Rex Minerals Limited Annual Report 2008

Plain-text annual report

ANNUAL REPORT >> 2008 ANNUAL REPORT >> 2008 DISCOVER THE POTENTIAL Corporate Directory ABN 12 124 960 523 DIRECTORS Paul Chapman (Chairperson) Steven Olsen (Managing Director) Richard Laufmann SHARE REGISTRARS Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross WA 6153 COMPANY SECRETARY Amber Rivamonte PRINCIPAL and REGISTERED OFFICE 24 Skipton Street Ballarat Victoria 3350 CONTACT DETAILS Rex Minerals Ltd PO Box 626W Ballarat West Victoria 3350 Telephone 03 5337 4000 Facsimile 03 5331 1776 Email info@rexminerals.com.au AUDITORS KPMG 147 Collins Street Melbourne Victoria 3000 BANKERS ANZ Banking Group Limited 927 Sturt Street Ballarat Victoria 3350 LEGAL ADVISORS Baker McKenzie 525 Collins Street Melbourne Victoria 3000 DISCOVER THE POTENTIAL >> DISCOVER THE POTENTIAL >> > RRR TTTTHHHHEEEE PPPPOOOOTTTTEEEENNNNTTTTIIIIAAAALLLL >>>> HE POTENTIAL >> DDDDIIIISSSSCCCCOOOOVVVVEEEERRRR TH A U S T R A L I A SOUTH SOUTH AU USTRALIA AUSTRALIA NEW SOUTH N NEW SOUTH WALES WALES WALES VICT VICTORIA TORIA Mt Carrington Lismore NEW SOUTH WALES Sydney SOUTH AUSTRALIA Cowell Wandearah Moonta South Adelaide St Arnaud VICTORIA North Creswick Melbourne >>>>>>>>>>>> CCCCCCCCCOOOOOOOOOPPPPPPPPPPPPPPPPPPEEEEEEEEERRRRRRRRR-GGGGGGGGGOOOOOOOOOLLLLLLLLLDDDDDDDDD >>>>>>>>>>>> IIIIIIIIIRRRRRRRRROOOOOOOOONNNNNNNNN OOOOOOOOORRRRRRRRREEEEEEEEE >>>>>>>>>>>> GGGGGGGGGOOOOOOOOOLLLLLLLLLDDDDDDDDD >>>>>>>>>>>> GGGGGGGGGOOOOOOOOOLLLLLLLLLDDDDDDDDD-SSSSSSSSSIIIIIIIIILLLLLLLLLVVVVVVVVVEEEEEEEEERRRRRRRRR >> COPPER-GOLD >> IRON ORE >> GOLD >> GOLD-SILVER >> COPPER-GOLD >> IRON ORE >> GOLD >> GOLD-SILVER > TABLE OF CONTENTS Rex Minerals Ltd Annual Report for the year ended 30 June 2008 INTRODUCTION, HIGHLIGHTS AND GOALS FOR 2009 ...................................1 LETTER FROM THE CHAIRMAN AND MANAGING DIRECTOR ......................2 REVIEW OF OPERATIONS................................................................................3 EXPLORATION PROJECTS ............................................................................4-7 TENEMENTS SCHEDULE.................................................................................8 DIRECTORS’ REPORT ..................................................................................9-21 BALANCE SHEETS .........................................................................................22 INCOME STATEMENTS ..................................................................................23 STATEMENTS OF CHANGES IN EQUITY .......................................................24 STATEMENTS OF CASH FLOWS ....................................................................25 NOTES TO THE FINANCIAL STATEMENTS...............................................26-46 DIRECTORS’ DECLARATION...........................................................................47 AUDITOR’S INDEPENDENCE DECLARATION ...............................................48 INDEPENDENT AUDIT REPORT ...............................................................49-50 ADDITIONAL SHAREHOLDER INFORMATION ..............................................51 > INTRODUCTION Rex Minerals Ltd (Rex) is a diversiﬁed exploration company. Rex’s strategy is to acquire highly prospective projects with the potential to host large resources in commodities that are in high demand. Headquartered in Ballarat, Victoria, Rex has ownership of projects covering the commodities of copper, gold, silver and iron. The projects are located in South Australia, Victoria and New South Wales and are within geological terrains that are known for their endowment of these commodities. Rex applies its extensive technical experience and existing drilling capacity to progress its projects, laying solid foundations for long term growth, enabling Rex to forge ahead as a diversiﬁed exploration and mining company. > HIGHLIGHTS Successfully completed a $7.0M IPO. New copper discovery (iron-oxide-copper-gold) in South Australia at Hillside,with a 100m intersection of copper mineralisation, in drill hole HDD006 averaging 0.65% copper. Option to acquire 100% of the Mt Carrington gold-silver project with; > Shallow 240,000 ozs gold equivalent resource, > Large scale shallow silver potential, and > Large and high grade gold potential at depth. > GOALS FOR 2009 > Key milestone of deﬁning an initial inferred resource estimate for the Hillside copper project, South Australia. > Update the gold and silver resources at Mt Carrington, New South Wales. > Complete drilling to deﬁne a large, shallow silver resource at the White Rock prospect, Mt Carrington. > Complete drilling to extend and increase the existing shallow gold resource at Mt Carrington. > Conﬁrm proof of concept that the Wandearah magnetic and gravity anomaly is associated with a large iron-oxide- copper-gold (IOCG) system. Page 1 A 24 Skipton Street Ballarat Victoria 3350 Australia T (03) 5337 4000 F (03) 5331 1776 P PO Box 626W Ballarat West Victoria 3350 Australia E info@rexminerals.com.au W www.rexminerals.com.au minerals ltd ABN 12 124 960 523 LETTER FROM THE CHAIRMAN AND MANAGING DIRECTOR For the year ended 30 June 2008 Dear Fellow Shareholder, The past year has laid the foundation for Rex to create value through the discovery of mineral resources. The IPO completed in September last year raised $7.0 million which, combined with a two year contract with Titeline Drilling, gives Rex access to drilling well beyond the capacity of most junior explorers. This structure was established in recognition of the fact that a mineral discovery typically takes a substantial amount of drilling and re-interpretation before the value of that discovery can be realised. A key inﬂuence at Rex is our belief that the long term demand for metals will continue to increase as the growth in developing countries (China, India, Brazil and others) drives world economic growth well into the foreseeable future. At the same time, the supply of many commodities will struggle to meet demand due to a lack of large mineral deposits in locations where they can be effectively developed. High quality resources in favourable jurisdictions are difﬁcult to ﬁnd and, once discovered, can command a premium price. Our philosophy from inception has been to aggressively pursue and explore projects that offer the opportunity for a signiﬁcant discovery in locations that allow for development and mining within a meaningful timeframe and security of tenure. Rex delivered into its IPO a group of projects and a planned exploration program that could realise a meaningful discovery. To this aim, Rex has already made signiﬁcant progress with a new Iron Oxide Copper Gold discovery at Hillside on the Yorke Peninsula in South Australia. This is an important project for Rex with the potential to deliver exciting copper-gold results as we uncover the extent of the copper-gold mineralisation at Hillside. Another signiﬁcant result since the IPO, was the purchase of an option to acquire 100% of the Mt Carrington project. Rex considers that this is a very signiﬁcant strategic asset with the potential to host large, scale shallow silver mineralisation and large scale, high grade gold mineralisation at depth. Existing drilling shows extensive silver mineralisation and future inﬁll drilling could prove up this potential. The style of mineralisation at Mt Carrington is also favourable for the presence of large scale, high grade gold deposits, similar to some of the most proﬁtable gold mines in the world. Therefore, the Mt Carrington project represents a very exciting new opportunity for Rex and will undoubtedly form an important part of the portfolio in the coming years. Within a very short timeframe, Rex has moved from a company with a number of good exploration projects, to a company ready to commence deﬁning copper, gold and silver resources. Rex has on-going drilling capacity which will allow for resource deﬁnition at the Hillside and Mt Carrington projects over the coming year. Yours sincerely, Paul Chapman Chairman Steven Olsen Managing Director Page 2 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD REVIEW OF OPERATIONS For the year ended 30 June 2008 SUMMARY Over the past year, Rex has advanced its high priority targets, achieving a number of exploration and corporate milestones along the way. The key activities completed over the past year are summarised below. July 2007 Acquired Moonta South and Wandearah copper-gold projects from Avoca Resources Ltd. Acquired North Creswick gold project from Lihir Australia Holdings Pty Ltd. Completed drilling agreement with Titeline Drilling to secure drilling services for a period of 2 years. September 2007 The Company completed its IPO, raising $7.0 million and was subsequently admitted to the ofﬁcial list of the ASX on 20 September, 2007. November 2007 Commenced drilling at Hillside, with a total of 1,056m and four drill holes completed by December 2007. Best intersections include 18m @ 0.2% copper and 37m @ 0.16% copper. January 2008 Commenced drilling at St Arnaud, with a total of 5,230m and 11 drill holes completed by April 2008. Best intersections include 1m @ 1,174g/t gold and 1 m @ 11.2 g/t gold. Renegotiated Cowell Iron Ore project to obtain 100% ownership. April 2008 Acquired rights to Mt Carrington gold-silver project, NSW. Mt Carrington project includes 240,000ozs gold equivalent resources. Commenced drilling at Hillside, with a total of 1,828m and ﬁve drill holes completed by June 2008. Best intersection of 30m @ 0.9% copper and 0.2g/t gold, within a number of structures cumulatively totalling 100m @ 0.65% copper. Drilling conﬁrms economic grade copper mineralisation within a large iron-oxide-copper-gold (IOCG) system. June 2008 Commenced drilling at Cowell Iron Ore project, with a total of 1,200m and six holes completed by July 08. Page 3 > REX MINERALS LTD EXPLORATION PROJECTS For the year ended 30 June 2008 HILLSIDE COPPER-GOLD PROJECT The Hillside copper-gold project in South Australia received considerable attention in late 2007 and the ﬁrst half of 2008, with drilling intersections providing good evidence that Rex has discovered a new IOCG deposit. As each program was completed, stronger copper mineralisation was intersected and an improved understanding of this mineralised system was obtained. The most signiﬁcant observable copper mineralisation intersected in the nine drill holes completed to date was from HDD006. This drill hole was designed to test one of the more signiﬁcant gravity anomalies deﬁned on the project area (Figure 1). As drilling progressed in HDD006, the alteration and copper mineralisation increased, particularly from 367m onwards. This area corresponds with the location where the elongate gravity and magnetic anomalies overlap. The copper mineralisation was found to be closely associated with haematite, magnetic and pyrite and was supported by anomalism in other elements that are typical of large IOCG deposits such as Prominent Hill and Olympic Dam. Figure 1: Gravity (left) and Magnetic (right) images at Hillside showing the drill hole locations. Given the copper results at Hillside it is anticipated that Rex will focus a signiﬁcant proportion of its drilling over 2008 and into 2009 towards deﬁning the extent of the copper mineralisation in this area, and moving towards deﬁnition of an inferred resource. Page 4 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD EXPLORATION PROJECTS (continued) For the year ended 30 June 2008 WANDEARAH COPPER-GOLD PROJECT The Wandearah project in South Australia has large scale copper-gold potential. Historical drilling at Wandearah has conﬁrmed the presence of low grade copper mineralisation and iron-oxide alteration similar to that observed at Prominent Hill and Olympic Dam. Although this project exists underneath 300m of cover sediments, the gravity and magnetic anomalies suggest that a massive mineralised IOCG system could exist. The lateral expression of the Olympic Dam deposit, one of the world’s largest copper deposits could easily ﬁt within the gravity and magnetic