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Renascor Resources Limited annual report 2016
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Highlights and achievements
Chairman’s letter
Review of operations
Directors’ report
Auditor’s independence declaration
Financial statements
Directors’ declaration
Independent auditor’s report
Shareholder information
Corporate directory
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A U S T R A L I A
Carnding
Warrior
Gairdner
Arno
Farina
Frome
Olary
Eastern Eyre
Adelaide
Perth
Munglinup
Competent Persons Statement
The exploration results reported herein, insofar as they relate to mineralisation, are based on information
compiled by Mr G. W. McConachy (fellow of the Australasian Institute of Mining and Metallurgy) who is a director of
Renascor. Mr McConachy has sufficient experience relevant to the style of mineralisation and type of deposits being
considered to qualify as a competent person as defined by the 2012 edition of the Australasian code for reporting
of exploration results, mineral resources and ore reserves (the JORC code, 2012 edition). Mr McConachy consents to
the inclusion in the report of the matters based on his information in the form and context in which it appears.
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Renascor Resources Limited annual report 2016
Renascor’s past financial year was highlighted by its activities at its
Arno Graphite Project in South Australia’s Eyre Peninsula, where
Renascor quickly established the Siviour Graphite Deposit as a potential
near-term supplier of high-quality, coarse-flake graphite.
Key achievements during the year included:
Acquisition
Renascor secured the rights to the project area in December
2015 through an agreement to acquire 100% of the issued capital
of Eyre Peninsula Minerals Pty Ltd (EPM). EPM is an unlisted
company that has an option to acquire four exploration licences
that comprise the Arno Graphite Project.
The project tenements included several graphite
prospects, including the area where Renascor defined the
Siviour Graphite Deposit.
Siviour discovery
Renascor’s maiden drilling program in the Arno project area in
January 2016 resulted in the discovery of extensive zones of thick,
near surface high-grade graphite at Siviour. The near
flat-lying orientation, substantial true thickness and shallow depth
of graphite mineralisation suggest the Siviour mineralised body
is unique within the region and favoured in terms of both its
potential size and strip-ratio.
Initial Mineral Resource estimate
Renascor’s maiden JORC-compliant Mineral Resource estimate
for Siviour, released in March 2016, marked Siviour as the
largest reported graphite deposit in Australia. With the graphite-
mineralised body largely open at shallow depths along strike,
Siviour contains a JORC compliant Mineral Resource estimate
of 16.8Mt @ 7.4% TGC for 1,243,200t of contained graphite
(reported above a cut-off grade of 3% TGC), including high-grade
mineralisation of 5.9Mt @ 10.0% TGC for 590,000t of contained
graphite (reported above a cut-off grade of 8% TGC).
3
Siviour Mineral Resource estimate as of 16 March 2016
Category
Indicated
Inferred
Total
Tonnes of
mineralisation
(millions)
6.8
10.0
16.8
TGC
8.1%
6.9%
Contained
graphite
(tonnes)
550,800
690,000
7.4%
1,243,2000
Note: Cut-off grade of 3% total graphitic carbon.
High-quality coarse flake graphite
Renascor has identified an abundance of coarse flake graphite at
Sivour, with high-grade samples from drill holes at Siviour returning
over 80% in the high-value super-jumbo (+500μm), jumbo (+300μm)
and large (+180μm) categories. With mineral process test work
currently in progress at Sivour, previous preliminary bench flotation
and gravity tests over a core sample from an adjacent prospect
suggest ample scope to produce a premium graphite product
at Siviour.
As Renascor commences the new financial year, the results from
2016 provide a firm basis to further advance the Siviour Deposit,
with work currently underway to increase the confidence in, and
size of, the Siviour Mineral Resource estimate and to establish flow
sheet parameters through comprehensive mineral processing
test work. Renascor expects these work programs to assist in the
preparation of a scoping study to be completed later this year.
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Dear Shareholder,
It is with great pleasure that I present Renascor’s Annual Report for
the year ended 30 June 2016.
Renascor made a number of significant breakthroughs during the
year, commencing with our acquisition of the rights to the Arno
Graphite Project in South Australia’s Eyre Peninsula. From our
evaluation of early stage exploration work at Arno, we recognised
an opportunity to define a valuable graphite resource with
minimal expenditure.
Our initial drilling at Arno offered immediate returns, as we
discovered extensive zones of thick, near-surface graphite at the
Siviour deposit. In March, our maiden mineral resource estimate
for Siviour marked Siviour as Australia’s largest reported
graphite JORC Mineral Resource.
Subsequent work programs have further confirmed the potential
value of Siviour. Further drilling has shown that the graphite
mineralisation defined within the existing mineral resource
extends at shallow depth. Preliminary petrographic and metallurgic
studies suggest Siviour contains an abundance of high-quality,
coarse-flake graphite.
Although, Siviour is a recent discovery, our work undertaken during
the year suggests Siviour is unique within the region and favoured
in terms of both its potential size and strip-ratio.
We recently appointed a new board member, Dick Keevers, who
has advanced multiple producing mines from discovery phase
through development. This expertise, which complements our
management team’s developmental experience, including in
South Australia, further strengthens the Renascor team.
As we continue our development of Siviour in the current year,
there is strong reason to believe the work undertaken to date,
together with continued developmental activities, may further
establish Siviour as a significant graphite project and provide
a catalyst for the re-rating of the company by the equity markets.
On behalf on my Board and fellow shareholders, I thank our
Managing Director, David Christensen and the entire Renascor
team for their dedicated work during an exciting year. I also
extend my sincere thanks to you, our shareholders, for your
continued support.
Yours faithfully,
Stephen Bizzell
Chairman
5
Renascor Resources Limited annual report 2016
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Port Augusta
South Australia
Kimba
Whyalla
Port Lincoln
Adelaide
Waddikee
Campoona
Oakdale
Cleve
Cowell
Arno Graphite
Project
Kookaburra
Gully
Uley
Port Lincoln
Arno Project Tenements
Other Renascor Tenements
Graphite mine
Graphite deposits
Major roads
Railway
0
50
100 km
Adelaide
Arno Graphite Project
The Arno Graphite Project consists of four granted exploration
licences, ELs 5618, 5204, 5496 and 5714, covering 1,372km2 in the
Eyre Peninsula, an established graphite region in South Australia.
The project is located within 150km of Port Lincoln and Whyalla
and approximately 500km driving distance from Adelaide. The Uley
graphite mine, owned by Valence Industries Limited (ASX: VXL), is
located approximately 140km to the south, and the immediate area
hosts several additional graphite deposits including Kookaburra
Gully, being developed by Lincoln Minerals Limited (ASX: LML), the
Waddikee and Campoona, being developed by Archer Exploration
Limited (ASX: AXE), and the Oakdale graphite deposit, being
developed by Oakdale Resources Limited (ASX: OAR).
The area also benefits from significant infrastructure advantages,
including established workforces in the nearby port cities of
Whyalla (population 23,000), Port Lincoln (population 15,000) and
Port Augusta (13,000), as well as the established population centres
of Arno Bay, Cleve, Cowell and Tumby Bay. Renascor’s licences
are located within 10km of a major highway and within 20km of
an operating railway servicing Port Lincoln. The project area is
connected to South Australia’s main power grid and is serviced by
ports at Port Lincoln and Whyalla.
6
EYRE PENINSULA
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Mineral Resource at Siviour
Renasor commenced its maiden drill program in the Arno project
area in January 2016. The 24-hole, 1550m reverse circulation
drilling program focused on the Siviour prospect and resulted in
an Indicated and Inferred Mineral Resources estimate for Siviour
as shown below in table 1. A nominal cut-off grade of 3% TGC
has been established for Siviour based on the potential mining
methods and costs of open-cut mining operations that could be
undertaken for mineralisation of this type.
Table 1: Siviour Mineral Resource estimate as of 16 March 2016
Category
Indicated
Inferred
Total
Tonnes of
mineralisation
(millions)
6.8
10.0
16.8
Note: Cut-off grade of 3% total graphitic carbon.
TGC
8.1%
6.9%
7.4%
Contained
graphite
(tonnes)
550,800
690,000
1,243,2000
Siviour Mineral Resource breakdown by cut-off grades
Table 2 below shows the Siviour total Mineral Resource at varying
cut-offs. As noted below, Siviour contains a significant high-grade
resource at an 8% cutoff: 5.9Mt @ 10.0% TGC for 590,000t of
contained graphite.
Table 2: Siviour Mineral Resource by cut-off grade
Cut-off
grade TGC
Tonnes of
mineralisation
(millions)
3%
4%
5%
6%
7%
8%
9%
10%
16.8
15.9
14.5
11.4
8.5
5.9
3.8
2.5
TGC
7.4%
7.6%
7.9%
8.5%
9.2%
10.0%
10.8%
11.5%
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Renascor Resources Limited annual report 2016
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S
SIV017
SIV018
Calc-silcate
Siviour: Section 631800 East
SIV019
SIV020
SIV021
SIV022
Graphite schist
High-grade graphite zone
Cover sequence
Open
6245700
6245800
6245900
6246000
6246100
N
0
-100
The Siviour deposit is shallow, tabular and near flat-lying, with most
of the graphite mineralisation occurring beneath only 10m to 25m
of cover. As shown in Figure 3, Section 631800E, the westernmost
section drilled of the Indicated Resource, shows a thick, shallow
graphite-mineralised zone that is near flat lying over the
southern and central portions of the prospect before dipping gently
to the north.
Siviour in comparison to other graphite resources in Australia
As shown below in Figure 4, the Siviour deposit is the largest
reported JORC resource in Australia, with ample scope for
expansion.
Australian Graphite Deposits
Halberts
Yalbra
Mt Dromedary South
Kookaburra Gully
Campoona
Central
Uley Pit 2
Mt Dromedary Central
Koppio
Siviour (8%)
Campoona Shaft
Wilclo South
Uley Stockpiles
Oakdale East
Barracuda
Longtom
Wahoo
Oakdale
Emporer
Siviour (3%)
5
10
15
20
25
30
35
Deposit size - Million Tonnes
Figure 3. Siviour
prospect: Geological
cross-section for
north-south Section
631800E
C
G
T
%
e
d
a
r
G
20
18
16
14
12
10
8
6
4
2
0
Figure 4. Scatter
plot showing grade
(%TGC) and tonnage
of Siviour (at 3% and
8% cut-off grades) with
the exploration target
estimate and reported
resources for Australian
graphite deposits.
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Extensions to Siviour Deposit
Following completion of its initial drilling at Siviour, Renascor
identified multiple high conductivity anomalies at Siviour in areas
along-strike, suggesting high potential to expand the initial size of
the Siviour deposit. As shown in Figure 5, a ground electromagnetic
(EM) survey identified potential extensions to Siviour in areas along-
strike to the east, west and north of the Indicated Resource.
631000m E
632000m E
633000m E
634000m E
SIV053
SIV052
SIV042
SIV049
SIV058
SIV041
SIV048
SIV057
SIV036
SIV050
SIV056
SIV040
SIV051
SIV055
SIV043
SIV039
SIV047
SIV054
SIV037
SIV038
SIV044
SIV046
SIV045
Indicated
Resource
SIV060
SIV05
SIV059
SIV061
SIV062
SIV066
Exploration target
SIV065
SIV064
SIV063
Conductivity
(Siemens)
2.00
0.20
0.06
0.0
Contour
Interval 1.0 S
6
2
4
7
0
0
0
m
N
6
2
4
5
0
0
0
m
N
Figure 5. Location
of recent drill
collars over ground
electromagnetic
image at Siviour.
0
500
metres
1000
Signifi cant graphite intersection
In July 2016, Renascor completed a 2,100m reverse circulation
drill program targeting these EM anomalies and intersected thick
intervals of shallow, high grade graphite in areas along-strike to the
east and west of the Siviour Graphite Deposit.
To the west, Renascor’s drilling confirm that the mineralised
graphite body located within the Siviour Indicated Resource is
continuous at least an additional 1km to the west and remains
open to the north and west of the current drilling limits. Results
from the July 2016 program included multiple intersections of thick,
shallow high-grade graphite, including:
• Siv054: 25m @ 9.0% TGC (from 13 to 38m)
• Siv055: 28m @ 7.1% TGC (from 28 to 56m)
• Siv056: 23m @ 8.7% TGC (from 49 to 72m).
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Renascor Resources Limited annual report 2016
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The drill results suggest a north dipping tabular graphitic horizon
in this western area. As shown in the south-north cross-section in
Figure 6, the mineralised horizon typically has a broad higher-grade,
+5% TGC cut-off and a narrow +3% TGC grade halo particularly in
the hanging wall of the deposit. This generally flat-lying orientation
is consistent throughout both the areas drilled to the west of the
Indicated Resource and within the Indicated Resource area.
Shown in
cross-section
below
Figure 6. Siviour -- Plan view
showing recent drill holes
over EM conductive zones
and cross-sections with TGC
Drilling to the immediate east of the existing Indicated Resource
at Siviour (in areas outside of JORC Mineral Resource estimate),
included some of the thickest intervals of graphite drilled to date,
with results including:
assay results (5%TGC cut-off
• Siv061: 35m @ 8.2% TGC (from 44m to 79m), with a 74m
in dark red and 3% TGC cut-
graphite zone from 5m to 79m
off in light red) over Section
• Siv062: 35m @ 8.7% TGC (from 17m to 52m), with a 56m
631600E).
graphite zone from 5m to 61m
• Siv063: 23m @ 9.2% TGC (from 16m to 39m)
This thick, eastern graphite zone remains open and offers potential
for significant extensions to the Siviour Deposit. Renascor expects
the recent drill results will form the basis of an updated Mineral
Resource estimate for Siviour to be released later this year.
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Graphite flake size and mineral processing test work
In addition to establishing Siviour as a premium graphite resource
in terms of its size and grade, initial testing undertaken during
the year identified an abundance of coarse flake graphite from
petrographic analysis of high-grade drill samples, with over 80% in
the high-value super-jumbo (+500μm), jumbo (+300μm) and large
(+180μm) categories. Nine high-grade samples from four recent
reverse circulation holes at Siviour were examined by Pontifex and
Associates. Photomicrographs prepared from these samples (see
Figures 7 - 10) have returned flake graphite with lengths of up to
1,600μm and over 60% of graphite flakes recording lengths of over
500μm. Complete results are described below in table 3.
Drill
hole
Depth
(m)
Total
Graphite flake
Flake length > Flake length >
graphitic
carbon1
length range
200 microns
500 microns
(microns)
Siv001
Siv001
Siv001
Siv002
Siv002
Siv002
Siv004
Siv004
Siv014
63
68
73
82
92
97
56
72
18
16.9%
100 to 1,600
82.5%
9.1%
100 to 1,000
82.5%
10.6%
100 to 1,000
87.5%
15.1%
100 to 1,200
10.1%
100 to 1,000
4.3%
100 to 600
12.3%
50 to 1,400
10.8%
100 to 800
17.2%
10 to 1,500
75%
80%
75%
85%
75%
85%
Table 3. Summary of graphite flake analysis from drill chips at Siviour prospect
65%
60%
70%
65%
60%
50%
80%
65%
40%
The abundance of coarse flake graphite identified in petrographic
analysis of Siviour drill samples suggests that the graphite-
mineralised zones at Siviour have the potential to produce
significant quantities of premium-priced coarseflake graphite in
concentrate. While it is expected that the proportion of coarse
flake graphite will be diminished in mineral processing, Renascor is
encouraged by the high proportion of coarse-flake graphite in the
high-grade drill samples at Siviour.
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Renascor Resources Limited annual report 2016
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While mineral processing test work has not yet been undertaken
on the high-grade graphite zones at Siviour, preliminary flotation
tests from the adjacent Paxtons prospect have produced
favourable graphite recoveries and purity of concentrates,
including producing flake graphite in the super-jumbo (+500μm)
category. Flotation and gravity tests were performed in 2014
on samples from an historical core hole (CRA090) drilled on the
eastern margin of Paxtons, located approximately 2km to the
southeast of the Siviour Inferred Resource. The hole, which was
drilled to test for uranium and not originally assayed for graphite,
intersected 24m of graphitic mineralisation, which subsequent
assaying has shown included 12.4m @ 8.34% TGC from 67.7m.
ALS Metallurgy performed bench flotation and gravity tests over
a 2.5kg core sample from CRA090, obtaining carbon (graphite)
recovery of 87% and producing 93% purity of concentrates with
flake size of up to 600μm.
500μm
500μm
Figure 7. Photomicrograph of graphite flakes (in white) from
Figure 8. Photomicrograph of graphite flakes (in white) from
Siv014 (17m to18m)
Siv002 (92m to 93m)
500μm
500μm
Figure 9. Photomicrograph of coarse graphite flakes (in white)
Figure 10. Photomicrograph of graphite flakes (in white) from
from Siv004 (56m to 57m)
Siv001 (73m to 74m)
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Acquisition of EPM
Renascor secured the rights to the Arno Project in December
2015 through an agreement to acquire up to 100% of the issued
capital of Eyre Peninsula Minerals Pty Ltd (EPM). EPM is an unlisted
company that has an option to acquire the four exploration
licences that comprise the Arno Graphite Project.
By virtue of having met exploration commitments and having
issued shares to EPM shareholders, Renascor currently holds a 49%
interest in EPM. Renascor acquired 20% of EPM in exchange for
having completed $400,000 in exploration expenditure by 21 June
2016. Renascor acquired an additional 29% interest in EPM from
EPM shareholders in exchange for 38,666,667 ordinary shares in
Renascor, which Renascor issued on 11 July 2016.
In August 2016, Renascor exercised an option to acquire (subject
to shareholder approval) the remaining shares in Renascor and
thereby increase its ownership interest in EPM to 100%.
Subject to obtaining shareholder approval at Renascor’s upcoming
annual shareholder meeting, Renascor will acquire the remaining
shares in EPM in exchange for 42,068,884 ordinary shares in
Renascor and 15,000,000 unlisted options at $0.05 per option and
expiring three years from the date of issue.
EPM option to acquire Ausmin
EPM’s primary asset is an option to acquire Ausmin Development
Pty Ltd (Ausmin), which owns the underlying rights to the
exploration tenements that comprise the Arno Graphite Project.
The option can be exercised at any time prior to 30 September
2018, and can be extended to December 2019 and to December
2020 by payment of $150,000 and $250,000, respectively. To
exercise the option, EPM must complete a bankable feasibility
study in relation to the commercial development of graphite on the
project tenements and issue to the owners of Ausmin a 22% equity
interest in a listed vehicle holding the project. After exercise of the
option, the Ausmin shareholders are entitled to an overriding 1%
gross royalty on minerals produced from the project tenements.
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Renascor Resources Limited annual report 2016
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A U S T R A L I A
W E S T E R N
A U S T R A L I A
Perth
Munglinup
Location:
Tenements:
Area:
Target:
Albany Fraser Range (Western Australia)
E74/517, E74/518, E74/523, E74/531, E74/538, E74/544, E74/545
579 km2
Graphite, lithium and nickel sulphide
Munglinup
The Munglinup project is located within the Albany-Fraser Range
province of Western Australia between the regional towns of
Esperance and Ravensthorpe. See Figure 11. Renascor considers
the project area to offer high prospectivity for graphite, lithium and
nickel sulphide and it has identified multiple drill-ready targets.
Figure 11. Significant
mines and deposits in
relation to Renascor’s
Munglinup Project.
Mt Thirsty Cobalt/Nickle Deposit
Mount Marlon Lithium Deposit
Maggie Hays Nickle Deposit
Mt Henry Gold Mine
Munglinup Tenements
Rathensthorpe
Mt Cattlin
Lithium Mine
Halbert’s Graphite
Esperance
14
0
20
40 km
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Graphite prospects
Renascor has identified multiple drill-ready targets for coarse
flake, high-grade graphite of the type located within the adjacent
Halbert’s deposit. Halbert’s is among Australia’s highest-grade
graphite deposits, with a reported JORC-compliant measured
and indicated resource of 1.47Mt at a fixed carbon content of
18.2%2. Sixty-seven percent (67%) of the recoverable graphite
from Halbert’s is reportedly coarse flake (+150μm, with 35% of
recoverable graphite classified as jumbo flake (+300μm)3.
