against its
respective functional currency, expressed in group’s presentation currency. If the AUD/ USD rates moved by +10%, the
effect on comprehensive loss would be as follows:
Consolidated
2017
$
2016
$
Loan to subsidiary – Aldevco Pty Ltd and Aldevco Inc. (in AUD)
5,404,011
3,101,102
Percentage shift of the AUD / USD exchange rate
Total effect on comprehensive loss of positive movements
Total effect on comprehensive loss of negative movements
10%
A$
540,401
(540,401)
10%
A$
310,110
(310,110)
The table below summarises the fx exposure on the net monetary position of parent and the subsidiary against its
respective functional currency, expressed in group’s presentation currency. If the AUD/ CAD rates moved by +10%, the
effect on comprehensive loss would be as follows:
Consolidated
Loan from subsidiary – Coventry Minerals. (in AUD)
Percentage shift of the AUD / CAD exchange rate
Total effect on comprehensive loss of positive movements
Total effect on comprehensive loss of negative movements
(e) Fair Value
2017
$
690,900
10%
A$
69,090
(69,090)
2016
$
240,877
10%
A$
24,088
(24,088)
The aggregate net fair values of the Consolidated Entity’s financial assets and financial liabilities both recognised and
unrecognised are as follows:
Carrying
Carrying
Amount in
Aggregate
Amount in the
Aggregate
the Financial
Net Fair
Financial
Net Fair
Statements
Value
Statements
2017
$
2017
$
2016
$
Value
2016
$
54,856
18,101
54,856
2,137,481
2,137,481
18,101
40,888
40,888
123,934
123,934
993,990
993,990
108,863
108,863
-
-
Financial Assets
Cash Assets
Receivables
Financial Liabilities
Payables
Borrowings
PolarX Limited
57
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
The following methods and assumptions are used to determine the net fair value of financial assets and liabilities.
Cash assets and financial assets are carried at amounts approximating fair value because of their short term nature to
maturity. Receivables and payables are carried at amounts approximating fair value.
24.
Share Based Payment Plans
(a) Recognised share based payment expenses
Total expenses arising from share based payment transactions recognised during the year as part of share based payment
expense were as follows:
Consolidated
2017
$
2016
$
Operating expenditure
Options issued to employees and directors
28,683
142,970
(b) Share based payment to employees
The Group has established an employee share option plan (ESOP) and also issues options to executive officers, directors,
consultants and employees outside the Plan (collectively the Options). The objective of the Options is to assist in the
recruitment, reward, retention and motivation of the recipients and/or reduce the level of cash remuneration that would
otherwise be paid to the recipient. An eligible person may receive the options or nominate a relative or associate to receive
the options. Details of Options granted are as follows:
2017
Grant date
Expiry date Exercise
Balance at
Granted
Exercised
Expired
Balance at
Exercisable
price
start of the
during the
during the
during the
end of the
at end of the
year
year
year
year
year
year
Number
Number
Number
Number
Number
Number
Jan 8, 2013 Dec 1, 2016
C$0.05
1,507,800
Jan 8, 2013 Aug 17, 2017
C$0.05
1,130,850
Jan 8, 2013 Mar 8, 2017
C$0.05
125,650
Nov 28, 2013 Nov 28, 2016
C$0.05
3,350,000
Feb 20, 2015 Feb 19, 2020 A$0.0143 20,000,000
Jun 18, 2015
Jun 17, 2020 A$0.035
2,000,000
Jun 18, 2015
Jun 30, 2018 A$0.026
731,000
-
-
-
-
-
-
-
Aug 31, 2016 Aug 30, 2019 A$0.039
- 2,000,000
28,845,300 2,000,000
-
-
-
-
-
-
-
-
-
(1,507,800)
-
-
-
1,130,850
1,130,850
(125,650)
(3,350,000)
-
-
-
-
- 20,000,000 20,000,000
-
-
-
2,000,000
2,000,000
731,000
731,000
2,000,000
2,000,000
(4,983,450) 25,861,850 25,861,850
Weighted remaining contractual
2.97
2.47
2.41
life (years)
Weighted average exercise price
$ 0.02
$ 0.02
$ 0.02
During the 2017 financial year, 2,000,000 Options were issued. The fair value at grant date of options was determined
using the Black Scholes option pricing model that takes into account the exercise price ($0.039), the term of the option (3
years), the share price at grant date ($0.03) and expected price volatility (162%) of the underlying share and the risk free
interest rate (1.4%) for the term of the Option. The expense of $49,197 had been accrued for at 30 June 2016.
