REX MINERALS LTD
ANNUAL REPORT
2012
AUSTRALIA’S NEXT GREAT COPPER PROJECT
REX MINERALS LTD
ANNUAL REPORT
2012
AUSTRALIA’S NEXT GREAT COPPER PROJECT
SHARE REGISTRARS
Computershare Investor Services Pty Limited
Yarra Falls
452 Johnston Street
Abbotsford Victoria 3067
Telephone +61 (0) 3 9415 4000 (investors)
1300 850 505 (investors within Australia)
AUDITORS
KPMG
147 Collins Street
Melbourne Victoria 3000
CORPORATE DIRECTORY
DIRECTORS
Paul Chapman (Chairperson)
Steven Olsen (Managing Director)
Richard Laufmann
Alister Maitland
COMPANY SECRETARY
Amber Rivamonte
PRINCIPAL and REGISTERED OFFICE
209 Dana Street
Ballarat Victoria 3350
SITE OFFICES
5A First Street
Ardrossan South Australia 5571
86 King William Road
Goodwood South Australia 5034
BANKERS
ANZ Banking Group Limited
927 Sturt Street
Ballarat Victoria 3350
Ord Minett Limited
120 Collins Street
Melbourne Victoria 3000
CONTACT DETAILS
Rex Minerals Ltd
PO Box 626W
Ballarat West Victoria 3350
Telephone +61 (0) 3 5337 4000
Facsimile +61 (0) 3 5331 1776
Email info@rexminerals.com.au
OPERATION LOCATIONS
LEGAL ADVISORS
Baker McKenzie
181 William Sreet
Melbourne Victoria 3000
SOUTH
AUSTRALIA
Wandearah
Cowell
Pine Point
Adelaide
A
A U S T R A L I A
SOUTH
SOUTH
AUSTRALIA
A
AUSTRALIA
NEW SOUTH
WALES
VICTORIA
TABLE OF CONTENTS
REX MINERALS LTD : Annual Report for the year ended 30 June 2012
INTRODUCTION
LETTER FROM THE CHAIRMAN AND THE MANAGING DIRECTOR
REVIEW OF OPERATIONS
EXPLORATION PROJECTS
TENEMENT SCHEDULE
DIRECTORS’ REPORT
STATEMENT OF FINANCIAL POSITION
STATEMENT OF COMPREHENSIVE INCOME
STATEMENT OF CHANGES IN EQUITY
STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
LEAD AUDITOR’S INDEPENDENCE DECLARATION
INDEPENDENT AUDIT REPORT
ADDITIONAL SHAREHOLDER INFORMATION
2
3
4
4-17
17
18-35
37
38
39
40
41-62
63
64
65-66
67
Page 1
REX MINERALS LTD
COMPANY OVERVIEW for the year ended 30 June 2012
Introduction
Rex Minerals Ltd (“Rex” or “the Company”) is an Australian minerals exploration and development company with
large-scale copper-gold-iron ore projects on the Yorke Peninsula, South Australia.
In 2008, Rex discovered the Hillside copper-gold project beneath shallow cover rocks approximately 12 kilometres from
the port of Ardrossan. After the initial discovery, Rex committed to a Resource drilling program at Hillside at the
beginning of 2010. Since then the Company has completed four Resource estimates and in July 2012 announced the most
recent Mineral Resource estimate with contained metal of 2Mt copper, 1.7Mozs gold and 44Mt iron ore. This Resource
will provide the basis for a Reserve calculation and a pre-feasibility study (PFS) outlining production plans for a
100,000tpa copper equivalent (CuEq) output with a mine life of at least 15 years.
Hillside is the first project in the Company’s plans to discover and develop multiple large-scale copper-gold deposits along
the Pine Point Fault Corridor on the Yorke Peninsula.
Highlights
Future Objectives
Larger Global Resource – An extensive diamond drilling
program has increased the global Resource estimate at Hillside to
330Mt @ 0.6% copper, 0.16g/t gold, 13.7% iron for a total of
2Mt copper, 1.7Mozs gold and 44Mt iron ore and puts Hillside
among Australia’s largest open pittable copper discoveries.
