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2023 ReportAnnual Financial Report 2007 Rex Minerals Limited Rex Minerals Limited (ACN 124 960 523) Annual Financial Report For the period from incorporation to 30 June 2007 Page 1 of 27 Annual Financial Report 2007 Rex Minerals Limited PAGE NO.: 3 4 9 10 11 12 13 24 25 26 CONTENTS Corporate Directory Directors’ Report Income Statements Balance Sheets Statements of Cash Flows Statements of Changes in Equity Notes to the Financial Statements Directors’ Declaration Independence Declaration Independent Audit Report to the Members of Rex Minerals Limited Page 2 of 27 Annual Financial Report 2007 Rex Minerals Limited CORPORATE DIRECTORY EXECUTIVE DIRECTORS Steven Olsen (Managing Director) NON-EXECUTIVE DIRECTORS Paul Chapman (Chairman) Richard Laufmann COMPANY SECRETARY Amber Rivamonte PRINCIPAL & REGISTERED OFFICE 30 Merino Drive ALFREDTON VIC 3350 Email: info@rexminerals.com.au AUDITORS KPMG Level 31, Central Park 152-158 St George’s Terrace PERTH WA 6000 SHARE REGISTRARS C/- Rex Minerals Limited PO Box 626W BALLARAT WEST VIC 3350 Email: info@rexminerals.com.au BANKERS ANZ Banking Group Limited 927 Sturt Street BALLARAT VIC 3350 Page 3 of 27 Annual Financial Report 2007 Rex Minerals Limited DIRECTORS' REPORT Your directors present their report on Rex Minerals Limited (“the Company” or “Rex Minerals”) and its wholly owned subsidiaries (“the Group”) for the period from incorporation to 30 June 2007. DIRECTORS The names of directors in office at any time during or since the end of the period are: Paul Chapman (appointed 18 April 2007) Richard Laufmann (appointed 16 May 2007) Steven Olsen (appointed 13 May 2007) Prudence Chapman (appointed 18 April 2007, resigned 13 May 2007) Andrew Chapman (appointed 18 April 2007, resigned 16 May 2007) PRINCIPAL ACTIVITIES The principal activity of the Group is minerals exploration. There were no significant changes in the nature of the Group’s principal activities during the financial period. OPERATING RESULTS The loss of the Group for the financial period, after providing for income tax amounted to $10,548. DIVIDENDS PAID OR RECOMMENDED The directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a dividend to the date of this report. REVIEW OF OPERATIONS Highlights during this period include the following: • • • On 18 April 2007, the Company was incorporated in Western Australia. On 4 May 2007, the Company entered into an agreement with Sedimentary Holdings Limited (“Sedimentary”) to purchase the St. Arnaud Gold Project in Victoria (“the Sedimentary Agreement”). Under the Sedimentary Agreement, Rex Minerals acquired EL4914 and Sedimentary’s rights under the option to purchase agreement with Glenelg Mining Pty Ltd (“the Glenelg Option”) and the joint venture agreement with Goldsearch Ltd (“the St Arnaud East Joint Venture”). The purchase consideration for the St. Arnaud Gold Project comprised the issue of 2,000,000 shares in Rex Minerals to AuSelect Limited. This transaction was completed on 18 June 2007. The St. Arnaud Gold Project is subject to native title claim. During the period the Company raised seed capital for the purpose of proceeding to an Initial Public Offering subsequent to 30 June 2007. Page 4 of 27 Annual Financial Report 2007 Rex Minerals Limited DIRECTORS' REPORT SIGNIFICANT CHANGES IN STATE OF AFFAIRS Rex Minerals was incorporated on 18 April 2007. On 31 May 2007, the Company issued 9,500,000 shares to founders and management of Rex Minerals as follows: • at $0.01 each to raise a gross $50,000; and • at $0.001 each to raise a gross $450. In addition, on 31 May 2007, the Company issued 3,500,000 options to founders and management of Rex Minerals at an exercise price of $0.25, exercisable at any time prior to 30 June 2011. On 4th May, 2007, Rex Minerals (Victoria) Ltd (a wholly owned subsidiary of Rex Minerals) entered into an agreement with Sedimentary Holdings for the purchase of their St Arnaud licences and associated agreements for 2.0Mill shares in Rex Minerals Ltd. FUTURE STRATEGY The primary objective of Rex Minerals is to explore its tenements for potential gold and base metals mineralisation. SUBSEQUENT EVENTS Subsequent to 30 June 2007 the following events have occurred: • On 2 July 2007, the Company entered into an agreement with Avoca Resources Limited (“Avoca”) to purchase the Cowell and Moonta Projects in South Australia (“the Avoca Agreement”). Under the Avoca Agreement, Rex Minerals acquired Avoca’s joint venture interest in the Cowell Project (EL’s 3016, 3148, 3418 and ELA 150/02) and a 100% interest in the Moonta Project (EL’s 3116 and 3459 and ELA’s 143/07, 144/07 and 142/07). The