PolarX Limited
58
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
2016
Grant date
Expiry date Exercise
Balance at
Granted
Exercised
Expired
Balance at
Exercisable
price
start of the
during
during the
during the
end of the
at end of the
year
the year
year
year
year
year
Number
Number
Number
Number
Number
Number
Jan 8, 2013
Jan 31, 2016
C$0.05
200,000
Jan 8, 2013 Dec 1, 2016
C$0.05
1,507,800
Jan 8, 2013 Aug 17, 2017
C$0.05
1,130,850
Jan 8, 2013 Mar 8, 2017
C$0.05
125,650
Nov 28, 2013 Nov 28, 2016
C$0.05
3,350,000
Feb 20, 2015 Feb 19, 2020 A$0.0143 20,000,000
Jun 18, 2015
Jun 17, 2020 A$0.035
2,000,000
Jun 18, 2015
Jun 30, 2018 A$0.026
860,000
29,174,300
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(129,000)
(200,000)
-
-
-
-
-
-
1,507,800
1,507,800
1,130,850
1,130,850
125,650
125,650
3,350,000
3,350,000
- 20,000,000 10,000,000
-
-
2,000,000
2,000,000
731,000
731,000
(129,000)
(200,000) 28,845,300 18,845,300
Weighted remaining contractual
3.94
2.97
2.61
life (years)
Weighted average exercise price
$ 0.02
$ 0.02
$ 0.03
During the 30 June 2016 financial year no Options were issued.
25.
Contingent Liabilities
The Company entered into an option agreement with Coronel Oviedo Mining Company SA dated April 16, 2007, whereby it
had an option to earn up to a 70% interest in the Oviedo uranium project in Paraguay (Oviedo Project). A Paraguayan
company, Semin SA (Semin), was retained to manage the exploration program on the Oviedo Project. On June 15, 2007,
Semin entered into a drill contract (the Oviedo Drill Contract) with a drilling company, Copami, with respect to exploration
drilling to be conducted by Copami at the Oviedo Project. The Company guaranteed the obligations of Semin under the
Oviedo Drill Contract.
Copami’s performance under the Oviedo Drill Contract was considered not acceptable and, after Semin provided notice to
Copami that Copami was not properly performing its obligations under the Oviedo Drill Contract, Semin terminated the
Oviedo Drill Contract in early 2008. The Company had heard nothing on this matter since late 2008; however, in May
2011, it was requested to attend a mediation meeting in Paraguay to discuss Copami's claim for payment under the
Oviedo Drill Contract. The mediation meeting did not proceed and the Company heard nothing further on this matter until
October 4, 2012, when it was informed that Copami has initiated arbitration proceedings at the Paraguay Center for
Arbitration and Mediation, in which both the Company and Semin have been named as defendant parties in a breach of
contract claim for US$1,505,782.
In August 2016, Coventry received notice from its Paraguayan legal counsel that the Arbitration Tribunal has determined
that the drilling contract had been incorrectly terminated by Semin. However, the Tribunal also held that the Copami was
concurrently negligent in its execution of the contract.
Based on its review of the Tribunal’s judgement and advice from its Paraguayan legal counsel, the Company has
assessed the quantum of damages that may be payable by it to Copami to be approximately US$40,000 plus interest. The
Company does not anticipate making any damages payment until it has received further advice in relation to the Tribunal
decision, including the enforceability of the judgement in Australia and the Company’s rights to challenge such
enforcement. The Company also notes that it has not received any further official correspondence in relation to the matter
since August 2016.
PolarX Limited
59
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
26.
Operating Segment
For management purposes, the Group is organised into one main operating segment, which involves mineral exploration,
predominantly for copper. All of the Group’s activities are interrelated, and discrete financial information is reported to the
Board (Chief Operating Decision Makers) as a single segment. Accordingly, all significant operating decisions are based
upon analysis of the Group as one segment. The financial results from this segment are equivalent to the financial
statements of the Group as a whole. The Group currently operates in Australia and the USA. The following table shows
the assets and liabilities of the Group by geographic region:
Assets
Australia
United States
Total Assets
Liabilities
Australia
United States
Total Liabilities
Operating Result
Australia
Canada
United States
Total loss from operations
27.