signatures that exist at Wandearah (Figure 2). Detailed gravity and follow up drilling are scheduled for late 2008. Figure 2: Oblique 3D view of the Wandearah magnetic anomaly, and the relative size of Olympic Dam (inset Top Left) for comparison. Page 5 > REX MINERALS LTD EXPLORATION PROJECTS (continued) For the year ended 30 June 2008 MT CARRINGTON GOLD-SILVER PROJECT In April 2008 Rex acquired an option over the Mt Carrington gold-silver project, located in north-eastern NSW. Rex recognised an opportunity for the discovery of a signiﬁcant gold and/or silver resource, based on the existing drilling information, and the prospective geology of the large mineralised system at Mt Carrington. The key attributes of Mt Carrington include: > Shallow resources of 240,000ozs gold equivalent. > Potential for large scale shallow gold mineralisation well beyond the existing resources. > Immediate open pit development potential. > Epithermal system with potential for large scale, high grade gold mineralisation at depth. > Existing infrastructure (mains power, fresh water dam, tailings dam) in place and close to additional infrastructure at Lismore (suppliers, workforce, etc). The improved geological understanding of this style of deposit, and increases in the gold and silver prices have transformed the outlook and economics of Mt Carrington. Accordingly, Rex considers that a well targeted drilling program could lead to the development of a large scale gold and silver operation at Mt Carrington. Of particular note are the previous drilling results at the White Rock prospect which highlight the very large shallow silver potential at Mt Carrington. The White Rock deposit contains a high grade silver resource of 2.26M oz (207g/t) surrounded by extensive lower grade silver mineralisation. High grade silver also exists 600m to the north of the existing resource, and historical workings to the west also indicate the potential for extensive large scale mineralisation at White Rock. Figure 3: Cross section of the White Rock project, showing the location of the high grade silver mineralisation. Page 6 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD EXPLORATION PROJECTS (continued) For the year ended 30 June 2008 COWELL IRON ORE PROJECT In January 2008, Rex entered into a new agreement with Stellar Resources Limited (Stellar) to enable Rex to maintain 100% ownership of an Iron Ore project near the township of Cowell on the Eyre Peninsula, South Australia. A 12km long magnetic feature dominates this project which Rex interprets to be the southern covered extensions of the Middleback Ranges. The Middleback Ranges have historically produced over 200 million tonnes of iron ore from haematite deposits, with One Steel now producing Iron Ore from magnetite iron deposits in this area. The Middleback Ranges are disrupted to the south by a body of granite, with the interpreted prospective extensions south of the granite covered by younger sediments. ST ARNAUD GOLD PROJECT Rex completed a drilling campaign and aeromagnetic survey at St Arnaud in the ﬁrst half of 2008. Drilling results were mixed, including a spectacular drill intersection at the Bristol target of 1m @ 1,174g/t gold. Geological mapping of an exposed open pit at Comstock, combined with interpretation of the geology intersected in the drilling, indicates that there is good potential for gold mineralisation beneath the historic workings at a number of locations within the Bristol and New Chum lines of mineralisation. The aeromagnetic survey is anticipated to assist in deﬁning a number of new targets on the north-western extensions to the historical gold mines, where the host rocks to the gold mineralisation extend underneath younger shallow cover sediments. NORTH CRESWICK GOLD PROJECT Some preliminary targeting was completed at North Creswick during the year, in preparation of a drilling campaign to be undertaken in late 2008. North Creswick has recorded historical production of 1.7 Mozs from buried alluvial gold deposits known as “deep leads” with almost 1.0 Mozs interpreted to be sourced from a much smaller area (approximately 3km long and 3km wide). Evidence from other Victorian goldﬁelds has shown that high grade quartz hosted gold deposits exist directly underneath the richest parts of the alluvial gold deposits. Rex therefore interprets that the best place to explore for high grade quartz deposits at North Creswick is directly underneath the highest concentration of gold deﬁned by the historical deep lead mining. Page 7 > REX MINERALS LTD TENEMENT SCHEDULE For the year ended 30 June 2008 Tenement Locality Lease Status Area Type Current Area Grant Date EL4914 St Arnaud Granted EL4363 St Arnaud Granted EL4669 St Arnaud Granted EL5105 St Arnaud Granted EL4920 Creswick Granted EL3875 Moonta South Granted EL3874 Moonta South Granted EL3116 Moonta South Granted EL3876 Wandearah Granted EL3459 Wandearah Granted EL3418 Cowell Granted km² km² km² km² km² km² km² km² km² km² km² 51 58 83 84 106 673 15/12/2005 12/07/2006 06/09/2006 19/06/2008 17/01/2007 02/08/2007 1262 02/08/2007 27 127 154 85 04/08/2003 02/08/2007 29/11/2005 16/09/2005 Page 8 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD DIRECTORS’ REPORT For the year ended 30 June 2008 The Directors present their report together with the ﬁnancial report of Rex Minerals Limited (“the Company”) and of the Group, being the Company and its subsidiaries, and the Group’s interest in associates and jointly controlled entities for the ﬁnancial year ended 30 June 2008 and the auditors’ report thereon. 1. DIRECTORS The Directors of the Company at any time during or since the end of the ﬁnancial year are: Name, qualiﬁcations and independence status Experience, special responsibilities and other directorships Mr Paul Chapman Independent Chairperson (B.Comm, ACA, Grad.Dip. Tax, CFPT(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 Richard Laufmann Independent Non-Executive Director (B.Eng (Mining), MAusIMM, MAICD) Mr Steven Olsen Managing Director (B.Sc.(Hons), M.Sc.(MinEx), Grad.Dip (F&I), MAusIMM) 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 listed explorer Silver Lake Resources Ltd. Director since 2007. 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 Golﬁelds 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. Director since 2007. Mr Steven Olsen has worked as a mine geologist and exploration geologist over the past 15 years, predominantly in Western Australia and Canada, on nickel and gold deposits. Mr Olsen has had continued exploration success for both nickel and gold mineralisation throughout his career. From 2002 to 2007, Mr 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. Director since 2007. 2. COMPANY SECRETARY Ms Amber Rivamonte CPA, B.Bus (Acc) was appointed to the position of Company Secretary and CFO in July 2007. Ms Rivamonte previously held the role of Company Secretary for four years at Ballarat Goldﬁelds NL and has over 15 years experience in the ﬁnancial management of public listed exploration companies. Page 9 > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2008 3. DIRECTORS’ MEETINGS The number of Directors’ meetings and number of meetings attended by each of the Directors of the Company during the ﬁnancial year are: Director Mr Paul Chapman Mr Richard Laufmann Mr Steven Olsen Board Meetings A 12 6 13 B 13 13 13 Audit Committee Meetings A 2 2 2 B 2 2 2 A – Number of meetings attended. B – Number of meetings held during the year whilst the Director held ofﬁce. 4. CORPORATE GOVERNANCE STATEMENT This statement outlines the main corporate governance practices in place throughout the ﬁnancial year, which comply with the ASX Corporate Governance Council recommendations, unless otherwise stated. Recommendation Comment 4.1 Lay solid foundations for management and oversight 4.1.1 Formalise and disclose the functions reserved to the Board and those delegated to management. The Board recognises the importance of distinguishing between the respective roles and responsibilities of the Board and management. The respective roles and responsibilities of Board and the Managing Director are set out in the Company’s Board Charter. The primary responsibility of the Board is to protect and advance the interest of shareholders. To fulﬁl this role, the Board has overall responsibility for developing and approving the Company’s corporate strategy, appointing the Managing Director, monitoring management performance and approving the Company’s risk and audit framework. The Board is also responsible for the Company’s general corporate governance matters, including matters such as disclosures and the appointment and monitoring of any committees set up by the Board. The Managing Director has primary responsibility to the Board for the affairs of the Company. The Managing Director’s responsibilities include implementing and monitoring (together with the Board) the strategic and ﬁnancial plans for the Company, managing the appointment of senior management positions, being the primary channel of communication and point of contact between the Executive Management and the Board, providing strong leadership to, and effective management of, the Company and otherwise carrying out the day to day management of the Company. Page 10 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2008 4. CORPORATE GOVERNANCE STATEMENT (continued) Recommendation Comment 4.2 Structure the Board to add value 4.2.1 A majority of the Board should be independent This recommendation is satisﬁed. Directors. 4.2.2 The Chairperson should be an independent Director. This recommendation is satisﬁed. 4.2.3 The roles of Chairperson and Chief Executive This recommendation is satisﬁed. Ofﬁcer should not be exercised by the same individual. 4.2.4 The Board should establish a nomination committee. The Board has not adopted a charter relevant to the speciﬁc functions of a nomination committee. Given the size of the Company and the Board, and the start up nature and straight forward structure of the Company, the Directors consider that any efﬁciencies achieved by the establishment of a nomination committee would be minimal, thereby not making its establishment cost effective. 4.3 Promoting ethical and responsible decision making 4.3.1 Establish a code of conduct to guide the Directors, the Chief Executive Ofﬁcer (or equivalent), the Chief Financial Ofﬁcer (or equivalent) and any other key Executives. This recommendation is satisﬁed. 4.3.2 Disclose the policy concerning trading in company This recommendation is satisﬁed. securities by directors, ofﬁcers and employees. 4.4 Safeguard integrity in ﬁnancial reporting 4.4.1 Require the Chief Executive Ofﬁcer (or equivalent) This recommendation is satisﬁed. and the Chief Financial Ofﬁcer (or equivalent) to state in writing to the Board that the Company’s ﬁnancial reports present a true and fair view, in all material respects, of the Company’s ﬁnancial condition and operational results and are in accordance with relevant accounting standards. Page 11 > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2008 4. CORPORATE GOVERNANCE STATEMENT (continued) Recommendation Comment 4.4.2 The Board should establish an audit committee. This recommendation is satisﬁed. The primary role of the Audit Committee is to satisfy itself that the Company has an adequate control framework for the oversight of the external audit and the internal audit arrangements. The Committee is required to ensure reliable management and ﬁnancial reporting, compliance with laws and regulations, and the maintenance of an effective and efﬁcient audit. The members of the Audit Committee are Paul Chapman and Richard Laufmann. Richard Laufmann is the Chairman of the Audit Committee. 4.4.3 Structure the audit committee so that it consists This recommendation is satisﬁed. of only Non-Executive Directors, a majority of independent Directors and an independent Chairperson, who is not a Chairperson of the Board. 4.4.4 The audit committee should have a formal charter. This recommendation is satisﬁed. 