The regional structure that hosts the Halbert’s deposit, the Halbert’s
Shear Zone, extends through Renascor’s new project area over
approximately 25km strike extent. See Figure 12. Limited previous
drilling within this structure, on E74/518 in Munglinup Central (to
the immediate south of the Halbert’s graphite deposit) intersected
high-grade graphite, including narrow graphite zones containing up
to 34.9% TGC4 . To the immediate north of the Halbert’s deposit, the
Halbert’s Shear Zone extends for approximately 20km to the north
on E74/517 and E74/531. A recently completed electromagnetic
(VTEM) survey over this northern extension has identified several
prospective conductive targets that Renascor considers high
priority targets for Halbert’s-style graphite deposits.
0
5 km
Munglinup
Ultramatic
Halbert’s Shear
Zone (interpreted)
Young River
Ultramatics
Figure 12. Munglinup
project, showing VTEM
and SKYTEM late channel
conductivity for central
portion, superimposed on a
background of magnetics.
Halbert’s
Graphite
Munglinup Central
Drill collars
2 As reported in Geological Survey of Western Australia (GSWA) Mineral Resources Bulletin
26, in 2015, graphite mineralisation in the Halbert’s Main Zone has a ‘resource estimate’
subsequently upgraded to a JORC compliant measured and indicated resource by Clifford
(2009) to 1.47Mt at a fixed carbon content of 18.2% TC (total carbon) over a strike length
of 555m to an average depth of 55m. This resource calculation for Halbert’s Main Zone
was based on an in situ ore density of 1.91 t/m3 with a fixed carbon cutoff of 5% TC, and a
minimum true thickness of 1.0m for tabular graphite bodies.’
3 Mineralisation Report in Support of Application for Mining Lease for M74/24, October 2009.
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Lithium prospects
The Munglinup project area is located approximately 70km from
the Mt Cattlin spodumene and tantalum mining operation and
is considered prospective for lithium-cesium- tantalum (LCT)
pegmatites of the type associated with the Mt Cattlin mine. The
area is mapped as the Munglinup gneiss, with remnants of the
Lake Johnston Archean greenstone interpreted through the
area. Although LCT pegmatites are uncommon, they are typically
hosted within Archean greenstones. Accordingly, Renascor
considers portions of its Munglinup project area with mapped
and interpreted Archean greenstone as potential targets for LCT
pegmatite development.
Figure 13. Regional EM
image for Munglinup
Project with interpreted
greenstone trends (Western
Mining Services 20135).
Renascor has identified a zone of anomalous lithium geochemistry
from a roadside auger soil-sampling program undertaken by
AngloGold Ashanti (ASX: AGG) in connection with a gold exploration
program in 20106. The AngloGold program included 115 samples
within Renascor’s E74/538, an area that has been previously
mapped to include Archean greenstones. The AngloGold samples
underwent multi-element testing and included assaying for lithium.
The lithium results include a set of elevated assays over the Young
River lithium prospect, an approximately 4km trend, with peak
value for lithium of 74.9 ppm, defined on a north-south oriented
traverse near the eastern limit of the tenement. See Figure 14.
4 GSWA Bulletin 26. See also Lithex Resources Limited ASX release dated 5 July 2013.
5 Western Mining Services, J. Hronsky, 2013. Report to Lithex Resources Ltd, Review of
the NiS Potential of Lithex Resources Ltd Munglinup Exploration Project.
6 Fletcher, Damian and Howard, Brendan 2010, Anglogold Ashanti Australia Limited
Annual Report Viking Project – Viking Group 4 (WAMEX A088744).
16
In addition to the Young River area, aeromagnetic data define large
areas of enhanced magnetic response consistent with possible
remanent Archean greenstones, in particular in areas to the area
immediate west of the elevated lithium zone at Young River. A
large area of subdued magnetic relief to the southwest of the
lithium anomalous zone is also interpreted as a possible granitic
intrusion that may represent a source for late stage pegmatitic
intrusion along the strong north-easterly trending structural fabric.
See Figure 15. Renascor considers these magnetic areas to offer
additional potential for locating lithium mineralisation associated
with pegmatites.
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Figure 14. Young River
lithium prospect – soil
geochemical results.
Figure 15. Young River
prospect, showing elevated
lithium geochemical
samples on regional
aeromagnetic image.
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Nickel prospects
Renascor also considers the project area to offer high-priority
nickel sulphide prospects. The project tenements are situated in
an untested area that is considered to be the southern extension
of the Lake Johnston Greenstone belt, the structural setting for
Poseidon Nickel Limited’s Maggie Hays and Emily Ann nickel
sulphide deposits, located approximately 50km to the north of
E74/544. See Figure 11.
In 2013, Lithex Resources Limited (ASX: LTX) commissioned a review
of the project’s nickel sulphide potential by Western Mining Services
Pty Ltd. See Lithex Resources ASX release dated 9 September 2013.
The Western Mining Services review concluded that, on a regional
scale, the Munglinup project tenements host significant strike
length of nickel sulphide prospective ultramafic rocks within an
underexplored strike extension of the Lake Johnston Greenstone
belt, a known nickel sulphide mineralised province.
Limited nickel exploration drilling undertaken by Lithex within
E74/518 supports the nickel sulphide prospectivity, with four (of
four) holes drilled in a reconnaissance, graphite-targeted drill
program in 2013 intersecting widespread hydrothermal veining and
alteration, with associated low level copper, potassium and lead
anomalism. According to Western Mining Services, the anomalous
mineralisation from the Lithex drilling is consistent with the distal
expression of a nickel sulphide deposit. Accordingly, Renascor
considers that conductive zones within the identified Greenstone
belt offer high potential for nickel sulphides, in addition to graphite.
Eastern Eyre
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A U S T R A L I A
Farina
S O U T H
Warrior
A U S T R A L I A
Gairdner
Olary
Eastern Eyre
Perth
Arno
Adelaide
Location:
Tenements:
Area:
Target:
Southern Gawler Craton (South Australia)
ELs 4721, 5012 and 5236 (100%)
1,200 km2
Copper and associated mineralisation
Eastern Eyre
Renascor’s exploration at the Eastern Eyre
project is targeting large-scale copper
deposits within the southern portion of
the Olympic Dam copper belt. See Figure
16. The Olympic Dam corridor is generally
considered to be among the world’s
most prospective target areas for copper
deposits, hosting the massive Olympic
Dam deposit, as well as other large-scale
copper deposits, including Prominent
Hill and Carrapateena to the north of the
project area and the Hillside deposit and
extensive historical copper mining district
of Moonta to the south. While large target
zones of the Olympic Dam corridor are
often located far from infrastructure
and in areas with deep cover sequences,
Renascor’s project area is readily
accessible, with basement targets from
surface to approximately 200m depth,
amongst the shallowest targets in the
Olympic Dam corridor.
Figure 16. Olympic Dam copper belt,
showing location of Eastern Eyre project.
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The project area includes large portions of the Roopena-Angle Dam
fault corridor, a largely untested zone that extends over approximately
40 kilometres. See Figure 17. Renascor considers this structure to be a
major conduit for mineralisation sourced from the adjacent Hiltaba-age
granites immediately east of the fault. These granites are associated
with mineralisation at the major deposits (e.g., Olympic Dam and
Prominent Hill) within the Olympic Dam copper belt.
Within the Angle Dam fault trend, at the 1050 East prospect, Renascor
has intersected high-grade copper-cobalt-silver mineralisation, with
results including 13m @ 1.45% Cu, 66 ppm Ag and 0.17% Co (from
215m), including a massive sulphide interval of 8m @ 2.2% Cu, 92 ppm
Ag and 0.26% Co. Renascor considers unexplained gravity, magnetic
and geochemical anomalies within the Angle Dam fault structure, as
well as the parallel Roopena fault structure, as particularly prospective
targets for economic copper ore bodies.
Renascor’s initial exploration work at Eastern Eyre, including the
discovery of high grade, massive sulphide at 1050 East and the
discovery of widespread copper mineralisation at Extension Tank, has
highlighted the importance of the major fault structures in the project
area. In particular, recent results suggest that the Angle Dam fault offers
significant untested targets for economic concentrations of copper.
Within this structure, in addition to 1050 East and the area immediately
east of Extension Tank, Renascor has identified additional untested
gravity, magnetic and geochemical drill targets.
Warrior
Figure 17. Eastern Eyre
project, Eastern Eyre
project, showing identified
gravity, magnetic and
geochemical targets.
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A U S T R A L I A
A U S T R A L I A
S O U T H
A U S T R A L I A
Perth
Warrior
Warrior
Gairdner
Farina
Olary
Arno
Adelaide
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Location:
Tenements:
Area:
Target:
Gawler Craton (South Australia)
ELs 4570 and 4707 (100%, subject to 1% net smelter royalty)
310 km2
Sandstone-hosted uranium
Warrior
Warrior is an historic uranium project discovered by PNC
Exploration Pty Ltd (PNC), the former Japanese government
sponsored uranium exploration company, in the late 1970s.
The project has been subject to infrequent exploration
since this time. Renascor acquired the project in 2013
in exchange for a residual net smelter royalty of 1%.
Renascor’s strategy at Warrior is to utilise the significant
exploration work undertaken by PNC to create low cost
opportunities to identify a valuable resource under present
market conditions.
Through the use of additional core drilling and a prompt
fission neutron tool, in both the elevated uranium
zones discovered by PNC as well as extensions to the
paleochannels suggested by later exploration work,
Renascor considers Warrior to offer significant prospects
for the delineation of an economic uranium ore body.
Renascor anticipates commencing drill-testing following
indications of a recovery in the uranium price.
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A U S T R A L I A
S O U T H
A U S T R A L I A
Perth
Carnding
Warrior
Gairdner
Farina
Olary
Adelaide
Location:
Tenements:
Area:
Target:
Gawler Craton (South Australia)
EL 4707 (100%, subject to 1% net smelter royalty)
162 km2
Gold
Carnding
Farina
The Carnding project area consists of two
tenement blocks located approximately
75km from the high-grade Challenger
gold mine in the north of South Australia.
See Figure 19. The project area contains
several areas prospective for Challenger-
style gold deposits.
The project area covers Archaean,
Mulgathing Complex, rocks that also host
the nearby Challenger gold mine. The
geology in this area is considered to be
prospective for Archaean gold deposits,
similar to Challenger, possible Proterozoic
IOCGs and sandstone-hosted uranium
in the younger Mesozoic and Cainozoic
sediments.
The project area contains numerous gold
prospects that Renascor identified from
historical surface sampling and limited
shallow drilling. Among these prospects
is the Sunshine prospect, a gold-in-
calcrete anomaly where previous drilling
interested 2m @ 6.66 g/T Au (from 60m).
The prospect is open to the north and
Renascor considers it prospective for high-
grade Challenger-style gold deposits.
Figure 19. Carnding project
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A U S T R A L I A
S O U T H
A U S T R A L I A
Perth
Warrior
Gairdner
Farina
Farina
Olary
Adelaide
Location:
Tenements:
Area:
Target:
Adelaide Fold Belt (South Australia)
ELs 4822 and 5586 (100%)
1,305 km2
Sedimentary and near-surface oxide copper
Farina
The Farina Project is made up a large, copper-
prospective ground position within South
Australia’s Adelaide Fold Belt. Renascor’s
exploration program here is focused on
identifying and drilling prospects for potentially
large tonnage Zambian Copper Beltstyle,
sedimentary copper deposits and near-surface
oxide copper deposits.
Renascor’s review of historical exploration in the
project area has resulted in the identification
of a new copper prospect, Callanna, located
within an area of historical drilling on the
northwest margin of exposed Adelaidean
rocks. In addition, Renascor identified two
prospective sedimentary copper target zones
where sediments are inferred to exist beneath
shallow cover and hence, amenable to EM
surveying. Ground sampling has focused on
historical copper occurrences at the Callanna
prospect. Results included strongly anomalous
gold values (maximum 2.6 g/t Au) associated
with oxide copper mineralisation. A single
hand-picked sample from a small working
approximately 3 kilometres north of the main
Callanna prospect area returned 27% Cu and
0.4 g/t Au with strongly anomalous rare earths
and molybdenum, suggesting a possible granitic
intrusive association.
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Figure 20. Farina Project, showing geology and historical
copper occurrences.
Renascor Resources Limited annual report 2016
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Renascor Resources Limited annual report 2016
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Your directors present their report on the
consolidated entity (referred to hereafter as the
Group) consisting of Renascor Resources Limited
(referred to hereafter as the Parent Entity or the
Company) and the entities it controlled at the
end of, or during, the year ended 30 June 2016.
Directors
The following persons were directors of the
Company during the whole of the financial year
and up to the date of this report, unless otherwise
stated:
David Christensen, Managing Director
David Christensen is an experienced mining
executive, with recent successful experience
managing and developing mining operations.
Prior to founding the Company, David served
as Chief Executive Officer of Adelaide-based
companies, Heathgate Resources Pty Ltd and
Quasar Resource Pty Ltd. While at Heathgate
and Quasar, his responsibilities included
overseeing Australian operations, including
the Beverley uranium mine, as well as the
expansion into new projects with the discovery
and development of the Four Mile deposit and
numerous joint ventures. David’s experience
also includes serving as President of Nuclear
Fuels Corporation, a trading and marketing
company, where he was responsible for
developing sales strategy, executing trades and
swaps and negotiating all off-take contracts.
David commenced his career as an attorney in
California and London offices of international
law firm Latham & Watkins, where he advised
on corporate finance and mergers and
acquisitions. David was educated at Cornell
University (BA, Economics and Classical
Civilizations), the University of California, Los
Angeles (JD) and the Universitá di Bologna
(Fulbright Fellow).
Special responsibilities
Managing Director
Stephen Bizzell, Non-Executive Chairman
Stephen is Chairman of boutique corporate
advisory and funds management group Bizzell
Capital Partners. He is highly experienced in
the fields of corporate restructuring, debt and
equity financing, mergers and acquisitions
and has over 20 years corporate finance and
public company management experience in the
resources sector in Australia and Canada.
26
Stephen was previously an Executive Director of
Arrow Energy from 1999 to until its acquisition
in 2010 by Royal Dutch Shell and PetroChina
for $3.5 billion. Stephen was instrumental in
Arrow’s corporate and commercial success
and its growth from a junior explorer to a large
integrated energy company. Stephen spent his
early career in the corporate finance division of
Ernst & Young and the tax division of Coopers
& Lybrand and qualified as a Chartered
Accountant. He is also a former director of
Queensland Treasury Corporation. During the
past three years Stephen has also served as a
Director of the following ASX listed companies:
Laneway Resources Ltd (since 1996), Bow
Energy Ltd (2004 to 2012), Dart Energy Ltd
(2006 to 2013), Hot Rock Ltd (2009 to 2014),
Diversa Ltd (since 2010), Stanmore Coal Ltd
(since 2009), Titan Energy Services Ltd (2011 to
2015), Armour Energy Ltd (since 2012) and UIL
Energy Ltd (since 2014).
Special responsibilities
Chairman of the board
Member of the Audit and Risk Management
Committee
Richard Keevers, Non-Executive Director (Appointed
22 July 2016)
Mr. Keevers has over 40 years of experience
in the resource sector, having previously held
senior executive positions with Broken Hill
South Limited and Newmont Mining Limited.
Mr Keevers’ experience includes advancing
multiple producing mines from discovery phase
through development, including the Telfer gold
and copper mine, the Phosphate Hill phosphate
mine and the Baal Gammon copper mine. Mr
Keevers also was a substantial shareholder
of and served as an executive director for
Pembroke Josephson Wright Limited, an
Australian share brokerage firm. Mr Keevers
has served on boards of several ASX-listed
resource companies, and he is currently a non-
executive director of Santana Minerals Limited.
Mr Keevers also serves as chairman of unlisted
Eyre Peninsula Minerals Proprietary Limited
Richard is a graduate of the University of New
England, NSW (BSc, Geology), and is a fellow of
Australasian Institute of Mining and Metallurgy.
Special responsibilities
Nil
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Andrew Martin, Non-Executive Director
Chris Anderson, Non-Executive Director
Andrew Martin is a director of Deutsche Bank.
Andrew has worked in a banking or advisory
capacity for over 15 years, generally within the
infrastructure, utilities and natural resources
sectors and in recent years, has advised on
transactions within these sectors. Andrew
has a Bachelor of Economics (Hons) from the
University of Sydney and is a founder and
Alternate Director of ASX listed Stanmore
Coal Limited (having been a Director from
2009 to 2014) and unlisted St Lucia Resources
International Pty Limited.
Special responsibilities
Chairman of the Audit and Risk Management
Committee
Geoffrey McConachy, Executive Director
Geoffrey McConachy is an accomplished
geologist with over thirty years of Australian
and international experience in the
mining industry assessing a wide range of
commodities. Prior to joining the Company,
Geoffrey worked for Heathgate Resources Pty
Ltd and Quasar Resources Pty Ltd, where his
roles included Managing Director, Exploration.
While at Heathgate and Quasar, Geoffrey
led the exploration and development team
in the discovery, definition and evaluation
of four uranium deposits including the Four
Mile deposit, for which he was co-honoured
with the Prospector of the Year award
from the Australian Association of Mining
& Exploration Companies. His experience
includes instrumental roles in the discovery of
the Fosterville gold deposit in Victoria and the
Potosi base metal deposit in New South Wales.
Geoffrey is a fellow of the Australasian Institute
of Mining and Metallurgy and a former Director
of the Uranium Information Centre.
Special responsibilities
Member of the Audit and Risk Management
Committee
Chris Anderson is an experienced geophysicist
with over 40 years in mineral exploration in
Australia and abroad. His recent experience
includes an instrumental role in the 2005
discovery of the Carrapateena copper-gold-
uranium mine in South Australia. His earlier
experience includes acting as Placer Pacific’s
Exploration Manager for Eastern Australia,
where he was instrumental in the discovery of
the Kalkaroo copper-gold-molybdenum deposit
in South Australia. Mr Anderson’s significant
international experience includes geophysical
interpretation in Zambia for Equinox Resources
Ltd., and in Tanzania for North Mara Gold
Mines, where he contributed to the discovery
of the one million ounce Gokona gold deposit.
From 2005 to 2010 Chris served as executive
director of ASX listed Stellar Resources Ltd.,
with exploration interests in South Australia,
New South Wales, Victoria and Tasmania.
Chris is a graduate of Adelaide University (BSc,
Geology and Geophysics) (Hons), and is a
fellow of Australasian Institute of Mining and
Metallurgy.
Special responsibilities
Nil
Chief Financial Officer and Company
Secretary
Angelo Gaudio, Chief Financial Officer and Company
Secretary
Angelo Gaudio has significant experience in
senior financial positions within the resource
sector. Prior to joining the Company in 2011,
he served as Vice President, Finance and
Administration with Heathgate Resources
Pty Ltd, for which he managed accounting,
financial affairs and procurement since the
inception of the Beverley uranium mine in
1999. Angelo is a qualified accountant with
over thirty five years of finance, management
and accounting experience. His expertise
includes corporate finance, risk management
and financial reporting, as well as corporate
development and Native Title relations. Angelo
is a Fellow of the Institute of Public Accountants
and a Certificated member of the Governance
Institute of Australia.
27
Renascor Resources Limited annual report 2016
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Directors’ Shareholdings
The following table sets out each director’s holdings and their relevant interest in shares,
options and performance rights in the Company as at the date of this report.
Director
Fully Paid Ordinary Shares
Listed Share Options
Performance Rights
David Christensen
Geoffrey McConachy
Andrew Martin
Stephen Bizzell
Chris Anderson
Richard Keevers
Meetings of directors
14,618,667
7,959,667
23,834,988
17,152,335
12,070,113
20,195,334
666,667
541,667
791,667
1,166,667
1,500,000
-
-
-
-
-
-
-
The numbers of meetings of the Company’s board of directors and of each board committee held
during the year ended 30 June 2016, and the numbers of meetings attended by each director were:
Full meetings of directors
Audit Committee meetings
Director
Stephen Bizzell
David Christensen
Geoffrey McConachy
Andrew Martin
Chris Anderson
A
Attended
B
Held
A
Attended
8
8
8
8
8
8
8
8
8
8
2
N/A
2
2
N/A
N/A
B
Held
2
N/A
2
2
N/A
N/a
Richard Keevers (Appointed 22 July 2016)
N/A
N/A
A = Number of meetings attended
B = Number of meetings held during the time the director held office or was a member of the
committee during the year
Dividends - Renascor Resources Limited
30 September 2016) were issued in
There were no dividends declared or paid during
the financial year (2015: Nil).