Dividends
Consolidated
30 June
30 June
2017
$
122,164
6,011,884
6,134,048
2016
$
2,226,042
3,986,716
6,212,758
223,407
9,390
232,797
770,446
223,544
993,990
30 June
2017
30 June
2016
$
$
(921,368)
-
(3,108)
(314,013)
(749,203)
(16,948)
(924,476)
(1,080,164)
No dividend was paid or declared by the Company in the period since the end of the financial year and up to the date of
this report. The Directors do not recommend that any amount be paid by way of dividend for the financial year ended 30
June 2017 (2016: Nil). The balance of the franking account as at 30 June 2017 is Nil (2016: Nil).
28.
Agreements over the Caribou Dome Copper Project
On November 5, 2014, the Company announced it had entered into agreements that provided it the right to acquire 80%
of the Caribou Dome Project via the acquisition of Aldevco Pty Ltd (Aldevco) (the Transaction). On February 20, 2015,
shareholders approved the Transaction, with completion taking place on February 25, 2015 following the issue of
60,000,000 Shares to Aldevco’s shareholders in consideration for the acquisition of 100% of the issued capital of
Aldevco.
PolarX Limited
60
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
Aldevco holds the right to acquire an 80% interest in the Caribou Dome Project from Hatcher Resources Inc (Hatcher) by:
(i) maintaining the claims (licenses) at the Caribou Dome Project in good standing, including making annual
claim rental payments and ensuring minimum expenditure commitments are met;
(ii) expending a minimum of US$100,000 on the Caribou Dome Project for each of the 12 month periods ending 1
September 2015, 2016 and 2017;
(iii) expending a minimum of US$2,000,000 (inclusive of payments in (ii) above) in each of the three year periods
(i) 2 September 2014 to 1 September 2017; (ii) 2 September 2017 to 1 September 2020; and (iii) 2 September
2020 to 6 June 2023 (unless the Earn-in deadline of 6 June 2023 is extended);
(iv) expending a total of US$9,000,000 on the Caribou Dome Project (inclusive of the payments in (ii) and (iii)
above) or completing a feasibility study on the Project by 6 June 2023 (unless the Earn-in deadline of 6 June
2023 is extended); and
(v) making annual payments to the underlying vendors of the Caribou Dome Project, who are not related parties
of Hatcher or Aldevco, in the amounts of (remaining payments only):
Due Date
6 June 2017
6 June 2018
6 June 2019
6 June 2020
6 June 2021
6 June 2022
Payment
US$50,000
US$100,000
US$100,000
US$100,000
US$100,000
US$100,000
Earn-in deadline (currently 6 June 2023)
US$1,360,000
Subject to Aldevco exercising its right to acquire an 80% interest in the Caribou Dome Project, Hatcher will retain a 10%
interest in the Project with the remaining 10% held by SV Metals LP. The current owner of the Caribou Dome Project, C-
D Development Corporation, would retain a 5.0% Net Smelter Returns royalty, with Coventry retaining the right to
purchase this royalty for US$1million for each 1.0%.
Related parties of former directors, Michael Haynes and Ian Cunningham retain a majority shareholding in Hatcher post
Transaction.
29.
Agreements over the Uncle Sam Gold Project
On December 15, 2010, Millrock Resources Inc. and Millrock Alaska LLC (collectively Millrock) entered into an option
agreement with Coventry (the Millrock Option), whereby Coventry was granted (and subsequently exercised in April
2013) an option to purchase an undivided 100% interest the Uncle Sam Gold Project. Pursuant to the Millrock Option,
during such time as Coventry retains an interest in the Uncle Sam Project it has the following obligations (the Resource
Share Payments) in relation to any future mineral resource estimate for the Uncle Sam Gold Project:
(i)
(ii)
the issue of 300,000 Shares to Millrock in the event that a gold mineral resource of 1,000,000 ounces or more is
defined, in accordance with NI 43-101 on the Uncle Sam Project; and
the issue of a further 200,000 Shares to Millrock in the event that a gold mineral resource of 2,000,000 ounces or
more is defined, in accordance with NI 43-101 on the Uncle Sam Project, plus an additional 200,000 shares for
every additional 1,000,000 ounces of resources in excess of 2,000,000 ounces.
Pursuant to the Millrock Option, Coventry also remains obligated to pay a 2% net smelter return royalty to a third party in
relation to any future production from the Uncle Sam Project.