purchase consideration for the Cowell and Moonta Projects comprised the issue of: o 6,000,000 shares in Rex Minerals; and o 1,000,000 options in Rex Minerals at an issue price of nil and an exercise price of $0.30, exercisable at any time prior to 30 June 2011. Completion of this transaction is subject to Rex Minerals achieving an ASX listing prior to 2 December 2007. The majority of the Moonta projects are on Freehold land and not subject to native title. Some parts of the Cowell project may be subject to native title with various land owner rights unresolved in the Cowell project area. • On 18 July 2007, the Company entered into an agreement with Lihir Australian Holdings Pty Ltd and Ballarat West Goldfields Pty Ltd (“Lihir”) to purchase the North Creswick Gold Project in Victoria (“the Lihir Agreement”). Under the Lihir Agreement, Rex Minerals acquired EL 4920. The purchase consideration for the North Creswick Gold Project comprised the following: o the issue to Lihir of 1,000,000 shares in Rex Minerals; Page 5 of 27 Annual Financial Report 2007 Rex Minerals Limited o the preferential allocation upon ASX listing to Lihir of 6,000,000 shares in Rex Minerals at a maximum subscription price of $0.25 per share; and o a 2% net smelter royalty. Completion of this transaction is subject to Rex Minerals achieving an ASX listing prior to 17 January 2008. Ballarat West Goldfields has entered into a regional Indigenous Land Use Agreement (ILUA), with the native title claiments at Nth Creswick. • On 20 July 2007, the Company entered into an agreement with Goldsearch Ltd (“Goldsearch”) to purchase Goldsearch’s interest in the St Arnaud East Joint Venture in Victoria (“the Goldsearch Agreement”). The purchase consideration for Goldsearch’s interest in the St Arnaud East Joint Venture comprised the following: o the issue to Goldsearch of 500,000 shares in Rex Minerals; o 500,000 options in Rex Minerals at an issue price of $0.01 and an exercise price of $0.30, exercisable at any time prior to 30 June 2011. Goldsearch has entered into a regional ILUA with the native title claimants on their St Arnaud licence (EL4669). • On 23 July 2007, the Company entered into an agreement with Titeline Drilling Pty Ltd (“Titeline”) to supply the Group with dedicated drilling services for approximately 30 months (“the Titeline Agreement”). The main terms of the Titeline Agreement are as follows: o Initial payment for 72 days drilling of $1 million; and o For each subsequent 100 days of drilling up to a maximum of 600 days, the issue of 1,000,000 ordinary shares in Rex Minerals (maximum of 6,000,000 ordinary shares).. Completion of this transaction is subject to Rex Minerals achieving an ASX listing. ENVIRONMENTAL ISSUES The Company is aware of its environmental obligations with regards to its exploration activities and ensures that it complies with all regulations when carrying out any exploration work. Page 6 of 27 Annual Financial Report 2007 Rex Minerals Limited DIRECTORS' REPORT INFORMATION ON DIRECTORS Mr Paul Chapman (Age 48) - Non Executive Chairman (B.Comm, ACA, Grad. Dip. Tax, CFTP(Snr), MAICD, SAFin) Mr Paul Chapman is a chartered accountant and has over twenty years resources experience gained in Australia and the US. He has worked in a number of commodity businesses including gold, nickel, manganese, bauxite/alumina and oil/gas. Mr Chapman has held senior management roles in public companies of various sizes and is Chairman of ASX listed uranium explorer Encounter Resources Ltd, a director of Albidon Ltd and chairman of unlisted explorer Silver Lake Resources Ltd. Mr Steven Olsen (Age 37) - Managing Director (B.Sc(Hons), M.Sc.(MinEx), Grad. Dip (F&I), MAusIMM) Mr Steven Olsen has worked as a mine geologist and exploration geologist over the past 14 years, predominantly in Western Australia and Canada, on nickel and gold deposits. Mr Steven Olsen has had continued exploration success for both nickel and gold mineralisation throughout his career. From 2002 to 2007, Mr Steven Olsen was Chief Geologist at Ballarat Goldfields NL (BGF), leading the geological team at BGF which developed a highly successful geological model creating a Resource base of 1.4Mozs and the ongoing conversion of exploration targets to Resources. The technical geological success at BGF was the foundation of the Company’s growth with its market capitalisation growing from $10 million in 2002 to over $350 million at the time of the merger between BGF and Lihir Gold Limited in March 2007. Mr Steven Olsen’s qualifications include a B.Sc. (Hons) University of Melbourne, a Masters in Mineral Exploration from Queens University, Ontario and a Graduate Diploma of