4.5 Make timely and balance disclosure 4.5.1 Establish written policies and procedures designed to ensure compliance with Listing Rule disclosure requirements and to ensure accountability at a senior management level for that compliance. This recommendation is satisﬁed. The Company has established written policies and procedures designed to ensure compliance with Listing Rule disclosure requirements and accountability for compliance. 4.6 Respect the rights of shareholders 4.6.1 Design and disclose a communications strategy to promote effective communication with shareholders and encourage effective participation at general meetings. 4.6.2 Request the external auditor to attend the annual general meeting and be available to answer shareholder questions about the conduct of the audit and the preparation and content of the auditor’s report. The Company places a high priority on communications with its Shareholders. Although the Company does not have a standalone communications strategy, the Company considers that its Continuous Disclosure Policy, together with disclosure through the following means, should be sufﬁcient to promote effective communications with shareholders: > announcements released to through the ASX company announcements platform; > notices of meetings to shareholders; and > provision of all relevant documentation released on the Company’s website. This recommendation is satisﬁed. Page 12 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2008 4. CORPORATE GOVERNANCE STATEMENT (continued) Recommendation Comment 4.7 Recognise and manage risk 4.7.1 The Board or appropriate Board Committee should establish policies on risk oversight and management. 4.7.2 The Chief Executive Ofﬁcer (or equivalent) and the Chief Financial Ofﬁcer (or equivalent) should state to the Board in writing that: The statement given in accordance with best practice recommendation 5.4.1 (the integrity of ﬁnancial statements) is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board. The Company’s risk management and internal compliance and control system is operating efﬁciently and effectively in all material respects. 4.8 Encourage enhanced performance 4.8.1 Disclose the process for performance evaluation of the Board, its committees and individual Directors, and key Executives. Although there is no standalone risk management policy, the Board Charter provides that it is the Board’s responsibility to approve the Company’s risk and audit framework, systems of risk management and internal control, as well approving compliance with any risk and audit policies and protocols in place at the time. This recommendation is satisﬁed. This recommendation is satisﬁed in as much as should a new Director be appointed, the Company’s Board Charter and other corporate governance documentation together with updated ﬁnancial statements will be given to the new Directors, all of which will set out details in respect of: > the Company’s ﬁnancial, strategic, operational and risk management position; > each Director’s rights, duties and responsibilities; and > the role of the Board and Management. The Directors otherwise consider that due to the size of the Company and its Board, a formal review procedures is not appropriate at this point in time and has instead adopted a self-evaluation process to measure its own performance. Page 13 > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2008 4. CORPORATE GOVERNANCE STATEMENT (continued) Recommendation Comment 4.9 Remunerate fairly and responsibly 4.9.1 Provide disclosure in relation to the Company’s remuneration policies to enable investors to understand: i. the costs and beneﬁts of those policies; and ii. the link between remuneration paid to Directors and key Executives and corporate performance. 4.9.2 The Board should establish a remuneration committee. 4.9.3 Clearly distinguish the structure of Non-Executive Director’s remuneration from that of Executives. 4.9.4 Ensure that payment of equity-based executive remuneration is made in accordance with thresholds set in plans approved by shareholders. 4.10 Recognise the legitimate interests of stakeholders This recommendation is satisﬁed in as much as the details have been included in the Remuneration report. This recommendation is not satisﬁed. Given the size of the Company and the Board, and the start up nature and straight forward structure of the Company, the Directors consider that any efﬁciencies achieved by the establishment of a remuneration committee would be minimal, not making its establishment cost effective. This recommendation is satisﬁed. However, Board members are entitled to options as set out in this Annual Report having regard to the small number of the Company’s management team. This recommendation is satisﬁed, insofar as options issued to the Managing Director were determined on formation of the Company and his remuneration arrangements are summarised in the Remuneration report. 4.10.1 Establish and disclose a code of conduct to guide compliance with legal and other obligations to legitimate stakeholders. This recommendation is satisﬁed. The Company has established a formal code of conduct. Page 14 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2008 5. PRINCIPAL ACTIVITIES The principal activity of the Group during the course of the ﬁnancial year was minerals exploration in Australia. There were no signiﬁcant changes in the nature of the Group’s principal activities during the year. Rex is a diversiﬁed exploration company. Rex’s strategy is to acquire highly prospective projects with the potential to host large resources in commodities that are in high demand. Headquartered in Ballarat, Victoria, Rex has ownership of projects covering the commodities of Copper, Gold, Silver and Iron. The projects are located in South Australia, Victoria and New South Wales and are within geological terrains that are known for their endowment in these commodities. Rex applies its extensive technical experience and existing drilling capacity to progress its projects, laying solid foundations for long term growth, enabling Rex to forge ahead as a diversiﬁed exploration and mining company. 5.1 Objectives The Group’s principal objective is to create value through the discovery, development and mining of mineral resources. To progress with the Group’s primary objective, the following targets have been set for 2009 and later ﬁnancial years. > Key milestone of deﬁning an initial inferred resource estimate for the Hillside copper project, South Australia. > Update the gold and silver resources at Mt Carrington, New South Wales. > Complete drilling to deﬁne a large, shallow silver resource at the White Rock prospect, Mt Carrington. > Complete drilling to extend and increase the existing shallow gold resource at Mt Carrington. > Conﬁrm proof of concept that the Wandearah magnetic and gravity anomaly is associated with a large iron-oxide-copper-gold (IOCG) system. 6. OPERATING AND FINANCIAL REVIEW The income statement shows a loss after tax of $857,987 (2007 loss: $10,548) for the year. The Group has no bank debt. As at 30 June 2008 the Group had a cash position of $3,876,807 (2007: $432,396). Operating activities incurred a cash outﬂow for the year of $804,247 (2007:$4,554). 7. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS In the opinion of the Directors, other than reported in the Directors’ report and in the Letter from the Chairman and Managing Director, there were no signiﬁcant changes in the state of affairs of the Group during the year ended 30 June 2008. 8. 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. 9. EVENTS SUBSEQUENT TO REPORTING DATE Subsequent to 30 June 2008 there has not arisen in the interval between the end of the ﬁnancial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect signiﬁcantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future ﬁnancial years. 10. LIKELY DEVELOPMENTS Likely developments are the continued minerals exploration on the tenements owned or controlled by the Group. Further information about likely developments in the operations of the Group and the expected results of those operations in future ﬁnancial years has not been included in this report because disclosure of the information would be likely to result in unreasonable prejudice to the Group. Page 15 > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2008 11. DIRECTORS’ INTERESTS The relevant interest of each Director in the shares or options over such instruments issued by the companies within the Group and other related bodies corporate, as notiﬁed by the Directors to the Australian Securities Exchange in accordance with S205G(1) of the Corporations Act 2001, at the date of this report is as follows: Rex Minerals Limited Ordinary shares Options over ordinary shares 2,500,000 2,500,000 4,500,000 1,000,000 1,000,000 1,500,000 Mr Paul Chapman Mr Richard Laufmann Mr Steven Olsen 12. SHARE OPTIONS 12.1 Options granted to Directors and Ofﬁcers of the Company During or since the end of the ﬁnancial year, the Company granted options for no consideration over unissued ordinary shares in the Company to the following Directors and to the following of the ﬁve most highly remunerated Ofﬁcers of the Company as part of their remuneration: Number of options granted Exercise price Expiry date Directors Mr Paul Chapman Mr Richard Laufmann Mr Steven Olsen Executives Ms Amber Rivamonte Mr Geoffrey Lowe – – – 600,000 600,000 – – – $0.25 $0.25 – – – 30 June 2011 30 June 2011 All options were granted during the ﬁnancial year. No options have been granted since the end of the ﬁnancial year. 12.2 Unissued shares under option At the date of this report unissued ordinary shares of the Company under option are: All options expire on the expiry date, unless the options have not vested and the employee is terminated then options will lapse. Expiry date 30 June 2011 30 June 2011 30 June 2011 Total Exercise price Number of shares $0.25 $0.30 $0.365 5,700,000 1,500,000 300,000 7,500,000 12.3 Shares issued on exercise of options During or since the end of the ﬁnancial year, the Company did not issue ordinary shares as a result of the exercise of options. Page 16 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2008 13. INDEMNIFICATION AND INSURANCE OF OFFICERS The Company provides insurance to cover legal liability and expenses for the Directors and Executive Ofﬁcers of the Company. The Directors and Ofﬁcers Liability Insurance provides cover against all costs and expenses that may be incurred in defending civil or criminal proceedings that fall within the scope of the indemnity and that may be brought against the Ofﬁcers in their capacity as Ofﬁcers. Disclosure of the nature of the liability cover and the amount of the premium is subject to a conﬁdentiality clause under the insurance policy. The Company has entered into an agreement with the Directors and certain Ofﬁcers to indemnify these individuals against any claims and related expenses, which arise as a result of their work in their respective capacities. The Company has not provided any insurance or indemnity for the auditor of the Company. 14. NON-AUDIT SERVICES During the year KPMG, the Company’s auditor, has also acted as investigating accountant for the IPO (see note 31 for disclosure of actual payment). 15. REMUNERATION REPORT – AUDITED 15.1 Principles of compensation Remuneration is referred to as compensation through this report. Key management personnel have authority and responsibility for planning, directing and controlling the activities of the Company and the Group, including Directors of the Company and other Executives. Key management personnel comprise the Directors of the Company and Executives for the Company and the Group including the ﬁve most highly remunerated Company and Group Executives. Compensation levels for key management personnel of the Group are competitively set to attract and retain appropriately qualiﬁed and experienced Directors and Executives. The Board obtains independent advice of the appropriateness of compensation packages of both the Company and the Group given trends in comparative companies and the objectives of the Company’s compensation strategy. The compensation structures are designed to attract suitably qualiﬁed candidates, reward the achievement of strategic objectives, and achieve the broader outcome of creation of value for shareholders. 