On 27 July 2015, a mineral lease and purchase agreement was finalized between Coventry and Great American Minerals
PolarX Limited
61
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
Exploration Inc. (GAME), pursuant to which GAME will lease the Uncle Sam Project for up to 10 years with an option to
purchase the Project outright at any time during the lease period. Details of the transaction are as follows:
(i)
GAME has paid an upfront deposit of US$30,000 to undertake exploration and development activities on the
Uncle Sam Project; $25,000 of which constitutes the first lease payment;
(ii)
GAME will thereafter pay further annual lease payments of US$25,000;
(iii)
(iv)
all property holding costs will be paid by GAME including annual rents, permitting costs and all other costs
associated with exploration and development activities;
during the term of the Agreement, GAME will have an option (the GAME Option) to purchase a 100% interest in
the Uncle Sam Project by:
paying an exercise price of US$500,000 in the event the GAME Option is exercised at any time prior to the
fifth anniversary of the Agreement;
paying an exercise price of US$750,000 in the event the GAME Option is exercised at any time following
the fifth anniversary and expiring on the date of the tenth anniversary of the Agreement;
prior annual lease payments will be credited to the exercise price payable; and
(v)
subject to GAME exercising the GAME Option:
GAME will reimburse Coventry for any Resource Share Payments; and
Coventry will be granted a 1% net smelter return royalty on future production and GAME will assume
responsibility for Coventry’s other third party obligations in relation to the Uncle Sam Project.
A 2% net smelter return royalty is also payable to a third party in relation to any future production from the Uncle Sam Gold
Project.
PolarX Limited
62
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Notes to the financial statements for the financial year ended 30 June 2017
30.
Information relating to PolarX Limited (“the parent entity”)
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Issued capital
Retained losses
Reserves
(Loss) of the parent entity
Total comprehensive (loss) of the parent entity
Guarantees entered into by the parent entity in relation to
the debts of its subsidiaries
Guarantees provided
Contingent liabilities of the parent entity
Commitment for the acquisition of property, plant and
equipment by the parent entity
Not longer than one year
Longer than one year and not longer than five years
Longer than five years
2017
$
76,997
5,414,129
5,491,126
223,406
-
223,406
5,267,720
2016
$
1,551,139
3,740,539
5,291,678
566,136
240,877
807,013
4,484,665
56,331,189
54,670,095
(54,272,450)
(53,316,531)
3,208,981
5,267,720
(955,919)
(955,919)
3,131,101
4,484,665
(8,524,096)
(8,524,096)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
PolarX Limited
63
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
DIRECTORS' DECLARATION
In accordance with a resolution of the directors of PolarX Limited, I state that:
In the opinion of the directors:
(a) the financial statements and notes of the consolidated entity 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
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and
the Corporations Regulations 2001;
(b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in
note 3(a);
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable; and
(d) this declaration has been made after receiving the declarations required to be made to the Directors in accordance
with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2017.
On behalf of the Board
Mark Bojanjac
Executive Chairman
28 September 2017
PolarX Limited
64
2017 Annual Report
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
28 September 2017
Board of Directors
PolarX Limited
Suite 9,
5 Centro Avenue,
SUBIACO WA 6008
Dear Directors
RE:
POLARX LIMITED
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of PolarX Limited.
As Audit Director for the audit of the financial statements of PolarX Limited for the year ended 30 June
2017, I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
Yours sincerely
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Martin Michalik
Director
Liability limited by a scheme approved
under Professional Standards Legislation
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
POLARX LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of PolarX Limited (formerly Coventry Resources Limited) the Company and its
subsidiaries (“the Group”), which comprises the consolidated statement of financial position as at 30 June 2017, the
consolidated statement of comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its financial
performance for the year then ended; and
(ii)
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 Company 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 confirm that the independence declaration required by the Corporations Act 2001, which has been given to the
directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Liability limited by a scheme approved
under Professional Standards Legislation
Key Audit Matters
How the matter was addressed in the audit
Carrying Value of Exploration and Evaluation
Assets
As at 30 June 2017, Exploration and Evaluation
Assets totals $6,031,415 (refer to Note 11 of the
financial report).
