Rex Minerals Limited Annual Report 2009

Plain-text annual report

Celtink Creative: Rex Minerals: Annual Report 2009 – 4pp Cover – OUTSIDE. 260909 PMS 8943 Metallic C M Y K ABN 12 124 960 523 CONTACT A 209 Dana Street Ballarat Victoria 3350 Australia T (03) 5337 4000 F (03) 5331 1776 P PO Box 626W Ballarat West Victoria 3350 Australia info@rexminerals.com.au E W www.rexminerals.com.au 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 9 Drill Discover Define annual report 2009 Celtink Creative: Rex Minerals: Annual Report 2009 – 4pp Cover – INSIDE. 210909 PMS 8943 Metallic C M Y K ABN 12 124 960 523 CORPORATE DIRECTORY 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 Janet Mason PRINCIPAL and REGISTERED OFFICE 209 Dana 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 181 William Sreet Melbourne Victoria 3000 OPERATION LOCATIONS A U S T R A L I A SOUTH AUSTRALIA NEW SOUTH WALES VICTORIA SOUTH AUSTRALIA Wandearah Pine Point Adelaide Mt Carrington Lismore NEW SOUTH WALES Sydney Designed and Produced by Celtink Creative Ballarat. info@celtink.com > TABLE OF CONTENTS Rex Minerals Ltd Annual Report for the year ended 30 June 2009 INTRODUCTION, HIGHLIGHTS AND GOALS FOR 2010 ..............................1 LETTER FROM THE CHAIRMAN AND MANAGING DIRECTOR ..................2 REVIEW OF OPERATIONS ...........................................................................3 EXPLORATION PROJECTS......................................................................4-12 TENEMENTS SCHEDULE ..........................................................................12 DIRECTORS’ REPORT............................................................................13-24 BALANCE SHEETS ....................................................................................25 INCOME STATEMENTS..............................................................................26 STATEMENTS OF CHANGES IN EQUITY ..................................................27 STATEMENTS OF CASH FLOWS................................................................28 NOTES TO THE FINANCIAL STATEMENTS ..........................................30-50 DIRECTORS’ DECLARATION ......................................................................51 AUDITOR’S INDEPENDENCE DECLARATION...........................................52 INDEPENDENT AUDIT REPORT ..........................................................53-54 ADDITIONAL SHAREHOLDER INFORMATION..........................................55 > INTRODUCTION Rex Minerals Ltd (“Rex”) is an Australian minerals exploration and development company with a large-scale copper project in South Australia and a copper, gold and silver project in New South Wales. On South Australia’s Yorke Peninsula, Rex seeks to discover multiple copper deposits leading to the development of a large, low-cost and long life mining operation. In New South Wales, Rex’s Mt Carrington project has existing gold and silver Resources and a shallow copper discovery which may provide the Company with a shorter term development option. Rex is progressing with both projects to identify the optimal development paths that will lay the foundations for continued growth as a diversiﬁed exploration and mining company. > HIGHLIGHTS Multiple large scale high grade copper intersections have been returned from drilling at the Hillside Project on the Yorke Peninsula in South Australia. Assay results include: > 259m @ 1.7% copper and 0.4g/t gold > 60m @ 3.0% copper and 0.5g/t gold > 57m @ 1.5% copper and 0.4g/t gold > 51m @ 1.5% copper and 0.1g/t gold A Resource update was completed at the Mt Carrington Project for a total Inferred Resource of: > 190,000 ounces of gold, and > 10.5 million ounces of silver A new shallow high grade copper discovery was made at Mt Carrington with drilling results of 18.7m @ 5.9% copper and 10.1m @ 6.3% copper. The Company exercised an option to purchase 100% of the Mt Carrington Project The Company successfully raised a total of $11.1 million during difﬁcult economic conditions in order to maintain progress at its projects. > GOALS FOR 2010 > Resource : At the Hillside copper project deﬁne an initial Inferred Resource estimate. > Scale : At Hillside identify and scope potential extensions of the copper mineralisation within 500m of the surface. > New Discovery : Make at least one new large scale copper discovery along the Pine Point Copper Belt. > Scale : At Mt Carrington identify the potential for the copper, gold and silver mineralisation within 200m of the surface. > Resource : At Mt Carrington deﬁne a new copper Resource and/or increase the gold and silver Resource. > Economics : Initiate scoping studies at Hillside and Mt Carrington. Page 1 A 209 Dana 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 2009 Dear Fellow Shareholder, At the Company’s IPO in September 2007, the foundation was laid down for Rex to test a number of large scale targets with a substantial drilling program planned for each project area. The underlying premise to this strategy was that almost all mineral discoveries require a substantial amount of drilling and re-interpretation before the potential can be realised. This strategy was made even more important during the past year as the global ﬁnancial crisis took hold. Whilst many explorers stopped drilling, Rex through its drilling alliance with Titeline Drilling continued with its drilling campaign at the Hillside copper project in South Australia. It was at close to the peak of the global ﬁnancial crisis that drill hole HDD018 returned high grade assay results (in January 2009) over a substantial length, which indicated the beginnings of what is now emerging as a substantial copper discovery. Since that time drilling has continued to produce a number of thick and high grade copper intersections, with the rewards from the strategy undertaken by Rex since the IPO now delivering results. With every new discovery comes a phase of rapid learning about the key features associated with each mineral deposit. There are many examples from other similar deposits that geologists can use to aid the discovery process, but each deposit will typically have a number of important characteristics that are unique. On the Yorke Peninsula, Rex has tested a wide range of theories about the copper mineralisation situated there, with some exciting results returned in terms of the scale of copper mineralisation that could ultimately be discovered. The initial targeting was focussed on the gravity features that were deﬁned in the area (one method used to discover the Prominent Hill deposit), which produced large scale, but lower grade copper results initially. It was the continuation of some of these early drill holes underneath the adjacent magnetic anomaly that ultimately led to the discovery of thick and high grade zones of copper mineralisation. The copper mineralisation was found to be closely associated with magnetite (cause of the magnetic anomaly), and recent high resolution magnetic surveys have shown that a number of high intensity linear magnetic anomalies over a substantial strike length are yet to be drill tested at Hillside. Therefore our belief is that the Hillside project alone could deliver a new large scale mining opportunity for Rex. However, the evolution of Rex’s growth is not just restricted to the Hillside Project. The Pine Point Copper Belt is a large geological zone that extends for over 60km within Rex’s Exploration Licence on the Yorke Peninsula. Key exploration criteria has been recognised within the Pine Point Copper Belt, based on government magnetic surveys, gravity surveys and a number of high grade historical copper mines. These criteria all support our view that the potential for multiple large scale copper targets in this region is very high. Rex is now moving into a very exciting and rapid growth phase as exploration expands to cover the entire Pine Point Copper Belt over the following year. In addition, exploration at the Mt Carrington copper-gold-silver project is continuing to uncover the potential in this area. Rex’s work this year has shown that the existing shallow copper-gold-silver Resources deﬁned to date are part of a much larger mineral system, with strong evidence for the presence of large scale mineralisation in the project area. This project therefore ﬁts within our original strategy of working on projects that have large scale potential which could support the development of a new mining operation. The capital raisings completed over the ﬁrst half of 2009 were crucial in achieving success from our exploration effort. Rex is now well ﬁnanced, with a solid capital structure and with 100% ownership of two projects that contain large scale growth opportunities. In the year ahead Rex is looking to move to a new level of copper exploration on the Yorke Peninsula. The potential that has been uncovered at both Hillside and further along the Pine Point Copper Belt has revealed a new frontier of copper exploration and discovery on the Yorke Peninsula. Rex will focus its attention on both the initial deﬁnition of a Resource at Hillside, along with proving up the regional copper potential that could all feed into a new large scale mining operation. At Mt Carrington, results are also leading Rex towards identifying a new large scale project. The shallow Resources and high grade copper results are encouraging and Rex will continue exploring the shallow potential at Mt Carrington. We look forward to your further support over the following year as we expand our exploration programs and expect to deliver a continuous stream of new and exciting exploration results leading towards the development of a new mining operation. 