High Grade Discoveries – A series of higher grade zones have been
defined within the Hillside deposit with approximately one third,
116Mt of the 330Mt deposit defined at 0.9% copper (1.2% CuEq).
This affords Rex an opportunity to ‘bulk out’ the global Resource to
greater thicknesses, which when combined with a number of shallow
zones starting at 20m from the surface, aids in the use of larger
mining equipment to achieve better economies of scale.
Expanded Mine Life – Throughout the year, Rex has significantly
increased the amount of available copper resources that can fit
within a conventional open pit mine design. The PFS will now be
assessing the potential to produce at a rate of over 100,000tpa
CuEq (approx. 70,000t copper, 50,000ozs gold and 1.3Mt iron ore)
with a mine life of over 15 years.
New Large Scale Extensions to Hillside – New large scale
discoveries at Hillside, to the north of Hillside and also at depth,
highlight the significant potential beyond the current proposed pit.
Many of these drill intersections have a true width of well over
100m providing opportunities to consider large scale underground
mining beyond the life of the open pit.
Feasibility Studies – Extensive technical work has been completed
for the Hillside PFS, including, metallurgical testing, geotechnical
drilling, hydrogeological drilling, environmental studies, resource
definition and infrastructure design. This huge body of work will
incorporate all drilling results up to 13 July 2012, with the PFS
results due for release in October 2012.
Regional Exploration – The search for new copper deposits within
close proximity to Hillside continues. Five high priority targets have
been tested by diamond drilling with low level copper mineralisation
intersected. The next stage of regional testing in 2012-2013 and
beyond will be aided by important broadscale baseline soil sampling
work, initial aircore drilling and new detailed magnetic surveys.
Equity Raising – Rex successfully raised $42 million in April 2012.
This provided funds to complete the feasibility studies and position
the Company towards the construction phase whilst securing an
optimal final financing package for the development of the Hillside
project. Since this capital raising the financial markets have
deteriorated considerably, however Rex has maintained a strong cash
position with cash at bank of $69.743 million as at 30 June 2012.
In summary, the new discoveries in the past year have significantly
enhanced the options for a new mine plan and re-affirmed Hillside
as one of the largest and most significant copper discoveries in
Australia in recent decades.
> Pre-feasibility Study – Completion of the
PFS, due for release in October, will define
the start-up capital requirements, production
profile and operating costs of Hillside.
> Reserves – In parallel with the PFS, Rex will
release the first Reserves for Hillside and an
accompanying larger life of mine plan which
should extend the potential of the Hillside
project out to 15 years and beyond.
> Financing – The Company will put in place
an optimal financing package with the goal
of maximising shareholder exposure to the
future cash flows from a new copper-gold-
iron ore operation at Hillside.
> Exploration – Maintain a near mine and
regional exploration push with the aim of
identifying multiple large-scale copper
deposits that can complement the Hillside
project, on Rex’s tenements on the Yorke
Peninsula, SA.
> Organisation – Plan for an organisational
transition from an explorer to a developer
to a producer.
The Hillside Difference
Hillside is at the centre of a 60km long major
geological feature – the Pine Point Fault
Corridor, on the York Peninsula, SA – in a region
which has produced some of Australia’s richest
and historically most significant copper mines,
such as the Moonta-Wallaroo copper mines.
It is the combination of modern exploration
techniques and exploration commitment to this
copper fault zone – under-explored for the best
part of 100 years – which provides significant
opportunities for resource extensions and new
discoveries near Hillside.
The world’s existing copper mines are seeing
decreased grades and reduced outputs. Much of
the proposed new supply is either in remote or
high-risk locations or at great depth with
significant capital costs.
Hillside is very different. With its large scale,
shallow open pittable copper, gold and iron ore,
Hillside is in an internationally enviable location
with ready access to people, port, and power –
this is the Hillside difference.
Page 2
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
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 THE MANAGING DIRECTOR
For the year ended 30 June 2012
Dear Fellow Shareholder,
As we write to report on the many important milestones that your Company has achieved over the past year we believe it is
important to first reflect on the major challenges the copper industry faces in finding new supplies and hence why we believe
large-scale, long-life quality-location assets such as Hillside are indeed rare and will ultimately create significant economic and
social value.