The carrying value of exploration and evaluation
assets is a key audit matter due to:
•
•
•
The significance of the total balance (98% of
total assets);
to assess management’s
The necessity
the
requirements of
the
application of
accounting standard Exploration
for and
Evaluation of Mineral Resources (“AASB 6”), in
light of any indicators of impairment that may
be present; and
The assessment of significant judgements
made by management in relation to the
evaluation
capitalised
expenditure.
exploration
and
Inter alia, our audit procedures
following:
included
the
i. Assessing the Group’s right to tenure over
exploration assets by corroborating
the
ownership of the relevant licences for mineral
resources to government registries and relevant
third-party documentation;
ii. Reviewing the directors’ assessment of the
carrying value of the exploration and evaluation
the veracity of
costs, ensuring
the data
presented and
that management have
considered the effect of potential impairment
indicators, commodity prices and the stage of
the Group’s projects also against AASB 6;
iii. Evaluation of Group documents for consistency
with the intentions for continuing exploration and
evaluation activities in certain areas of interest
and
interviews with
management. The documents we evaluated
included:
corroborated with
▪ Minutes of the board and management; and
▪ Announcements made by the Group to the
Australian Securities Exchange;
iv. Consideration of the requirements of accounting
standard AASB 6 and reviewed the financial
statements to ensure appropriate disclosures
are made.
Other Information
The directors are responsible for the other information. The other information comprises the information included in
the Group’s annual report for the year ended 30 June 2017, but does not include the financial report and our auditor’s
report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form
of assurance opinion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true and
fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or has 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 Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the financial report.
The procedures selected depend on the auditor's judgement, including the assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation of the financial report that gives a true and fair view in
order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity's internal control.
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.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.
We 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.
We 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.
We 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.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements.
We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most significance in
the audit of the financial report of the current period and are therefore key audit matters. We describe these matters
in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 21 to 26 of the directors’ report for the year ended 30
June 2017.
In our opinion, the Remuneration Report of PolarX Limited for the year ended 30 June 2017 complies with section
300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Martin Michalik
Director
West Perth, Western Australia
28 September 2017
PolarX Limited (formerly Coventry Resources Limited)
ASX Additional Information
Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in this
report. The additional information was applicable as at 21 September 2017.
Information in relation to the Company’s securities is provided on a post-Consolidation basis.
Distribution of Security Holders
Analysis of numbers of listed equity security holders by size of holding:
Holding
Number of shareholders
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
64
159
101
260
172
756
There are 268 shareholders holding less than a marketable parcel of ordinary shares.
Statement of Restricted Securities
There are no restricted securities on issue.
Substantial Shareholders
The substantial shareholders of the Company are as follows:
Shareholder
Number of shares
JP Morgan Chase & Co and its affiliates
Ruffer LLP
Orogen Investments Pty Ltd
23,400,000
18,234,000
13,631,832
Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary Shares
Each ordinary share is entitled to one vote when a poll is called otherwise each member present at a meeting or by proxy
has one vote on a show of hands.
Options
These securities have no voting rights.
PolarX Limited
70
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Quoted Equity Security Holders
The names of the twenty largest ordinary shareholders of the Company as at 21 September 2017 are as follows:
Shareholder
HSBC Custody Nominees (Australia) Limited
Millrock Resources Inc
J P Morgan Nominees Australia Limited