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 9 < > REX MINERALS LTD REVIEW OF OPERATIONS For the year ended 30 June 2009 SUMMARY Rex has consolidated its activities down to two major projects during the year with the following important milestones achieved. October 2008 Sale of Victorian Gold assets (St Arnaud and North Creswick) for $1.5 million. December 2008 January 2009 March 2009 March 2009 April 2009 Complete Resource upgrade at the Mt Carrington project, NSW, for a total Inferred Resource of: 190,000 ounces of gold, and 10.5 million ounces of silver Large scale and high grade copper mineralisation discovered at Hillside, South Australia, including: 259m @ 1.7% copper and 0.4g/t gold from 205m in drill hole HDD 018W1. Complete capital raising of $5.51 million at a share price of $0.40. This was the ﬁrst capital raising since the company’s IPO in September 2007 where a total of $7.0 million was raised at a share price of $0.25. Discovered new high grade and shallow copper mineralisation at Mt Carrington with results of: 18.9m @ 5.9% copper from 52.25m and 10.1m @ 6.3% copper from 88.0m in drill hole KYD001. Further large scale and high grade copper intersected at Hillside including: 57m @ 1.5% copper and 0.4g/t gold from 381m in drill hole HDD023. April 2009 Exercise option to purchase 100% of the Mt Carrington project. May 2009 Complete capital raising of $5.6 million at a share price of $0.70. June 2009 Complete ﬁnancial year with $12.3 Million cash and 100% ownership of two large scale projects hosting new copper discoveries over the past year. Page 3 > REX MINERALS LTD EXPLORATION PROJECTS For the year ended 30 June 2009 PINE POINT COPPER BELT, YORKE PENINSULA, SOUTH AUSTRALIA Rex has 100% ownership over a 60km section of the highly prospective Pine Point Copper Belt (‘PPCB’) on the Yorke Peninsula of South Australia, between the townships of Pine Point, Ardrossan and White Cliffs. The features which attracted Rex to the area and underpin its current focus include: Historic ﬁnds : Multiple historical high-grade copper deposits exist along the PPCB. Thin cover : Most of the Pine Point Copper Belt is ‘hidden’ by a thin layer of cover rocks (approx. 10m to 50m thick). Multiple targets : A range of prospects and targets exist along the 60 km section of the copper belt. Scale : Large scale and high-grade copper mineralisation has now been discovered (Hillside) at one of many ‘hidden’ targets along the PPCB. Setting : The copper discovered to date is associated with magnetite, which in high concentrations will produce magnetic anomalies on detailed surveys allowing Rex to ‘see through’ the cover rocks to focus on new targets. Modern Techniques : Detailed high resolution magnetic surveys have the potential to redeﬁne in much greater detail a large number of copper targets. Infrastructure : The proximity to Adelaide (1.5hrs by car) and the location of a major highway along the entire length of the Peninsula and the nearby ports will assist the economics of new developments. Power : The area is connected to the State’s main power grid. The exploration activity to date on the Pine Point Copper belt has largely been focussed at the Hillside project. The discovery of large scale copper mineralisation at Hillside has important implications for additional copper mineralisation along the Pine Point Copper Belt. The most important exploration tool which is considered to have the ability to focus the drilling towards the highest concentrations of copper at Hillside is a detailed magnetic survey. A large (1000km2) high resolution magnetic survey has been planned for September 2009 to cover the entire Pine Point Copper Belt that lies within Rex’s Exploration Licences on the Yorke Peninsula. HILLSIDE COPPER-GOLD PROJECT, SOUTH AUSTRALIA Following on from the early indications that Rex had discovered a large scale IOCG (Iron-Oxide-Copper-Gold) type of deposit at Hillside, Rex received further conﬁrmation of this in the form of multiple large scale and high grade copper intersections. Table 1 is a summary of the signiﬁcant drill intersections that were returned during the year from the Hillside project. Of particular signiﬁcance is that high grade copper mineralisation has now been broadly identiﬁed in exploration drilling over a large magnetic anomaly which has a total length of over two kilometres (Figure 3). All of the drilling completed to date at Hillside shows a strong correlation between copper and magnetite. Magnetite is the mineral which has been identiﬁed as the cause of the magnetic anomalies at Hillside. (This relationship is similar to many other copper-gold deposits such as the Ernest Henry deposit in Queensland). It was therefore considered important to deﬁne the magnetic anomalies at Hillside in as much detail as possible, to optimise the subsequent drilling program. To this end a new high resolution airborne magnetic survey was recently completed which has dramatically improved the resolution of the magnetic data at Hillside, and enabled Rex geologists to locate a number of new high priority target areas. The magnetic survey has identiﬁed three distinct north-south oriented structures which are interpreted to extend for up to 1.6km each (Figure 4). Drilling to date has focussed on the central section of the westernmost structure which corresponds with the Zanoni Fault. Within the Zanoni structure, as well as the other two structures to the east, there are a number of locations that have yet to be tested, which Rex considers are important targets (Figure 4). Testing of these targets is considered to give Rex the best opportunity of determining the extent of the copper mineralisation between 20m and 500m of the surface at Hillside. Rex is planning to test a number of important targets at Hillside, over the remainder of 2009 and into 2010, that were deﬁned from the new magnetic image. The results from this drilling campaign should enable Rex to make an initial scoping assessment of the copper dimensions and grade between 20m and 500m depth, which in turn will allow the drilling campaign to be focussed on the areas with the highest potential to deliver an initial Resource estimate by mid 2010. 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 9 < > REX MINERALS LTD EXPLORATION PROJECTS (continued) For the year ended 30 June 2009 HILLSIDE COPPER-GOLD PROJECT, SOUTH AUSTRALIA (continued) Hole Number From (m) To (m) Interval (m) Copper (%) Gold (g/t) Structure HDD009 HDD010 HDD011 HDD012 HDD013 HDD015 HDD017 HDD018 HDD018W1 including including HDD020 HDD023 including HDD024 364 235 301 300 516 303 334 205 447 205 252 416 182 381 400 413 HDD024W1 413 HDD024W2 400 HDD025 HDD026 including HDD013 HDD015 HDD017 HDD023 465 257 350 492 220 170 270 HDD024W1 671 HDD024W2 609 HDD023 HDD022 459 56 369 239 306 306 532 305 336 280 452 464 280 442 184 438 405 499 499 498 508 525 372 499 225 173 286 691 660 546 68 5 4 5 6 16 2 2 75* 5 259* 28* 26* 2 57 5.0 86 86 98 43 268 22 7 5 3 16 20 51 87 12 1.1 2.4 3.0 1.9 1.4 2.4 1.7 3.3 3.5 1.7 4.1 4.4 1.1 1.5 9.6 0.6 0.6 0.5 0.4 0.7 3.2 2.0 1.0 1.9 0.6 0.6 1.5 0.3 2.0 0.3 0.2 0.7 0.5 0.2 0.3 0.1 0.8 0.6 0.4 1.3 0.9 0.2 0.4 2.1 0.1 0.1 0.1 – 0.2 0.7 0.3 0.3 0.2 – 0.05 0.1 – 0.4 Zanoni Zanoni Zanoni Zanoni Zanoni Zanoni Zanoni Zanoni Zanoni Zanoni Zanoni Zanoni Zanoni Zanoni Zanoni Zanoni Zanoni Zanoni Zanoni Zanoni Zanoni Dart Dart Dart Dart Dart Dart Marion Marion Table 1: Summary of drilling results from the Hillside for the 2008/2009 ﬁnancial year. *Denotes reported intersections are not true width. Page 5 > REX MINERALS LTD EXPLORATION PROJECTS (continued) For the year ended 30 June 2009 HILLSIDE COPPER-GOLD PROJECT, SOUTH AUSTRALIA (continued) Figure 1: Residual Gravity Image for the Pine Point Copper Belt. Figure 2: Residual Magnetic Image for the Pine Point Copper Belt, showing the location of the Pine Point Fault. 