Review and results of operations
a) Corporate and Financial
• For the year ended 30 June 2016, the loss
for the Group after providing for income
tax was $890,079 (2015: $4,932,426).
This included a write down of capitalised
exploration and evaluation expenditure
of $265,602 and relinquishment of five
tenements during the period.
• On 9 July 2015 the retail component of an
accelerated non-renounceable entitlement
offer (ANREO) was completed with the
issue of 20,650,612 paid ordinary shares
raising $419,012 before costs. On 9th July
38,725,310 free attaching listed options
(exercisable at $0.03 and expiring on
28
relation to both the institutional and retail
components of the ANREO.
• During the year 3,276,424 shares were
issued to Non-executive Directors as part
of the Non-Executive Directors’ Share Plan
(NEDSP) approved by shareholders at the
AGM held on 26 November 2015. Non-
executive directors have received up to
50% of their compensation in shares in the
Company and received a cash payment for
50% of their director fees.
• On 26 February 2016 the Company
completed a transaction to acquire 100%
of Sol Jar Property Pty Ltd, the owner of
the Munglinup project, a highly prospective
graphite-nickel sulphide tenement position
in the Albany-Fraser Range province of
Western Australia. As consideration the
Company issued 18,000,000 ordinary shares
and 4,000,000 listed options @ $0.03 and
expiring on 30 September 2016.
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• On 2 December 2015, the Company
entered into a binding agreement with
Eyre Peninsula Minerals Pty Ltd (EPM) and
EPM’s shareholders (EPM JV Agreement)
that granted the Company an option to
acquire up to 100% of EPM in exchange for
exploration expenditure and shares and
options in Renascor. EPM, in turn, has an
option to acquire Ausmin Development
Pty Ltd (Ausmin), an unlisted company
that holds the underlying rights to the
Arno graphite project. Pursuant to the
EPM JV Agreement the company managed
the exploration program as agreed with
EPM. The Company completed its earn-
in commitment during June 2016 and
accordingly acquired 20% of EPM’s
issued capital.
• On 13 May 2016 the Company issued
47,400,003 shares and 11,850,003 free
attaching listed options exercisable at $0.03
per share expiring on 30 September 2016,
to complete a placement to sophisticated
investors raising $711,000 before costs.
b) Operations
• Renascor’s activities during the past
financial year were directed at exploring for,
acquiring and developing mineral assets.
• Significant activities undertaken during the
year included:
- The acquisition of the Arno Graphite
Project,
- The discovery of significant graphite
mineralization at the Siviour prospect,
- The declaration of the initial Mineral
Resource estimate for the Siviour
Deposit, and
- The identification of high quality, coarse-
flake graphite at Sivour
• Renascor has maintained a strong
exploration portfolio, identifying and
maintaining a strong pipeline of targets
for the development of graphite, lithium,
uranium, gold, copper and other mineral
assets. To limit non-essential expenditure,
Renascor has also relinquished 5 tenements
considered less prospective.
Significant changes in the state of affairs
There have been no significant changes in the
Group’s state of affairs during the financial year
other than have been disclosed elsewhere in
this report.
Matters subsequent to the end of the
financial year
Pursuant to the EPM JV Agreement, the Company
completed the exercise its first option to acquire
an additional 29% of the issued shares of EPM.
On 11 July 2016 the Company issued 38,666,667
ordinary shares in Renascor at the closing price of
$0.016 valued $618,667 and taking the Company’s
holding in EPM to 49%.
On 11 July 2016, the Company issued 39,266,668
ordinary fully paid shares and 9,816,668 listed
options exercisable@ $0.03 expiring on 30
September 2016. The Shares and options
completed the fundraising initiated in May 2016 in
raising a further $589,000 before costs.
On 11 July 2016, the Company issued 600,001
ordinary fully paid shares to management as a
result of the exercise of performance rights held.
On 25 August 2016, the Company issued 32,000
ordinary fully paid shares as a result of the
exercise of 32,000 listed options @ $0.03 expiring
on 30 September 2016
On 29 August 2016 the Company exercised its
second option to acquire the remaining 51%
of EPM, subject to shareholder approval within
2 months. Pursuant to the EPM JV Agreement
the consideration will be Ordinary shares to the
value of $2,040,000 plus 15,000,000 unlisted
options with an exercise price of 5 cents per
ordinary share and expiry 3 years from the date
of issue. The value and issue price of each share is
calculated using the 20-day VWAP as at the date of
exercise of the option which has been calculated
as $0.048492. Accordingly, subject to shareholder
approval, Renascor will issue 42,068,684 ordinary
shares and 15,000,000 unlisted options to
subscribe for fully paid ordinary shares in Renascor
with an exercise price of 5 cents per ordinary share
and expiry 3 years from the issue date.
On 5 September the Company announced that
it had executed an underwriting agreement that
provides the confidence that it will receive total
gross proceeds of $1.9m from its listed 3 cent
options expiring on 30 September 2016 (“Listed
Options”). The underwriting agreement is with
Bizzell Capital Partners Pty Ltd (“BCP”), an entity
associated with Stephen Bizzell (Chairman of
Renascor), pursuant to which BCP has agreed to
act as Underwriter to the exercise of the Listed
Options and will also have the right to act as Lead
Manager to a share placement to raise up to an
additional $600,000.
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In the opinion of the directors, no other matter or
circumstance has arisen since 30 June 2016 that
has significantly affected, or may
significantly affect:
•
•
•
the Group’s operations in future financial
years, or
the results of those operations in future
financial years, or
the Group’s state of affairs in future
financial years.
Likely developments and expected
results of operations
The Company will continue activities in the
exploration, evaluation, development and
acquisition of viable projects with the objective of
establishing a significant production business.
Environmental regulation and
performance
The directors have put in place strategies and
procedures to ensure that the Group manages its
compliance with environmental regulations. The
directors are not aware of any breaches of any
applicable environmental regulations.
b) Principles used to determine the nature and
amount of remuneration
Role of the remuneration committee
The board carries out the functions of the
Remuneration and Nominations Committees and
is responsible for reviewing and negotiating the
compensation arrangements of senior executives.
It assesses the appropriateness of the nature
and amount of remuneration of such officers on
a periodic basis by 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
board is responsible for managing:
• non-executive director fees;
• executive remuneration (directors and other
executives); and
•
the over-arching executive remuneration
framework and incentive plan policies.
Their objective is to ensure that remuneration
policies and structures are fair and competitive
and aligned with the long-term interests of the
Group.
The Corporate Governance Statement which can
be located on the Company’s website
Remuneration report – audited
(www.renascor.com.au/company)
This remuneration report sets out remuneration
information for the Group’s non-executive
directors, executive directors and other key
management personnel of the Group and the
Company.
a) Key management personnel
The following persons were key management
personnel of the Company during the
financial year:
Directors
Position
Non-Executive Chairman
Stephen Bizzell
Managing Director
David Christensen
Geoffrey McConachy Executive Director
Andrew Martin
Chris Anderson
Richard Keevers
Non-Executive Director
Non-Executive Director
Non-Executive Director
Other key management personnel:
Angelo Gaudio
CFO and Company
Secretary
provides further information on the role of this
committee.
Relationship between remuneration and Group
performance
During the financial year, the Group has
generated losses as its principal activity was
exploration for copper, gold, uranium and other
minerals within South Australia. As the Group is
still in the exploration and evaluation stage, the
link between remuneration, Group performance
and shareholder wealth is sometimes tenuous.
Share prices are subject to the influence of metals
prices, market sentiment toward the sector
and the global economy, and as such increases
or decreases may occur quite independent of
executive performance or remuneration.
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The following table shows key performance indicators for the Group over the last five years since the
Company has been listed on the ASX:
Key performance indicators
2016
2015
2014
2013
2012
Profit/(Loss) for the year
attributable to owners ($)
($890,079)
($4,932,426)
($1,513,910)
($528,989)
(297,219)
Basic earnings per share (cents)
Share price (cents) at year end
(0.4)
2.0
(3.5)
2.0
(1.3)
3.7
(0.5)
3.5
(0.3)
5.2
Increase/(decrease) in share price (%)
(0%)
(45.9%)
5.7%
(32.7%)
(30.7%)
Total KMP incentives as a percentage
of profit/(loss) for the year (%)
-
(0.2%)
(2.4%)
(4.6%)
-
Non-executive directors
Fees and payments to non-executive directors
reflect the demands which are made on, and the
responsibilities of, the directors. Non-executive
directors’ fees and payments are reviewed
periodically by the board. The Chair’s fees are
determined independently to the fees of non-
executive directors based on comparative roles in
the external market. The Chair is not present at
any discussions relating to determination of his
own remuneration.
Non-executive directors do not receive
performance-based pay.
Directors’ fees
The current base fees were established with effect
from 15 December 2010.
Non-executive directors’ fees are determined
within an aggregate directors’ fee pool limit,
which is periodically recommended for approval
by shareholders. The maximum currently stands
at $350,000 per annum and was approved by
a special resolution of the members of the
Company on 5 August 2010.
At the AGM held on 27 November 2014,
shareholders approved the Non-Executive
Directors Share Plan (NEDSP) for non-executive
directors to receive up to 50% of their
compensation in shares in the Company. Since
the 1 October 2014 non-executive directors
have received payment for 50% of their director
fees through the issue of NEDSP shares issued
bi-annually each 6 month period 1 October to 31
March and 1 April to 30 September.
The following director fees have applied during
the period:
Base fees
From 1 July 2016
From 1 July 2015
Chair
$60,000 p.a.
$60,000 p.a.
Other non-executive directors
$33,000-40,000 p.a.
$33,000-40,000 p.a.
Retirement allowances for non-executive directors
In line with guidance from the ASX Corporate
Governance Council on non-executive directors’
remuneration, no retirement allowances
are provided for non-executive directors.
Superannuation contributions required under
the Australian superannuation guarantee
legislation continue to be made as required
and are deducted from the directors’ overall fee
entitlements.
Executive pay
The objective of the Group’s executive reward
framework is to ensure reward for performance
is competitive and appropriate for the results
delivered. The framework aligns executive reward
with achievement of strategic objectives and the
creation of value for shareholders, and conforms
to market practice for delivery of reward. The
board ensures that executive reward satisfies the
following key criteria for good reward governance
practices:
• competitiveness and reasonableness;
• acceptability to shareholders;
• performance linkage / alignment of executive
compensation;
•
transparency; and
• capital management.
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The Group has structured an executive
remuneration framework that is market
competitive and complementary to the reward
strategy of the organisation.
Alignment to shareholders’ interests:
• has economic profit as a core component of
plan design;
•
focuses on sustained growth in shareholder
wealth, consisting of dividends and growth in
share price;
• delivering constant return on assets as well
as focusing the executive on key non-financial
drivers of value; and
• attracts and retains high calibre executives.
Alignment to program participants’ interests:
•
•
rewards capability and experience;
reflects competitive reward for contribution to
growth in shareholder wealth;
• provides a clear structure for earning rewards;
and
• provides recognition for contribution.
The framework provides a mix of fixed and long-
term incentives.
The board carries out the functions of the
Remuneration and Nominations Committees and
is responsible for reviewing and negotiating the
compensation arrangements of senior executives.
It assesses the appropriateness of the nature
and amount of remuneration of such officers on
a periodic basis by 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
board manages remuneration and incentive
policies and practices and remuneration packages
and other terms of employment for executive
directors, other senior executives and non-
executive directors. The Corporate Governance
Statement provides further information on the
role of a Remuneration committee.
The executive pay and reward framework has the
following components:
• base pay and benefits, including
superannuation;
• short-term incentive through a cash bonus
may be determined by the board; and
•
long-term incentives through the issue of
unlisted share options and performance rights.
The combination of these comprises an
executive’s total remuneration.
Base pay and benefits
Base pay and benefits are structured as a total
employment cost package which may be delivered
as a combination of cash and prescribed non-
financial benefits, at the executive’s discretion and
subject to board approval.
32
Executives are offered a competitive base pay
that comprises the fixed component of pay
and rewards to ensure base pay is set to reflect
the market for a comparable role. Base pay for
executives is reviewed periodically to ensure the
executive’s pay is competitive with the market.
There is no guaranteed base pay increase
included in any of the executives’ contracts.
Benefits
Private health insurance benefits are provided to
the Managing Director.
Superannuation
Retirement benefits are delivered via
superannuation contributions required under the
Australian superannuation guarantee legislation.
Other retirement benefits may be provided
directly by the Group if approved by shareholders.
Short-term incentives
The Company currently has no formal performance
related remuneration policy which governs the
payment of annual cash bonuses upon meeting
pre-determined performance targets.
Long-term incentives
Long-term incentives may be provided to
directors, executives and consultants through
the granting of unlisted share options and or
performance rights.
The granting of unlisted share options and
performance rights is designed to provide long-
term incentives for executives to deliver long-term
shareholder returns. The granting of such options
and performance rights is at the board’s discretion
and no individual has a contractual right to receive
any guaranteed benefits. The options are issued
for nil consideration and have variable vesting
dates, exercise prices and maturity dates, i.e. last
date to exercise the options.
The performance rights plan was approved by
shareholders at the 2012 annual general meeting
and is designed to focus executives on delivering
long-term shareholder return. Under the plan,
participants were granted rights to shares which
only vest if certain performance conditions are
met and the participants are still employed by
the company at the end of the vesting period.
Participation in the plan is at the absolute
discretion of the disinterested board members.
Vesting of the performance rights have been
subject to a corporate share performance (CSP)
condition and a personal key performance
indicator (KPI) condition.
The performance rights were issued for nil
consideration and had variable vesting dates,
subject to either CSP condition or KPI condition
(and the maximum number of shares which may
be issued where the relevant conditions are
fully satisfied which are converted on a one for
one basis).
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Total
$
c) Details of remuneration
Amounts of remuneration
Details of the remuneration of the directors and the key management personnel of the Group (as
defined in AASB 124 Related Party Disclosures) are set out in the following tables. The key management
personnel of the Company includes the directors as per pages 26 and 27 above and Angelo Gaudio,
CFO and Company Secretary who has authority and responsibility in respect of planning, directing and
controlling activities of the Company and reports directly to the Managing Director.
Key management personnel of the Company and the Group
2016
Name
Non-executive directors
Stephen Bizzell 1
Andrew Martin 1
Chris Anderson 1
Short-term
employee benefits
long-term
benefits
Post
employment
benefits
Share-based
payments
Non-
Cash
salary monetary
benefits
and fees
Long service
leave
NEDSP shares1
Super- & performance
rights
annuation
$
$
$
30,000
16,530
16,500
$
-
-
-
-
$
-
-
-
-
-
3,470
-
3,470
30,000 1
20,000 1
16,500 1
60,000
40,000
33,000
66,500 1 133,000
Sub-total non-executive directors
63,030
Executive directors
David Christensen
Geoffrey McConachy
Other key management personnel
Angelo Gaudio 2
Sub-total executive directors and
other key management personnel
Total key management
249,600
239,200
18,785
-
14,357
13,759
19,308
19,308
- 302,050
- 272,267
222,952 2
-
0
14,118
- 237,070
711,752
18,785
28,116
52,734
- 811,387
personnel compensation
774,782
18,785
28,116
56,204
66,500 1 944,387
1 At the AGM held on 27 November 2014, shareholders approved the Non-Executive Directors Share Plan (NEDSP)
for non-executive directors to receive up to 50% of their compensation in shares in the Company. Commencing
on 1 October 2014 non-executive directors have received payment for 50% of their director fees. During the
year NEDSP shares were issued as part of tranche#2 for the 6 month period 1 April to 30 September 2015 and
tranche#3 for the 6 month period 1 October 2015 to 31 March 2016.with the remaining balance accrued, to be
issued in tranche#4 for the 6 month period 1 April to 30 September 2016 during the next financial year.
2 On 15 April 2016, Mr Gaudio terminated his employment agreement with the Company. Cash salary and fees
include the payment of annual leave entitlements at termination of $43,607. On 15 April 2016, the Company
entered into an agreement with Angelo Gaudio and his company to provide services as Company Secretary and
Chief Financial Officer. Services are to be provided at a rate of $8,333 per month plus GST plus expenses. The
agreement may be terminated by either party on one months’ notice.
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Key management personnel of the Company and the Group
2015
Name
Non-executive directors
Stephen Bizzell
Andrew Martin
Chris Anderson
Short-term
employee benefits
long-term
benefits
Post
employment
benefits
Share-based
payments
Non-
Cash
salary monetary
benefits
and fees
Long service
Options
Super- & performance
rights
leave annuation
$
37,500
21,530
20,625
$
-
-
-
-
$
-
-
-
-
$
$
Total
$
-
3,470
-
3,470
22,500 1
15,000 1
12,375 1
60,000
40,000
33,000
49,875 1
133,000
Sub-total non-executive directors
79,655
Executive directors
David Christensen
Geoffrey McConachy
Other key management personnel
Angelo Gaudio
Sub-total executive directors and
other key management personnel
Total key management
personnel compensation
290,703
278,590
17,498
-
12,118
11,614
18,783
18,783
3,302
342,404
3,184 312,1717
214,077
-
8,476
18,751
1,390
242,694
783,370
17,498
32,208
56,317
7,876
897,269
863,025
17,498
32,208
59,787
57,751 1,030,269
The relative proportions of remuneration that are linked to performance and those that are
fixed are as follows:
Name
2016
2015
2016
2015
2016
2015
Fixed remuneration
At risk - STI
At risk - STI*
Non-executive directors of the Company
Stephen Bizzell
Andrew Martin
Chris Anderson
Executive directors of the Company
David Christensen
Geoffrey McConachy
100%
100%
100%
100%
100%
100%
100%
100%
99.0%
99.0%
Other key management personnel of the Group
Angelo Gaudio
100%
99.4%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
1.0%
1.0%
-%
0.6%
* Since the long-term incentives are provided exclusively by way of options and or performance rights, the
percentages disclosed also reflect the value of remuneration consisting of options and performance rights, based
on the value of options and performance rights expensed during the year.
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d) Bonuses and short-term incentives
Key management personnel and executives were
not paid cash bonuses or performance-related
bonuses during the years ended 30 June 2016
and 2015.
e) Service agreements
On appointment to the board, all non-executive
directors enter into a service agreement with the
Company in the form of a letter of appointment.
The letter summarises the board policies and
terms, including compensation, relevant to the
office of director.
Remuneration and other terms of employment for
the managing director, exploration director, chief
financial officer and the other key management
personnel are also formalised in service
agreements. Provisions of the agreements relating
to remuneration are set out below.
David Christensen, Managing Director, has an
agreement with the Company for an indefinite
term, subject to six-months’ notice or a
f) Share-based compensation
termination payment of six months. As at year
ended 30 June 2016, his per annum rate, exclusive
of superannuation, was payable at a rate of
$249,600 per annum.
Geoffrey McConachy, Exploration Director, has
an agreement with the Company for an indefinite
term, subject to three-months’ notice or a
termination payment of three months. As at year
ended 30 June 2016, his per annum rate, exclusive
of superannuation, was payable at a rate of
$239,200 per annum.
Angelo Gaudio, Chief Financial Officer and
Company Secretary, terminated his employment
agreement with the Company on 15 April 2016.
On 15 April 2016 the Company entered into an
agreement with Angelo Gaudio and his company
to provide services as Company Secretary and
Chief Financial Officer. Services are to be provided
at a rate of $8,333 per month plus GST plus
expenses. The agreement may be terminated by
either party on one months’ notice.