Applied Finance and Investment from the Securities Institute of Australia. Mr Richard Laufmann (Age 44) - Non Executive Director (B.Eng (Mining), MAusIMM, MAICD) Mr Richard Laufmann is a mining engineer with a proven track record in the resources sector both in Australia and overseas. He was Managing Director of Ballarat Goldfields NL from 2002 until 2007, at which time Ballarat Goldfields merged with Lihir Gold Limited. Mr Laufmann also previously led WMC Resources Limited's Gold Business as General Manager - Operations. His extensive operational experience includes three years as General Manager of St Ives Gold in Western Australia. Mr Laufmann is currently the Managing Director of Indophil Resources, an ASX listed company operating in the Philippines. COMPANY SECRETARY Ms Amber Rivamonte (Age: 35) CPA, B. Bus (Acc) Appointed 13 July 2007 Amber was appointed to the position of company secretary in July 2007. Ms. Rivamonte previously held the role of company secretary for four years at Ballarat Goldfields NL and has over 14 years experience in the financial management of public listed exploration companies. Page 7 of 27 Annual Financial Report 2007 Rex Minerals Limited DIRECTORS' REPORT MEETINGS OF DIRECTORS The number of directors' meetings (including committees) held during the financial year each director held office and the number of meetings attended by each director are: Director Paul Chapman Steven Olsen Richard Laufmann Prudence Chapman Andrew Chapman Directors’ Meetings Meetings Attended Number Eligible to Attend 6 4 2 2 2 6 4 2 2 4 OPTIONS At the end of the financial period, 3,500,000 options at an exercise price of $0.25, expiring on 30 June 2011, were issued over unissued ordinary shares in the Company. INDEMNIFYING OFFICERS In accordance with the constitution, except as may be prohibited by the Corporations Act 2001, every officer or agent of the Company shall be indemnified out of the property of the Company against any liability incurred by him in his capacity as officer or agent of the Company or any related corporation in respect of any act or omission whatsoever and howsoever occurring or in defending any proceedings, whether civil or criminal. PROCEEDINGS ON BEHALF OF COMPANY No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any proceeding to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year. AUDITOR’S INDEPENDENCE DECLARATION The lead auditor’s independence declaration for the period ended 30 June 2007 has been received and forms part of the director’s report and can be found on page 25 of the financial report. NON AUDIT SERVICES No non-audit services were performed during the year by the entity’s auditors. This report is made in accordance with a resolution of the directors. Paul I. Chapman Chairman 25 July 2007 Page 8 of 27 Annual Financial Report 2007 Rex Minerals Limited INCOME STATEMENTS For the Period from 18 April 2007 to 30 June 2007 REVENUES Administration Expenses Prospectus Expenses Exploration Expenditure Incorporation Fees Marketing Expenses Travel & Accommodation Notes Company $ Group $ - - (3,820) (3,820) (301) - (301) (250) (880) (1,680) (2,754) (2,754) (1,743) (1,743) LOSS BEFORE INCOME TAX EXPENSE (9,498) (10,548) Income Tax Benefit / (Expense) 2 - - NET LOSS (9,498) (10,548) NET LOSS ATTRIBUTABLE TO MEMBERS OF REX MINERALS LIMITED (9,498) (10,548) Basic loss per share (cents per share) 13 (0.001) The accompanying notes form part of these financial statements. Page 9 of 27 Annual Financial Report 2007 Rex Minerals Limited BALANCE SHEETS As at 30 June 2007 Notes Company $ Group $ CURRENT ASSETS Cash Assets Receivables Other TOTAL CURRENT ASSETS NON-CURRENT ASSETS Exploration & Evaluation Expenditure Receivables Investments TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Payables TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued Capital Accumulated Losses 3 4 5 3 6 7 8 9 432,396 130,000 - 432,396 130,000 10,000 562,396 572,396 - 211,030 20 211,050 200,000 - - 200,000 773,446 772,396 5,994 5,994 5,994 5,994 5,994 5,994 767,452 766,402 776,950 (9,498) 776,950 (10,548) TOTAL EQUITY 767,452 766,402 The accompanying notes form part of these financial statements. Page 10 of 27 Annual Financial Report 2007 Rex Minerals Limited STATEMENTS OF CASH FLOWS For the Period from 18 April 2007 to 30 June 2007 Notes Company $ Group $ CASH FLOWS FROM OPERATING ACTIVITIES Payments to Suppliers (3,504) (4,554) NET CASH FLOWS USED IN OPERATING ACTIVITIES 10(a) (3,504) (4,554) CASH FLOWS FROM INVESTING ACTIVITIES Loans to Subsidiaries Payments for Environmental Bonds (11,050) - - (10,000) NET CASH FLOWS USED IN INVESTING ACTIVITIES (11,050) (10,000) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from Issue of Ordinary Shares 446,950 446,950 NET CASH FLOWS FROM FINANCING ACTIVITIES 446,950 446,950 NET INCREASE IN CASH HELD Cash at Beginning of Period 432,396 432,396 - - CASH AT END OF PERIOD 10(b) 432,396 432,396 The accompanying notes form part of these financial statements. Page 11 of 27 Annual Financial Report 2007 Rex Minerals Limited STATEMENTS OF CHANGES IN EQUITY For the Period from 18 April 2007 to 30 June 2007 Notes Company $ Group $ Beginning of Period Issue of shares Net loss - 776,950 (9,498) - 776,950 (10,548) 30 June 2007 8 767,452 766,402 The accompanying notes form part of these financial statements. Page 12 of 27 Annual Financial Report 2007 Rex Minerals Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2007 1. SIGNIFICANT ACCOUNTING POLICIES Rex Minerals Limited (“the Company”) is a company domiciled in Australia. The consolidated financial report of the Company for the period ended 30 June 2007 comprises the Company and its subsidiaries (together referred to as the “consolidated entity”). The consolidated financial report was authorised for issue by the directors on 25 July 2007. (a) Statement of Compliance The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards (“AASBs”) adopted by the Australian Accounting Standard Board (“AASB”) and the Corporations Act 2001. International Financial Reporting Standards (“IFRSs”) form the basis of Australian Accounting Standards adopted by the AASB, and for the purpose of this report are called Australian equivalents to IFRS (“AIFRS”) to distinguish from previous Australian GAAP. The financial report of the consolidated entity also complies with IFRS and interpretations adopted by the International Accounting Standards board. (b) Basis of preparation The financial report is prepared iin Australian dollars. The financial report is presented on the historical cost basis except that the following assets and liabilities are stated at their fair value: derivative financial instruments and financial instruments classified as available-for-sale. The preparation of a financial report in conformance with Australian Accounting Standards requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. These estimates and associated assumptions are based on historical experience and various factors that are believed to be reasonable under the circumstances. The results of which forms the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. These accounting policies have been consistently applied by each entity in the consolidated entity. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. The accounting policies have been consistently applied by all entities in the consolidated entity. Page 13 of 27 Annual Financial Report 2007 Rex Minerals Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2007 (c) Basis of consolidation Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Investments in subsidiaries are carried at their cost of acquisition in the Company’s financial statements. Minority interests in the results and equity of subsidiaries are shown separately in the consolidated income statement and balance sheet respectively. (d) Comparatives Rex Minerals Limited was incorporated on 18 April 2007. Accordingly there are no comparative results for prior periods. (e) Income Tax Income tax expenses comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that they probably will not reverse in the foreseeable future. Deferred tax Is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. A deferred tax asset is recognised to the extent that it is probable the future taxable profits will be available against which temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and reduced to the extent that is no longer probable that the related tax benefit will be realised. Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the relates dividend is recognised. Page 14 of 27 Annual Financial Report 2007 Rex Minerals Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2007 (f) Exploration, Evaluation and Development Expenditure Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are carried forward only if they relate to an area of interest for which rights of tenure are current and in respect of which: (i) such costs are expected to be recouped through successful development and exploitation or from sale of the area; or (ii) exploration and evaluation activities in the area have not, at balance date, resulted in booking economically recoverable reserves, and active operations in, or relating to, this area are continuing. Accumulated costs in respect of areas of interest which are abandoned are written off in full against profit in the year in which the decision to abandon the area is made. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until production commences. (g) Payables Liabilities are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the Company. (h) Cash For the purpose of the Statement of Cash Flows, cash includes on hand and other funds held at call net of bank overdrafts. (i) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office (“ATO”). In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the statement of financial position. Cash flows are included in the statement of cash flow on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows. (j) Earnings Per Share Basic earnings per share are calculated as net earnings attributable to members, adjusted to exclude costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for an bonus element. Page 15 of 27 Annual Financial Report 2007 Rex Minerals Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2007 (k) Issued Capital Issued and paid up capital is recognised at the fair value of the consideration received by the Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received. 2. INCOME TAX The prima facie tax on loss is different to the income tax provided in the financial statements as follows: Prima facie tax benefit on loss at 30% Add/(less) tax effect of permanent differences: Non-deductible expenditure Tax losses not brought to account as future income tax benefits Company $ Group $ (2,849) (3,164) 264 504 2,585 2,660 Income tax (benefit)/expense - - Income tax losses Future income tax benefit arising from tax losses not recognised at reporting date as realisation of the benefit is not regarded as virtually certain. 3. RECEIVABLES CURRENT Share issue proceeds (i) (i) As at 30 June 2007, shares had been allotted for which the cash consideration was received subsequent to 30 June 2007 NON-CURRENT Loans to subsidiaries (i) (i) Loans are interest free and repayable at call 2,585 2,660 Company $ Group $ 130,000 130,000 211,030 - Page 16 of 27 Annual Financial Report 2007 Rex Minerals Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2007 4. OTHER (CURRENT ASSETS) Environmental Bond 5. EXPLORATION AND EVALUATION EXPENDITURE Exploration and evaluation costs carried forward in respect of minerals exploration areas of interest: - Exploration and evaluation phases Opening balance Exploration expenditure incurred on acquiring assets Closing balance Company $ - Group $ 10,000 Company $ Group $ - - - - 200,000 - 200,000 200,000 The ultimate recoupment of costs carried forward for exploration and evaluation phases is dependent on the successful development and commercial exploitation or sale of the mineral exploration areas of interest. 6. INVESTMENTS Investment in subsidiaries 7. PAYABLES Company $ Group $ 20 - Amounts Owing to Director and Director Related Entities * 5,994 5,994 Company $ Group $ * In relation to reimbursement of expenses Page 17 of 27 Annual Financial Report 2007 Rex Minerals Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2007 8. ISSUED CAPITAL Ordinary shares fully paid Number 16,765,000 $ - (a) Movements in shares on issue At the beginning of the period Shares issued during the period: - Founders’ shares (i) & (ii) 9,500,000 (iii) 5,265,000 - Seed capital provider’s shares - St. Arnaud Gold Project consideration shares (iv) 2,000,000 At end of reporting period Number - 50,450 526,500 200,000 16,765,000 776,950 (i) (ii) On 31 May 2007 the Company issued 5.0 million ordinary shares at $0.01 each to directors for providing founding capital to the Company. On 31 May 2007 the Company issued 4.5 million ordinary shares at $0.001 to a director for providing founding capital to the Company. (iii) On 29 June 2007 the Company issued 5.265 million ordinary shares at $0.10 each to various parties for providing seed capital to the Company. On 18 June 2007 the Company issued 2 million ordinary shares at a fair value of $0.10 each to AuSelect Limited in consideration for acquiring the St Arnaud Gold Project. (iv) (b) Movements in options on issue At the beginning of the period Shares issued during the period: - Founders’ options At end of reporting period Number - (i) 3,500,000 3,500,000 (i) On 31 May 2007 the Company issued 3.5 million options at an exercise price of $0.25 expiring on 30 June 2011 for providing founding capital to the Company. Terms and conditions of issued capital Ordinary shares Ordinary shares have the right to receive dividends as declared and, in the event of the winding up of the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company. Options Options have an exercise price of $0.25 and expire on 30 June 2011. Page 18 of 27 Annual