Orogen Investments Pty Ltd
Aetas Global Markets Limited
Equity Trustees Limited
Mr William Willoughby
Mr Adam Leslie Hajek + Mrs Lisa Gaye Hajek
Mr Lauritz Alexander Barnes + Mr Daniel Murray Davis
Bullseye Geoservices Pty Ltd
Mr Gregory William Fry
Mr Richard Offer
CS Fourth Nominees Pty Limited
Anita Cunningham
Dr Charles Frazer Tabeart
Mui Choo Chng
BNP Paribas Nominees Pty Ltd
Citicorp Nominees Pty Limited
Mr Frank Violi
Mr Andrew John Pearson
Number of
Shares
30,000,320
25,653,968
22,164,986
13,631,832
9,618,099
8,550,000
5,169,427
4,777,945
4,378,841
3,893,248
3,872,471
3,815,916
3,800,000
3,720,931
3,447,368
3,412,557
3,273,617
3,061,379
3,009,184
2,943,446
% of Issued
Capital
12.56%
10.74%
9.28%
5.71%
4.03%
3.58%
2.16%
2.00%
1.83%
1.63%
1.62%
1.60%
1.59%
1.56%
1.44%
1.43%
1.37%
1.28%
1.26%
1.23%
162,195,535
67.89%
PolarX Limited
71
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Unquoted Equity Security Holders
Class
Number of
options
Number of
holders
Holders with more than 20%
Unlisted stock options each
exercisable at $0.13 on or
before 30/6/2018
Unlisted stock options each
exercisable at $0.0715 on or
before 19/2/2020
Unlisted stock options each
exercisable at $0.175 on or
before 17/6/2020
Unlisted stock options each
exercisable at $0.195 on or
before 30/8/2019
Unlisted stock options each
exercisable at $0.12 on or
before 18/9/2020
146,200
4,000,000
400,000
400,000
400,000
3
3
1
1
2
Richard Offer (60,200) Peter
Hyland (60,200)
Denise Worthington (2,000,000)
Robert Boaz (1,000,000)
Michael Fowler (1,000,000)
Julie Lai (400,000)
Anthony Violi (400,000)
Jayart Funds Management Pty
Ltd (200,000)
Borsa Enterprises Pty Ltd
(200,000)
PolarX Limited
72
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Tenement Schedule
Project
Location
Licence(s)
Ownership Interest
Caribou Dome Copper
Project
Alaska, USA
Uncle Sam Gold Project**
Alaska, USA
Option to earn 80%
Option to earn 80%
Option to earn 80%
Option to earn 80%
Option to earn 90%
Option to earn 80%
Option to earn 90%
100%
Caribou 1 – Caribou 20
ADL# 563243 - 563262
Copper 1 – Copper 6
ADL# 588461 – 588466
Copper 7 – Copper 11
ADL# 645375 – 645379
CD 1 – CD66
ADL# 664859 – 664924
CD 001 – 040
ADL# 719909 – 719948
CDS 001 – 038
ADL# 719949 – 719986*
CDE-01 – 27
ADL# 722216 – 722242
Claim
US 2
US 3
US 8
US 9
US 10
US 13
US 17
US 18
US 19
US 20
US 23
US 24
US 27
US 28
US 35
US 36
US 37
US 38
US 39
US 40
ADL #
631481
631482
631487
631488
631489
631492
631496
631497
631498
631499
631502
631503
631506
631507
631514
631515
631516
631517
631518
631519
US 41
*Claims numbered CDS 007 (ADL# 719955), CDS 008 (ADL# 719956), CDS 009 (ADL# 719957), CDS 015 (ADL# 719963), CDS 016
(ADL# 719964) and CDS 017 (ADL# 719965), overlap prior existing active claims. Hence no exploration activity has been undertaken
on these claims to date and no work will be undertaken on these claims unless they are abandoned by the original locator. The claims
are not considered material to the overall Caribou Dome Project.
631520
PolarX Limited
73
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Project
Location
License(s)
Ownership Interest
Uncle Sam Project** (cont)
Alaska, USA
100%
Claim
US 56
US 57
US 58
US 59
US 60
US 76
US 79
US 80
US WEST 2
US WEST 5
US WEST 6
US WEST 22
US WEST 26
US WEST 27
US WEST 46
US WEST 47
US WEST 66
US WEST 67
US WEST 85
US WEST 86
US WEST 97
US WEST 98
US WEST 155
US WEST 160
US WEST 161
US WEST 166
US WEST 167
US WEST 168
US WEST 170
ADL #
631535
631536
631537
631538
631539
631555
631558
631559
631862
631865
631866
631882
631886
631887
631906
631907
631926
631927
631945
631946
631957
631958
632015
632020
632021
632026
632027
632028
632030
US WEST 171
**Subject to a mineral lease and purchase agreement with Great American Minerals Exploration Inc. (GAME), pursuant to which GAME
will lease the Uncle Sam Gold Project for up to 10 years with an option to purchase outright at any time during the lease period on the
terms and conditions detailed in the ASX announcement of 30 July 2015.
632031
PolarX Limited
74
2017 Annual Report
PolarX Limited (formerly Coventry Resources Limited)
Project
Location
Licence(s)
Ownership Interest
Stellar Copper Gold Project
Alaska, USA
100%
Claim
SB 154
SB 155
SB 167
SB 168
ZK 3
ZK 4
ZK 5
ZK 14
ZK 19
ZK 20
ZK 21
Z 1
Z 2
Z 3
Z 4
Z 5
Z 6
Z 7
Z 8
Z 9
Z 10
SB 281
SB 282
SB 283
SB 297
SB 298
SB 299
SB 317
SB 318
SB 319
SB 346
SB 347
SB 348
SB 364
SB 365
SB 366
SB 367
SB 368
SB 376
SB 377
SB 379
SB 389
SB 390
SB 417
ADL #
704562
704563
704575
704576
704621
704622
704623
704632
704637
704638
704639
709427
709428
709429
709430
709431
711728
711729
711730
711731
711732
714079
714080
714081
714095
714096
714097
714115
714116
714117
714144
714145
714146
714162
714163
714164
714165
714166
714174
714175
714177
714187
714188
715392
PolarX Limited
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2017 Annual Report