The terms and conditions of each grant of performance rights affecting remuneration in the current or
a future reporting period are as follows:
Grant Date
Vesting Date
Expiry Date Exercise
Price
Performance achieved #
%
%
Vested Forfeited
Tranche 1
30 Nov 2012
28 Feb 2014
30 Nov 2019
$Nil
54th percentile
20%
Tranche 1a
28 Feb 2014
28 Feb 2014
30 Nov 2019
$Nil
54th percentile
20%
Tranche 1b
28 Feb 2014
28 Feb 2014
30 Nov 2019
$Nil
80% of KPI
80%
Tranche 2
30 Nov 2012
30 Jun 2014
30 Nov 2019
$Nil
Tranche 2a
28 Feb 2014
30 Jun 2014
30 Nov 2019
$Nil
# 54th percentile
# 20%
# 54th percentile
# 20%
80%
80%
20%
# 80%
# 80%
Tranche 2b
28 Feb 2014
30 Jun 2014
30 Nov 2019
$Nil
80% of KPI
* 80%
* 20%
Tranche 3
30 Nov 2012
30 Jun 2015
30 Nov 2019
$Nil
# Below 50th percentile
# Nil%
# 100%
Tranche 3a
28 Feb 2014
30 Jun 2015
30 Nov 2019
$Nil
# Below 50th percentile
# Nil%
# 100%
Tranche 3b
28 Feb 2014
30 Jun 2015
30 Nov 2019
$Nil
80% of KPI
* 80%
* 20%
# The CSP Performance rights conditions were assessed by the disinterested board members and the TSR Rank
achieved for Year Ended 30 June 2014 was determined to be between 50th and 67th percentile and 20% of the
CSP proportion of performance shares vested and 80% forfeited for tranche 2a. For Year Ended 30 June 2015
the TSR Rank achieved was determined to be below the 50th percentile with no CSP proportion of performance
shares vesting and 100% forfeited for tranche 3a. The vested performance rights were exercised and shares
issued on 11 July 2016.
* The KPI Performance rights conditions were assessed by the disinterested board members for Years Ended
30 June 2014 and 30 June 2015 and determined to that 80% of KPI proportion of performance shares for tranches
2b and 3b vesting and 20% forfeited. The vested performance rights were exercised and shares issued on
11 July 2016.
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g) Equity instruments held by key management personnel
Options holdings
Listed options are held directly, indirectly or beneficially by key management personnel* as at year ended
30 June 2016:
2016
Name
Listed options
Balance at
at the start acquired during the
reporting year
of the year
Eercised
during the
reporting year
Expired
during
the year
Balance
at the end
of the year
Vested and
exercisable at
the end of the
reporting year
number
number#
number
number
number
number
Directors of the Company
David Christensen
Geoffrey McConachy
Andrew Martin
Stephen Bizzell
Chris Anderson
Richard Keevers
250,000
375,000
625,000
500,000
1,000,000
-
Other key management personnel of the Group
Angelo Gaudio
250,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
250,000
375,000
625,000
500,000
1,000,000
-
250,000
375,000
625,000
500,000
1,000,000
-
250,000
250,000
* Key management personnel include close family members and entities over which the key management person or their
close family members have direct or indirect control, joint control or significant influence.
Performance holdings
Details of performance rights held directly, indirectly or beneficially by key management personnel* as at
year ended 30 June 2016:
Approved to be
granted during the
reporting year
Exercised
during the
as compensation reporting year
Lapsed Balance at
Vested
the end of at the end
during the
reporting year
the year of the yesr reporting period
Vested and
Vested and
exercisable at
not exercisable
the end of the at the end of the
reporting period
number
number
number
number
number
number
number
2016
Name
Balance at
the start
of the year
number
Directors of the Company
David
Christensen
280,000
Geoffrey
McConachy
Andrew Martin
Stephen Bizzell
Chris Anderson
270,000
-
-
-
Other key management personnel of the Group
Angelo Gaudio
116,667
666,667
-
-
-
-
-
-
-
-
-
-
-
-
-
-
28,000
252,000
252,000
252,000
27,000
243,000
243,000
243,000
-
-
-
-
-
-
-
-
-
-
-
-
11,666
105,001
105,001
105,001
66,666
600,001
600,001
600,001
-
-
-
-
-
-
-
* Key management personnel include close family members and entities over which the key management person or their
close family members have direct or indirect control, joint control or significant influence.
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g) Equity instruments held by key management personnel conitinued
Shareholdings
Details of equity instruments (other than options and rights) held directly, indirectly or beneficially by key
management personnel* as at year ended 30 June 2016 are as follows:
2016
Ordinary Shares -
Balance
at the start
of the year
Issued during
reporting year as
Recieved during
the year on the
exercise of
compensation 2 Performance Rights
Ordinary Shares -
Other
changes
during the year
Balance
at the end
of the year
Directors of the Company
Ordinary Shares
David Christensen
Geoffrey McConachy
Andrew Martin1
Stephen Bizzell
Chris Anderson
Richard Keevers
12,700,000
7,050,000
22,182,929
13,007,583
9,257,166
-
Other key management personnel of the Group
-
-
985,392
1,478,085
812,947
-
Ordinary shares
Angelo Gaudio
6,715,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12,700,000
7,050,000
23,168,321
14,485,668
10,070,113
-
6,715,000
1 Mr Martin is a non-executive director and is a director of SLRI Pty Ltd and St Lucia Capital Fund Pty Ltd, which act as
corporate trustees for trust funds which together are substantial (greater than 5%) shareholders in the Company. Mr Martin
is a beneficiary of a trust ultimately holding a more than 20% interest in these trust funds.
* Key management personnel include close family members and entities over which the key management person or their close
family members have direct or indirect control, joint control or significant influence.
2 Shares issued as part of Non-executive directors Plan (NEDSP) in lieu of payment of 50% of director fees for the period from
1st April 2015 through 31 March 2016 and as approved by shareholders at Annual General Meeting held on
26 November 2015.
h) Other transactions with key management
personnel
Mr G W McConachy and Mr C. Anderson are
directors of Euro Exploration Services Pty Ltd
(Euro). Euro has provided the company with
exploration services, geochemical sampling
services as well as the provision of geological
personnel services during the year. The services
provided are based on normal commercial terms
and conditions. During the financial year the
Company incurred expenses of $54,134 (2015:
$77,978) from Euro which has been capitalised as
Exploration Expenditure during the financial year.
An amount of $5,235 (2015: $13,736) was owing to
Euro at 30 June 2016.
Mr C. Anderson is a director of Pondray Pty Ltd
trading as CG Anderson & Associates (CGAA).
CGAA has provided geophysical services to the
company. During the financial year the Company
incurred expenses of $72,600 (2015: $51,150)
from CGAA of which $72,600 (2015: $51,150)
has been capitalised as Exploration Expenditure
during the financial year. An amount of $11,300
(2015: $8,910) was owing to CGAA at 30 June 2016.
Mr S. Bizzell is a director of Bizzell Capital Partners
Pty Ltd (BCP). BCP has provided corporate
advisory and underwriting services to the
company in relation to a capital raising. During
the financial year the Company incurred expenses
of $72,600 (2015: $15,000) from BCP which was
included as a cost of the capital raising during the
financial year. An amount of $Nil (2015: $Nil) was
owing to BCP for capital raising services at
30 June 2016.
Mr D. Christensen has an equity interest in Arion
Legal. Arion Legal has provided legal services
to the company. During the financial year the
Company incurred expenses of $6,770 (2015:
$9,690) from Arion Legal of which $6,770 was
included as a legal expense during the financial
year. An amount of $Nil (2015: $Nil) was owing to
Arion Legal at 30 June 2016.
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Mr R Keevers is a director and also has an equity
interest in Eyre Peninsula Minerals Pty Ltd (EPM).
The Company has an agreement with EPM and
EPM’s shareholders that grants the Company
the option to acquire up to 100% of EPM in
exchange for exploration expenditure and shares
and options in Renascor. The Company has
acquired 49% of EPM by meeting its exploration
expenditure requirements and issued shares
to EPM shareholders on 11 July 2016 (See note
26, in the notes to the consolidated financial
statements. for details). Mr Keevers received
20,195,334 shares in connection with the shares
issued to EPM shareholders. On 29 August 2016,
the Company notified EPM of its intention to
exercise its remaining option to acquire the
balance of the issued capital of EPM, and it is
expected that this will be completed during the
fourth quarter of 2016.
End of remuneration report - audited
Shares under option
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Date options granted
Expiry date
9 June 2015 (listed options)
18 June 2015 (listed options)
9 July 2015 (listed options)
26 February 2016 (listed options)
13 May 2016 (listed options)
9 July 2016 (listed options)
30 September 2016
30 September 2016
30 September 2016
30 September 2016
30 September 2016
30 September 2016
Exrecise price
of shares
Number under
option
$0.03
$0.03
$0.03
$0.03
$0.03
$0.03
12,500,000
15,750,000
10,475,310
4,000,000
11,850,003
9,816,668
64,391,981
Date Performance Rights
approved
Expiry date
Exrecise price
of shares
30 November 2012*
30 November 2019
28 February 2014*
30 November 2019
$Nil
$Nil
Number of
Performance Rights
held
Nil
Nil
Nil
* No performance rights were granted as remuneration to the directors and the most highly remunerated officers
during the year. Details of performance rights held by key management personnel are disclosed on page 37.
600,001 shares of the Company were issued on 11 July 2016 on the exercise of vested performance rights
and 32,000 shares of the Company were issued on 25 August 2016 on the exercise of listed options granted.
No further shares have been issued since that date on the exercise of options or performance rights granted.
Indemnification and insurance of
directors, officers and auditor
The Company has established an insurance policy
to indemnify all directors and officers against all
liabilities to a third party that may arise from their
position as directors or officers of the Company
and its controlled entities, except where the
liability arises out of conduct involving a lack of
good faith.
During the financial year, the Company paid
a premium in respect of a contract insuring
directors, secretaries and executive officers of
the Company and its controlled entities against
a liability incurred as director, secretary or
executive officer to the extent permitted by the
Corporations Act 2001. The contract of insurance
prohibits disclosure of the nature of the liability
and the amount of the premium.
The Company has not otherwise, during or since
the end of the financial year, except to the extent
permitted by law, indemnified or agreed to
indemnify an officer or auditor of the Company
or any of its controlled entities against a liability
incurred as such an officer or auditor.
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Non-audit services
During the financial year, the following fees for non-audit services were paid or payable to the auditor,
BDO, or their related practices:
Consolidated
Notes
30 June 2016
$
30 June 2015
$
Taxation services
Amounts paid to a related practice of BDO Audit (SA) Pty Ltd
for tax compliance and advisory services
Total remuneration for taxation services
Total fees for non-audit services
7,076
7,076
7,076
6,929
6,929
6,929
Non-audit services (continued)
The directors are satisfied that the provision of
non-audit services, during the year, by the auditor
(or by another person or firm related to the
auditor), is compatible with the general standard
of independence for auditors imposed by the
Corporations Act 2001.
On the advice of the audit committee, the
directors are satisfied that the provision of non-
audit services by the auditor, as set out above,
did not compromise the auditor independence
requirements of the Corporations Act 2001 for the
following reasons:
• all non-audit services have been reviewed by
the audit committee to ensure that they do
not impact the integrity and objectivity of the
auditor; and
• none of the non-audit services undermine
the general principles relating to auditor
independence as set out in APES 110 Code of
Ethics for Professional Accountants.
Corporate Governance
The board of directors of the Company (“Board”)
is responsible for the corporate governance of
the Company. The Board guides and monitors the
business and affairs of the Company on behalf of
its shareholders by whom they are elected and
to whom they are accountable. The Company
believes that good corporate governance
enhances investor confidence and adds value to
stakeholders. The Board continually monitors
and reviews its policies, procedures and charters
with a view to ensure its compliance with the
ASX Corporate Governance Council’s “Corporate
Governance Principles and Recommendations,
3rd Edition” to the extent considered appropriate
for the size of the Company and its scale of its
operations.
The company’s Corporate Governance Statement
is available on the Company’s website
www.renascor.com.au/company.
Proceedings on behalf of the Company
No person has applied to the Court under section
237 of the Corporations Act 2001 for leave to
bring proceedings on behalf of the Company,
or to intervene in any proceedings to which the
Company is a party, for the purpose of taking
responsibility on behalf of the Company for all or
part of those proceedings.
No proceedings have been brought or
intervened in on behalf of the Company with leave
of the Court under section 237 of the
Corporations Act 2001.
Auditor’s Independence Declaration
A copy of the auditor’s independence declaration
as required under section 307C of the
Corporations Act 2001 is set out on page 40.
This report is made in accordance with a
resolution of directors.
David Christensen
Director
Adelaide Date: 30 September 2016
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Auditor’s independence declaration
Annual Report 2016 RENASCOR RESOURCES LIMITED | 16
Auditor’s independence declaration
(to be inserted)
Tel: +61 8 7324 6000
Fax: +61 8 7324 6111
www.bdo.com.au
BDO Centre
Level 7, 420 King William Street
Adelaide SA 5000
GPO Box 2018 Adelaide SA 5001
Australia
DECLARATION OF INDEPENDENCE
BY MICHAEL HAYDON
TO THE DIRECTORS OF RENASCOR RESOURCES LIMITED
As lead auditor of Renascor Resources Limited for the year ended 30 June 2016, I declare that,
to the best of my knowledge and belief, there have been:
No contraventions of the auditor independence requirements of the Corporations Act 2001
in relation to the audit; and
No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Renascor Resources Limited and the entities it controlled during
the period.
Michael Haydon
Director
BDO Audit (SA) Pty Ltd
Adelaide, 29 September 2016
BDO Audit (SA) Pty Ltd ABN 33 161 379 086 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77
050 110 275, an Australian company limited by guarantee. BDO Audit (SA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK
company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under
Professional Standards Legislation (other than for the acts or omissions of financial services licensees).
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Renascor Resources Limited ABN 90 135 531 341 annual report 2016
Consolidated statement of profit or loss and
other comprehensive income
For the year ended 30 June 2016
Revenue
Other Income
Administration and consulting
and amortisation expense
Employee benefits expense
Legal fees
Office accommodation
Impairment of exploration costs
Other expenses
Loss before income tax
Income tax expense
Loss for the year
Other comprehensive income
Other comprehensive income for the year, net of tax
Notes
5(a)
5(b)
6
6
6
6
7
Consolidated
30 June 2016
$
30 June 2015
$
27,996
26,317
12,000
(129,559)
(4,158)
(427,155)
(10,288)
(30,596)
(265,602)
(62,717)
41,556
(121,304)
(7,296)
(500,131)
300
(30,225)
(4,266,131)
(75,512)
(890,079)
(4,932,426)
-
(890,079)
-
(4,932,426)
-
-
Total comprehensive income for the year
(890,079)
(4,932,426)
Loss is attributable to:
Owners of Renascor Resources Limited
Total comprehensive income for the year is attributable to:
Owners of Renascor Resources Limited
Non-controlling interest
(890,079)
(4,932,426)
(890,079)
(4,932,426)
-
-
(890,079)
(4,932,426)
Cents
Cents
Earnings per share for loss attributable to the ordinary
owners of the Parent Entity:
Basic earnings per share
Diluted earnings per share
29
29
(0.4)
(0.4)
(3.5)
(3.5)
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
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Renascor Resources Limited ABN 90 135 531 341 annual report 2016
Consolidated statement of financial position
As at 30 June 2016
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Other
Total current assets
Non-current assets
Property, plant and equipment
Exploration and evaluation
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Non-current liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Accumulated losses
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Notes
30 June 2016
$
30 June 2015
$
8
9
862,488
154,720
15,887
1,075,336
224,803
23,355
1,033,095
1,323,494
10
11
7,287
5,977,606
9,596
3,534,046
5,984,893
3,543,642
7,017,988
4,867,136
13
14
15
345,763
132,007
242,337
154,979
477,770
397,316
70,750
70,750
57,630
57,630
548,520
454,946
6,469,468
4,412,190
17
18(a)
18(b)
13,235,479
1,041,506
(9,407,517)
11,903,316
1,026,312
(8,517,438)
Equity and reserves attributable the owners of
Renascor Resources Limited
4,869,468
4,412,190
Non-controlling interests
26
1,600,000
-
Total equity
6,469,468
4,412,190
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
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Consolidated statement of changes in equity
For the year ended 30 June 2016
Consolidated
Share-based
Payments
Contributed
equity
Notes
$
Reserve
$
Accumulated
Losses
$
Balance at 1 July 2014
10,803,970
1,018,436
(3,585,012)
8,237,394
Loss for the year
Total comprehensive income
Transactions with owners
in their capacity as owners:
Contributions of equity
-
-
net of transaction costs
17(b)
1,099,346
Share-based payments
18(a)
-
1,099,346
-
-
-
7,876
7,876
(4,932,426)
(4,932,426)
(4,932,426)
(4,932,426)
-
-
-
1,099,346
7,876
1,107,222
Non-
Total
controlling
$
Total
equity
$
8,237,394
(4,932,426)
(4,932,426)
1,099,346
7,876
1,107,222
$
-
-
-
-
-
-
-
-
-
-
Balance at 30 June 2015
Balance at 1 July 2015
Loss for the year
Total comprehensive income
Transactions with owners
in their capacity as owners:
Contributions of equity,
11,903,316
1,026,312
(8,517,438)
4,412,190
-
4,412,190
11,903,316
1,026,312
(8,517,438)
4,412,190
-
-
(890,079)
(890,079)
(890,079)
(890,079)
-
-
-
4,412,190
(890,079)
(890,079)
net of transaction costs
17(b)
1,332,163
Recognition of non-controlling
interest of Eyre Peninsula
Minerals Pty Ltd
26
-
Amount recognised during
the current period for
Share-based payments
18(a)
-
15,194
1,332,163
15,194
-
1,332,163
-
1,332,163
-
-
-
-
1,600,000
1,600,000
15,194
-
15,194
1,347,357
1,600,000
2,947,357
Balance at 30 June 2016
13,235,479
1,041,506
(9,407,517)
4,869,468
1,600,000
6,469,468
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
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Consolidated statement of cash flows
For the year ended 30 June 2016
Consolidated
Notes
30 June 2016
$
30 June 2015
$
Cash flows from operating activities
Receipts from Goods & Services Tax paid
Payments to suppliers and employees (inclusive of goods and services tax)
Interest received
Other (Research & Development tax concession)
Other (Deposits received)
74,463
(631,200)
28,733
192,942
10,000
94,433
(697,114)
26,077
118,627
15,000
Net cash inflow (outflow) from operating activities
28
(325,062)
(442,977)
Cash flows from investing activities
Cash held in subsidiary on acquisition
Payments for property, plant and equipment
Proceeds from sale of tenement
Payments for exploration expenditure
46,876
-
-
(931,935)
-
(3,433)
62,500
(1,047,063)
Net cash inflow (outflow) from investing activities
(885,059)
(987,996)
Cash flows from financing activities
Proceeds of loan from shareholder
Repayment of loan from shareholder
Payment for share issue expenses
Proceeds from issues of shares
-
-
(138,429)
1,135,702
-
-
(48,669)
1,130,000
Net cash inflow (outflow) from financing activities
997,273
1,081,331
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial period
(212,848)
1,075,336
(349,642)
1,424,978
Cash and cash equivalents at end of year
8
862,488
1,075,336
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
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Notes to the consolidated financial statements
Note Contents
Page
1 Summary of significant accounting policies
2
Financial risk management
3 Critical accounting estimates and judgments
4 Segment information
5 Revenue
6 Expenses
7
Income tax expense
8 Current assets - Cash and cash equivalents
9 Current assets - Trade and other receivables
10 Non-current assets - Property, plant and equipment
11 Non-current assets - Exploration and evaluation, development and mine properties
12 Non-current assets - Deferred tax assets
13 Current liabilities - Trade and other payables
14 Current liabilities - Provisions
15 Non-current liabilities - Provisions
16 Non-current liabilities - Deferred tax liabilities
17 Contributed equity
18 Reserves and retained earnings
19 Dividends
20 Key management personnel disclosures
21 Remuneration of auditors
22 Commitments and contingent liabilities
23 Related party transactions
24 Subsidiaries
25
Interests in joint ventures
26 Business Combinations
27 Events occurring after the reporting period
28 Reconciliation of profit after income tax to net cash outflow from operating activities
29 Earnings per share
30 Share-based payments
31 Parent Entity financial information
32 Application of new and revised Accounting Standards
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Renascor Resources Limited ABN 90 135 531 341 annual report 2016
Notes to the consolidated financial statements
1 Summary of significant accounting policies
The principal accounting policies adopted
in the preparation of these consolidated
financial statements are set out below. These
policies have been consistently applied to
all the years presented, unless otherwise
stated. The financial statements are for the
Group consisting of Renascor Resources
Limited (‘’Company’’ or ‘’Parent Entity’’) and its
subsidiaries. Renascor Resources Limited is a
for-profit entity for the purpose of preparing
these financial statements.
a) Basis of preparation
These general purpose financial statements
have been prepared in accordance with
Australian Accounting Standards, other
authoritative pronouncements of the
Australian Accounting Standards Board and
the Corporations Act 2001. The presentation
currency used in this financial report is
Australian dollars.
i) Compliance with IFRS
The consolidated financial statements of the
Group also comply with International
Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards
Board (IASB).
ii) Historical cost convention
These financial statements have been prepared
on a historical cost basis, as modified by the
revaluation of available for sale investments
and financial assets and liabilities (including
derivative financial instruments) at fair value
through profit and loss.
iii) Going concern
The financial statements have been prepared
on a going concern basis which contemplates
the continuity of normal business activities
and the realisation of assets and discharge of
liabilities in the ordinary course of business.