15.1.1 Fixed compensation Fixed compensation consists of base compensation (which is calculated on a total cost basis and includes any FBT charges related to employee beneﬁts including motor vehicles), as well as employer contributions to superannuation funds. Compensation levels are reviewed annually by the Board through a process that considers individual and overall performance of the Group. In addition external consultants provide analysis and advice to ensure the Directors’ and Senior Executives’ compensation is competitive in the market place. 15.1.2 Performance linked compensation Performance linked compensation includes both short-term and long-term incentives, and is designed to reward key management personnel for meeting or exceeding their ﬁnancial and personal objectives. 15.1.3 Short-term incentive bonus The short-term incentive (STI) is a discretionary bonus provided in the form of cash, which is calculated based on an assessment of key performance indicators, including share price performance, business growth, exploration success and safety, environment and community issues. 15.1.4 Long-term incentive The long-term incentive (LTI) is provided as options over ordinary shares of the Company. Page 17 > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2008 15. REMUNERATION REPORT – AUDITED (continued) 15.1.5 Service agreements It is the Group’s policy that employment contracts for key management personnel, excluding the Chief Executive Ofﬁcer are unlimited in term but capable of termination on 3 months’ notice and that the Group retains the right to terminate the contract immediately, by making payment equal to 3 months’ pay in lieu of notice. The Group has entered into contracts with each key management person, excluding the Chief Executive Ofﬁcer, that are capable of termination on three month’s notice. The Group retains the right to terminate a contract immediately by making payment equal to three month’s pay in lieu of notice. The key management personnel are also entitled to receive on termination of employment their statutory entitlements of accrued annual and long service leave, together with any superannuation beneﬁts. The employment contract outlines the components of compensation paid to the key management personnel but does not prescribe how compensation levels are modiﬁed year to year. Compensation levels are reviewed each year to take into account cost-of-living changes, any change in the scope of the role performed by the Senior Executive and any changes required to meet the principles of the compensation policy. Mr Steven Olsen, Chief Executive Ofﬁcer, has a contract of employment dated 1 July 2007 with the Company and terminates on the 30 June 2010. The contract speciﬁes the duties and obligations to be fulﬁlled by the Chief Executive Ofﬁcer and provides that the Board and Chief Executive Ofﬁcer will consult and agree objectives for achievement each year. The Chief Executive Ofﬁcer has no entitlement to termination payment in the event of removal for misconduct or gross negligence. Discretionary bonus payments are allowable under the current management employment contracts including the Chief Executive Ofﬁcer for meeting and/or exceeding performance milestones and upon approval by the Board. Non-Executive Directors Total compensation for all Non-Executive Directors, last voted upon by shareholders at the 2007 AGM, is not to exceed $300,000 per annum and is set based on advice from external advisors with reference to fees paid to other Non-Executive Directors of comparable companies. Directors’ base fees are presently up to $95,000 per annum. The Chairperson and Non-Executive Directors do not receive performance related remuneration. Directors’ fees cover all main Board activities and membership of committees. Page 18 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2008 15. REMUNERATION REPORT – AUDITED (continued) 15.2 Directors’ and Executive Ofﬁcers’ remuneration (Company and Group) Details of the nature and amount of each major element of remuneration of each Director of the Company, each of the ﬁve named Company Executives and relevant Group Executives who receive the highest remuneration and other key management personnel are: – – – – – – . 5 7 2 – . 6 6 2 – . 6 5 1 – – – – – – – – – 0 0 5 , 4 5 – 0 5 0 , 9 4 – 0 0 0 , 8 1 2 – – – – – – – 5 9 3 , 7 1 2 4 7 9 , 9 5 – – 6 6 . 5 7 0 , 5 2 2 4 7 9 , 9 5 – 9 1 . – – – 0 2 0 , 4 6 7 8 4 9 , 9 1 1 – – – – – – – – – – – – – – 0 0 5 , 4 0 0 0 , 0 5 – – 0 5 0 , 4 0 0 0 , 5 4 – – 0 0 0 , 8 1 0 0 0 , 0 0 2 – – 8 9 9 , 2 1 3 2 4 , 4 4 1 – – s n o i t p o f o e u l a V f o n o i t r o p o r P f o n o i t r o p o r p s a n o i t a r e n u m e r n o i t a r e n u m e r e c n a m r o f r e p % % d e t a l e r $ l a t o T e u l a V r i a F s n o i t p O ) B ( $ - m r e T n o i t a n i s t ﬁ e n e b $ - r e p u S n o i t a u n n a $ s t ﬁ e n e b $ l a t o T - n o N y r a t e n o m s t ﬁ e n e b d e s a b - e r a h S s t n e m y a p - t s o P t n e m y o l p m e m r e t - t r o h S $ – – – – – – – – I T S h s a c s u n o b ) A ( $ – – – – – – – – - t r o h S m r e t y r a l a S s e e f & $ 0 0 0 , 0 5 8 0 0 2 – 7 0 0 2 s r o t c e r i D e v i t u c e x E - n o N s r o t c e r i D n a m p a h C l u a P r M ) n o s r e p r i a h C ( 0 0 0 , 5 4 8 0 0 2 n n a m f u a L d r a h c i R r M – 7 0 0 2 0 0 0 , 0 0 2 8 0 0 2 – 7 0 0 2 s r o t c e r i D e v i t u c e x E – n e s l O n e v e t S r M r o t c e r i D g n i g a n a M s e v i t u c e x E 3 2 4 , 4 4 1 8 0 0 2 – e t n o m a v i R r e b m A s M y r a t e r c e S y n a p m o C – 7 0 0 2 7 0 0 2 y l u J d e t n i o p p A 2 4 7 , 0 1 9 5 3 , 4 5 1 0 0 0 , 0 2 0 0 0 , 5 1 9 5 3 , 9 1 1 8 0 0 2 r e g a n a M n o i t a r o l p x E – e w o L y e r f f o e G r M – – – – – 7 0 0 2 7 0 0 2 t s u g u A d e t n i o p p A 0 9 2 , 0 5 2 8 7 , 3 9 5 0 0 0 , 0 2 0 0 0 , 5 1 2 8 7 , 8 5 5 8 0 0 2 – – – – – 7 0 0 2 y e k : n o i t a s n e p m o c l a t o T l e n n o s r e p t n e m e g a n a m ) p u o r G d n a y n a p m o c ( Page 19 > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2008 15. REMUNERATION REPORT – AUDITED (continued) 15.2 Directors’ and Executive Ofﬁcers’ remuneration (Company and Group) (continued) Notes in relation to the table of Directors’ and Executive Ofﬁcers’ remuneration A. B. The short-term incentive bonus is for performance during the respective ﬁnancial year using the criteria set out in the Remuneration Report. The amount was ﬁnally determined after performance reviews were completed and approved by the Board. No amounts vest in future years in respect of the bonuses paid. The fair value of the unlisted options granted has been calculated at the date of grant based upon the Black Scholes option pricing model. The fair value is allocated to each reporting period evenly over the period from grant date to vesting date. The value disclosed is the portion of the fair value of the options recognised in this reporting period. The following factors and assumptions were used in determining the fair value of options on grant date: Grant Date Option life Fair value per option Exercise price Price of shares on grant date Expected volatility Risk free interest rate 31st July 2007 3.92 years $0.121 $0.25 $0.25 55% 6.15% 15.3 Equity Instruments All options refer to options over ordinary shares of Rex Minerals Ltd, which are exercisable on a one-for-one basis. 15.3.1 Options and rights over equity instruments granted as compensation Details on options over ordinary shares in the Company that were granted as compensation to each key management person during the reporting period and details on options that were vested during the reporting period are as follows: Number of options granted during 2008 Fair value per option at grant date ($) Exercise price per option ($) Grant date Number of options vested during 2008 Expiry date – – – – – – – – – – – – – – – – – – Directors Mr Paul Chapman Mr Richard Laufmann Mr Steven Olsen Executives Ms Amber Rivamonte 600,000 31 July 2007 $0.121 $0.25 30 June 2011 200,000 Mr Geoffrey Lowe 600,000 31 July 2007 $0.121 $0.25 30 June 2011 200,000 No options were granted as compensation to a key management person during the 2007 ﬁnancial year. No options have been granted since the end of the ﬁnancial year. The options were provided at no cost to the recipients. 15.3.2 Modiﬁcation of terms of equity-settled share-based payment transactions No terms of equity-settled share-based payment transactions (including options and rights granted as compensation to a key management person) have been altered or modiﬁed by the issuing entity during the reporting period or the prior period. Page 20 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2008 15. REMUNERATION REPORT – AUDITED (continued) 15.3 Equity Instruments (continued) 15.3.3 Exercise of options granted as compensation During the reporting period, no options were exercised in regards to previously granted compensation. 15.3.4 Analysis of movements in options The movement during the reporting period, by value, of options over ordinary shares in the Company held by each key management person, and each of the ﬁve named Company Executives and Group Executives is detailed below. Granted in year $ (A) Value of Options Exercised in year $ (B) Lapsed in year $ (C) Directors Mr Paul Chapman Mr Richard Laufmann Mr Steven Olsen Executives Ms Amber Rivamonte Mr Geoffrey Lowe – – – 59,974 59,974 119,948 – – – – – – – – – – – – (A) The value of options granted in the year is the fair value of the options calculated at grant date using the Black Scholes option pricing model as described in note 23. The total value of the options granted is included in the table above. This amount is allocated to remuneration over the vesting period. (B) There were no options exercised during this year. (C) No options lapsed during the year. 16. LEAD AUDITOR’S INDEPENDENCE DECLARATION The lead auditor’s independence declaration is set out on page 48 and forms part of the Directors’ report for the year ended 30 June 2008. Dated at Melbourne this 24th day of September 2008. Signed in accordance with a resolution of the Directors: Steven Olsen Managing Director Page 21 > REX MINERALS LTD BALANCE SHEETS As at 30 June 2008 Note 10 11 12 11 13 14 16 17 18 19 Group 2008 $ Group 2007 $ Company Company 2008 $ 2007 $ 3,876,807 133,719 304,576 4,315,102 – – 5,207,774 336,128 5,543,902 9,859,004 312,176 827,713 29,474 1,169,363 1,169,363 432,396 130,000 10,000 572,396 – – 200,000 – 200,000 772,396 5,994 – – 5,994 5,994 3,876,807 133,719 304,576 4,315,102 5,084,069 30 196,160 155,987 5,436,246 9,751,348 203,470 827,713 29,474 1,060,657 1,060,657 432,396 130,000 – 562,396 211,030 20 – – 211,050 773,446 5,994 – – 5,994 5,994 8,689,641 766,402 8,690,691 767,452 20(i) 20(iii) 9,195,395 362,781 (868,535) 8,689,641 776,950 – (10,548) 766,402 9,195,395 362,781 (867,485) 8,690,691 776,950 – (9,498) 767,452 Current Assets Cash assets Receivables Other assets Total current assets Non-current assets Receivables Investments Exploration and evaluation expenditure Property, plant and equipment Total non-current assets Total assets Current Liabilities Trade payables Non cash drilling accruals Employee beneﬁts Total current liabilities Total liabilities Net assets Equity Issued capital Reserves Accumulated losses Total equity The notes on pages 26 to 46 are an integral part of these ﬁnancial statements. Page 22 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD INCOME STATEMENTS For the year ended 30 June 2008 Group 2008 $ Group 2007 $ Company Company 2008 $ 2007 $ 192,415 – 192,415 – (310,579) – (24,751) – (646,007) (69,065) (5,813) (301) – (1,680) – (2,754) (857,987) (10,548) (310,579) – (24,751) – (646,007) (69,065) (857,987) (5,563) (301) – (880) – (2,754) (9,498) – – – – Note 