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 9 < > REX MINERALS LTD EXPLORATION PROJECTS (continued) For the year ended 30 June 2009 HILLSIDE COPPER-GOLD PROJECT, SOUTH AUSTRALIA (continued) Figure 3: Hillside Project high resolution magnetics and drillhole locations. Page 7 > REX MINERALS LTD EXPLORATION PROJECTS (continued) For the year ended 30 June 2009 HILLSIDE COPPER-GOLD PROJECT, SOUTH AUSTRALIA (continued) Figure 4: Hillside Project high resolution magnetics with target zones deﬁned – Zanoni, Parsee and Songvaar. 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 9 < > REX MINERALS LTD EXPLORATION PROJECTS (continued) For the year ended 30 June 2009 HILLSIDE COPPER-GOLD PROJECT, SOUTH AUSTRALIA (continued) Figure 5: Geological Cross Section 74400N (‘AB’) with drillholes and deﬁned copper zones. Figure 6: Geological Cross Section 74300N (‘CD’) with drillholes and deﬁned copper zones. Page 9 > REX MINERALS LTD EXPLORATION PROJECTS (continued) For the year ended 30 June 2009 WANDEARAH COPPER-GOLD PROJECT, SOUTH AUSTRALIA The Wandearah project in South Australia comprises two Exploration Licences which have 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, combined gravity and magnetic anomalies on the project suggest that a massive mineralised IOCG system could exist in basement rocks. 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. In the year ended June 2009 Rex completed a detailed geophysical gravity survey over the project, followed by a single vertical diamond drill hole. The gravity survey highlighted the presence of a number of strong north-west and northerly trending structural features which appear to constrain the area of several gravity anomalies at their intersection points. Several targets have been identiﬁed from this survey within an area of 12km x 6km. A single diamond drill hole was completed to test one of the gravity–structural targets in late 2008. The hole was drilled to 707m and intersected a sequence of carbonaceous sediments and conglomerate before passing into basement sediments at 465m, displaying weak pervasive hematite alteration and veining, minor brecciation and thin granitic intrusions. No signiﬁcant alteration was encountered and assay results were generally low. A thick zone of weak copper mineralisation was noted at 130m down hole depth within graphitic sediments, which may represent an alternative viable copper target of the ‘Mt Gunson’ style. COWELL PROJECT, SOUTH AUSTRALIA The Cowell project in South Australia comprises a single Exploration Licence which has copper-gold and uranium potential. Initial geological interpretation also indicated there may be potential for Haematite and Magnetite Iron Ore, similar to the deposits mined in the Middleback Ranges to the north. On this premise a total of six holes were drilled in mid 2008 to test for both Haematite and Magnetite Iron Ore. Drilling intersected a thick sequence of magnetite-bearing metamorphic gneiss beneath 50m of cover sediments, however low Fe analyses were returned. Drilling did return anomalous copper and uranium assays related to ﬂuorite-bearing granites. 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 9 < > REX MINERALS LTD EXPLORATION PROJECTS (continued) For the year ended 30 June 2009 MT CARRINGTON GOLD-SILVER PROJECT, NEW SOUTH WALES At the Mt Carrington Project in NSW, Rex completed a comprehensive review of the drilling and geological information leading to an updated Resource estimate which was completed in December 2008. The results from this work are summarised in Table 2 below. Veriﬁcation drilling of the Resources was also completed in early 2009, and the discovery of shallow high grade copper mineralisation in drilling during this program has also presented a new opportunity for Rex at Mt Carrington Extensive copper mineralisation has been previously identiﬁed at Mt Carrington but not thoroughly evaluated, and consequently the results from drill hole KYDD001 (intersecting 18.7m @ 5.9% copper and 10.1m @ 6.3% copper) which were announced in March 2009, indicate that the shallow copper potential could add signiﬁcant value to the development options at Mt Carrington. MT CARRINGTON INFERRED RESOURCES Gold Resources Deposit Strauss Kylo 1,150,000 1,370,000 Guy Bell 160,000 Sub-Total 2,680,000 Silver Resources Tonnes Gold Grade (g/t) Gold Ounces Silver Grade (g/t) Silver Ounces 2.1 1.6 2.5 1.9 78,000 71,000 13,000 162,000 5.0 3.2 4.9 4.1 185,000 141,000 25,000 351,000 Deposit Tonnes Gold Grade (g/t) Gold Ounces Silver Grade (g/t) Silver Ounces Lady Hampden 1,070,000 White Rock 4,080,000 0.8 – Sub-Total 5,150,000 Total 7,830,000 28,000 – 28,000 190,000 59 62 61 2,030,000 8,134,000 10,164,000 10,515,000 Table 2: Summary of the Mt Carrington Inferred Resource estimate completed by Rex Minerals in December 2008. All gold Resources have been produced using a lower cut-off of 0.5g/t and all silver Resources have been produced using a lower cut-off of 25g/t. The gold Resources at Mt Carrington predominantly occur within three deposits (Kylo, Strauss and Guy Bell) that are in close proximity to each other and to existing infrastructure which previous operations at Mt Carrington had established, and which can form part of a new development opportunity in the future. This infrastructure includes access to mains power, a fresh water dam, a tailings dam and a cleared plant site (previous processing plant was removed). The deposits display considerable potential for further extensions to each of the existing gold Resources at depth and along strike. A number of areas have yet to be tested in between the existing deposits, providing opportunities to increase the shallow Resources that are amenable to open pit mining within the existing mine site area. The silver Resources and additional exploration potential provide a unique opportunity and exposure to the silver price. The largest silver Resource at Mt Carrington is at White Rock which contains 8.5Mozs of silver with additional drilling outside the resource indicating that the silver mineralisation extends well beyond the existing Resource (Figure 7). In addition to the shallow copper, gold and silver potential at Mt Carrington, there is some geological evidence that the Mt Carrington ﬁeld has large scale potential at depth. In order to effectively test this potential within a meaningful time frame Rex has committed to complete an extensive program of detailed Induced Polarisation (IP) surveys, a detailed magnetic survey, and a large scale regional review of the geology, collating the work of the numerous companies that have explored Mt Carrington over the past 30 years or more. This work will be followed up by intermittent drillings programs testing the high priority targets that have been uncovered through 2010. Page 11 > REX MINERALS LTD EXPLORATION PROJECTS (continued) For the year ended 30 June 2009 MT CARRINGTON GOLD-SILVER PROJECT, NEW SOUTH WALES (continued) Figure 7: White Rock Project IP Chargeability Image showing area of the Inferred Silver Resource. TENEMENT SCHEDULE For the year ended 30 June 2009 Tenement Locality Lease Status Area Type Current Area Grant Date EL3875 EL3874 EL3116 EL3876 EL3459 EL3418 Moonta South Granted Moonta South Granted Moonta South Granted Wandearah Wandearah Cowell Granted Granted Granted km² km² km² km² km² km² 422 1262 27 127 81 85 02/08/2007 02/08/2007 04/08/2003 02/08/2007 29/11/2005 16/09/2005 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 9 < > REX MINERALS LTD DIRECTORS’ REPORT For the year ended 30 June 2009 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 2009 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 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 over 16 years experience in the resources industry with a background of 14 years working as a mine geologist and exploration geologist, 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. Ms Janet Mason, CPA, B.Bus (Acc) was appointed Acting Company Secretary and CFO in December 2008, whilst Ms Rivamonte is on 12 months leave. Ms Mason has 15 years experience in the mining industry, including 11 years with WMC in a number of ﬁnance roles. Page 13 > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2009 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 16 15 17 B 17 17 17 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 Companies should establish the functions reserved to the Board and those delegated to senior executives and disclose those functions. The Board recognises the importance of distinguishing between the respective roles and responsibilities of the Board and management. The respective roles and responsibilities of the 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 and monitoring implementation of the strategy, appointing the Managing Director, monitoring senior executives’ 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 executive positions, being the primary channel of communication and point of contact between the senior executives 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 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 9 < > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2009 4. CORPORATE GOVERNANCE STATEMENT (continued) Recommendation 4.1.1 Continued. 