Financial Report 2007 Rex Minerals Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2007 9. ACCUMULATED LOSSES Balance at the beginning of the period Net loss attributable to members of Rex Minerals Limited Company $ - (9,498) Group $ - (10,548) Balance at end of the period (9,498) (10,548) 10. STATEMENT OF CASH FLOWS (a) Reconciliation of the operating loss after tax to the net cash flows from operations: Net loss Changes in operating assets and liabilities Increase in payables and accruals (Increase) in receivables Company $ Group $ - - (9,498) (10,548) 5,994 - 5,994 - Net cash flows (used in) / from operating activities (3,504) (4,554) (b) Reconciliation of cash: Cash balances comprises - Cash at bank 11. COMMITMENTS The Company had no commitments at 30 June 2007. 432,396 432,396 12. SEGMENT INFORMATION The Company operates predominantly in one geographical segment, being Australia, and in one industry, mineral mining and exploration. 13. LOSS PER SHARE The following reflects the income and share data used in the calculation of basic and diluted earnings per share: Earnings used in calculation of diluted earnings per share $ (10,548) Weighted average number of ordinary shares on issue used in the calculation of basic EPS Number 8,382,500 14. RELATED PARTY DISCLOSURES There were no related party transactions during the period other than in the normal course of business. . Page 19 of 27 Annual Financial Report 2007 Rex Minerals Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2007 15. REMUNERATION Amounts received or due and receivable by KPMG for: - an audit of the financial report of the Company at the financial year $ - 16. FINANCIAL INSTRUMENTS (a) Interest rate risk The Company’s exposure to interest rate risks and the effective interest rates of financial assets and financial liabilities, both recognised and unrecognised at balance date, are as follows: Floating Interest Rate $ Non- Fixed Interest Interest Maturing <1 Year Bearing $ $ Total $ Average Effective Interest Rate % - 432,396 - 432,396 - - 140,000 - 140,000 - Financial Instrument Financial Assets Cash Assets Trade and Other Receivables Total Financial Assets - 572,396 - 572,396 - Financial Liabilities Trade and Other Payables - 5,994 5,994 - Total Financial Liabilities - 5,994 - 5,994 - (b) Net fair values of financial assets and liabilities Financial assets and liabilities have been recognised at the balance date at their net fair values. The following methods and assumptions are used to determine the net fair values of financial assets and liabilities: Recognised Financial Instruments Cash and cash equivalents: The carrying amount approximates fair value because of their short-term maturity. Receivables and payables: The carrying amount approximates fair value. (c) Credit Risk Exposures The Company’s maximum exposure to credit risk at each balance date in relation to each class of recognized financial assets is the carrying amount, net of any provision for doubtful debts, of those assets as indicated in the balance sheet. (d) Concentration of Credit Risk The Company is not materially exposed to any individual overseas country or individual customer. Page 20 of 27 Annual Financial Report 2007 Rex Minerals Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2007 17. DIRECTORS’ AND EXECUTIVES’ DISCLOSURE (a) Remuneration No remuneration was paid to Directors and Executives during the period. (b) Shares and option holdings All equity dealings with directors have been entered into with terms and conditions no more favourable than those that the entity would have adopted if dealing at arm’s length. Shares Held By Directors & Executives Paul Chapman Richard Laufmann Steven Olsen Andrew Chapman Prudence Chapman Balance at Beginning of Period - (i) (ii) - (iii) - - - Received as Options Shares Remuneration Exercised Acquired Balance at End of Year - - - - - - - - - - 2,500,000 2,500,000 2,500,000 2,500,000 4,500,000 4,500,000 - - - - (i) Held indirectly through Stone Poneys Nominees Pty Ltd as trustee for the Chapman Superannuation Fund and the Chapman Investment Fund. These are founder shares and were acquired at $0.01 each. (ii) Held indirectly through Natalie Laufmann. These are founder shares and were acquired at $0.01 each. (iii) Held indirectly through S&S Olsen Pty Ltd as trustee for the Olsen Family Trust. These are founder shares and were acquired at $0.001 each. Options Held By Directors & Executives Paul Chapman Richard Laufmann Steven Olsen Andrew Chapman Prudence Chapman (i) (ii) (iii) Balance at Beginning of Period - - - Received as Options Shares Remuneration Exercised Acquired - 1,000,000 - 1,000,000 - 1,500,000 - - - Balance