This includes the realisation of capitalised
exploration expenditure of $5,977,606 (30 June
2015: $3,534,046).
The Group has incurred a loss after tax for
the year of $890,079 (2015: $4,932,426) and
operations were funded by a net cash outflow
of $212,848 (2015: $349,642). At 30 June 2016,
the Group had net current assets of $555,325
(30 June 2015: $926,178).
The consolidated entity’s ability to continue
as a going concern is contingent on raising
additional capital and/or the successful
exploration and subsequent exploitation of its
areas of interest through sale or development.
On 11 July 2016, the Company completed the
fundraising initiated in May 2016 and raised a
further $589,000 before costs. On 5 September
the Company announced that it had executed
an underwriting agreement that provides the
confidence that it will receive total gross proceeds
of $1.9m from its listed 3 cent options expiring on
30 September 2016. The funds raised will primarily
be used to fund the advancement of its Arno
graphite project and, in the opinion of the directors,
removes any significant uncertainty about the
Company’s ability to continue as a going concern
for at least the next 12 months from the date of
authorising the financial report for issue and into
the foreseeable future.
b) Principles of consolidation
i) Subsidiaries
The consolidated financial statements
incorporate the assets and liabilities of all
subsidiaries of Renascor Resources Limited
(‘company’) as at 30 June 2016 and the
results of all subsidiaries for the year then
ended. Renascor Resources Limited and its
subsidiaries together are referred to in these
financial statements as the Group or the
consolidated entity.
Subsidiaries are all those entities over which
the consolidated entity has control. The
consolidated entity controls an entity when
the consolidated entity 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 to direct the
activities of the entity. Subsidiaries are fully
consolidated from the date on which control is
transferred to the consolidated entity. They are
de consolidated from the date that
control ceases.
Intercompany transactions, balances and
unrealised gains on transactions between
entities in the consolidated entity are
eliminated. Unrealised losses are also
eliminated unless the transaction provides
evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries
have been changed where necessary to ensure
consistency with the policies adopted by the
consolidated entity.
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1 Summary of significant accounting policies
d) Revenue recognition
continued
b) Principles of consolidation continued
ii) Joint arrangements
Joint arrangements are arrangements in
which one or more parties have joint control
(the contractual sharing of control of an
arrangement where decisions about relevant
activities require unanimous consent of the
parties sharing control).
iii) Joint operations
The consolidated entity has entered into joint
arrangements which are classified as joint
operations because the parties to the joint
arrangements have rights to the assets and
obligations for the liabilities, rather than to
the net assets, of the joint arrangements. The
consolidated entity has recognised its direct
right to, as well as its share of jointly held,
assets, liabilities, revenues and expenses of
joint operations which have been included in
the financial statements under the appropriate
headings. Details of joint operations are set out
in note 25.
Revenue is measured at the fair value of the
consideration received or receivable. Amounts
disclosed as revenue are net of returns, trade
allowances and duties and taxes paid. The
following specific recognition criteria must also
be met before revenue is recognised:
Interest Revenue
Interest income is recognised on a time
proportion basis using the effective interest
method.
Government grants
Grants from the government are recognised
at their fair value where there is reasonable
assurance that the grant will be received and
the Group will comply with all the attached
conditions. Government grants relating to
costs are deferred and recognised in profit
or loss over the period necessary to match
them with the costs that they are intended
to compensate. Government grants relating
to exploration and evaluation expenditure
are offset against exploration and evaluation
assets.
c) Foreign currency translation
i) Functional and presentation currency
Items included in the financial statements of
each of the Group’s entities are measured
using the currency of the primary economic
environment in which it operates (‘the
functional currency’). The consolidated financial
statements are presented in Australian
dollars, which is the Company’s functional and
presentation currency.
e) Cash and cash equivalents
For the purpose of presentation in the
statements of cash flows, cash and cash
equivalents includes cash on hand, deposits
held at call with financial institutions, other
short term and highly liquid investments with
original maturities of three months or less that
are readily convertible to known amounts of
cash and which are subject to an insignificant
risk of changes in value.
ii) Transactions and balances
f) Trade receivables
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 profit or
loss, except when they are deferred in equity as
qualifying cash flow hedges and qualifying net
investment hedges or are attributable to part of
the net investment in a foreign operation.
Foreign exchange gains and losses that relate
to borrowings are presented in profit or loss,
within finance costs. All other foreign exchange
gains and losses are presented in profit or loss
on a net basis within other income or other
expenses.
Trade and other receivables are recognised
initially at cost less any impairment losses.
Trade and other receivables are generally
due for settlement within 30 days. They are
presented as current assets unless collection
is not expected for more than 12 months after
the reporting date.
g) Income tax
The income tax expense or revenue for the
period is the tax payable on the current period’s
taxable income based on the applicable income
tax rate for each jurisdiction adjusted by
changes in deferred tax assets and liabilities
attributable to temporary differences and to
unused tax losses.
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h) Business combinations
continued
g) Income tax continued
Deferred tax is provided in full on temporary
differences arising between the tax bases
of assets and liabilities and their carrying
amounts in the consolidated financial
statements. However, deferred tax liabilities
are not recognised if they arise from the initial
recognition of goodwill. Deferred tax is also not
accounted for if it arises from initial recognition
of an asset or liability in a transaction other
than a business combination that at the time
of the transaction affects neither accounting
nor taxable profit or loss. Deferred tax is
determined using tax rates (and laws) that have
been enacted or substantially enacted by the
end of the reporting period and are expected
to apply when the related deferred tax asset is
realised or the deferred income tax liability
is settled.
Deferred tax assets are recognised for
deductible temporary differences and unused
tax losses only if it is probable that future
taxable amounts will be available to utilise
those temporary differences and losses.
Deferred tax liabilities and assets are not
recognised for temporary differences
between the carrying amount and tax bases of
investments in foreign operations where the
Company is able to control the timing of the
reversal of the temporary differences and it is
probable that the differences will not reverse in
the foreseeable future.
Deferred tax assets and liabilities are offset
when there is a legally enforceable right to
offset current tax assets and liabilities and
when the deferred tax balances relate to the
same taxation authority. Current tax assets and
tax liabilities are offset where the entity has a
legally enforceable right to offset and intends
either to settle on a net basis, or to realise the
asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit
or loss, except to the extent that it relates
to items recognised in other comprehensive
income or directly in equity. In this case, the
tax is also recognised in other comprehensive
income or directly in equity, respectively.
The acquisition method of accounting is used
to account for all business combinations,
regardless of whether equity instruments or
other assets are acquired. The consideration
transferred for the acquisition of a subsidiary
comprises the fair values of the assets
transferred, the liabilities incurred and the
equity interests issued by the Group. The
consideration transferred also includes the
fair value of any asset or liability resulting
from a contingent consideration arrangement
and the fair value of any pre existing equity
interest in the subsidiary. Acquisition related
costs are expensed as incurred. Identifiable
assets acquired and liabilities and contingent
liabilities assumed in a business combination
are, with limited exceptions, measured initially
at their fair values at the acquisition date. On
an acquisition by acquisition basis, the Group
recognises any non-controlling interest in the
acquiree either at fair value or at the non-
controlling interest’s proportionate share of the
acquiree’s net identifiable assets.
The excess of the consideration transferred and
the amount of any non-controlling interests in
the acquiree and the acquisition date fair value
of any previous equity interest in the acquiree
over the fair value of the Group’s share of the
net identifiable assets acquired are recorded
as goodwill. If those amounts are less than the
fair value of the net identifiable assets of the
subsidiary acquired and the measurement of
all amounts has been reviewed, the difference
is recognised directly in profit or loss as a
bargain purchase.
Where settlement of any part of cash
consideration is deferred, the amounts
payable in the future are discounted to their
present value as at the date of exchange. The
discount rate used is the entity’s incremental
borrowing rate, being the rate at which a
similar borrowing could be obtained from an
independent financier under comparable terms
and conditions.
Contingent consideration is classified either as
equity or a financial liability. Amounts classified
as a financial liability are subsequently
remeasured to fair value with changes in fair
value recognised in profit or loss.
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1 Summary of significant accounting policies
continued
h) Business combinations continued
i) Impairment of assets
Goodwill and intangible assets that have
an indefinite useful life are not subject to
amortisation and are tested annually for
impairment or more frequently if events
or changes in circumstances indicate that
they might be impaired. Other assets that
are subject to amortisation are reviewed for
impairment whenever events or changes
in circumstances indicate that the carrying
amount may not be recoverable. An
impairment loss is recognised for the amount
by which the asset’s carrying amount exceeds
its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less
costs to sell and value in use. For the purposes
of assessing impairment, assets are grouped at
the lowest levels for which there are separately
identifiable cash flows (cash generating units).
Non-financial assets other than goodwill that
have previously been impaired are reviewed
for possible reversal of impairment at each
reporting date.
j) Property, plant and equipment
All plant and equipment is stated at historical
cost less depreciation. Historical cost includes
expenditure that is directly attributable to the
acquisition of the items.
The cost of an item of plant and equipment
also includes the initial estimate of the costs
of dismantling and removing the item and
restoring the site on which it is located.
Subsequent costs are included in the asset’s
carrying amount or recognised as a separate
asset, as appropriate, only when it is probable
that future economic benefits associated with
the item will flow to the Group and the cost
of the item can be measured reliably. The
carrying amount of any component accounted
for as a separate asset is derecognised when
replaced. All other repairs and maintenance
are charged to profit or loss during the
reporting period in which they are incurred.
Depreciation on plant and equipment
(excluding land) is calculated on a straight line
basis over the estimated useful life of the asset.
The expected useful lives in the current and
comparative periods are as follows:
- Plant and equipment
3 – 10 years
50
The assets’ residual values and useful lives are
reviewed, and adjusted if appropriate, at the
end of each reporting period.
An asset’s carrying amount is written down
immediately to its recoverable amount if the
asset’s carrying amount is greater than its
estimated recoverable amount (note 1(i)).
Gains and losses on disposals are determined
by comparing proceeds with carrying amount.
These are included in the income statement.
k) Exploration and evaluation expenditure
Exploration and evaluation expenditure is
carried forward in the financial statements, in
respect of areas of interest for which the rights
of tenure are current and where:
i) such costs are expected to be recouped
through successful development and
exploitation of the area of interest, or
alternatively, by its sale; or
ii) exploration and/or 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 while active and
significant operations in, or in relation to, the
area are continuing.
Exploration expenditure incurred that does not
satisfy the policy stated above is expensed in
the period in which it is incurred. Exploration
expenditure that has been capitalised which
no longer satisfies the policy stated above
is written off in the period in which any
capitalised exploration expenditure no longer
satisfies that policy.
The net carrying value of each area of interest
is reviewed regularly and, to the extent to
which this value exceeds its recoverable value,
that excess is provided for or written off in the
year in which this is determined.
l) Trade and other payables
These amounts represent liabilities for goods
and services provided to the Group prior to the
end of financial year which are unpaid. The
amounts are unsecured and are usually paid
within 30 days of recognition. Trade and other
payables are presented as current liabilities
unless an unconditional right exists to defer
payment 12 months from the reporting date.
They are recognised initially at their fair value
and subsequently measured at amortised cost
using the effective interest method.
Renascor Resources Limited ABN 90 135 531 341 annual report 2016
Notes to the consolidated financial statements
1 Summary of significant accounting policies
continued
m) Provisions
Provisions for legal claims are recognised
when: the Group has a present legal or
constructive obligation as a result of past
events; it is more likely than not that an outflow
of resources will be required to settle the
obligation; and the amount has been reliably
estimated. Provisions are not recognised for
future operating losses.
Where there are a number of similar
obligations, the likelihood that an outflow will
be required in settlement is determined by
considering the class of obligations as a whole.
A provision is recognised even if the likelihood
of an outflow with respect to any one item
included in the same class of obligations may
be small.
The Group has obligations to restore and
rehabilitate certain areas where drilling has
occurred on exploration tenements. These
obligations are currently being met as the
drilling is completed and as such no provision
has been recognised.
n) Employee benefits
i) Short term employee obligations
Liabilities for wages and salaries, including
non monetary benefits expected to be settled
wholly within 12 months after the end of each
reporting period in which the employees
render the related service are recognised in
respect of employees’ services up to the end
of the reporting period and are measured at
the amounts expected to be paid when the
liabilities are settled.
ii) Other long term employee obligations
The liability for annual leave and long service
leave not expected to be settled wholly
within 12 months of the reporting date,
are recognised as part of the provision for
employee benefits and measured as the
present value of expected future payments
to be made in respect of services provided by
employees up to the reporting date using the
projected unit credit method. Consideration
is given to expected future salaries and wages
levels, experience of employee departures and
periods of service. Expected future payments
are discounted using corporate bond rates at
the end of the reporting period with terms to
maturity and currency that match, as closely as
possible, the estimated future cash outflows.
s
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Regardless of when settlement is expected
to occur, liabilities for long service leave and
annual leave are presented as current liabilities
in the statement of financial position if the
entity does not have an unconditional right to
defer settlement for at least 12 months after
the end of the reporting period.
iii) Retirement benefit obligations
Defined contribution plans
A defined contribution plan is a post
employment benefit plan under which an entity
pays fixed contributions into a separate entity
and will have no legal or constructive obligation
to pay further amounts. Obligations for
contributions to defined contribution pension
plans are recognised as an employee benefit
expense in profit or loss when they are due.
iv) Share based payments
Share based compensation benefits are
provided to directors, executives and
consultants through the granting of unlisted
share options and performance rights.
Detailed information is set out in note 30.
Options and performance rights are granted
for no cash consideration. When these share
options and performance rights are granted,
the fair value of the options and performance
rights issued are recognised as an employee
benefits expense with a corresponding
increase in equity. The amount recognised as
an expense is adjusted to reflect the number
of share options and performance rights for
which the related service and non-market
performance conditions are expected to
be met, such that the amount ultimately
recognised as an expense is based on the
number of share options and performance
rights that meet the related service and non-
market performance conditions at the
vesting date.
The fair value of share options and
performance rights are measured using an
appropriate pricing model. Measurement
inputs include the share price on measurement
date, exercise price of the instrument, expected
price volatility of the underlying share, the
expected dividend yield and the risk free
interest rate for the term of the option and
performance rights. Service and non-market
performance conditions attached to the
transactions are not taken into account in
determining fair value.
Upon the exercise of options and performance
rights, the balance of the share based
payments reserve relating to those options and
performance rights is transferred to
share capital.
51
Cash flows are presented on a gross basis.
The GST components of cash flows arising
from investing or financing activities which
are recoverable from, or payable to the
taxation authority, are presented as operating
cash flows.
s) Parent Entity financial information
The financial information for the Parent Entity,
Renascor Resources Limited, disclosed in note
31 has been prepared on the same basis as the
consolidated financial statements, except as set
out below.
i) Investments in subsidiaries
Investments in subsidiaries are accounted for
at cost, less any impairment, in the financial
statements of the Parent Entity.
t) R&D Tax Incentives
R&D tax incentives are considered more akin
to government grants because they are not
conditional upon earning taxable income and
the group accounts for any R&D Tax incentives
received as government grants under AASB
120 Accounting for Government Grants and
Disclosure of Government Assistance.
Renascor Resources Limited ABN 90 135 531 341 annual report 2016
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Notes to the consolidated financial statements
1 Summary of significant accounting policies
continued
o) Contributed equity
Ordinary shares are classified as equity
Incremental costs directly attributable to the
issue of new shares are shown in equity as a
deduction, net of tax, from the proceeds.
p) Earnings per share
i) Basic earnings per share
Basic earnings per share is calculated by
dividing:
• the profit attributable to owners of the
Company, excluding any costs of servicing
equity other than ordinary shares
• by the weighted average number of ordinary
shares outstanding during the financial year
(refer to note 29).
ii) Diluted earnings per share
Diluted earnings per share adjusts the figures
used in the determination of basic earnings per
share to take into account:
• the after income tax effect of interest and
other financing costs associated with dilutive
potential ordinary shares, and
• the weighted average number of additional
ordinary shares that would have been
outstanding assuming the conversion of all
dilutive potential ordinary shares.
q) Segment reporting
Operating segments are reported in a manner
consistent with the internal reporting provided
to the Managing Director, who is the Group’s
chief operating decision maker. The Managing
Director is responsible for allocating resources
and assessing performance of the operating
segments. Refer to note 4 for segment
reporting information.
r) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised
net of the amount of associated GST, unless
the GST incurred is not recoverable from the
taxation authority. In this case it is recognised
as part of the cost of acquisition of the asset or
as part of the expense.
Receivables and payables are stated inclusive
of the amount of GST receivable or payable.
The net amount of GST recoverable from, or
payable to, the taxation authority is included
with other receivables or payables in the
consolidated statement of financial position.
52
Renascor Resources Limited ABN 90 135 531 341 annual report 2016
Notes to the consolidated financial statements
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2 Financial risk management
The Group considers its capital to comprise its ordinary share capital and accumulated losses. The Group
does not have a formally established treasury function. The board is responsible for managing the
Group’s finance facilities. The Group does not currently undertake hedging of any kind and is not directly
exposed to currency risk.
The Group holds the following financial instruments:
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities at amortised cost
Trade and other payable
Consolidated
30 June 2016
$
30 June 2015
$
862,488
154,720
1,075,336
224,803
1,017,208
1,300,139
345,763
345,763
242,337
242,337
a) Market risk
i) Cash flow and fair value interest rate risk
As at 30 June 2016 and 30 June 2015, the Group had no borrowings.
The table below summarises the Group’s exposure to interest rate risk at the end of the reporting period:
Consolidated
30 June 2016
30 June 2015
Weighted
average
interest rate
%
1.8 %
- %
- %
Weighted
average
interest rate
%
3.08 %
- %
- %
Balance
$
862,488
154,720
(345,763)
671,445
Balance
$
1,075,336
224,803
(242,337)
1,057,802
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Net exposure to cash flow
interest rate risk
53
Renascor Resources Limited ABN 90 135 531 341 annual report 2016
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Notes to the consolidated financial statements
2 Financial risk management continued
a) Market risk continued
An analysis by maturities is provided in (c) below.
The Group analyses its interest rate exposure on a dynamic basis.
ii) Summarised sensitivity analysis
The table below summarises the sensitivity of the Group’s financial assets and financial liabilities to
interest rate risk.