4.1.2 Companies should disclose the process for evaluating the performance of senior executives. Comment This recommendation is also 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 together with a formal letter of appointment which will set out details in respect of, amongst other matters: > the Company’s ﬁnancial, strategic, operational and risk management position > each Director’s rights, duties and responsibilities; and > the role of the Board and senior executives The Company’s goals for the year are set out in the Annual Report and these are used as the basis for evaluating performance of senior executives. Performance evaluations are undertaken annually, in June, by the Managing Director. The Managing Director’s performance evaluation is also undertaken annually, in June, by the Board. 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 Chair 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. 4.2.5 Companies should disclose the process for evaluating the performance of the Board, its committees and individual Directors. 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. The Company has Board processes in place which raise issues that would otherwise be considered by a nomination committee. The Directors consider that due to the size of the Company and its Board, such a formal review procedure is not appropriate at this point in time and has instead adopted a self evaluation process to measure it’s own performance. This recommendation is satisﬁed in as much as the details have been included in the Annual Report and the Board Charter. Page 15 > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2009 4. CORPORATE GOVERNANCE STATEMENT (continued) Recommendation Comment 4.3 Promoting ethical and responsible decision making 4.3.1 Companies should establish a code of conduct and disclose the code or a summary of the code as to: > the practises necessary to maintain conﬁdence in the Company’s integrity. > the practises necessary to take into account their legal obligations and the reasonable expectations of their stakeholders. > the responsibility and accountability of individuals for reporting and investigating reports of unethical practices. 4.3.2 Companies should establish a policy concerning trading in Company securities by Directors, senior executives and employees and disclose the policy or a summary of that policy. This recommendation is satisﬁed. The Company’s Code of Conduct sets out the Company’s expectations for the conduct of the Company’s Directors, senior executives and employees, including in relation to business conduct, personal and professional conduct (such as conﬁdentiality, personal behaviour and respect for others). This recommendation is satisﬁed. The Company’s Share Trading Policy sets out the Company’s policy regarding the trading of securities in the Company, by Directors, senior executives and certain others. This provides details of the Company’s Insider Trading Policy as well as various other matters relating to institutional investors and journalists, as well as various other matters. 4.4 Safeguard integrity in ﬁnancial reporting 4.4.1 The Board should establish an Audit Committee. This recommendation is satisﬁed. 4.4.2 The Audit Committee should be structured so that it: Consists only of non-executive Directors; Consists of a majority of independent Directors; Is chaired by an independent Chair who is not chair of the Board; Has at least 3 members. The members of the Audit Committee are Paul Chapman and Richard Laufmann, who are both independent Directors. Richard Laufmann is an independent Chair of the Audit Committee (and he is not Chair of the Board). 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 the Audit Committee is of sufﬁcient size, independence and technical expertise to discharge its mandate effectively. 4.4.3 The Audit Committee should have a formal charter. This recommendation is satisﬁed. 4.5 Make timely and balanced disclosure 4.5.1 Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies. This recommendation is satisﬁed. The Company has established written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and accountability for compliance. The Company’s Continuous Disclose Policy sets out the Company’s policies and procedures with regard to the reporting of material price sensitive information to the ASX subject to conﬁdentiality carve-out aspects and the Company’s procedures in this regard. 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 9 < > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2009 4. CORPORATE GOVERNANCE STATEMENT (continued) Recommendation Comment 4.6 Respect the rights of shareholders 4.6.1 Companies should design and disclose a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose their policy or a summary of that policy. 4.7 Recognise and manage risk 4.7.1 Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies. 4.7.2 The Board should require management to design and implement the risk management and internal control system to manage the Company’s material business risks and report to it on whether those risks are being managed effectively. The Board should disclose that management has reported to it as to the effectiveness of the Company’s management of its material business risks. 4.8 Remunerate fairly and responsibly 4.8.1 The Board should establish a Remuneration Committee. 4.8.2 Companies should clearly distinguish the structure of Non-Executive Director’s remuneration from that of Executive Directors and senior executives. The Company places a high priority on communications with its Shareholders. Although the Company does not have a standalone communications policy, 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 through to the ASX company announcements platform; > notices of meetings to shareholders; and > provision of all relevant documentation released on the Company’s website. 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 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. Page 17 > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2009 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 discover large scale mineral Resources in locations with important strategic advantages and 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 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 2010 and later ﬁnancial years. > Deﬁne an initial Inferred Resource estimate for the Hillside copper project, South Australia. > Identify the potential extents of the copper mineralisation at Hillside within 500m of the surface. > Make at least one new large scale copper discovery along the Pine Point Copper Belt. > Identify the potential for the copper, gold and silver mineralisation at Mt Carrington within 200m of the surface. > Deﬁne a new copper Resource and/or increase the gold and silver Resource at Mt Carrington. 6. OPERATING AND FINANCIAL REVIEW The income statement shows a loss after tax of $1,851,166 (2008 loss: $857,987) for the year. The Group has no bank debt. As at 30 June 2009 the Group had a cash position of $12,286,067 (2008: $3,876,807). Operating activities incurred a cash outﬂow for the year of $829,394 (2008: $804,247). 7. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS In the opinion of the Directors there were no further signiﬁcant changes in the state of affairs of the Group during the year ended 30 June 2009. 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 2009 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 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 9 < > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2009 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: Mr Paul Chapman Mr Richard Laufmann Mr Steven Olsen 12. SHARE OPTIONS 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 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: All options were granted during the ﬁnancial year. No options have been granted since the end of the ﬁnancial year. 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 Ms Janet Mason – – – – – – – – – – – – – – – 120,000 $0.41 30 June 2011 12.2 Unissued shares under option At the date of this report unissued ordinary shares of the Company under option are: Expiry date 30 June 2011 30 June 2011 30 June 2011 30 June 2011 31 May 2012 Total Exercise price Number of shares $0.25 $0.30 $0.365 $0.41 $0.70 5,200,000 1,500,000 150,000 180,000 300,000 7,330,000 All options expire on the expiry date, unless the options have not vested and the employee is terminated then options will lapse. Page 19 > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2009 12. SHARE OPTIONS (continued) 12.3 Shares issued on exercise of options During the ﬁnancial year, the Company did not issue ordinary shares as a result of the exercise of options. Since the end of the ﬁnancial year, the Company has issued 530,000 options resulting from the exercise of options. 