at End of Year 1,000,000 1,000,000 1,500,000 - - - - - - - - - - (i) Held indirectly through Stone Poneys Nominees Pty Ltd as trustee for the Chapman Superannuation Fund and the Chapman Investment Fund. These are founder options. (ii) Held indirectly through Natalie Laufmann. These are founder options. (iii) Held indirectly through S&S Olsen Pty Ltd as trustee for the Olsen Family Trust. These are founder options (c) Other Transactions Director Related Entities There were no other transactions with director related entities. Page 21 of 27 Annual Financial Report 2007 Rex Minerals Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2007 18. EMPLOYEE BENEFITS At 30 June 2007, Rex Minerals has no employees. 19. SUBSEQUENT EVENTS Subsequent to 30 June 2007 the following events have occurred: • On 2 July 2007, the Company entered into an agreement with Avoca Resources Limited (“Avoca”) to purchase the Cowell and Moonta Projects in South Australia (“the Avoca Agreement”). Under the Avoca Agreement, Rex Minerals acquired Avoca’s joint venture interest in the Cowell Project (EL’s 3016, 3148, 3418 and ELA 150/02) and a 100% interest in the Moonta Project (EL’s 3116 and 3459 and ELA’s 143/07, 144/07 and 142/07). The purchase consideration for the Cowell and Moonta Projects comprised the issue of: o 6,000,000 shares in Rex Minerals; and o 1,000,000 options in Rex Minerals at an issue price of nil and an exercise price of $0.30, exercisable at any time prior to 30 June 2011. Completion of this transaction is subject to Rex Minerals achieving an ASX listing prior to 2 December 2007. The majority of the Moonta projects are on Freehold land and not subject to native title. Some parts of the Cowell project may be subject to native title with various land owner rights unresolved in the Cowell project area. • On 18 July 2007, the Company entered into an agreement with Lihir Australian Holdings Pty Ltd and Ballarat West Goldfields Pty Ltd (“Lihir”) to purchase the North Creswick Gold Project in Victoria (“the Lihir Agreement”). Under the Lihir Agreement, Rex Minerals acquired EL 4920. The purchase consideration for the North Creswick Gold Project comprised the following: o o the issue to Lihir of 1,000,000 shares in Rex Minerals; the preferential allocation upon ASX listing to Lihir of 6,000,000 shares in Rex Minerals at a maximum subscription price of $0.25 per share; and o a 2% net smelter royalty. Completion of this transaction is subject to Rex Minerals achieving an ASX listing prior to 17 January 2008. Ballarat West Goldfields has entered into a regional Indigenous Land Use Agreement (ILUA), with the native title claiments at Nth Creswick. • On 20 July 2007, the Company entered into an agreement with Goldsearch Ltd (“Goldsearch”) to purchase Goldsearch’s interest in the St Arnaud East Joint Venture in Victoria (“the Goldsearch Agreement”). The purchase consideration Page 22 of 27 Annual Financial Report 2007 Rex Minerals Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2007 19. SUBSEQUENT EVENTS (CONTINUED) • for Goldsearch’s interest in the St Arnaud East Joint Venture comprised the following: o the issue to Goldsearch of 500,000 shares in Rex Minerals; o 500,000 options in Rex Minerals at an issue price of $0.01 and an exercise price of $0.30, exercisable at any time prior to 30 June 2011. • Goldsearch has entered into a regional ILUA with the native title claimants on their St Arnaud licence (EL4669). • On 23 July 2007, the Company entered into an agreement with Titeline Drilling Pty Ltd (“Titeline”) to supply the Group with dedicated drilling services for approximately 30 months (“the Titeline Agreement”). The main terms of the Titeline Agreement are as follows: o Initial payment for 72 days drilling of $1 million; and o For each subsequent 100 days of drilling up to a maximum of 600 days, the issue of 1,000,000 ordinary shares in Rex Minerals. Completion of this transaction is subject to Rex Minerals achieving an ASX listing. Page 23 of 27 Annual Financial Report 2007 Rex Minerals Limited DIRECTORS' DECLARATION The directors of the Company declare that: 1. the financial statements and notes, as set out on pages 9 to 23, are in accordance with the Corporations Act 2001; (a) comply with Accounting Standards and the Corporations Regulations 2001; (b) giving a true and fair view of the Company’s and the Group’s financial position as at 30 June 2007 and of their performance for the period from 18 April 2007 to 30 June 2007; and 2. in the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the Board of Directors. Paul Chapman Chairman 25 July 2007 Page 24 of 27
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