Consolidated
Interest rate risk
1.0%
+ 1.0%
Carrying amount
$
Profit
$
Other equity
$
Profit
$
Other equity
$
30 June 2016
Financial assets
Cash and cash equivalents
Trade and other receivables
862,488
154,720
(8,625)
-
Financial liabilities
Trade and other payables
(345,763)
-
Total increase/(decrease)
671,445
(8,625)
-
-
-
-
8,625
-
-
8,625
-
-
-
-
Consolidated
Interest rate risk
1.0%
+ 1.0%
Carrying amount
$
Profit
$
Other equity
$
Profit
$
Other equity
$
30 June 2015
Financial assets
Cash and cash equivalents
Trade and other receivables
1,075,336
224,803
(10,753)
-
Financial liabilities
Trade and other payables
(242,337)
-
Total increase/(decrease)
1,057,802
(10,753)
-
-
-
-
10,753
-
-
10,753
-
-
-
-
54
Renascor Resources Limited ABN 90 135 531 341 annual report 2016
Notes to the consolidated financial statements
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2 Financial risk management continued
b) Credit risk
Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents and deposits
with banks and financial institutions, as well as credit exposures to customers, including outstanding
receivables and committed transactions. For banks and financial institutions, only independently rated
parties with a minimum rating of ‘A’ are accepted. If wholesale customers are independently rated, these
ratings are used. Otherwise, if there is no independent rating, risk control assesses the credit quality of
the customer, taking into account its financial position, past experience and other factors. Individual risk
limits are set based on internal or external ratings in accordance with limits set by the board.
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference
to external credit ratings (if available) or to historical information about counterparty default rates:
Trade and other receivables
Counterparties without external credit rating
Total trade and other receivables
Cash and cash equivalents
Minimum rating of A
Total cash and cash equivalents
c) Liquidity risk
Consolidated
30 June 2016
$
30 June 2015
$
154,720
154,720
862,488
862,488
224,803
224,803
1,075,336
1,075,336
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and
the availability of funding through an adequate amount of committed credit facilities to meet obligations
when due and close out market positions. At the end of each reporting period the Group held deposits
at call of $862,488 (2015: $1,075,336) that are expected to readily generate cash inflows for managing
liquidity risk. The Group has sufficient funds to finance its operations and exploration activities and to
allow for reasonable contingencies.
Maturities of financial liabilities
The tables below analyse the Group’s financial liabilities into relevant maturity groupings based on their
contractual maturities.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within
12 months equal their carrying balances as the impact of discounting is not significant.
Group
Less than
6 – 12
6 months
months
Less
than
1 year
Between
Over
Total
1 and 5
years
5 years
contractual
cash flows
Carrying
Amount
(assets)/
liabilities
At 30 June 2016
$
Trade payables
(345,763)
(345,763)
$
-
-
$
-
-
$
-
-
$
-
-
$
$
(345,763)
(345,763)
(345,763)
(345,763)
Total
Group
Less than
6 months
6 – 12
months
Less
than
1 year
Between
1 and 5
years
Over
Total
5 years
contractual
cash flows
Carrying
Amount
(assets)/
liabilities
At 30 June 2015
$
Trade payables
(242,337)
Total
(242,337)
$
-
-
$
-
-
$
-
-
$
-
-
$
$
(242,337)
(242,337)
(242,337)
(242,337)
55
Renascor Resources Limited ABN 90 135 531 341 annual report 2016
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Notes to the consolidated financial statements
3 Critical accounting estimates and judgments
Estimates and judgments 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.
Estimates and judgments are continually evaluated and are based on management’s historical
experience and knowledge of relevant facts and circumstances at that time.
The Group makes estimates and judgments concerning the future. The resulting accounting estimates
and judgments may differ from the related actual results and may have a significant effect on the
carrying amounts of assets and liabilities within the next financial year and on the amounts recognised
in the financial statements. Information on such estimates and judgments is contained in the accounting
policies and/or notes to the financial statements.
i) Exploration and evaluation expenditure
Expenditure incurred on exploration and evaluation activities have been carried forward in accordance
with Note 1 (k) on the basis that exploration and evaluation activities 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. Exploration expenditure incurred
that does not satisfy the policy stated above is expensed in the period in which it is incurred. Exploration
expenditure that has been capitalised which no longer satisfies the policy stated above is written off
in the period in which the decision is made. Details of capitalised exploration and evaluation costs are
presented in Note 11.
ii) Impairment of property, plant and equipment, deferred exploration and development expenditure and
mine properties
The Group reviews for impairment of property, plant and equipment, exploration and development
expenditure and mine properties in accordance with the accounting policy stated in note 1(i) to 1(k).
With the exception of deferred exploration (refer Note 11), the recoverable amount of these assets
has been determined based on higher of the assets’ fair value less costs to sell and value in use. These
calculations require the use of estimates and judgments.
iii) Income taxes
Judgement is required in determining not to recognise deferred tax assets for tax losses. Total unused
tax losses are shown at note 7(c).
iv) Share-based payments
Management has determined that the Black Scholes and Monte Carlo simulation models are appropriate
techniques to determine the fair value of share-based payments. These models require the use of input
assumptions, including expected volatility, expected life, expected dividend rate and expected risk-free
rate of return. The list of inputs used to calculate the fair values of share-based payments are provided in
Note 30.
4 Segment information
The Group has identified its operating segments based on the internal reports that are reviewed and
used by the Managing Director (chief operating decision maker) and the board of directors in assessing
performance determining the allocation of resources. The Group is managed primarily on a geographic
basis, that is, the location of the respective areas of interest (tenements) in Australia. Operating
segments are determined on the basis of financial information reported to the board which is at the
consolidated level. The Group does not have any products or services it derives revenue from.
Accordingly, management currently identifies the Group as having only one reportable segment, being
the exploration for copper, gold, uranium and other minerals in Australia. There have been no changes
in the operating segments during the year. 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.
56
Renascor Resources Limited ABN 90 135 531 341 annual report 2016
Notes to the consolidated financial statements
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5 Revenue and Other Income
a) Revenue
Interest income
b) Other Income
Sundry Income
Profit on sale of tenement
6 Expenses
Profit/(Loss) before income tax includes the following
specific expenses:
Depreciation
Office furniture and equipment
Computer equipment
Total depreciation
Exploration costs
Exploration expenditure incurred
Exploration expenditure written off
Finance costs - net
Interest and finance charges paid/payable for financial liabilities
not at fair value through profit or loss
Fair value gains on interest swaps cash flow hedges -
transfer from equity
Finance costs expensed
Employee benefits expense
Employee share based payments expense
Defined contribution superannuation expense
Consolidated
30 June 2016
$
30 June 2015
$
27,996
26,317
12,000
-
-
41,556
12,000
41,556
Consolidated
30 June 2016
$
30 June 2015
$
771
3,387
4,158
768
6,528
7,296
-
265,602
-
4,266,131
265,602
4,266,131
-
-
-
373,431
-
53,724
427,155
-
-
-
427,555
7,876
64,700
500,131
Minimum office lease payments
30,596
30,225
57
Renascor Resources Limited ABN 90 135 531 341 annual report 2016
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Notes to the consolidated financial statements
7 Income tax expense
a) Income tax expense:
Current tax
Deferred tax
Deferred income tax (revenue) expense included in income tax
expense comprises:
Decrease (increase) in deferred tax assets (note 12)
(Decrease) increase in deferred tax liabilities (note 16)
Consolidated
30 June 2016
$
30 June 2015
$
-
-
-
-
-
-
240,978
(240,978)
-
(849,055)
849,055
-
b) Numerical reconciliation of income tax expense to
prima facie tax payable
Profit/(Loss) from continuing operations before income tax expense
(890,079)
(4,932,426)
Tax at the Australian tax rate of 30% (2015: 30%)
(267,024)
(1,479,728)
Tax effect of amounts which are not deductible (taxable) in
calculating Taxable income:
Non-taxable income:
- Debt forgiveness
- Research and development tax concession
Non-deductible expenses:
- Entertainment
- Share-based payments
- Other
Deferred tax asset not recognised
Under / over provision for income tax
Income tax expense
c) Tax losses
Unused tax losses for which no deferred tax asset has
been recognised
Potential tax benefit @ 30%
d) Unrecognised temporary differences
Temporary differences for which deferred tax assets have not
been recognised:
Temporary differences
Potential tax benefit @ 30%
-
(36,407)
53
-
-
-
(57,283
12
2,363
-
303,377
-
1,534,636
-
267,024
1,479,728
-
-
8,780,729
7,944,562
2,634,219
2,383,369
-
-
-
-
58
Renascor Resources Limited ABN 90 135 531 341 annual report 2016
Notes to the consolidated financial statements
8 Current assets – Cash and cash equivalents
Cash at bank and in hand
a) Cash at bank and on hand
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Consolidated
30 June 2016
$
30 June 2015
$
862,488
1,075,336
Cash at bank accounts are interest bearing attracting normal market interest rates.
As funds are held with AA/AA1 to A/A1 credit rated financial institutions (as per S&P/Moody’s ratings)
there is minimal counterparty credit risk of funds held.
b) Fair value
The carrying amount for cash and cash equivalents equals the fair value.
9 Current assets – Trade and other receivables
GST refundable
Research & Development Tax Concession receivable
Sundry receivables
a) Fair value risk
Consolidated
30 June 2016
$
30 June 2015
$
33,064
121,356
300
154,720
16,998
190,942
16,863
224,803
Due to the short term nature of current receivables, their carrying amount is assessed to approximate
their fair value.
b) Credit risk
The maximum exposure to credit risk at the end of each reporting period is the carrying amount of each
class of receivables mentioned above. Refer to note 2 for more information on the risk management
policy of the Group and the credit quality of the entity’s trade receivables.
The maximum exposure to credit risk at the end of each reporting period is the carrying amount of each
class of receivables mentioned above. Refer to note 2 for more information on the risk management
policy of the Group and the credit quality of the entity’s trade receivables.
10 Non-current assets – Property, plant and equipment
Consolidated
Gross carrying amount
Balance at 30 June 2014
Additions
Depreciation charge
Balance at 30 June 2015
Additions
Depreciation charge
Balance at 30 June 2016
Computer Office furniture
equipment and equipment
$
$
10,849
3,433
(6,527)
7,755
1,849
(3,387)
6,217
2,610
-
(769)
1,841
-
(771)
1,070
Total
$
13,459
3,433
(7,296)
9,596
1,849
(4,158)
7,287
59
Renascor Resources Limited ABN 90 135 531 341 annual report 2016
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Notes to the consolidated financial statements
10 Non-current assets – Property, plant and equipment continued
Computer Equipment
Cost
Accumulated depreciation
Net book amount
Plant and Equipment
Cost
Accumulated depreciation
Net book amount
11 Non-current assets – Exploration and evaluation expenditure
Exploration and evaluation
Opening balance
Acquisitions through business combinations *
Impairments
R&D tax refund offset against capitalised exploration and evaluation #
Tenement acquisition/(sale) component of exploration and evaluation
Expenditure incurred
Closing balance
Consolidated
30 June 2016
$
30 June 2015
$
36,831
(30,614)
6,217
34,982
(27,227)
7,755
4,444
(3,374)
4,444
(2,603)
1,070
1,841
Consolidated
30 June 2016
$
30 June 2015
$
3,534,046
2,238,605
(265,603)
(121,356)
-
6,942,371
-
(4,266,131)
(190,942)
(20,944)
591,913
1,069,692
5,977,605
3,534,046
# Note: Refundable tax incentives (Research and development tax concession) are accounted for as government grants under AASB 120
Accounting for Government Grants and Disclosure of Government Assistance and offset against capitalised exploration and evaluation
expenditure.
* Note: Acquisitions through business combinations include:
1) Eyre Peninsula Minerals Pty Ltd through business combinations includes $232,160 on acquisition plus recognition of $1,767,352
fair value adjustment on consolidation.
2) Sol Jar Property Pty Ltd - asset acquisition includes $239,043 on acquisition.
Exploration and evaluation expenditure comprises of net direct costs and includes an appropriate
portion of related salaries & wages expenditure associated with each area of interest. During the
financial year the Group has allocated $461,623 of internal personnel costs (2015: $590,450) and
management fees for joint venture tenements of $45,931 (2015: $1,678) which form part of the
exploration expenditure for the year.
The recoverability of exploration and evaluation assets depends on successful developments and
commercial exploitation of tenement areas.
60
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Renascor Resources Limited ABN 90 135 531 341 annual report 2016
Notes to the consolidated financial statements
12 Non-current assets – Deferred tax assets
The balance comprises temporary differences attributable to:
Deductible temporary differences
- Accruals and other payables
- Employee benefits
- Expenses deductible over 5 years
- Investment in Subsidiary
Tax losses
Total deferred tax assets
Consolidated
30 June 2016
$
30 June 2015
$
8,027
60,827
66,553
179,970
855,532
1,170,909
6,917
63,783
58,917
-
620,345
929,932
Set off of deferred tax liabilities pursuant to set off provisions (note 16)
(1,170,909)
(929,932)
Net deferred tax assets
Movements:
Opening balance at 1 July
Credited to profit or loss
Closing balance at 30 June
13 Current liabilities – Trade and other payables
Trade payables
Sundry creditor and accrued expenses
Other payables
14 Current liabilities – Provisions
Employee benefits
-
-
929,932
240,978
1,778,987
(849,055)
1,170,909
929,932
Consolidated
30 June 2016
$
30 June 2015
$
168,819
176,944
-
345,763
42,759
199,578
-
242,337
Consolidated
30 June 2016
$
30 June 2015
$
132,007
154,979
Provision for employee benefits is made for annual leave owed as at 30 June 2016.
61
Renascor Resources Limited ABN 90 135 531 341 annual report 2016
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Notes to the consolidated financial statements
15 Non-current liabilities – Provisions
Employee benefits
Consolidated
30 June 2016
$
30 June 2015
$
70,750
57,630
Provision for employee benefits is made for long service leave as at 30 June 2016
16 Non-current liabilities – Deferred tax liabilities
The balance comprises temporary differences attributable to:
Assessable temporary differences
- Interest receivable
- Exploration and evaluation expenditure
Total deferred tax liabilities
Consolidated
30 June 2016
$
30 June 2015
$
-
1,170,910
221
929,711
1,170,910
929,932
Set off of deferred tax liabilities pursuant to set off provisions (note 12)
(1.170,910)
(929,932)
Net deferred tax liabilities
Movements:
Opening balance at 1 July
Charged to profit or loss
Closing balance at 30 June
17 Contributed equity
a) Share capital
Ordinary shares (b),(c)
Fully paid
-
-
929,932
(240,978)
1,778,987
(849,055)
1,170,910
929,932
30 June 2016
Shares
30 June 2015
Shares
30 June 2016
$
30 June 2015
$
284,466,527
194,839,488
13,235,479
11,903,316
62
Renascor Resources Limited ABN 90 135 531 341 annual report 2016
Notes to the consolidated financial statements
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17 Contributed equity continued
b) Movements in ordinary share capital:
Date
Details
Notes
Number
of shares
Issued
price
$
1 July 2014 Opening balance
136,400,000
10,803,970
3 Sep 2014 Ordinary shares issued to Currie
Resources Pty Ltd – consideration
pursuant to Currie Agreement
7 May 2015 Ordinary shares issued to
non-executive directors pursuant
to Non-Executive Directors Share Plan.
9 Jun 2015
Placement to Acorn Capital -
Ordinary shares issued.
18 Jun 2015
Institutional component of accelerated
non-renounceable entitlement offer–
Ordinary shares issued.
500,000
$0.044
22,000
1,439,488
$33,250
33,250
25,000,000
$0.02
500,000
Less: Transaction costs arising on share
issues, net of tax
30 June 2015 Balance
194,839,488
31,500,000
58,439,488
$ 0.02
630,000
1,185,250
(85,904)
11,903,316
9 Jul 2015
Retail component of accelerated
non-renounceable entitlement offer –
Ordinary shares issued.
14 Oct 2015
Ordinary shares issued to non-executive
directors pursuant to Non-Executive
Directors Share Plan.
26 Feb 2016
Consideration on acquisition of Sol Jar
Property Pty Ltd – Ordinary shares issued.
11 Apr 2016
Ordinary shares issued to non-executive
directors pursuant to Non-Executive
Directors Share Plan.
13 May 2016 Placement to Sophisticated Investors -
Ordinary shares issued.
20,950,612
$0.02
419,012
935,510
$0.018
16,752
18,000,000
$ 0.013
234,000
2,340,914
$0.021
49,748
47,400,003
89,627,039
$0.015
711,000
1,430,512
(98,349)
13,235,479
Less: Transaction costs arising on share
issues, net of tax
30 June 2015 Balance
284,466,527
c) Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the
Company in proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is
entitled to one vote, and upon a poll each share is entitled to one vote.
63
Renascor Resources Limited ABN 90 135 531 341 annual report 2016
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Notes to the consolidated financial statements
17 Contributed equity continued
d) Listed options
Consolidated
30 June 2016
$
30 June 2015
$
Balance at 30 June 2015
Issued 9 July 2015 pursuant to a Placement
Issued 9 July 2015 pursuant to Rights Issue
Issued 26 Feb 2016 as part consideration for the acquisition of
Sol Jar Property Pty Ltd.
Issued on 13 May 2015 pursuant to a Placement.
Balance at 30 June 2016
-
12,500,000
26,225,310
4,000,000
11,850,003
54,575,313
-
-
-
-
-
-
The options are listed on the ASX, have an exercise price of $0.03 per share and an expiry date of
30 September 2016.
e) Unlisted Options and performance rights
Information relating to unlisted options and performance rights issued, exercised and lapsed during the
financial year and options and performance rights outstanding at the end of the reporting period, is set out
in note 30.
f) Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going
concern while maximising the return to stakeholders through the optimisation of its capital structure
comprising equity and cash.
The Group reviews the capital structure on a semi-annual basis. As part of this review the Group
considers the cost of capital and the risks associated with each class of capital. Due to the nature of the
Group’s activities, being that of exploration, the Directors believe that the most advantageous way to
fund activities is through equity. The Group’s exploration activities are monitored against budget and
cash flow forecasts are prepared and maintained to ensure that adequate funds are available.
18 Reserves and accumulated losses
a) Reserves
Share based payments
Movements:
Share-based payments
Balance 1 July
Listed options issued
Performance rights granted
Balance 30 June
Options and performance rights granted arise from:
Amount recognised during the period for Listed Options issued
to the vendors as part of the consideration on the acquisition of
Sol Jar Property Pty Ltd (refer note 24)
Amount recognised during the period for Performance Rights/Share
Options previously issued to directors and executives
(refer note 30(a))
64
Consolidated
30 June 2016
$
30 June 2015
$
1,041,506
1,026,312
1,026,312
15,194
-
1,018,436
-
7,876
1,041,506
1,026,312
15,194
-
-
15,194
7,876
7,876
Renascor Resources Limited ABN 90 135 531 341 annual report 2016
Notes to the consolidated financial statements
18 Reserves and accumulated losses continued
b) Accumulated losses
Movements in accumulated losses were as follows:
Balance 1 July
Net loss for the year
Balance 30 June
c) Nature and purpose of reserves
i) Share-based payments
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Consolidated
30 June 2016
$
30 June 2015
$
8,517,438
890,079
3,585,012
4,932,426
9,407,517
8,517,438
The share-based payments reserve is used to recognise the fair
value of equity instruments issued to directors, executives, consultants and others.
19 Dividends
The directors did not declare a dividend for the June 2016 period.
Franking credits available for subsequent financial years
based on a tax rate of 30% (2015: 30%)
-
-
Consolidated
30 June 2016
$
30 June 2015
$
20 Key management personnel disclosures
a) Key management personnel compensation
Short-term employee benefits
Long-term benefits
Post-employment benefits
Share-based payments
b) Details of remuneration
Consolidated
30 June 2016
$
30 June 2015
$
793,567
28,116
56,204
66,500
944,387
880,522
32,208
59,788
57,751
1,030,269
Details of the remuneration of each director of the Company and each of the other key management
personnel of the Group, including their personally related entities, are set out in the remuneration report
on pages 30 to 38.
65
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Notes to the consolidated financial statements
20 Key management personnel disclosures continued
c) Other transactions with key management personnel
Mr G W McConachy and Mr C Anderson are directors of Euro Exploration Services Pty Ltd (Euro). Euro
has provided the company with exploration services, geochemical sampling services as well as the
provision of geological personnel services during the year. The services provided are based on normal
commercial terms and conditions. During the financial year the Company incurred costs of $54,134
(2015: $77,978) from Euro which has been capitalised as Exploration Expenditure during the financial
year. An amount of $5,235 (2015: $13,736) was owing to Euro at 30 June 2016.