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, did not provide any non-audit services to the Company (2008: $16,500). 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. Net loss attributable to equity holders of the parent $1,851,166 Change in share price $0.295 2009 2008 $857,987 $0.010 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. 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 9 < > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2009 15. REMUNERATION REPORT – AUDITED (continued) 15.1 Principles of compensation (continued) 15.1.4 Long-term incentive The long-term incentive (LTI) is provided as options over ordinary shares of the Company. Options granted to employees currently only have service conditions attached to them, due to the nature of the Company at this time; the Board believes this is appropriate. 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 $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 21 > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2009 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: 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 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 - n o N y r a t e n o m s t ﬁ e n e b $ 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 & $ – – – – – – . 7 1 1 . 5 7 2 8 5 . . 6 6 2 . 9 7 2 – – – – – 0 0 5 , 4 5 0 0 5 , 4 5 0 5 0 , 9 4 0 5 0 , 9 4 0 6 . 0 4 4 , 0 5 2 – 0 0 0 , 8 1 2 – – – – – – – – – 6 6 6 , 7 0 1 6 2 6 , 2 1 5 9 3 , 7 1 2 4 7 9 , 9 5 6 2 9 , 7 1 2 6 2 6 , 2 1 6 6 . 5 7 0 , 5 2 2 4 7 9 , 9 5 – – 2 2 1 , 7 2 1 0 2 5 , 5 3 3 0 7 , 6 0 8 2 7 7 , 0 6 0 2 0 , 4 6 7 8 4 9 , 9 1 1 – – – – – – – – – – – – – – – – 0 0 5 , 4 0 0 0 , 0 5 0 0 5 , 4 0 0 0 , 0 5 0 5 0 , 4 0 0 0 , 5 4 0 5 0 , 4 0 0 0 , 5 4 0 4 4 , 9 1 0 0 0 , 1 3 2 0 0 0 , 8 1 0 0 0 , 0 0 2 7 4 8 , 7 2 9 1 , 7 8 8 9 9 , 2 1 3 2 4 , 4 4 1 – – – – – – – – 0 0 3 , 5 1 0 0 0 , 0 9 1 0 0 0 , 0 2 – – – – 0 0 0 , 0 5 9 0 0 2 0 0 0 , 0 5 8 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 0 0 0 , 5 4 9 0 0 2 n n a m f u a L d r a h c i R r M 0 0 0 , 5 1 0 0 0 , 6 1 2 9 0 0 2 – 0 0 0 , 0 0 2 8 0 0 2 s r o t c e r i D e v i t u c e x E r o t c e r i D g n i g a n a M : n e s l O n e v e t S r M – – – 2 9 1 , 7 8 9 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 s e v i t u c e x E 3 2 4 , 4 4 1 8 0 0 2 7 0 0 2 y l u J d e t n i o p p A 0 0 0 , 0 7 1 9 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 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 7 0 0 2 g u A d e t n i o p p A 3 6 5 , 7 8 3 0 , 4 8 – – – – – – 8 3 0 , 4 8 9 0 0 2 g n i t c A : n o s a M t e n a J s M y r a t e r c e S y n a p m o C – 8 0 0 2 8 0 0 2 c e D d e t n i o p p A 0 0 7 , 8 5 0 3 2 , 7 8 6 0 0 0 , 0 2 0 0 0 , 5 1 0 3 2 , 2 5 6 9 0 0 2 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 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 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 9 < > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2009 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 13th Feb 2009 2.37 years $0.296 $0.25 $0.41 $0.25 $0.51 55% 90% 6.15% 2.85% 15.3 Equity Instruments All options refer to options over ordinary shares of Rex Minerals Ltd, which are exercisable on a one-for-one basis. 15.3.1 Options and rights over equity instruments granted as compensation Details on options over ordinary shares in the Company that were granted as compensation to each key management person during the reporting period and details on options that were vested during the reporting period are as follows: Grant date Number of options granted during 2009 Fair value per option at grant date ($) Exercise price per option ($) Expiry date Number of options vested during 2009 Directors Mr Paul Chapman Mr Richard Laufmann Mr Steven Olsen Executives Ms Amber Rivamonte Mr Geoffrey Lowe – – – – – – – – – – – – – – – – – – – – – – – – – – – – 200,000 200,000 Ms Janet Mason 120,000 13 Feb 2009 $0.296 $0.41 30 June 2011 80,000 Grant date Number of options granted during 2008 Fair value per option at grant date ($) Exercise price per option ($) Expiry date Number of options vested during 2008 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 Ms Janet Mason – – – – – – No options have been granted since the end of the ﬁnancial year. The options were provided at no cost to the recipients. Page 23 > REX MINERALS LTD DIRECTORS’ REPORT (continued) For the year ended 30 June 2009 15. REMUNERATION REPORT – AUDITED (continued) 15.3 Equity Instruments (continued) 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. 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 Ms Janet Mason 119,948 – – – – – 35,520 35,520 – – – – – – – – – – – – – – (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 24. 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 52 and forms part of the Directors’ Report for the year ended 30 June 2009. Dated at Melbourne this 29th day of September 2009. Signed in accordance with a resolution of the Directors: Steven Olsen Managing Director 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 9 < > REX MINERALS LTD BALANCE SHEETS As at 30 June 2009 Note 7 8 9 8 10 11 13 14 15 16 Group 2009 $ Group 2008 $ Company Company 2009 $ 2008 $ 12,286,067 24,720 1,271,008 3,876,807 133,719 304,576 12,286,067 24,720 1,271,008 3,876,807 133,719 304,576 13,581,795 4,315,102 13,581,795 4,315,102 – – 9,127,523 165,636 – – 5,207,774 336,128 8,966,435 30 – 165,636 5,084,069 30 196,160 155,987 9,293,159 5,543,902 9,132,101 5,436,246 22,874,954 9,859,004 22,713,896 9,751,348 228,042 – 82,938 312,176 827,713 29,474 66,584 – 82,938 203,470 827,713 29,474 310,980 1,169,363 149,522 1,060,657 310,980 1,169,363 149,522 1,060,657 22,563,974 8,689,641 22,564,374 8,690,691 17(i) 17(iii) 24,711,046 552,130 (2,699,202) 9,195,395 362,781 (868,535) 24,711,046 552,130 (2,698,802) 9,195,395 362,781 (867,485) 22,563,974 8,689,641 22,564,374 8,690,691 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 30 to 50 are an integral part of these ﬁnancial statements. Page 25 > REX MINERALS LTD INCOME STATEMENTS For the year ended 30 June 2009 Group 2009 $ Group 2008 $ Company Company 2009 $ 2008 $ Note 18 19 20 21 246,809 192,415 246,809 192,415 (334,667) (39,321) (700,981) (135,189) (887,817) (310,579) (24,751) (646,007) (69,065) – (334,667) (39,070) (700,981) (135,189) (888,718) (310,579) (24,751) (646,007) (69,065) – (1,851,166) (857,987) (1,851,816) (857,987) – – – – Finance income Administrative expenses Depreciation expense Employee beneﬁts expense Marketing expenses Loss on sale of subsidiary Loss before tax Income tax (expense) beneﬁt Loss for the period (1,851,166) (857,987) (1,851,816) (857,987) Loss per share attributable to ordinary equity holders Basic and diluted loss per share (cents) 22 (3.13) (1.91) (3.13) (1.91) The notes on pages 30 to 50 are an integral part of these 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 9 < > REX MINERALS LTD STATEMENTS OF CHANGES IN EQUITY For the year ended 30 June 2009 Attributable to equity holders of the Group Share Capital Reserves $ Reserves $ Retained Earnings $ Total Equity $ 776,950 8,418,445 – – 9,195,395 9,195,395 15,515,651 – – 24,711,046 – (10,548) 766,402 – 362,781 – 362,781 362,781 – 189,349 – 552,130 – – (857,987) 8,418,445 362,781 (857,987) (868,535) 8,689,641 (868,535) 8,689,641 – 20,499 (1,851,166) 15,515,651 209,848 (1,851,166) (2,699,202) 22,563,974 Attributable to equity holders of the Company Share Capital Reserves $ Reserves $ Retained Earnings $ Total Equity $ 776,950 8,418,445 – – 9,195,395 9,195,395 15,515,651 – – 24,711,046 – (9,498) 767,452 – 362,781 – 362,781 362,781 – 189,349 – 552,130 – – (857,987) 8,418,445 362,781 (857,987) (867,485) 8,690,691 (867,485) 8,690,691 – 20,499 (1,851,816) 15,515,651 209,848 (1,851,816) (2,698,802) 22,564,374 Balance at 1 July 2007 Issue of ordinary shares Issue of ordinary shares Loss for the period Balance at 30 June 2008 Balance at 1 July 2008 Issue of ordinary shares Issue of ordinary shares Loss for the period Balance at 30 June 2009 Balance at 1 July 2007 Issue of ordinary shares Issue of ordinary shares Loss for the period Balance at 30 June 2008 Balance at 1 July 2008 Issue of ordinary shares Issue of ordinary shares Loss for the period Balance at 30 June 2008 The notes on pages 30 to 50 are an integral part of these ﬁnancial statements. Page 27 > REX MINERALS LTD STATEMENTS OF CASH FLOWS For the year ended 30 June 2009 Group 2009 $ Group 2008 $ Company Company 2009 $ 2008 $ Note Cash ﬂows from operating activities Cash paid to suppliers and employees Interest received (1,076,203) 246,809 (996,662) 192,415 (1,706,203) 246,809 (996,662) 192,415 Net cash (used in) from operating activities 23 (829,394) (804,247) (829,394) (804,247) Cash ﬂows from investing activities Exploration and evaluation payments Acquisition of property, plant and equipment Proceeds from sale of investments (2,759,247) (48,719) 1,411,969 (2,055,616) (364,171) – – (48,719) 1,411,969 (181,012) (180,738) – Net cash from (used in) investing activities (1,395,997) (2,419,787) 1,363,250 (361,750) Cash ﬂows from ﬁnancing activities Funds advanced to controlled entities Proceeds from issue of share capital Payment of transaction costs – 11,110,000 (475,349) – 7,155,000 (486,555) (2,759,247) 11,110,000 (475,349) (2,058,037) 7,155,000 (486,555) Net cash from (used in) ﬁnancing activities 10,634,651 6,668,445 7,875,404 4,610,408 Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the period 8,409,260 3,444,411 8,409,260 3,444,411 3,876,807 432,396 3,876,807 432,396 Cash and cash equivalents at period end 7 12,286,067 3,876,807 12,286,067 3,876,807 The notes on pages 30 to 50 are an integral part of these ﬁnancial statements. 