7 8 9 Finance income Administrative expenses Prospectus expenses Depreciation expense Incorporation fees Employee beneﬁts expense Marketing expenses Loss before tax Income tax (expense) beneﬁt Loss for the period (857,987) (10,548) (857,987) (9,498) Loss per share attributable to ordinary equity holders Basic and diluted loss per share (cents) 22 (1.91) (0.001) (1.91) (0.001) The notes on pages 26 to 46 are an integral part of these ﬁnancial statements. Page 23 > REX MINERALS LTD STATEMENTS OF CHANGES IN EQUITY For the year ended 30 June 2008 Attributable to equity holders of the Group Share Capital Reserves $ Reserves $ – 776,950 – 776,950 776,950 8,418,445 – – 9,195,395 – – – – – – 362,781 – 362,781 Retained Earnings $ – – (10,548) (10,548) Total Equity $ – 776,950 (10,548) 766,402 (10,548) 766,402 – – (857,987) 8,418,445 362,781 (857,987) (868,535) 8,689,641 Attributable to equity holders of the Company Share Capital Reserves $ Reserves $ – 776,950 – 776,950 776,950 8,418,445 – – 9,195,395 – – – – – – 362,781 – 362,781 Retained Earnings $ – – (9,498) (9,498) Total Equity $ – 776,950 (9,498) 767,452 (9,498) 767,452 – – (857,987) 8,418,445 362,781 (857,987) (867,485) 8,690,691 Balance at 18 April 2007 Issue of ordinary shares Loss for the period Balance at 30 June 2007 Balance at 1 July 2007 Issue of ordinary shares Issue of ordinary shares Loss for the period Balance at 30 June 2008 Balance at 18 April 2007 Issue of ordinary shares Loss for the period Balance at 30 June 2007 Balance at 1 July 2007 Issue of ordinary shares Issue of ordinary shares Loss for the period Balance at 30 June 2008 The notes on pages 26 to 46 are an integral part of these ﬁnancial statements. Page 24 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD STATEMENTS OF CASH FLOWS For the year ended 30 June 2008 Group 2008 $ Group 2007 $ Company Company 2008 $ 2007 $ Note Cash ﬂows from operating activities Cash paid to suppliers and employees Interest received (996,662) 192,415 Net cash (used in) from operating activities 21 (804,247) Cash ﬂows from investing activities Exploration and evaluation payments Payment for environmental bond Acquisition of property, plant and equipment (2,055,616) – (364,171) Net cash from (used in) investing activities (2,419,787) Cash ﬂows from ﬁnancing activities Funds advanced to controlled entities Proceeds from issue of share capital Payment of transaction costs Net cash from (used in) ﬁnancing activities – 7,155,000 (486,555) 6,668,445 (4,554) – (4,554) – (10,000) – (10,000) – 446,950 – 446,950 (996,662) 192,415 (804,247) (181,012) – (180,738) (361,750) (3,504) – (3,504) – – – – (2,058,037) 7,155,000 (486,555) 4,610,408 (11,050) 446,950 – 435,900 Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the period 3,444,411 432,396 3,444,411 432,396 432,396 – 432,396 – Cash and cash equivalents at period end 10 3,876,807 432,396 3,876,807 432,396 The notes on pages 26 to 46 are an integral part of these ﬁnancial statements. Page 25 > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS 1. REPORTING ENTITY Rex Minerals Limited (the “Company”) is a Company domiciled in Australia. The address of the Company’s registered ofﬁce is 24 Skipton Street, Ballarat, Victoria, 3350. The Group ﬁnancial statements of the Company as at and for the year ended 30 June 2008 comprise the Company and its subsidiaries (together referred to as the “Group” and individually as “Group entities”). The Group primarily is involved in minerals exploration. 2. BASIS OF PREPARATION (a) Statement of compliance The ﬁnancial report is a general purpose ﬁnancial report which has been prepared in accordance with Australian Accounting Standards (AASBs) (including Australian Interpretations) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The Group ﬁnancial report of the Group and the ﬁnancial report of the Company comply with International Financial Reporting Standards (IFRSs) and interpretations adopted by the International Accounting Standards Board (IASB). The ﬁnancial statements were approved by the Board of Directors on 24 September 2008. (b) Basis of measurement The Group ﬁnancial statements have been prepared on the historical cost basis. (c) Functional and presentation currency These Group ﬁnancial statements are presented in Australian dollars, which is the Company’s functional currency and the functional currency of the Group. (d) Use of estimates and judgements The preparation of ﬁnancial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. 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 and in any future periods affected. In particular, information about signiﬁcant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most signiﬁcant effect on the amount recognised in the ﬁnancial statements are described in the following notes: > > > note 23 – measurement of share-based payments notes 19 and 26 – employee beneﬁts and contingencies note 14 – exploration and evaluation expenditure 3. SIGNIFICANT ACCOUNTING POLICIES The accounting policies set out below have been applied consistently to all periods presented in these Group ﬁnancial statements, and have been applied consistently by Group entities. (a) Basis of consolidation (i) Subsidiaries Subsidiaries are entities controlled by the Group. Control exists when the Group has the power 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 currently are exercisable are taken into account. The ﬁnancial statements of subsidiaries are included in the Group ﬁnancial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group. In the Company’s ﬁnancial statements, investments in subsidiaries are carried at cost. (ii) Transactions eliminated on consolidation Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the Group ﬁnancial statements. Page 26 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued) (b) Financial instruments (i) Non-derivative ﬁnancial instruments Non-derivative ﬁnancial instruments comprise investments in equity, trade and other receivables, cash and cash equivalents and trade and other payables. Non-derivative ﬁnancial instruments are recognised initially at fair value plus, for instruments not at fair value through proﬁt or loss, any directly attributable transaction costs. Subsequent to initial recognition non-derivative ﬁnancial instruments are measured as described below. A ﬁnancial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Group’s contractual rights to the cash ﬂows from the ﬁnancial assets expire or if the Group transfers the ﬁnancial asset to another party without retaining control or substantially all risks and rewards of the asset. Sales of ﬁnancial assets are accounted for at trade date, i.e., the date that the Group commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Group’s obligations speciﬁed in the contract expire or are discharged or cancelled. (i) Receivables – other debtors Other debtors are reviewed on an ongoing basis. An impairment loss is recognised for debts which are known to be uncollectible. An impairment allowance is raised for any doubtful accounts. (ii) Receivables – sale of non-current assets The net gain (loss) on the sale of goods is included as revenue or expense at the date control of the assets passes to the buyer. The gain or loss on disposal is calculated as the difference between the carrying amount of the asset at the time of disposal and the net proceeds on disposal (including incidental costs). (iii) Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less. (iv) Trade and other payables Liabilities are recognised for amounts to be paid in the future for goods and services provided to the Company prior to the end of the reporting period and are stated at amortised cost. The amounts are unsecured and are usually paid within 30 days of recognition. Other non-derivative ﬁnancial instruments are measured at amortised cost using the effective interest method, less any impairment losses. (ii) Share capital Ordinary shares Ordinary shares are classiﬁed as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects. (c) Property, plant and equipment (i) Recognition and measurement Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. (ii) Subsequent costs The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic beneﬁts embodied within the part will ﬂow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in proﬁt or loss as incurred. Page 27 > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued) (c) Property, plant and equipment (continued) (iii) Depreciation Depreciation is recognised in proﬁt or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. The estimated useful lives for the current and comparative periods are as follows: > > buildings vehicles 40 years 5 years Depreciation methods, useful lives and residual values are reviewed at each reporting date. (d) Exploration and evaluation Exploration and evaluation costs, including the costs of acquiring licences, are capitalised as exploration and evaluation assets on an area of interest basis. Costs incurred before the Group has obtained the legal rights to explore an area are recognised in the income statement. Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either: > > the expenditures are expected to be recouped through successful development and exploitation of the area of interest; or activities in the area of interest have not, at the reporting date, reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active and signiﬁcant operations in, or in relation to, the area of interest are continuing. Exploration and evaluation assets are assessed for impairment if: > > sufﬁcient data exists to determine technical feasibility and commercial viability; and facts and circumstances suggest that the carrying amount exceeds the recoverable amount. For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the exploration activity relates. The cash generating unit shall not be larger than the area of interest. In the event that an area of interest is abandoned or if the Directors consider the expenditure to be of reduced value, accumulated costs carried forward are written off in the period in which that assessment is made. Each area of interest is reviewed at the end of each accounting period and accumulated costs are written off to the extent that they will not be recoverable in the future. (e) Impairment (i) Financial assets A ﬁnancial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A ﬁnancial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash ﬂows of that asset. An impairment loss in respect of a ﬁnancial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash ﬂows discounted at the original effective interest rate. An impairment loss in respect of an available-for-sale ﬁnancial asset is calculated by reference to its fair value. Individually signiﬁcant ﬁnancial assets are tested for impairment on an individual basis. The remaining ﬁnancial assets are assessed collectively in groups that share similar credit risk characteristics. All impairment losses are recognised in proﬁt or loss. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For ﬁnancial assets measured at amortised cost, the reversal is recognised in proﬁt or loss. For available-for-sale ﬁnancial assets that are equity securities, the reversal is recognised directly in equity. Page 28 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued) (e) Impairment (continued) (ii) Non-ﬁnancial assets The carrying amounts of the Group’s non-ﬁnancial assets, and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indeﬁnite lives or that are not yet available for use, recoverable amount is estimated at each reporting date. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash ﬂows are discounted to their present value using a pre-tax discount rate that reﬂects current market assessments of the time value of money and the risks speciﬁc to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inﬂows from continuing use that are largely independent of the cash inﬂows of other assets or groups of assets (the “cash-generating unit”). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating units that are expected to beneﬁt from the synergies of the combination. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in proﬁt or loss. Impairment losses recognised in respect of cash-generating units are allocated ﬁrst to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis. An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. (f) Employee beneﬁts (i) Wages, salaries and annual leave Liabilities for employee beneﬁts for wages, salaries and annual leave that are expected to be settled within twelve months of the reporting date represent obligations resulting from employee’s services provided to reporting date, are calculated at undiscounted amounts based on remuneration wage and salary rates that the Company expects to pay as at reporting date including related on-costs, such as workers compensation insurance and payroll tax. (ii) Share-based payments Equity-based compensation will be recognised as an expense in respect of the services received, or as capitalised exploration expenditure as appropriate. The fair value of options granted is recognised as an asset or expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees became unconditionally entitled to the options. The fair value at grant date is independently determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the options, the vesting and performance criteria, the impact of dilution, the non-tradable nature of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option. (g) Revenue Recognition Revenue is recognised in the income statement when the signiﬁcant risks and rewards of ownership have been transferred to the buyer. No revenue is recognised if there are signiﬁcant uncertainties regarding recovery of the consideration due. Revenues are recognised at fair value of the consideration received net of the amount of GST. Exchanges of goods or services of the same nature and value without any cash consideration are not recognised as revaluations. Page 29 > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued) (h) Tax (i) Income taxes Income tax expense 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 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 to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognised for taxable temporary differences arising on the initial recognition of goodwill. 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. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised to the extent that it is probable that future taxable proﬁts will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax beneﬁt will be realised. (ii) Tax consolidation The Company has not chosen to implement tax consolidation at this time. (iii) Goods and services tax Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the balance sheet. Cash ﬂows are included in the statement of cash ﬂows on a gross basis. The GST components of cash ﬂows arising from investing and ﬁnancing activities which are recoverable from, or payable to, the ATO are classiﬁed as operating cash ﬂows. (i) Finance income Finance income comprises interest income on funds invested. Interest income is recognised as it accrues in proﬁt or loss, using the effective interest method. (j) Earnings per share The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the proﬁt or loss attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the proﬁt or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise share options granted to employees. (k) Segment reporting A segment is a distinguishable component of the Group that is engaged either in providing related products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments. Page 30 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued) (l) New standards and interpretations not yet adopted The following standards, amendments to standards and interpretations have been identiﬁed as those which may impact the entity in the period of initial application. They are available for early adoption at 30 June 2008, but have not been applied in preparing this ﬁnancial report: > > > > Revised AASB 3 Business Combinations changes the application of acquisition accounting for business combinations and the accounting for non-controlling (minority) interests. Key changes include: the immediate expensing of all transaction costs; measurement of contingent consideration at acquisition date with subsequent changes through the income statement; measurement of non-controlling (minority) interests at full fair value or the proportionate share of the fair value of the underlying net assets; guidance on issues such as reacquired rights and vendor indemnities; and the inclusion of combinations by contract alone and those involving mutuals. The revised standard becomes mandatory for the Group’s 30 June 2010 ﬁnancial statements. AASB 8 Operating Segments introduces the “management approach” to segment reporting. AASB 8, which becomes mandatory for the Group’s 30 June 2010 ﬁnancial statements, will require the disclosure of segment information based on the internal reports regularly reviewed by the Group’s Chief Operating Decision Maker in order to assess each segment’s performance and to allocate resources to them. Revised AASB 101 Presentation of Financial Statements introduces as a ﬁnancial statement (formerly “primary” statement) the “statement of comprehensive income”. The revised standard does not change the recognition, measurement or disclosure of transactions and events that are required by other AASBs. The revised AASB 101 will become mandatory for the Group’s 30 June 2010 ﬁnancial statements. The Group has not yet determined the potential effect of the revised standard on the Group’s disclosures. AASB 2008-1 Amendments to Australian Accounting Standard – Share-based Payment: Vesting Conditions and Cancellations changes the measurement of share-based payments that contain non-vesting conditions. AASB 2008-1 becomes mandatory for the Group’s 30 June 2010 ﬁnancial statements. The Group has not yet determined the potential effect of the amending standard on the Group’s ﬁnancial report. 4. DETERMINATION OF FAIR VALUES A number of the Group’s accounting policies and disclosures require the determination of fair value for ﬁnancial assets and liabilities. Fair values have been determined for measurement and / or disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes speciﬁc to that asset or liability. (i) Trade and other receivables The fair value of trade and other receivables is estimated as the present value of future cash ﬂows, discounted at the market rate of interest at the reporting date. (ii) Non-derivative ﬁnancial liabilities Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash ﬂows, discounted at the market rate of interest at the reporting date. (iii) Share-based payments Equity-based compensation will be recognised as an expense in respect of the services received, or as capitalised exploration expenditure as appropriate. The fair value of options granted is recognised as an asset or expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees became unconditionally entitled to the options. The fair value at grant date is independently determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the options, the vesting and performance criteria, the non- tradable nature of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option. Page 31 > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 5. FINANCIAL RISK MANAGEMENT (i) Capital Management The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, so as to maintain a strong capital base sufﬁcient to maintain future exploration and development of its projects. In order to maintain or adjust the capital structure, the Group may return capital to shareholders, or issue new shares. The Group’s focus has been to raise sufﬁcient funds through equity to fund exploration and evaluation activities and currently has no external borrowings. The Group encourages employees to be shareholders through the Employee Share Option Plan. There were no changes in the Group’s approach to capital management during the year. Risk management policies and procedures are established with regular monitoring and reporting. Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements. (ii) Credit risk Credit risk is the risk of ﬁnancial loss to the Group if a customer or counterparty to a ﬁnancial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers and investment securities. For the Company it arises from receivables due from subsidiaries. (iii) Guarantees Group policy is to provide ﬁnancial guarantees only to wholly-owned subsidiaries. (iv) Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its ﬁnancial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufﬁcient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. (v) Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or the value of its holdings of ﬁnancial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. 6. SEGMENT REPORTING The Company operates predominantly in one geographical segment, being Australia, and one industry, mineral mining and exploration. 7. FINANCE INCOME AND EXPENSE Finance income – interest income on bank deposits Finance expense Net ﬁnance income and expense Group 2008 $ 192,415 – 192,415 Group 2007 $ – – – Company Company 2008 $ 192,415 – 192,415 2007 $ – – – Page 32 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 8. EMPLOYEE BENEFITS EXPENSE Wages and salaries Share based payments expense Increase in liability for annual leave Total employee beneﬁts expense Group 2008 $ 561,149 55,384 29,474 646,007 Group 2007 $ – – – – Company Company 2008 $ 561,149 55,384 29,474 646,007 2007 $ – – – – 9. INCOME TAX EXPENSE NUMERICAL RECONCILIATION BETWEEN TAX EXPENSE AND PRE-TAX ACCOUNTING LOSS Loss for the period (857,987) (10,548) (857,987) (9,498) Group 2008 $ Group 2007 $ Company Company 2008 $ 2007 $ Income tax using the domestic corporation tax rate of 30% (2007: 30%) Increase in income tax due to: Non-deductible expenses Decrease in income tax expense due to: Effect of tax losses not recognised Total income tax expense (beneﬁt) on pre-tax net proﬁt 10. CASH ASSETS (257,396) (3,164) (257,396) (2,849) 39,759 504 39,759 264 (217,637) 2,660 (217,637) 2,585 – – – – Group 2008 $ Group 2007 $ Company Company 2008 $ 2007 $ Bank balances 3,876,807 432,396 3,876,807 432,396 Cash and cash equivalents in the statement of cash ﬂows 3,876,807 432,396 3,876,807 432,396 The Group’s exposure to interest rate risk and a sensitivity analysis for ﬁnancial assets and liabilities are disclosed in note 24. Page 33 > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 11. RECEIVABLES Current Other receivables Total current receivables Non-current Loans to subsidiaries (i) Total non-current receivables Company Company Group 2008 $ Group 2007 $ 133,719 133,719 130,000 130,000 2008 $ 133,719 133,719 – – – – 5,084,069 5,084,069 2007 $ 130,000 130,000 211,030 211,030 (i) The recovery of the carrying value of loans to controlled entities is dependent on the successful development and commercial exploitation, or sale of interest held by controlled entities. 12. OTHER ASSETS Prepayments Drilling contract prepayments Environmental bonds Total other assets 13. INVESTMENTS IN SUBSIDIARIES Investments in subsidiaries Total investments Group 2008 $ 9,018 295,558 – 304,576 Group 2008 $ – – Group 2007 $ – – 10,000 10,000 Group 2007 $ – – Company Company 2008 $ 9,018 295,558 – 304,576 2007 $ – – – – Company Company 2008 $ 30 30 2007 $ 20 20 Page 34 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 14. EXPLORATION AND EVALUATION EXPENDITURE Cost Balance at 1 July Acquisitions Additions Expenditure written off Balance at 30 June Amortisation and impairment losses Balance at 1 July Balance at 30 June Carrying amounts At 1 July At 30 June Company Company Group 2008 $ 200,000 2,224,071 2,783,703 – 5,207,774 – – 200,000 Group 2007 $ – 200,000 – – 200,000 – – – 2008 $ – 150,000 46,160 – 196,160 – – – 2007 $ – – – – – – – – – 5,207,774 200,000 196,190 The recoverability of the carry amounts of exploration and evaluation assets is dependent on the successful development and commercial exploitation or sale of the respective area of interest. 