Mr C Anderson is a director of Pondray Pty Ltd trading as CG Anderson & Associates (CGAA). CGAA has
provided geophysical services to the company. During the financial year the Company incurred costs of
$72,600 (2015: $51,150) from CGAA of which $72,600 (2015: $51,150) has been capitalised as Exploration
Expenditure during the financial year. An amount of $11,330 (2015: $6,600) was owing to CGAA at
30 June 2016.
Mr S. Bizzell is a director of Bizzell Capital Partners Pty Ltd (BCP). BCP has provided corporate advisory
and underwriting services to the company in relation to its capital raising. During the financial year the
Company incurred costs of $72,660 (2015: $15,000) from BCP which was included as a cost of the capital
raising during the financial year. An amount of $Nil (2015: $Nil) was owing to BCP at 30 June 2016.
Mr D. Christensen has an equity interest in Arion Legal. Arion Legal has provided legal services to the
company. During the financial year the Company incurred costs of $6,770 (2014: $9,690) from Arion Legal
of which $6,770 was included as a legal expense during the financial year. An amount of $Nil (2015: $Nil)
was owing to Arion Legal at 30 June 2016.
Mr R Keevers is a director and also has an equity interest in Eyre Peninsula Minerals Pty Ltd (EPM). The
Company has an agreement with EPM and EPM’s shareholders that grants the Company the option to
acquire up to 100% of EPM in exchange for exploration expenditure and shares and options in Renascor.
The Company has acquired 49% of EPM by meeting its exploration expenditure requirements and issuing
shares to EPM shareholders on 11 July 2016 (See note 26 for details). Mr Keevers received 20,195,334
shares in connection with the shares issued to EPM shareholders. On 29 August 2016, the Company
notified EPM of its intention to exercise its remaining option to acquire the balance of the issued capital
of EPM, and it is expected that this will be completed during the fourth quarter of 2016.
21 Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the Parent
Entity, and its related practices:
BDO Audit (SA) Pty Ltd
i) Audit and other assurance services
Amounts paid/payable for audit and review of financial statements
for the entity or any entity in the Group:
Total remuneration for audit and other assurance services
ii) Taxation services
Amounts paid/payable to a related practice of the auditor for tax
compliance and advisory services for the entity or any entity
in the Group:
Total remuneration for taxation services
Total auditors’ remuneration
Consolidated
30 June 2016
$
30 June 2015
$
35,579
35,579
30,300
30,300
7,076
42,655
6,929
37,229
The auditor of Renascor Resources Limited is BDO Audit (SA) Pty Ltd.
It is the Group’s policy to employ the auditors on assignments additional to their statutory audit duties
where their expertise and experience with the Group are important. These assignments are principally
for taxation advice and the services are provided by a related practice of the auditor.
66
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Notes to the consolidated financial statements
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22 Commitments and contingent liabilities
In order to maintain current rights to tenure to exploration tenements, the Group is required to perform
minimum exploration work to meet the minimum expenditure requirements specified by various State
governments. These amounts are subject to renegotiation when application for a mining lease is made
and at other times. These amounts, which are not provided for in the financial report and are expected
to be capitalised as incurred but not recognised as liabilities, are as follows:
Exploration and mining lease commitments
Commitments in relation to exploration and mining leases held at the
end of each reporting period but not recognised as liabilities, payable:
Within one year
Later than one year but not later than five years
Later than five years
Consolidated
30 June 2016
$
30 June 2015
$
1,756,447
585,259
-
1,863,988
926,958
-
2,341,706
2,790,946
To keep tenements in good standing, work programs should meet certain minimum expenditure
requirements. If the minimum expenditure requirements are not met, the Company has the option to
negotiate new terms or relinquish the tenements. The Company also has the ability to meet expenditure
requirements by joint venture or farm-in agreements.
Exploration and mining lease contingent liabilities
The Group has previously entered into Asset Sale Agreements with Hillment Pty Ltd to acquire tenement
EL 4570 and a similar agreement with Hiltaba Gold Pty Ltd for EL4707. Under each agreement, the
company has granted a 1% royalty of the Net Smelter Return. The timing and amount of any financial
effect relating to these agreements are dependent on the successful exploration and subsequent
exploitation of the associated tenements.
Non-cancellable operating lease commitments:
Within one year
Later than one year but not later than five years
Later than five years
-
-
-
-
-
-
-
-
The office lease expired on 30 November 2013. The company continues to occupy the office with rent
payable monthly in advance on a month to month basis.
23 Related party transactions
a) Parent Entities
The Parent Entity within the Group is Renascor Resources Limited.
b) Subsidiaries
Interests in subsidiaries are set out in note 24.
c) Key management personnel
Disclosures relating to key management personnel are set out in note 20.
67
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Notes to the consolidated financial statements
24 Subsidiaries
Significant 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 1(b).
Name of entity
Country of
incorporation
Kurilpa Uranium Pty Ltd
Astra Resources Pty Ltd
Sol Jar Property Pty Ltd 1
Eyre Peninsula Minerals Pty Ltd 2
Australia
Australia
Australia
Australia
Class of
Shares
Ordinary
Ordinary
Ordinary
Ordinary
Enquity holding
2016
%
100
100
100
20*
2015
%
100
100
-
-
1
The Company completed a transaction to acquire 100% of Sol Jar Property Pty Ltd, the owner of the Munglinup project, a highly prospective
graphite-nickel sulphide tenement position in the Albany-Fraser Range province of Western Australia. As consideration, the Company issued
18,000,000 ordinary shares and 4,000,000 listed options @ $0.03 expiring on 30 September 2016. For accounting purposes the Company has
treated the acquisition as an asset acquisition.
2 The Company entered into a binding agreement with Eyre Peninsula Minerals Pty Ltd (EPM) and EPM’s shareholders (EPM JV Agreement) that
granted the Company an option to acquire up to 100% of EPM in exchange for exploration expenditure and shares and options in Renascor.
EPM, in turn, has an option to acquire Ausmin Development Pty Ltd (Ausmin), an unlisted company that holds the underlying rights to the
Arno graphite project. Pursuant to the EPM JV Agreement the company managed the exploration program as agreed with EPM. The Company
completed its earn-in commitment during June 2016 and accordingly acquired 20% of EPM’s issued capital. During June 2016 the Company
notified EPM of its intention to exercise its option acquire an additional 29% of EPM’s issued capital which was completed subsequent to
year end, on 11 July 2016. Pursuant to the EPM JV Agreement the Company had a voting control over the management committee. For
accounting purposes the Company has considered that it had effective control over the activities of EPM from the 20 June 2016 and it has been
consolidated in the Company’s Financial Reports from that date. The equity in EPM is held by subsidiary, Kurilpa Uranium Pty Ltd.
Summarised Financial Information of Subsidiaries with Material Non-controlling Interests
Set out below is the summarised financial information for each subsidiary that has non-controlling interests
that are material to the Group, before any intragroup eliminations. Note that Eyre Peninsula Minerals Pty
Ltd became a controlled entity of the Group during the reporting period ending 30 June 2016
Summarised Financial Position
Current assets
Non-current assets
Current liabilities
Non-current liabilities
NET ASSETS
Carrying amount of non-controlling interests
Eyre Peninsula Minerals Pty Ltd
2016 $
2015 $
49,763
1,999,512
(49,275)
-
2,000,000
1,600,000
-
-
-
-
-
-
There was no revenue, expenditures or cash flow recorded in EPM from the period of acquisition to
30 June 2016
25 Joint Operations
Currie Joint Venture
On 5 September 2013 the Company entered into a joint venture agreement with Currie Resources Pty Ltd
(the Currie Joint Venture Agreement), an unlisted company holding exploration licence applications in the
Eyre Peninsula adjacent to the Company’s Eastern Eyre project. The Company had the ability to acquire
100% interest of two exploration licences, subject to the final grant of the licences to Currie. The two
licences, EL 5400 and EL 5401, were granted on 30 April 2014 and the Company paid Currie $25,000 and
issued 500,000 Renascor shares in exchange for a two-year option during which time the Company would
manage and fund all exploration within the optioned areas.
On 30 April 2016, marking the end of the two year option period, the Company elected to exit the Currie
Joint Venture and relinquished its option to acquire 100% interest in EL 5400 and EL 5401 from Currie
Resources Pty Ltd, resulting in the write off of $238,310 capitalised Exploration and Evaluation Expenditure.
68
Renascor Resources Limited ABN 90 135 531 341 annual report 2016
Notes to the consolidated financial statements
26 Business Combinations
Eyre Peninsula Minerals Pty Ltd
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During December 2015, the Company entered into an agreement with Eyre Peninsula Minerals Pty Ltd
(EPM) and EPM’s shareholders (EPM JV Agreement) that granted the Company an option to acquire up
to 100% of EPM in exchange for exploration expenditure and shares and options in Renascor. EPM, in
turn, has an option to acquire Ausmin Development Pty Ltd (Ausmin), an unlisted company that holds
the underlying rights to the Arno graphite project. Pursuant to the EPM JV Agreement, the Company
committed to completing $400,000 in exploration expenditure by 21 June 2016 in exchange for shares
representing 20% of the issued shares of EPM. The EPM JV Agreement grants the Company two
additional options pursuant to which the Company can increase its ownership in EPM to 100%.
During June 2016, the Company completed its initial earn-in commitment of $400,000 in exploration
expenditure acquiring 20% of EPM. The Company also exercised its option to acquire an additional 29%
of the issued shares of EPM in exchange for the issue of 38,666,667 ordinary shares in Renascor on
11 July 2016, at the closing price of $0.016 and valued $618,667 and taking the Company’s holding in
EPM to 49%.
From completion of the earn-in, the activities and strategic direction of EPM are controlled by
management committee. Pursuant to the EPM JV Agreement the Company had a voting control over
the management committee. For accounting purposes the Company has considered that it had
effective control over the activities of EPM and consolidated EPM in the Company’s Financial Reports
from 21 June 2016.
On 29 August 2016, the Company exercised its second option to acquire the remaining 51% of EPM,
subject to shareholder approval. Pursuant to the EPM JV Agreement, the consideration will be ordinary
shares to the value of $2,040,000 and 15,000,000 unlisted options with an exercise price of 5 cents per
ordinary share and expiring 3 years from the date of issue. Pursuant to the EPM JV Agreement, the
value and issue price of each share is calculated using the 20-day VWAP as at the date of exercise of the
option which has been calculated as $0.048492. Accordingly, subject to shareholder approval, Renascor
will issue 42,068,684 ordinary shares and 15,000,000 unlisted options to subscribe for fully paid
ordinary shares in Renascor with an exercise price of 5 cents per ordinary share and expiry 3 years
from the issue date.
Details of the acquisition consideration and the net assets are as follows:
Net Assets
Cash Assets
Receivables
Exploration and Evaluation Expenditure 2
Payables
Consideration
16 June 2016 - Earn-in Exploration Expenditure (20% Equity)
Non-controlling interest 1
Fair Value
$
46,876
2,887
1,999,512
(49,275)
2,000,000
400,000
1,600,000
2,000,000
1
2
An 80% interest in Eyre Peninsula Minerals Pty Ltd (EPM) is held by non-controlling interest. The fair value of the non-controlling interests
at acquisition date has been recognised at $1,600,000 which was determined with reference to the fair value of net assets of EPM at
acquisition date.
EPM’s carrying value of Exploration and Evaluation Expenditure was $232,160 at acquisition and as a result of the acquisition, a
carrying value adjustment of $1,767,352 was recognised and re-valued up the Exploration and Evaluation Expenditure to its fair value of
$1,999,512.
There was no business combination for year ended 30 June 2015.
69
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Notes to the consolidated financial statements
27 Events occurring after the reporting period
Pursuant to the EPM JV Agreement, the Company completed the exercise its first option to acquire an
additional 29% of the issued shares of EPM. On 11 July 2016 the Company issued 38,666,667 ordinary
shares in Renascor at the closing price of $0.016 valued $618,667 and taking the Company’s holding in
EPM to 49%.
On 11 July 2016, the Company issued 39,266,668 ordinary fully paid shares and 9,816,668 listed options
exercisable@ $0.03 expiring on 30 September 2016. The Shares and options completed the fundraising
initiated in May 2016 in raising a further $589,000 before costs.
On 11 July 2016, the Company issued 600,001 ordinary fully paid shares to management as a result of
the exercise of performance rights held.
On 25 August 2016, the Company issued 32,000 ordinary fully paid shares as a result of the exercise of
32,000 listed options @ $0.03 expiring on 30 September 2016
On 29 August 2016 the Company exercised its second option to acquire the remaining 51% of EPM,
subject to shareholder approval within 2 months. Pursuant to the EPM JV Agreement the consideration
will be Ordinary shares to the value of $2,040,000 plus 15,000,000 unlisted options with an exercise price
of 5 cents per ordinary share and expiry 3 years from the date of issue. The value and issue price of
each share is calculated using the 20-day VWAP as at the date of exercise of the option which has been
calculated as $0.048492. Accordingly, subject to shareholder approval, Renascor will issue 42,068,684
ordinary shares and 15,000,000 unlisted options to subscribe for fully paid ordinary shares in Renascor
with an exercise price of 5 cents per ordinary share and expiring 3 years from the issue date.
On 5 September the Company announced that it had executed an underwriting agreement that provides
the confidence that it will receive total gross proceeds of $1.9m from its listed 3 cent options expiring on
30 September 2016 (“Listed Options”). The underwriting agreement is with Bizzell Capital Partners Pty
Ltd (“BCP”), an entity associated with Stephen Bizzell (Chairman of Renascor), pursuant to which BCP has
agreed to act as Underwriter to the exercise of the Listed Options and will also have the right to act as
Lead Manager to a share placement to raise up to an additional $600,000.
28 Reconciliation of profit after income tax to net cash outflow from operating activities
Profit / (loss) for the year
Depreciation and amortisation
Profit on Sale of tenement
R&D Claim received
Write Off Exploration/Inventories
Non-cash director, executive and consultant benefits expense -
share-based payments
Change in operating assets and liabilities, net of effects from
purchase of controlled entity:
(Increase) / decrease in trade and other receivables
(Increase) / decrease in other assets
Increase / (decrease) in trade and other payables
Increase / (decrease) in provisions
Consolidated
30 June 2016
$
30 June 2015
$
(890,079)
4,158
-
190,942
265,602
(4,932,426)
7,296
(41,556)
-
4,266,131
66,500
41,126
(7,524)
7,467
47,725
(9,852)
138,258
5,064
(5,260)
78,389
Net cash inflow / (outflow) from operating activities
(325,061)
(442,977)
Non-cash financing and investing activities
Shares and options issued to Vendors of Sol Jar Property Pty Ltd for
no cash consideration in respect of Exploration and Evaluation activities
(249,394)
(22,000)
Shares issued to non-executive directors in lieu of 50% of cash
director fees from 1 April 2015 to 31 March 2016 pursuant to NEDSP
Performance rights issued to executive directors for no cash consideration
(66,500)
-
(33,250)
(7,876)
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Renascor Resources Limited ABN 90 135 531 341 annual report 2016
Notes to the consolidated financial statements
29 Earnings per share
a) Basic earnings per share
From continuing operations attributable to the ordinary owners
of the Company
Total basic earnings per share attributable to the ordinary owners
of the Company
b) Diluted earnings per share
From continuing operations attributable to the ordinary owners
of the Company
Total diluted earnings per share attributable to the ordinary
owners of the Company
c) Reconciliations of earnings used in calculating earnings per share
Basic earnings per share
Profit / (loss) attributable to the ordinary owners of the Company
used in calculating basic earnings per share
From continuing operations
d) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings per share
Adjustments for calculation of diluted earnings per share:
Options and performance rights *
Consolidated
30 June 2016
Cents
30 June 2015
Cents
(0.4)
(0.4)
(0.4)
(0.4)
(3.5)
(3.5)
(3.5)
(3.5)
Consolidated
30 June 2016
$
30 June 2015
$
(890,079)
(4,932,426)
(890,079)
(4,932,426)
Consolidated
30 June 2016
Number
30 June 2015
Number
229,059,984
139,658,005
-
-
Weighted average number of ordinary shares and potential ordinary
shares used as the denominator in calculating diluted earnings per share
229,059,984
139,658,005
* Options and performance rights are considered anti-dilutive as the Group is loss making
i) Options and performance rights
The options and performance rights have not been included in the determination of basic earnings per share.
Options and performance rights could potentially dilute earnings per share in the future. Details relating to the
options and performance rights are set out in note 30.
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Notes to the consolidated financial statements
30 Share-based payments
a) Share based payments to directors, executives and consultants
At the AGM held on 27 November 2014 and 26 November 2015, shareholders approved the Non-
Executive Directors Share Plan (NEDSP) for non-executive directors to receive up to 50% of their
compensation in shares in the Company. During the year ended 30 June 2016 the Company has issued
3,276,424 ordinary fully paid shares to the non-executive directors pursuant to the NEDSP for the twelve
month period from 1 April 2015 to 31 March 2016.
Set out below are summaries of options granted to directors, senior management and consultants:
Balance
start of
the year
Number
Granted
during
the year
Number
Exercised
during
the year
Number
Expired/
Forfeited
during
the year
Number
Balance
at end of
the year
Number
Vested &
exercisable
at end of
the year
Number
Options
Grant
date
Expiry
date
Exercise
price
Consolidated – 2016
30 Aug 2010 31 Dec 2014 $0.24
31 Dec 2014 $0.24
27 Oct 2010
Total
Weighted average exercise price
Consolidated – 2015
30 Aug 2010 31 Dec 2014 $0.24
31 Dec 2014 $0.24
27 Oct 2010
Total
-
-
-
$-
1,000,000
700,000
1,700,000
Weighted average exercise price
$0.24
-
-
-
$-
-
-
-
$-
-
-
-
$-
-
-
-
$-
-
-
-
$-
(1,000,000)
(700,000)
(1,700,000)
$0.24
-
-
-
$-
-
-
$-
-
-
-
$-
-
-
-
$-
1,700,000 share options expired on 31 December 2014 and no contractual life of the above share options
remains at the end of the period. (2015: nil years).
There was no amount of the equity settled share-based payment recognised in the current period in
respect of the options granted above to directors and executives (2015: $Nil).
There was no amount of the equity settled share-based payment recognised in the current period in
respect of the options granted above to consultants (2015: $Nil). Amounts previously recognised have
been included under administration and consulting expense in the statement of profit or loss and other
comprehensive income.
Set out below are summaries of performance rights granted to directors and senior management:
Balance
start of
the year
Number
Granted
during
the year
Number
Exercised
during
the year
Number
Lapsed
during
the year
Number
Balance
at end of
the year
Number
Vested &
exercisable
at end of
the year
Number
Performance rights
Grant
date
Expiry
date
Exercise
price
Consolidated – 2016
28 Feb 2014 28 Feb 2021
30 Nov 2012 30 Nov 2019
$Nil
$Nil
Total
116,667
550,000
666,667
Consolidated – 2015
28 Feb 2014 28 Feb 2021
30 Nov 2012 30 Nov 2019
Total
$Nil
$Nil
274,167
1,292,500
1,566,667
-
-
-
-
-
-
-
-
-
-
-
-
(11,666)
(55,000)
105,001
495,000
105,001
495,000
(66,666)
600,001
600,001
(157,500)
(742,500)
116,667
550,000
40,834
192,500
(900,000)
666,667
233,334
There was no weighted average remaining contractual life of the above performance rights outstanding at the
end of the period (2015: 4.90 years).
There was no equity settled share-based payment expense recognised in the current period in respect of the
performance rights granted above to directors and executives (2015: $7,876). Any amounts recognised are
included under employee benefits expense in the statement of profit or loss and other comprehensive income.
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Notes to the consolidated financial statements
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30 Share-based payments continued
b) Exploration and evaluation share based payments
During the year ended 30 June 2016, the Company issued 18,000,000 ordinary shares and 4,000,000
listed options @ $0.03 and expiring on 30 September 2016, as consideration for the acquisition of Sol
Jar Property Pty Ltd, the owner of the Munglinup project, a highly prospective graphite-nickel sulphide
tenement position in the Albany-Fraser Range province of Western Australia.