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 9 < > REX MINERALS LTD Drill : Discover : Deﬁne Page 29 > 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 209 Dana Street, Ballarat, Victoria, 3350. The Group ﬁnancial statements of the Company as at and for the year ended 30 June 2009 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 29 September 2009. (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 24 – measurement of share-based payments notes 19 and 27 – employee beneﬁts and contingencies note 11 – 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 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 9 < > 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 31 > 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 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 9 < > 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 33 > 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 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 9 < > 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 2009, 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 35 > 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. CASH ASSETS Group 2009 $ Group 2008 $ Company Company 2009 $ 2008 $ Bank balances 12,286,067 3,876,807 12,286,067 3,876,807 Cash and cash equivalents in the statement of cash ﬂows 12,286,067 3,876,807 12,286,067 3,876,807 The Group’s exposure to interest rate risk and a sensitivity analysis for ﬁnancial assets and liabilities are disclosed in note 25. 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 9 < > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 8. RECEIVABLES Current Other receivables Total current receivables Non-current Loans to subsidiaries (i) Total non-current receivables Group 2009 $ 24,720 24,720 – – Group 2008 $ 133,719 133,719 Company Company 2009 $ 24,720 24,720 2008 $ 133,719 133,719 – – 8,966,435 5,084,069 8,966,435 5,084,069 (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. 9. OTHER ASSETS Prepayments Drilling contract prepayments (i) Total other assets Group 2009 $ 9,468 1,261,540 1,271,008 Group 2008 $ 9,018 295,558 304,576 Company Company 2009 $ 9,468 1,261,540 1,271,008 2008 $ 9,018 295,558 304,576 (i) Refer to note 15 for further details of the drilling contract. 10. INVESTMENTS IN SUBSIDIARIES Investments in subsidiaries Total investments Group 2009 $ – – Group 2008 $ – – Company Company 2009 $ 30 30 2008 $ 30 30 Page 37 > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 11. EXPLORATION AND EVALUATION EXPENDITURE Cost Balance at 1 July Acquisitions Additions Disposals 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 2009 $ Group 2008 $ 5,207,774 350,000 5,691,191 (2,121,442) 200,000 2,224,071 2,783,703 – 9,127,523 5,207,774 – – – – 2009 $ 196,160 – – (196,160) – – – 2008 $ – 150,000 46,160 – 196,160 – – – 5,207,774 200,000 196,160 9,127,523 5,207,774 – 196,160 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. 12. UNRECOGNISED DEFERRED TAX ASSETS Group 2009 $ Group 2008 $ Company Company 2009 $ 2008 $ Net deferred tax assets have not been recognised in respect of the following Tax losses 5,470,741 2,935,453 Total tax assets / (liabilities) not recognised 5,470,741 2,935,453 1,231,227 1,231,227 819,455 819,455 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 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 9 < > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 13. 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 14. TRADE PAYABLES Current Other trade payables and accrued expenses Total current trade and other payables 15. NON CASH DRILLING ACCRUALS Current Drilling contract accrual payable in fully paid ordinary shares Total non cash drilling accruals Group 2009 $ 364,171 48,719 (183,433) 229,457 28,043 39,321 1,545 (5,088) 63,821 Group 2008 $ – 364,171 – 364,171 – 24,751 3,292 – 28,043 Company Company 2009 $ 180,738 48,719 – 229,457 24,751 39,070 – – 63,821 2008 $ – 180,738 – 180,738 – 24,751 – – 24,751 336,128 165,636 – 336,128 155,987 165,636 – 155,987 Group 2009 $ Group 2008 $ 228,042 228,042 312,176 312,176 Company Company 2009 $ 66,584 66,584 2008 $ 203,470 203,470 Group 2009 $ Group 2008 $ Company Company 2009 $ 2008 $ – – 827,713 827,713 – – 827,713 827,713 On 23 July 2007, the Company entered into an agreement with Titeline Drilling Pty Ltd (“Titeline”) pursuant to which Titeline agreed to provide the Company with certain drilling and related services. The services to be provided are for a period of 672 days of drilling. The services comprise all activities and costs associated with diamond and percussion drilling. The Company agreed to pay Titeline as follows: (a) A cash payment of $1,000,000 (plus GST). This amount was originally capitalised as a prepayment. As at 30 June 2009 the balance included in prepayments, refer to note 9, relates to drilling days yet to be provided to the Company. Page 39 > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 15. NON CASH DRILLING ACCRUALS (continued) (b) (c) The issue to Titeline Property Pty Ltd of 6,000,000 shares. The shares issuable to Titeline under this agreement have all been issued during the period July 2008 to June 2009. Shares that have been issued for drilling days yet to be provided have been capitalised as a prepayment, refer note 9. 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 as the drilling days are provided to the Company. To the extent that services have been rendered in satisfaction of these options, they have been charged to the share based payments reserve. 16. EMPLOYEE BENEFITS Current Liability for annual leave Total employee beneﬁts 17. ISSUED CAPITAL Group 2009 $ 82,938 82,938 Group 2008 $ 29,474 29,474 Company Company 2009 $ 82,938 82,938 2008 $ 29,474 29,474 Date of issue No of shares Issue price $ $ (i) Movements in shares on issue: Opening balance at 1 July 2008 Issue of ordinary shares – Titeline Issue of ordinary shares – Titeline Issue of ordinary shares – Capital Raising Less costs of the Capital Raising Issue of ordinary shares – Capital Raising Less costs of the Capital Raising Issue of ordinary shares – Capital Raising Less costs of the Capital Raising Closing balance at 30 June 2009 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 21/10/2008 13/03/2009 13/03/2009 23/04/2009 27/05/2009 20/07/2007 20/07/2007 13/09/2007 52,565,000 1,810,000 4,190,000 6,887,500 – 6,887,500 – 8,000,000 – 80,340,000 16,765,000 300,000 500,000 28,000,000 – 10/04/2008 1,000,000 Closing balance at 30 June 2008 52,565,000 – – 0.40 – 0.40 – 0.70 – 0.10 0.25 0.25 – 0.25 9,195,395 1,472,435 3,408,565 2,755,000 (83,427) 2,755,000 (120,020) 5,600,000 (271,902) 24,711,046 776,950 30,000 125,000 7,000,000 (486,555) 250,000 9,195,395 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 9 < > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 17. ISSUED CAPITAL (continued) Date of issue No of options Exercise price $ Expiry date 0.365 0.365 0.41 0.70 30/06/2011 30/06/2011 30/06/2011 31/05/2012 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 (ii) Movements in options on issue: Opening balance at 1 July 2008 Lapsing of options – to employees (30/08/2009) Lapsing of options – to employees (03/09/2009) Issue of options – to employees Issue of options – to employees Closing balance at 30 June 2008 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 03/12/2007 03/12/2007 13/02/2009 19/06/2009 20/07/2007 20/07/2007 13/09/2007 13/09/2007 03/12/2007 (iii) Movements in share based payment reserve: Opening balance at 1 July 