15. UNRECOGNISED DEFERRED TAX ASSETS Group 2008 $ Group 2007 $ Company Company 2008 $ 2007 $ Net deferred tax assets have not been recognised in respect of the following Tax losses Total tax assets / (liabilities) not recognised 2,935,453 2,935,453 – – 819,455 819,455 – – The tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable proﬁt will be available against which the Company can utilise the beneﬁts. Page 35 > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 16. PROPERTY, PLANT AND EQUIPMENT Cost Balance at 1 July Acquisitions Disposals Balance at 30 June Depreciation and impairment losses Balance at 1 July Depreciation charge for the year Depreciation charged to exploration projects Disposals Balance at 30 June Carrying amounts At 1 July At 30 June 17. TRADE PAYABLES Current Other trade payables and accrued expenses Total current trade and other payables 18. NON CASH DRILLING ACCRUALS Current Drilling contract accrual payable in fully paid ordinary shares Total non cash drilling accruals Group 2008 $ – 364,171 – 364,171 – 24,751 3,292 – 28,043 – 336,128 Group 2008 $ 312,176 312,176 Group 2008 $ 827,713 827,713 Group 2007 $ – – – – – – – – – – – Group 2007 $ 5,994 5,994 Group 2007 $ Company Company 2008 $ – 180,738 – 180,738 – 24,751 – – 24,751 – 155,987 2007 $ – – – – – – – – – – – Company Company 2008 $ 203,470 203,470 2007 $ 5,994 5,994 Company Company 2008 $ 2007 $ – – 827,713 827,713 – – On 23 July 2007, the Company entered into an agreement with Titeline Drilling Pty Ltd (“Titeline”) pursuant to which Titeline has agreed to provide the Company with certain drilling and related services. The services will be provided for a period of 672 days of drilling. The services are to comprise all activities and costs associated with diamond and percussion drilling. The Company has agreed to pay Titeline as follows: (a) A cash payment of $1,000,000 (plus GST). This amount was prepaid and based on drilling services provided to date, $704,442 has been capitalised with the balance carried forward as a prepayment, refer note 12. Page 36 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 18. NON CASH DRILLING ACCRUALS (continued) (b) (c) The issue to Titeline Property Pty Ltd of up to 6,000,000 shares. The shares issuable to Titeline under this agreement are expected to be issued over the period from July 2008 to December 2009 as drilling is undertaken. To the extent that shares have been earned prior to 30 June 2008, they have been accrued based on the value of drilling services provided (refer table above). The issue to Titeline Property Pty Ltd of 1,000,000 options over shares at an exercise price of $0.25 per option exercisable at any time before 30 June 2011. These options are only exercisable by Titeline after the agreement has been completed to the satisfaction of the Company. These options have been issued and vest on the basis described above. To the extent that services have been rendered in satisfaction of these options, they have been charged to the share based payments reserve. 19. EMPLOYEE BENEFITS Group 2008 $ 29,474 29,474 Group 2007 $ – – Current Liability for annual leave Total employee beneﬁts 20. ISSUED CAPITAL Company Company 2008 $ 29,474 29,474 Date of issue No of shares Issue price $ (i) Movements in shares on issue: Opening balance at 1 July 2007 Issue of ordinary shares – seed capital Issue of ordinary shares – to acquire EL4669 Issue of ordinary shares – initial public offering (IPO) Less costs to the IPO issue Issue of ordinary shares – to acquire all SA licences Issue of ordinary shares – to acquire EL4920 Closing balance at 30 June 2008 Opening balance at 18 April 2007 Issue of ordinary shares – founding Directors Issue of ordinary shares – seed capital Issue of ordinary shares – to acquire St Arnaud project 20/07/2007 20/07/2007 13/09/2007 13/09/2007 10/04/2008 13/05/2007 18/06/2007 16,765,000 300,000 500,000 28,000,000 – 6,000,000 1,000,000 52,565,000 – 9,500,000 5,265,000 29/06/2007 2,000,000 Closing balance at 30 June 2007 16,765,000 0.10 0.25 0.25 – 0.25 0.25 0.10 0.10 0.10 2007 $ – – $ 776,950 30,000 125,000 7,000,000 (486,555) 1,500,000 250,000 9,195,395 – 50,450 525,500 200,000 776,950 Page 37 > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 20. ISSUED CAPITAL (continued) Date of issue No of options Exercise price $ Expiry date 0.30 0.25 0.30 0.25 0.365 30/06/2011 30/06/2011 30/06/2011 30/06/2011 30/06/2011 0.25 30/06/2011 (ii) Movements in options on issue: Opening balance at 1 July 2007 Issue of options – to acquire EL4669 Issue of options – to employees Issue of options – to acquire all SA licences Issue of options – for contract drilling services Issue of options – to employees Closing balance at 30 June 2008 Opening balance at 18 April 2007 Issue of options – founding Directors Closing balance at 30 June 2007 20/07/2007 20/07/2007 13/09/2007 13/09/2007 03/12/2007 31/05/2007 (iii) Movements in share based payment reserve: Opening balance at 1 July 2007 Employee share based payments – to employees Options issued – to acquire EL4669 and all SA licences Options issued – for contract drilling services Closing balance at 30 June 2008 3,500,000 500,000 1,200,000 1,000,000 1,000,000 300,000 7,500,000 – 3,500,000 3,500,000 $ – 168,974 159,000 34,807 362,781 21. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES Cash ﬂows from operating activities Loss for the period Adjustments for non cash items: Depreciation Share based payment transactions Operating loss before changes in working capital and provisions (Increase)/decrease in trade and other receivables (Decrease)/increase in trade and other payables (Decrease)/increase in employee beneﬁts Net cash (used in) from operating activities Group 2008 $ Group 2007 $ Company Company 2008 $ 2007 $ (857,987) (10,548) (857,987) (9,498) 24,751 55,384 (777,852) (137,737) 102,712 8,630 (804,247) – – 24,751 55,384 (10,548) – 5,994 – (4,554) (777,852) (137,737) 102,712 8,630 (804,247) – – (9,498) – 5,994 – (3,504) Page 38 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 21. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES (continued) During the ﬁnancial year, the Group had the following non-cash investing and ﬁnancing activities which are not reﬂected in the statement of cash ﬂows (refer note 20): (a) Acquisition of Victorian and South Australian licences for a combination of share and option consideration. (b) Issue of options to employees, some of which have been capitalised as exploration expenditure. (c) Drilling services provided by Titeline drilling for a combination of share and option consideration. 22. LOSS PER SHARE Loss per share Basic loss per share – cents Diluted loss per share – cents (a) Basic loss per share Group 2008 $ (1.91) (1.91) Group 2007 $ (0.001) (0.001) The calculation of basic earnings (loss) per share (EPS) at 30 June 2008 was based on the loss attributable to ordinary equity holders of $857,987 (2007: $10,548) and a weighted average number of ordinary shares outstanding during the ﬁnancial year ended 30 June 2008 of 44,852,124 (2007: 8,382,500). (b) Diluted loss per share The calculation of diluted earnings (loss) per share at 30 June 2008 is the same as basic earnings per share. 23. SHARE BASED PAYMENTS The Company established a share option plan that entitles employees (other than Directors) to purchase shares in the Company. The following options were granted during the ﬁnancial year ending 30 June 2008: Employees entitled Grant date No of options Expiry date Key management personnel (A) Other employees (B) 20/07/2007 03/12/2007 Total 1,200,000 300,000 1,500,000 30/06/2011 30/06/2011 There were no options forfeited or exercised during the period. Options issued in 2007 are founding options and not granted as compensation to key management personnel. Key management personnel options (A) are exercisable at a price of 25 cents each, employee options (B) are exercisable at a price of 36.5 cents each, vesting one third immediately, one third on 30 June 2008, one third on 30 June 2009 and expiring 30 June 2011. Each option entitles the holder to subscribe for 1 ordinary share in the Company. All options vest on the vesting date, unless the options have not vested and the employee is terminated, in which case these options will lapse. These options do not entitle the holder to participate in any share issue of the Company or any other related entity. Page 39 > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 23. SHARE BASED PAYMENTS (continued) (a) Fair value of share options and assumptions The fair value of the unlisted options have been calculated at the date of the grant based upon the Black Scholes option pricing model. The fair value is allocated to each reporting evening over the period from grant date to vesting date. The value disclosed below (employee expenses) is the portion of the fair value of the options allocated to this reporting period. Employees entitled Fair value at grant date Share price at date of grant* Exercise price Expected volatility Option life (years) Risk free interest rate (A) $0.121 $0.25 $0.25 55% 3.92 6.15% (B) $0.207 $0.365 $0.365 60% 3.57 6.17% *Issue price under the prospectus for options issued on or around the date the prospectus lodged with ASIC on 10 August 2007 and for the options issued following listing and trading the 5 day volume weighted average price. The common method for valuing options is the Black Scholes option pricing model. Black Scholes option pricing model looks at the past share price as an indicator of the future share price. Black Scholes option pricing model assumes that high volatility in the share prices is an indicator for a higher valuation as there is a greater chance of the share price moving signiﬁcantly (upwards or downwards). The model also assumes that the options are exercised at or near the expiry date of the options. (b) Employee expenses Share options granted in 2007 Share options granted in 2008 – recognised in income statement Share options granted in 2008 – capitalised to exploration projects Group 2008 $ – 55,384 113,590 Total expense recognised as employee costs 168,974 Group 2007 $ – – – – Company Company 2008 $ – 55,384 113,590 168,974 2007 $ – – – – 24. FINANCIAL INSTRUMENTS Exposure to credit risk and interest rate risks arose in the normal course of the Group’s business. (a) Credit risk Management monitors the exposure to credit risk on an ongoing basis. The Company does not require collateral in respect of ﬁnancial assets. At reporting date, cash is held with a reputable ﬁnancial institution. The maximum exposure to credit risk is represented by the carrying amount of each ﬁnancial asset in the balance sheet. (b) Fair value The ﬁnancial assets and ﬁnancial liabilities included in assets and liabilities approximate net fair values. Page 40 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 24. FINANCIAL INSTRUMENTS (continued) (c) Liquidity risk The following are the contractual maturities of ﬁnancial liabilities excluding derivatives. Financial liabilities Group 2008 Trade and other payables 2007 Trade and other payables Financial liabilities Company 2008 Trade and other payables 2007 Trade and other payables Carrying amount $ Contractual cash ﬂows $ 1 year or less $ 1-2 years $ 312,176 (312,176) 312,176 (312,176) (312,176) (312,176) 5,994 5,994 (5,994) (5,994) (5,994) (5,994) – – – – Carrying amount $ Contractual cash ﬂows $ 1 year or less $ 1-2 years $ 203,470 (203,470) 203,470 (203,470) (203,470) (203,470) 5,994 5,994 (5,994) (5,994) (5,994) (5,994) – – – – (d) Interest rate risk The Group’s exposure to market interest rates relates primarily to the Group’s short-term deposits. At balance date, the Group had the following ﬁnancial assets exposed to variable interest rate risk: Group 2008 $ Group 2007 $ Company Company 2008 $ 2007 $ Cash and cash equivalents 3,876,807 432,396 3,876,807 432,396 At balance date, the Group has no ﬁnancial liabilities exposed to variable interest rate risks. The following sensitivity analysis is based on the interest rate risk exposure in existence at the balance sheet date. At 30 June 2008, if interest rates had moved, as illustrated in the table below, with all other variables constant, proﬁt and or loss and equity would have been affected as follows: Page 41 > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 24. FINANCIAL INSTRUMENTS (continued) (d) Interest rate risk (continued) Group +1% (100 basis points) -1% (100 basis points) Company +1% (100 basis points) -1% (100 basis points) > Proﬁt or loss higher/(lower) 2008 $ 2007 $ > Equity higher/(lower) 2008 $ 2007 $ 24,462 (24,462) 24,462 (24,462) – – – – 24,462 (24,462) 24,462 (24,462) – – – – The movements in proﬁt or loss are due to higher/lower interest earnings from variable rate cash balances. The movements in equity are directly linked to movements in the Income Statement. (e) Impairment losses None of the Group’s receivables are post due (2007: nil). 