The amount of the equity settled share-based payment recognised in the current period in respect of the
ordinary shares issued is $234,000 (2014: $22,000). Amounts previously recognised have been included as
exploration and evaluation expenditure within the non-current assets in the statement of financial position.
Set out below are summaries of the granted options:
Options
Grant
date
Expiry
date
Exercise
price
2016
Consolidated – Listed Options
26 Feb 2016
30 Sep 2016 $0.03
2016
Consolidated – Unlisted Options
20 Dec 2010
30 Apr 2012
17 Feb 2015 $0.24
30 Apr 2016 $0.054
Total
Balance
start of
the year
Number
Granted
during
the year
Number
Exercised
during
the year
Number
Forfeited
during
the year
Number
Balance
at end of
the year
Number
Vested &
exercisable
at end of
the year
Number
-
4,000,000
-
750,000
-
-
750,000
4,000,000
-
-
-
-
-
4,000,000
4,000,000
-
(750,000)
-
-
-
(750,000)
4,000,000
4,000,000
Weighted average exercise price
$0.054
$0.03
$-
$0.054
$0.03
$0.03
Options
Grant
date
Expiry
date
Exercise
price
Balance
start of
the year
Number
Granted
during
the year
Number
Exercised
during
the year
Number
Forfeited
during
the year
Number
Balance
at end of
the year
Number
Vested &
exercisable
at end of
the year
Number
2015
Consolidated – Listed Options
-
-
-
-
2015
Consolidated – Unlisted Options
20 Dec 2010
30 Apr 2012
17 Feb 2015 $0.24
30 Apr 2016 $0.054
Total
750,000
750,000
1,500,000
-
-
-
-
Weighted average exercise price
$0.147
$-
-
-
-
-
-
-
-
$-
(750,000)
-
-
750,000
-
750,000
(750,000)
750,000
750,000
$0.24
$0.054
$0.054
The weighted average remaining contractual life of the above share options outstanding at the end of
the period was 0.25 years (2015: 0.84 years).
The amount of the equity settled share-based payment recognised in the current period in respect of
the options granted above $15,194 (2015: $Nil). Amounts are recognised and included as exploration
and evaluation expenditure within the non-current assets in the statement of financial position.
c) Equity raising share based payments
There were no equity raising share based payments during the year ended 30 June 2016.
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Notes to the consolidated financial statements
30 Share-based payments continued
d) Fair value of performance rights granted
The assessed fair value at grant date of options is allotted equally over the period from grant date to
vesting date. Fair values of options at grant date are determined using the Black-Scholes Model. This
option pricing model takes into account the exercise price, the term of the option, the vesting and
performance criteria, the impact of dilution, the non-tradable nature of the option, the share price at
grant date, expected price volatility of the underlying share, the expected dividend yield and the risk free
interest rate for the term of the option (refer to table below for inputs used).
The following table lists the inputs to the models used to value options for the year ended 30 June 2016:
Black Scholes Model inputs
Options grant date
Options expiry date
Weighted average exercise price
Weighted average life of the options
Weighted average underlying share price
Expected share price volatility
Weighted average risk free interest rate
Number of options issued
Value (Black-Scholes) per option
Total value of options issued
e) Fair value of performance rights granted
Sol Jar
01/10/2016
30/09/2016
$0.30
1 years
$0.14
123.26%
1.98%
4,000,000
$0.0038
$15,194
Non-market related performance rights
The assessed fair value at grant date of performance rights with non-market related vesting conditions
were valued using the Black-Scholes model. The values derived from these models are allotted equally
over the period from grant date to vesting date. The expense recognised is adjusted to reflect the number
of rights for which the related service and non-market performance conditions are expected to be met,
such that the amount ultimately recognised as an expense is based on the number of awards that meet
the related service and non-market performance conditions at the vesting date.
Market related performance rights granted
The assessed fair value at grant date of performance rights is allotted equally over the period from
grant date to vesting date. Fair values at grant date are determined using Monte Carlo Simulation. This
method involves the use of a computer model to represent the operation of a complex financial system.
A characteristic of the Monte Carlo Simulation is the generation of a large number of random samples
from a specified probability distribution or distributions to represent the role of risk in the market. Monte
Carlo simulates the path of the share price according to a probability distribution assumption. After a large
number of simulations, the arithmetic average of the outcomes, discounted to the pricing date, is calculated
to represent the performance right value. Monte Carlo Simulation is an approach that can accommodate
complex exercise conditions. In particular, it can be used when the portion of options exercised depends on
some function of the whole path followed by the share price, rather than just its value at expiry.
The board determines the number of vested performance rights as at the test date based on assessment
of achievement of the market based performance conditions.
If the performance conditions have not been met, performance rights lapse and do not carry forward
to the next test date. Performance rights that have not previously been exercised may lapse for a
controllable event which causes cessation of employment.
f) General terms and conditions
All of these options and performance rights were issued by the Company and entitle the holder to
one ordinary share in the Company for each option and performance rights that may be exercised.
The options and performance rights were granted for no consideration. Once vested the options and
performance rights can be exercised at any time up to the expiry date. Options and performance rights
granted carry no dividend or voting rights.
During the year covered by the above tables, 4,000,000 listed options were granted, 750,000
unlisted options expired, 433,333 performance rights vested and became exercisable and 66,666
performance rights lapsed.
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Renascor Resources Limited ABN 90 135 531 341 annual report 2016
Notes to the consolidated financial statements
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31 Parent Entity financial information
a) Summary financial information
The individual financial statements for the Parent Entity show the following aggregate amounts:
Statement of Financial Position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Contributed equity
Share-based payment reserves
Retained earnings
Total equity
Profit / (loss) for the year
Total comprehensive income
Parent entity
30 June 2016
$
30 June 2015
$
983,082
4,659,611
1,323,394
3,792,527
5,642,693
5,115,921
428,496
70,750
454,946
397,316
57,630
454,946
5,143,448
4,660,975
13,235,479
1,041,506
(9,133,537)
11,903,316
1,026,312
(8,268,653)
5,143,448
4,660,975
(864,884)
(4,928,730)
(864,884)
(4,928,730)
b) Contingent liabilities of the Parent Entity
The Parent Entity has entered into Asset Sale Agreements with Hillment Pty Ltd to acquire tenement
EL 4570 and a similar agreement with Hiltaba Gold Pty Ltd for EL4707. Under each agreement, the
company has granted a 1% royalty of the Net Smelter Return. The parent entity did not have any other
contingent liabilities as at 30 June 2016.
c) Contractual commitments for the acquisition of property, plant or equipment
As at 30 June 2016, the Parent Entity had no contractual commitments for the acquisition of property,
plant or equipment.
d) Guarantees
As at 30 June 2016, the Parent Entity had not guaranteed the debts of any subsidiary Company.
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Notes to the consolidated financial statements
32 Application of new and revised Accounting Standards
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but
are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting
period ended 30 June 2016. The consolidated entity’s assessment of the impact of these new or amended
Accounting Standards and Interpretations, most relevant to the consolidated entity, are set out below.
Standard/Interpretation
beginning on or after
financial year ending
Likely impact
Effective for annual
Expected to be
reporting periods
initially applied in the
AASB 9 ‘Financial Instruments’
1 January 2018
30 June 2019
The Group is yet to undertake a detailed
(December 2014), AASB 2014-7
‘Amendments to Australian
Accounting Standards arising
from AASB 9’ (December 2014)
assessment of the impact of AASB 9. However,
based on the entity’s preliminary assessment,
the Standard is not expected to have a material
impact on the transactions and balances
recognised in the financial statements. when it
is first adopted 30 June 2019
AASB 15 Revenue from
1 January 2018
30 June 2019
The Group is yet to undertake a detailed
contracts with customers,
AASB 2014-5 Amendments to
Australian Accounting
Standards arising from
AASB 15
AASB 2014-3 ‘Accounting for
1 January 2016
30 June 2017
acquisitions of interests in joint
operations’
AASB 2014-10 ‘Amendments to
1 January 2016
30 June 2017
Australian Accounting Standards
– Sale or Contribution of Assets
between an Investor and its
Associate or Joint Venture’
AASB 2015-1 ‘Amendments to
1 January 2016
30 June 2017
Australian Accounting Standards
– Annual Improvements to
Australian Accounting Standards
2012-2014
assessment of the impact of AASB 15. However,
based on the entity’s preliminary assessment,
the Standard is not expected to have a material
impact on the transactions and balances
recognised in the financial
statements when it is first adopted.
There will be no impact on the financial
statements when these amendments are first
adopted because they apply prospectively to
acquisitions of interests in joint operations.
There will be no impact on the financial
statements when these amendments are first
adopted because they apply prospectively to
sales or contributions of assets occurring after
the application date.
When these amendments are first adopted
there will be no material impact on the
transactions and balances recognised in the
financial statements.
AASB 2015-2 ‘Amendments
1 January 2016
30 June 2017
These amendments affect presentation and
to Australian Accounting
Standards – Disclosure Initiative:
Amendments to AASB 101’
disclosures only. Therefore on first time
adoption of these amendments on 1 July 2016,
comparatives will need to be restated in line
with presentation and note ordering.
AASB 16 Leases
1 January 2019
30 June 2020
The entity is yet to undertake a detailed
assessment of the impact of AASB 16. However,
based on the entity’s preliminary assessment,
the Standard is not expected to have a material
impact on the transactions and balances
recognised in the financial statements when it
is first adopted.
76
Renascor Resources Limited ABN 90 135 531 341 annual report 2016
Directors’ declaration
In the directors’ opinion:
a) the financial statements and notes set out on pages 42 to 76 are in accordance with the
Corporations Act 2001, including:
i) complying with Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting requirements, and
ii) give a true and fair view of the Group’s financial position as at 30 June 2016 and of its
performance for the financial year ended on that date, and
b) the remuneration disclosures included on pages 30 to 38 of the directors’ report (as part
of the audited Remuneration Report) for the year ended 30 June 2016, comply with section
300A of the Corporations Act 2001.
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
Note 1(a) confirms that the financial statements also comply with International Financial
Reporting Standards as issued by the International Accounting Standards Board.
The directors have been given the declarations by the Managing Director and Chief Financial
Officer required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
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David Christensen
Director
Adelaide
Date: 30 September 2016
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Independent auditor’s report to members
Tel: +61 8 7324 6000
Fax: +61 8 7324 6111
www.bdo.com.au
Level 7, BDO Centre
420 King William St
Adelaide SA 5000
GPO Box 2018, Adelaide SA 5001
AUSTRALIA
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF RENASCOR RESOURCES LIMITED
Report on the Financial Report
We have audited the accompanying financial report of Renascor Resources Limited, which comprises
the consolidated statement of financial position as at 30 June 2016, the consolidated statement of
profit or loss and other comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year then ended, notes comprising a summary of
significant accounting policies and other explanatory information, and the directors’ declaration of
the consolidated entity comprising the company and the entities it controlled at the year’s end or
from time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement,
whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting
Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with
International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the
company’s preparation of the financial report that gives a true and fair view in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made
by the directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001,
which has been given to the directors of Renascor Resources Limited, would be in the same terms if
given to the directors as at the time of this auditor’s report.
BDO Audit (SA) Pty Ltd ABN 33 161 379 086 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (SA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for
the acts or omissions of financial services licensees).
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Independent auditor’s report to members
Opinion
In our opinion:
(a) the financial report of Renascor Resources Limited is in accordance with the Corporations Act
2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June
2016 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
(b) the financial report also complies with International Financial Reporting Standards as disclosed
in Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 6 to 13 of the directors’ report for the
year ended 30 June 2016. The directors of the company are responsible for the preparation and
presentation of the Remuneration Report in accordance with section 300A of the Corporations Act
2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit
conducted in accordance with Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Renascor Resources Limited for the year ended 30 June
2016 complies with section 300A of the Corporations Act 2001.
BDO Audit (SA) Pty Ltd
Michael Haydon
Director
Adelaide, 30 September 2016
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Renascor Resources Limited Shareholder information 30 June 2016
The shareholder information set out below was applicable as at 1 September 2016.
A. Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
Holding
1 – 1000
1,001 – 5,000
5,001 – 10,000 *
10,001 – 100,000
100,001 and over
Ordinary Shares Unlisted Options
Listed Options
14
20
74
471
388
967
–
–
–
–
–
–
2
13
7
59
86
167
* Holdings of 10,000 shares or less is regarded as holding less than a marketable parcel of securities.
B. Equity security holders: Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
Quoted equity securities
Name
1 Mr Richard Edward Keevers
2 David Christensen
3 Slri Pty Limited
4 Casalamada Pty Ltd
5 Rookharp Investments Pty Limited
6 St Lucia Resources Capital Fund Pty Limited
7 Mr David Vigolo
8 Cannc Consulting Pty Ltd
9 Douglas Ian Young
10 Geoffrey William Mcconachy
11 Bizzell Nominees Pty Ltd
12 Clasm Pty Ltd
13 Mr John Stephen Finnemore & Mrs Leigh Finnemore
14 Dr Leon Eugene Pretorius
15 CPS Control Systems Pty Limited
16 M & K Korkidas Pty Ltd
17 Mr Steven Vigolo
18 Andrew Robert Joseph Martin
19 Mrs Tracey Ann Mezzino
20 Mr Gregory Michael Josephson & Mrs Mary Margaret Josephson
Total
80
Ordinary Shares
Number held
18,717,627
12,200,000
11,000,000
10,300,000
10,000,000
9,000,000
8,200,000
8,033,333
7,881,102
7,959,667
6,758,333
5,500,000
5,166,667
5,000,000
4,444,445
4,062,097
3,915,000
3,834,988
3,250,000
3,231,422
Percentage of
issued Shares
5.16%
3.36%
3.03%
2.84%
2.75%
2.48%
2.26%
2.21%
2.17%
2.19%
1.86%
1.52%
1.42%
1.38%
1.22%
1.12%
1.08%
1.06%
0.90%
0.89%
147,788,014
40.71%
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Renascor Resources Limited Shareholder information 30 June 2016
B. Equity security holders (continued)
Quoted equity securities (continued)
Name
1 M & K Korkidas Pty Ltd
2 Mr Gregory Michael Josephson & Mrs Mary Margaret Josephson
3 Wythenshawe Pty Ltd
4 Idinoc Pty Ltd
5 Mr Steven John Larkins & Mrs Ann Kathleen Larkins
6 Mr John Stephen Finnemore & Mrs Leigh Finnemore
7 CPS Control Systems Pty Limited
8 Casalamada Pty Ltd
9 Master Terrence Vogiatzis
10 Mr David Phillip Bamford
11 Mr Luke Milojevic
12 Mr Peter Howarth
13 Rookharp Investments Pty Limited
14 Howarth Super Pty Ltd
15 Clasm Pty Ltd
16 Mr John Colin Loosemore & Mrs Susan Marjory Loosemore
17 Martin Place Securities Staff Superannuation Fund Pty Ltd
18 Mr Brian Carl Bartels & Mrs Angela Bartels
19 Gibson Constructions Pty Ltd
20 Andrew Robert Joseph Martin
Total
Unquoted equity securities
Performance Rights
Share options
There are no unlisted Performance Rights or unlisted options on issue.
Listed Options
Number held
Percentage of
listed Options
6,331,051
5,706,947
5,000,000
3,520,000
1,750,000
1,666,667
1,666,667
1,500,000
1,423,000
1,320,000
1,267,462
1,100,000
1,000,000
1,000,000
1,000,000
1,000,000
875,000
833,333
833,333
791,667
9.84%
8.87%
7.77%
5.47%
2.72%
2.59%
2.59%
2.33%
2.21%
2.05%
1.97%
1.71%
1.55%
1.55%
1.55%
1.55%
1.36%
1.29%
1.29%
1.23%
39,585,127
61.51%
Number on
issue/granted
Number
of holders
N/A
N/A
N/A
N/A
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Renascor Resources Limited Shareholder information 30 June 2016
C. Substantial holders
Substantial holders in the Company are set out below:
Name
Andrew Martin + Related Interests
Richard Keevers + Related Interests
Total
D. Voting rights
Ordinary Shares
Number held
Percentage
23,834,988
20,195,334
44,030,322
6.57%
5.56%
12.13%
The voting rights attaching to each class of equity securities are set out below:
a) Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and
upon a poll each share shall have one vote.
b) Options and Performance Rights
No voting rights.
E. Restricted securities
There were 38,666,667 ordinary shares, subject to voluntary escrow, on issue as at 1 September 2016.
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Renascor Resources Limited Shareholder information 30 June 2016
F. Interests in Tenements
The Group held the following interests in tenements as at 1 September 2016:
Tenement
Name
% Interest
Application Grant Date
Expiry Date
Lodged
South Australia
EL 5822 (Prev EL4721)
Iron Baron, SA
EL 5012
EL 5236
Cultana, SA
Old Wartaka, SA
EL 4675 2 (ELA2016/21) Gairdner, SA
EL 4836
Lake Harris, SA
EL 5733 (Prev EL4570) Warrior, SA
EL 4707 2 (ELA2015/234) Carnding, SA
EL 4822 1
EL 5586
EL 5585
EL 5584
EL 5228
EL 5322
Willouran, SA
Callana Area, SA
Cutana, SA
Outalpa, SA
Wompinie, SA
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
Lake Callabonna, SA
100 %
EL 5204 #
Malbrom, SA
EL 5495 #
Lipson Cove, SA
EL 5618 #
Verran, SA
EL 5715 #
Malbrom West, SA
0% - option to earn
100% interest
0% - option to earn
100% interest
0% - option to earn
100% interest
0% - option to earn
100% interest
# Tenement Holder – Ausmin Development Pty Ltd
1 Tenement under renewal – Form 29 lodged with Department of State Development (DSD)
2 Tenement under subsequent renewal – Form 29 lodged with DSD
Western Australia
E74/517
E74/518
E74/523
E74/531
E74/538
E74/544
E74/545
Munglinup Project, WA
100 %
Munglinup Project, WA
100 %
Munglinup Project, WA
100 %
Munglinup Project, WA
100 %
Munglinup Project, WA
100 %
Munglinup Project, WA
100 %
Munglinup Project, WA
100 %
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
04-Apr-16
03-Apr-18
13-Sep-12
12-Sep-17
08-May-13 07-May-17
22-Feb-11
21-Feb-16 2
15-Feb-12
14-Feb-17
21-Sep-15
21-Sep-17
28-Mar-11 27-Mar-16 2
17-Jan-12
16-Jan-16 1
07-Apr-15
06-Apr-17
10-Dec-09
09-Dec-16
10-Dec-09
09-Dec-16
01-May-13 30-Apr-17
16-Jul-12
15-Jul-17
05-Apr-13
04-Apr-18
29-Sep-14
28-Sep-19
29-Jan-15
28-Jan-20
05-Feb-16
04-Feb-21
12-Mar-12
11-Mar-17
03-Jul-12
02-Jul-17
18-Sep-12
17-Sep-17
26-Aug-13
25-Aug-18
04-Jul-14
03-Jul-19
04-Jul-14
03-Jul-19
04-Jul-14
03-Jul-19
Northern Territory
ELA27517
ELA27518
Nirripi Nth, NT
0 (Application) 29-Jul-09
Nirripi West, NT
0 (Application) 29-Jul-09
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-
-
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83
Renascor Resources Limited annual report 2016
ASX Code:
RNU
Share Registry
Link Market Services Limited
ANZ Building
Level 15, 324 Queen Street
Brisbane Qld 4000
Phone: +61 2 8280 7454
Fax: +61 2 92870303
Auditors
BDO Audit (SA) Pty Ltd
Level 7, BDO Centre
420 King William Street
Adelaide SA 5000
Phone: +61 8 7324 6000
Fax: +61 8 7324 6111
Renascor Resources Limited
ABN 90 135 531 341
Directors
Stephen Bizzell
David Christensen
Geoffrey McConachy
Andrew Martin
Chris Anderson
Richard Keevers
Secretary
Angelo Gaudio
Administration and Registered Office
36 North Terrace
Kent Town SA 5067
Phone: + 61 8 8363 6989
Fax: +61 8 8363 4989
Website: www.renascor.com.au
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