2008 Employee share based payments – to employees Options issued – for contract drilling services Transferred to Retained Earnings Closing balance at 30 June 2009 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 18. FINANCE INCOME AND EXPENSE 7,500,000 (60,000) (60,000) 180,000 300,000 7,860,000 3,500,000 500,000 1,200,000 1,000,000 1,000,000 300,000 7,500,000 $ 362,781 154,315 55,533 (20,499) 552,130 – 168,974 159,000 34,807 362,781 Finance income – interest income on bank deposits Finance expense Net ﬁnance income and expense Group 2009 $ 246,809 – 246,809 Group 2008 $ 192,415 – 192,415 Company Company 2009 $ 246,809 – 246,809 2008 $ 192,415 – 192,415 Page 41 > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 19. EMPLOYEE BENEFITS EXPENSE Wages and salaries Share based payments expense Increase in liability for annual leave Total employee beneﬁts expense Group 2009 $ 578,011 69,505 53,465 700,981 Group 2008 $ 561,149 55,384 29,474 646,007 Company Company 2009 $ 578,011 69,505 53,465 700,981 2008 $ 561,149 55,384 29,474 646,007 20. CONTROLLED ENTITY DISPOSAL The following controlled entity was disposed of: 2009: On 20 November 2008, Rex Minerals (Victoria) Pty Ltd 2008: Nil Consideration Cash Received Disposal Costs Inﬂow of cash Net Consideration Carrying value of net assets of controlled entity disposed of: Property, plant and equipment Exploration and evaluation expenditure NC Investment Intercompany debt forgiveness Loss on sale of controlled entity Group 2009 $ 1,480,000 (68,031) 1,411,969 1,411,969 178,344 2,121,442 - - 2,299,786 (887,817) Group 2008 $ Company Company 2009 $ 2008 $ - - - - - - - - - - 1,480,000 (68,031) 1,411,969 1,411,969 - - 10 2,300,677 2,300,687 (888,718) - - - - - - - - - - 21. INCOME TAX EXPENSE NUMERICAL RECONCILIATION BETWEEN TAX EXPENSE AND PRE-TAX ACCOUNTING LOSS Group 2009 $ Group 2008 $ Company Company 2009 $ 2008 $ Loss for the period (1,851,166) (857,987) (1,851,816) (857,987) Income tax using the domestic corporation tax rate of 30% (2008: 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 (555,350) (257,396) (555,545) (257,396) 63,289 39,759 21,186 39,759 (492,061) (217,637) (534,359) (217,637) – – – – 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 9 < > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 22. LOSS PER SHARE Loss per share Basic loss per share – cents Diluted loss per share – cents (a) Basic loss per share Group 2009 $ (3.13) (3.13) Group 2008 $ (1.91) (1.91) The calculation of basic earnings (loss) per share (EPS) at 30 June 2009 was based on the loss attributable to ordinary equity holders of $1,851,166 (2008: $857,987) and a weighted average number of ordinary shares outstanding during the ﬁnancial year ended 30 June 2009 of 59,227,171 (2008: 44,852,124). (b) Diluted loss per share The calculation of diluted earnings (loss) per share at 30 June 2009 is the same as basic earnings per share. 23. 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 Adjustments for other items: Loss on sale of subsidiary Group 2009 $ Group 2008 $ Company Company 2009 $ 2008 $ (1,851,166) (857,987) (1,851,816) (857,987) 39,321 69,505 24,751 55,384 39,070 69,505 24,751 55,384 887,817 – 888,718 – 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 (854,523) 108,550 (136,886) 53,464 (777,852) (137,737) 102,712 8,630 (854,523) 108,550 (136,886) 53,464 (777,852) (137,737) 102,712 8,630 Net cash (used in) from operating activities (829,395) (804,247) (829,395) (804,247) 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 17): (a) Issue of options to employees, some of which have been capitalised as exploration expenditure. (b) Drilling services provided by Titeline drilling for a combination of share and option consideration. Page 43 > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 24. 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 2009: Employees entitled Grant date No of options Expiry date Key management personnel (A) Other employees (A) Other employees (B) Total 13/02/2009 13/02/2009 19/06/2009 120,000 60,000 300,000 480,000 30/06/2011 30/06/2011 31/05/2012 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 (C) Other employees (D) 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 exercised during the period, however 120,000 of options (D) lapsed during the year after two employees left the Company. Key management personnel and employee options (A) are exercisable at a price of 41 cents each, vesting two thirds immediately, one third on 30 June 2009 and expiring on 30 June 2011. Employee options (B) are exercisable at a price of 70 cents each, have no vesting period and expire on 31 May 2012. Key management personnel options (C) are exercisable at a price of 25 cents each, employee options (D) 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. (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) $0.2960 $0.51 $0.41 90% 2.37 2.85% (B) $0.2235 $0.57 $0.70 70% 2.50 4.36% (C) $0.1210 $0.25 $0.25 55% 3.92 6.15% (D) $0.2070 $0.365 $0.365 55% 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. 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 9 < > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 24. SHARE BASED PAYMENTS (continued) (b) Employee expenses Share options granted in 2008 – recognised in income statement Share options granted in 2008 – capitalised to exploration projects Share options granted in 2009 – recognised in income statement Share options granted in 2009 – capitalised to exploration projects Group 2009 $ Group 2008 $ Company Company 2009 $ 2008 $ 33,985 55,384 33,985 55,384 – 113,590 – 113,590 35,520 84,810 – – 35,520 84,810 – – Total expense recognised as employee costs 154,315 168,974 154,315 168,974 25. 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. (c) Liquidity risk The following are the contractual maturities of ﬁnancial liabilities excluding derivatives. Financial liabilities Group 2009 Trade and other payables 2008 Trade and other payables Financial liabilities Company 2009 Trade and other payables 2008 Trade and other payables Carrying amount $ Contractual cash ﬂows $ 1 year or less $ 1-2 years $ 228,042 (228,042) 228,042 (228,042) 312,176 (312,176) 312,176 (312,176) (228,042) (228,042) (312,176) (312,176) – – – – Carrying amount $ Contractual cash ﬂows $ 1 year or less $ 1-2 years $ 66,584 66,584 (66,584) (66,584) 203,470 (203,470) 203,470 (203,470) (66,584) (66,584) (203,470) (203,470) – – – – Page 45 > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 25. FINANCIAL INSTRUMENTS (continued) (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 2009 $ Group 2008 $ Company Company 2009 $ 2008 $ Cash and cash equivalents 12,286,067 3,876,807 12,286,067 3,876,807 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 2009, 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: Group +1% (100 basis points) -1% (100 basis points) Company +1% (100 basis points) -1% (100 basis points) > Proﬁt or loss higher/(lower) 2009 $ 2008 $ > Equity higher/(lower) 2009 $ 2008 $ 48,021 (48,021) 24,462 (24,462) 48,021 (48,021) 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 (2008: nil). 26. 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 have the authority to defer, waive or amend the minimum expenditure requirements. Group 2009 $ Group 2008 $ Not later than one year Later than one year but not later than ﬁve years 835,000 3,340,000 1,125,300 4,626,500 Company Company 2009 $ – – 2008 $ – – 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 9 < > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 27. 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 $0 (2008: $40,000) in the event the Company is called upon to rehabilitate exploration sites. There are no other contingent liabilities or assets at the date of this report. 28. 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 Ms Janet Mason* 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 Acting Company Secretary & CFO Appointed 16 July 2007 Appointed 27 August 2007 Appointed 19 December 2008 *Ms Rivamonte is on leave for 2009 and Ms Mason is ﬁlling her position during this time. There have been no changes to key management personnel between 1 July 2009 and the date of this report. The key management personnel compensation included in “Employee Beneﬁts Expenses” (see note 19) and “Exploration and Evaluation” (see note 11) are as follows: Short term employee beneﬁts Post employment beneﬁts Share based payments Group 2009 $ 667,230 58,700 60,772 Group 2008 $ 573,782 50,290 119,948 Company Company 2009 $ 667,230 58,700 60,772 2008 $ 573,782 50,290 119,948 (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 20 to 24. 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 47 > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 28. 