25. EXPLORATION EXPENDITURE COMMITMENTS In order to maintain current rights of tenure to exploration tenements, the Company is required to perform minimum exploration work to meet the minimum expenditure requirements. These obligations are expected to be fulﬁlled in the normal course of operations. Mining interests may be relinquished or joint ventured to reduce this amount. The various State governments has the authority to defer, waive or amend the minimum expenditure requirements. Group 2008 $ Group 2007 $ Not later than one year Later than one year but not later than ﬁve years 1,125,300 4,626,500 1,311,850 4,460,800 Company Company 2008 $ – – 2007 $ – – 26. CONTINGENCIES The Directors are of the opinion that provisions are not required in respect of these matters, as it is not probable that a future sacriﬁce of economic beneﬁt will be required or the amount is not capable of reliable measurement. The Company’s bankers have guaranteed $40,000 (2007: $10,000) in the event the Company is called upon to rehabilitate exploration sites. The guarantee is secured against land and buildings. There are no other contingent liabilities or assets at the date of this report. Page 42 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 27. KEY MANAGEMENT PERSONNEL DISCLOSURES The following were key management personnel of the Group at any time during the reporting period and unless otherwise indicated were key management personnel for the entire period. Name Non-Executive Directors Mr Paul Chapman Mr Richard Laufmann Executive Directors Mr Steven Olsen Executives Ms Amber Rivamonte Mr Geoffrey Lowe Position held Appointment detail Chairperson Chairperson – Audit Committee Appointed 18 April 2007 Appointed 16 May 2007 Managing Director Appointed 13 May 2007 Company Secretary & CFO Exploration Manager Appointed 16 July 2007 Appointed 27 August 2007 There have been no changes to key management personnel between 1 July 2008 and the date of this report. The key management personnel compensation included in “Employee Beneﬁts Expenses” (see note 8) and “Exploration and Evaluation” (see note 14) are as follows: Short term employee beneﬁts Post employment beneﬁts Share based payments Group 2008 $ 573,782 50,290 119,948 Group 2007 $ – – – Company Company 2008 $ 573,782 50,290 119,948 2007 $ – – – (a) Key management personnel compensation disclosures Information regarding individual Directors and Executives compensation and some equity instrument disclosures as permitted by Corporation Regulations 2M.3.03 and 2M.6.04 are provided in the Remuneration Report section of the Directors’ Report on pages 17 to 21. No key management personnel has entered into a material contract or related party transactions with the Group since the end of the previous ﬁnancial year and there were no material contracts involving Directors’ interests existing at year end. Page 43 > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 27. KEY MANAGEMENT PERSONNEL DISCLOSURES (continued) (b) Options over equity instruments The movement during the reporting period in the number of options over ordinary shares in Rex Minerals Ltd held, directly, indirectly or beneﬁcially, by each key management person, including their related parties, is as follows: Held at 1 July 2007 Granted as compensation Vested during year Held at 30 June 2008 Vested and exercisable at 30 June 2008 Note 2008 Directors Mr Paul Chapman Mr Richard Laufmann Mr Steven Olsen (i) (iv) (ii) (iv) (iii) (iv) 1,000,000 1,000,000 1,500,000 – – – – – – 1,000,000 1,000,000 1,500,000 1,000,000 1,000,000 1,500,000 Executives Ms Amber Rivamonte Mr Geoffrey Lowe – – 600,000 600,000 200,000 200,000 600,000 600,000 200,000 200,000 Held at 18 April 2007 Note 2007 Directors Mr Paul Chapman Mr Richard Laufmann Mr Steven Olsen (i) (iv) (ii) (iv) (iii) (iv) Executives Ms Amber Rivamonte Mr Geoffrey Lowe – – – – – Options acquired* 1,000,000 1,000,000 1,500,000 – – Vested during year Held at 30 June 2007 Vested and exercisable at 30 June 2007 – – – – – 1,000,000 1,000,000 1,500,000 1,000,000 1,000,000 1,500,000 – – – – * The options acquired in 2007 are founding options and not granted as compensation to key management personnel. Options over ordinary shares that were held by related parties of key management personnel are disclosed below. (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. (iv) Interests held are subject to ASX escrow until 24 months after listing (ie 20 September 2009) No options were exercised during the ﬁnancial years ending 2007 & 2008. Page 44 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 27. KEY MANAGEMENT PERSONNEL DISCLOSURES (continued) (c) Movements in shares The movement during the reporting period in the number of ordinary shares in Rex Minerals Ltd held, directly, indirectly or beneﬁcially, by key management person, including their related parties, is as follows: Note (i) (ii) (iii) Note (i) (ii) (iii) 2008 Directors Mr Paul Chapman Mr Richard Laufmann Mr Steven Olsen Executives Ms Amber Rivamonte Mr Geoffrey Lowe 2007 Directors Mr Paul Chapman Mr Richard Laufmann Mr Steven Olsen Executives Ms Amber Rivamonte Mr Geoffrey Lowe Held at 1 July 2007 2,500,000 2,500,000 4,500,000 Purchases Sales Held at 30 June 2008 – – – – – – – – 2,500,000 2,500,000 4,500,000 250,000 10,000 250,000 – – 10,000 Held at 18 April 2007 Purchases Sales Held at 30 June 2007 – – – – – 2,500,000 2,500,000 4,500,000 250,000 – – – – – – 2,500,000 2,500,000 4,500,000 250,000 – Shares that were held by related parties of key management personnel are disclosed below. (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 $0.01 each. (d) Director related entities There were no other transactions with Director related entities. Page 45 > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 28. RELATED PARTIES (a) Identity of related parties The Group has a related party relationship with its subsidiaries (see note 29), and with its key management personnel (see note 27). (b) Subsidiaries Loans are made by the Company to wholly owned subsidiaries. Loans outstanding between the Company and its subsidiaries have no ﬁxed date of repayment but are repayable at call, and are non-interest bearing. During the year ended 30 June 2008, such loans totalled $2,058,037 (2007: $211,050). 29. GROUP ENTITIES Parent entity Rex Minerals Ltd Subsidiaries Rex Minerals (SA) Pty Ltd Rex Minerals (Vic) Pty Ltd Rex Minerals (Iron Ore) Pty Ltd Country of Incorporation Ownership Interest 2007 2008 Australia Australia Australia Australia 100% 100% 100% 100% 100% – The subsidiaries are small proprietary companies and are not required to prepare ﬁnancial statements. Consequently no individual audit reports have been issued for them. 30. SUBSEQUENT EVENTS There have been no subsequent events to 30 June 2008 to disclose at the date of this report. 31. AUDITORS’ REMUNERATION KPMG Australia Audit services Other services Group 2008 $ 37,000 16,500 Group 2007 $ – – Company Company 2008 $ 37,000 16,500 2007 $ – – Page 46 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD DIRECTORS’ DECLARATION 1. In the opinion of the Directors of Rex Minerals Ltd (‘the Company’): a) the ﬁnancial statements and notes set out on pages 22 to 46, and the Remuneration report in the Directors' report, set out on pages 17 to 21, are in accordance with the Corporations Act 2001, including: (i) (ii) giving a true and fair view of the Company’s and the Group’s ﬁnancial position as at 30 June 2008 and of their performance, for the ﬁnancial year ended on that date; and complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; the ﬁnancial report also complies with International Financial Reporting Standards as disclosed in note 2(a); there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. b) c ) 2. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Ofﬁcer and Chief Financial Ofﬁcer for the ﬁnancial year ended 30 June 2008. Dated at Melbourne this 24th day of September 2008. Signed in accordance with a resolution of the Directors: Steven Olsen Managing Director Page 47 > REX MINERALS LTD LEAD AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 Page 48 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD INDEPENDENT AUDIT REPORT TO THE MEMBERS OF REX MINERALS LIMITED Page 49 > REX MINERALS LTD INDEPENDENT AUDIT REPORT TO THE MEMBERS OF REX MINERALS LIMITED Page 50 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < > REX MINERALS LTD ADDITIONAL SHAREHOLDER INFORMATION Additional information required by the ASX Limited Listing Rules and not disclosed elsewhere in this report is set out below. (a) Substantial shareholders lodged with the Company as at 31 August 2008 Name of Ordinary Shareholder Number of Shares % of Shares Held Lihir Australia Holdings PL Avoca Resources Ltd S&S Olsen PL 7,000,000 6,000,000 4,500,000 13.32 11.41 8.56 (b) Listing of 20 largest shareholders as at 31 August 2008 Rank Name Designation Number of Shares Held % of Issued Capital 13.32% 11.41% 8.56% 4.76% 3.8% 3.8% 2.38% 2.38% 1.9% 1.26% 0.95% 0.95% 0.57% 0.57% 0.53% 0.48% 0.48% 0.39% 0.38% 0.38% 59.25% Lihir Australia Holdings PL Avoca Resources Ltd S & S Olsen PL Natalie Laufmann Auselect Ltd J P Morgan Nominees Australia Ltd Stone Poneys Nominees PL Stone Poneys Nominees PL Philippa Jean Laufmann Lyrebird PL Goldsearch Ltd James Ronald Selkirk CL Smith & Associates PL Stephen Twyerould Geoffrey Van Lear Amber Rayne Rivamonte P B & C A Johnston Flagstaff Place PL Tectonex Geoconsultants PL Thylacine PL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Total Chapman S/F A/C Chapman Inv Fund Laufmann Family A/C Lyrebird S/F A/C Colin Smith S/F A/C SCT & CCC S/F A/C B209 A/C Johnston Family A/C Etheridge S/F A/C Brian Phillips S/F 7,000,000 6,000,000 4,500,000 2,500,000 2,000,000 2,000,000 1,250,000 1,250,000 1,000,000 660,000 500,000 500,000 300,000 300,000 279,000 250,000 250,000 207,000 200,000 200,000 31,146,000 (c) Distribution of shareholders as at 31 August 2008 Range Total Holders Units % of Issued Capital 1-1,000 1,001-5,000 5,001-10,000 10,001-100,000 100,001 - over Total 1 73 154 365 59 652 1,000 237,044 1,322,860 13,143,443 37,860,653 52,565,000 0.00% 0.45% 2.52% 25.00% 72.03% 100.00% (d) Number of shareholders holding less than a marketable parcel as at 31 August 2008 Fifteen. (e) Voting rights On a show of hands every shareholder of fully paid ordinary shares present in person or by proxy shall have one vote and upon a poll, each share shall have one vote. (f) Stock exchange listing Rex Minerals Ltd is listed on the Australian Stock Exchange. The Company’s ASX code is RXM. Page 51 > REX MINERALS LTD NOTES Page 52 R e x M i n e r a l s L t d > A N N U A L R E P O R T 2 0 0 8 < ANNUAL REPORT >> 2008 ANNUAL REPORT >> 2008 Designed and Produced by Celtink Creative Ballarat. info@celtink.com ABN 12 124 960 523 Contact A 24 Skipton Street Ballarat Victoria 3350 Australia T (03) 5337 4000 F (03) 5331 1776 P PO Box 626W Ballarat West Victoria 3350 Australia E info@rexminerals.com.au W www.rexminerals.com.au

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