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 2008 Granted as compensation Vested during year Held at 30 June 2009 Vested and exercisable at 30 June 2009 Note 2009 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 Ms Janet Mason 2008 Directors 600,000 600,000 – – – 120,000 200,000 200,000 80,000 600,000 600,000 120,000 400,000 400,000 80,000 Held at 1 July 2007 Granted as compensation Vested during year Held at 30 June 2008 Vested and exercisable at 30 June 2008 Note 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 Ms Janet Mason – – – 600,000 600,000 – 200,000 200,000 – 600,000 600,000 – 200,000 200,000 – 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 2008 & 2009. 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 9 < > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 28. 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) 2009 Directors Mr Paul Chapman Mr Richard Laufmann Mr Steven Olsen Executives Ms Amber Rivamonte Mr Geoffrey Lowe Ms Janet Mason 2008 Directors Mr Paul Chapman Mr Richard Laufmann Mr Steven Olsen Executives Ms Amber Rivamonte Mr Geoffrey Lowe Ms Janet Mason Held at 1 July 2008 2,500,000 2,500,000 4,500,000 250,000 10,000 10,000 Held at 1 July 2007 2,500,000 2,500,000 4,500,000 250,000 – – Purchases Sales Held at 30 June 2009 – – – – – – – – – – – – 2,500,000 2,500,000 4,500,000 250,000 10,000 10,000 Purchases Sales Held at 30 June 2008 – – – – 10,000 10,000 – – – – – – 2,500,000 2,500,000 4,500,000 250,000 10,000 10,000 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 49 > REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (continued) 29. RELATED PARTIES (a) Identity of related parties The Group has a related party relationship with its subsidiaries (see note 30), and with its key management personnel (see note 28). (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 2009, such loans totalled $2,759,247 (2008: $2,058,037). 30. GROUP ENTITIES Parent entity Rex Minerals Ltd Subsidiaries Rex Minerals (SA) Pty Ltd Rex Minerals (Vic) Pty Ltd Rex Minerals (Iron Ore) Pty Ltd Rex Minerals (NSW) Pty Ltd Country of Incorporation Ownership Interest 2008 2009 Australia Australia Australia Australia Australia 100% – 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. 31. SUBSEQUENT EVENTS There have been no subsequent events to 30 June 2009 to disclose at the date of this report. 32. AUDITORS’ REMUNERATION KPMG Australia Audit services Other services Group 2009 $ 34,497 – Group 2008 $ 37,000 16,500 Company Company 2009 $ 2008 $ 34,497 – 37,000 16,500 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 9 < > REX MINERALS LTD DIRECTORS’ DECLARATION 1. In the opinion of the Directors of Rex Minerals Ltd (‘the Company’): a) the ﬁnancial statements and notes and the Remuneration report in the Directors' report, set out on pages 20 to 50, 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 2009 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 2009. Dated at Melbourne this 29th day of September 2009. Signed in accordance with a resolution of the Directors: Steven Olsen Managing Director Page 51 > REX MINERALS LTD LEAD AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To: the directors of Rex Minerals Limited I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended 30 June 2009 there have been: (i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and (ii) no contraventions of any applicable code of professional conduct in relation to the audit. KPMG Alison Kitchen Partner Melbourne 29 September 2009 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. 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 9 < > REX MINERALS LTD INDEPENDENT AUDIT REPORT TO THE MEMBERS OF REX MINERALS LIMITED Independent auditor’s report to the members of Rex Minerals Limited Report on the financial report We have audited the accompanying financial report of Rex Minerals Limited (the Company), which comprises the balance sheets as at 30 June 2009, and the income statements, statements of changes in equity and cash flow statements for the year ended on that date, a description of significant accounting policies and other explanatory notes 1 to 32 and the directors’ declaration of the Group comprising the company and the entities it controlled at the year’s end or from time to time during the financial year. Directors’ responsibility for the financial report The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor’s responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We performed the procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001 and Australian Accounting Standards (including the Australian Accounting Interpretations), a view which is consistent with our understanding of the Company’s and the Group’s financial position and of their performance. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. Page 53 > REX MINERALS LTD INDEPENDENT AUDIT REPORT TO THE MEMBERS OF REX MINERALS LIMITED Auditor’s opinion In our opinion: (a) the financial report of Rex Minerals Limited is 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 2009 and of their performance for the year ended on that date; and complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001. (b) the financial report of the Company and the Group entity also complies with International Financial Reporting Standards as disclosed in note 2. Report on the remuneration report We have audited the Remuneration Report included in section 15 of the directors’ report for the year ended 30 June 2009. The directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with Section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with auditing standards. Auditor’s opinion In our opinion, the remuneration report of Rex Minerals Limited for the year ended 30 June 2009, complies with Section 300A of the Corporations Act 2001. KPMG Alison Kitchen Partner Melbourne 29 September 2009 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. Page 54 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 9 < > 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 2009 Name of Ordinary Shareholder Number of Shares % of Shares Held Grand South Development Eye Investment Fund Ltd Avoca Resources Ltd Greenstone Property Pty Ltd S&S Olsen PL Acorn Capital 7,000,000 7,000,000 6,000,000 6,000,000 4,500,000 4,933,000 8.71% 8.71% 7.47% 7.47% 5.60% 6.00% (b) Listing of 20 largest shareholders as at 31 August 2009 Rank Name Designation Number of Shares Held % of Issued Capital 14.95% 8.71% 7.47% 7.47% 5.60% 4.56% 3.11% 1.56% 1.56% 1.24% 0.87% 0.87% 0.53% 0.52% 0.52% 0.50% 0.50% 0.45% 0.43% 0.37% 61.79% National Nominees Ltd Grand South Development Limited Avoca Resources Ltd Greenstone Property Pty Ltd S & S Olsen PL J P Morgan Nominees Australia Ltd Natalie Laufmann Stone Poneys Nominees PL Stone Poneys Nominees PL Philippa Jean Laufmann James Ronald Selkirk D J Molloy & D M Molloy CL Smith & Associates PL HSBC Custody Nominees Aust Ltd Ozga Super Fund PL First Charnock PL Willstreet PL Lyrebird PL EJT Investments PL Bimbimbie Super 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 Nezan S/F A/C Colin Smith S/F A/C Ozga S/F A/C Lyrebird S/F A/C Kane Family A/C Bimbimbie S/F A/C 12,008,000 7,000,000 6,000,000 6,000,000 4,500,000 3,665,000 2,500,000 1,250,000 1,250,000 1,000,000 700,000 700,000 425,000 420,000 420,000 400,000 400,000 360,000 346,846 300,000 49,644,846 (c) Distribution of shareholders as at 31 August 2009 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 67 291 250 492 76 1,176 53,285 957,086 2,147,849 17,777,441 59,404,339 80,340,000 0.07% 1.19% 2.67% 22.13% 73.94% 100.00% (d) Number of shareholders holding less than a marketable parcel as at 31 August 2009 Two. (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 55 > REX MINERALS LTD NOTES Page 56 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 9 < Celtink Creative: Rex Minerals: Annual Report 2009 – 4pp Cover – INSIDE. 210909 PMS 8943 Metallic C M Y K ABN 12 124 960 523 CORPORATE DIRECTORY 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 Janet Mason PRINCIPAL and REGISTERED OFFICE 209 Dana 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 181 William Sreet Melbourne Victoria 3000 OPERATION LOCATIONS A U S T R A L I A SOUTH AUSTRALIA NEW SOUTH WALES VICTORIA SOUTH AUSTRALIA Wandearah Pine Point Adelaide Mt Carrington Lismore NEW SOUTH WALES Sydney Designed and Produced by Celtink Creative Ballarat. info@celtink.com Celtink Creative: Rex Minerals: Annual Report 2009 – 4pp Cover – OUTSIDE. 260909 PMS 8943 Metallic C M Y K ABN 12 124 960 523 CONTACT A 209 Dana Street Ballarat Victoria 3350 Australia T (03) 5337 4000 F (03) 5331 1776 P PO Box 626W Ballarat West Victoria 3350 Australia info@rexminerals.com.au E W www.rexminerals.com.au 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 9 Drill Discover Define annual report 2009

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