It has been evident for the better part of a decade that copper grades are declining and copper output from many existing mines are
falling. A good example comes from the giant Escondida mine which has historically mined copper ore at an average of 1.66%
copper, but has seen current production fall to below 1.0% copper, whilst remaining reserves are even lower at 0.68% copper.
Against this backdrop of falling supply from existing mines, the demand for copper – a true proxy for economic growth and
industrialisation – continues to increase and is forecast to grow from approximately 17Mt in 2013 to over 23Mt by 2025
according to studies by respected forecasters CRU. Over the same time period, production from exiting mines is expected to drop
from 16Mt to less than 13Mt. The developing shortfall between existing mine supply and demand is huge; equivalent to over 15
times the giant Olympic Dam expansion project and will need to be filled by new mine supply.
In terms of possible new mine supply, research across the globe lists many proposed new large copper projects from locations as
diverse and different as Alaska, Pakistan and Australia. So whilst on paper and in theory, it may be possible for copper supply to
keep up with demand, the reality has proven otherwise. The decision by BHP Billiton to indefinitely delay the expansion of its
Olympic Dam mine is a clear example of the many hurdles that many new large copper projects face and demonstrates that not
all of them will necessarily make the transition from concept through to production.
The inter relationship between new supply and capital hurdles was highlighted earlier this year in a report by Goldman Sachs in a
review of the world’s top 40 undeveloped copper mines. The report estimated new capital expenditure on mega copper mines was
running at US$15,000 per tonne of new copper production.
If we assume CRU’s estimate of a need to find an additional 10Mtpa from new mine supply over the next 10-12 years, the global
copper industry would need to invest US$150 billion in building new capacity. As the Olympic Dam decision shows, and recent
announcements by a number of major mining houses trimming their new project budgets, the outlook for new copper supply would
appear to be diminishing, not increasing.
In our view, this will ultimately underpin strength in the copper price, but also bring into sharp focus the enviable low-cost
operating economics and very low to moderate capital intensity of Hillside, particularly in comparison against forty of the world’s
mega copper projects.
In short, Hillside is a strategically valuable global copper asset. As a starting point, our PFS for the Hillside project, which is due
later this year, will outline a mine plan for over 100,000tpa of copper equivalent production for over 15 years. On current
estimates, Hillside will be Australia’s largest open pit copper producer for the next decade. This is a valuable advantage.
Many companies, including major mining companies, have focussed on finding new copper supply in new and remote locations,
sometimes with success, only to find that the capital costs to develop these projects are too high, or access to water and power is
near to impossible. At Rex we have never lost sight of how important the location and access to infrastructure is when developing
a new large-scale mining operation. Where else can you find a new large-scale and long-life copper project within 10km of a port
with spare capacity and with the ability to connect to the state’s power and water supply?
We firmly believe that the Company’s continued focus on both copper and our logistical advantages at Hillside will ultimately
reward shareholders and we believe that this will become more apparent with the release of the results of the Hillside PFS.
Over the year the Company’s employees have worked hard to deliver a new and substantial Resource update for our flagship
Hillside project which now contains 2Mt of contained copper plus significant gold and iron ore credits. The work involved with the
feasibility studies is ongoing and the results of which will be shown over the coming months.
On behalf of the Board, we would like to thank our employees for their efforts and achievements during the year. We would also
like to acknowledge the support of our suppliers and our shareholders for their continued confidence in Rex.
Rex is also proud to be a member of the community on the Yorke Peninsula and we look forward to increasing our contribution to
the community and many other businesses and services in the region as the project develops.
Yours sincerely,
Paul Chapman
Chairman
Steven Olsen
Managing Director
REX MINERALS LTD
REVIEW OF OPERATIONS for the year ended 30 June 2012
Rex Minerals Ltd (“Rex”) has completed the following important milestones over the year.
July 2011 – June 2012 Continuous high grade copper drilling results announced.
July 2011 – June 2012 Completion of on ground activities (with 7 to 8 drill rigs) for the purpose of completing a PFS
April 2012
June 2012
at Hillside. Major works included, metallurgical test drilling and analysis, water bore
(hydrogeological) drilling, environmental studies, infill and extensional drilling of the copper
Resource, geotechnical drilling for ground control designs, and multiple studies for the various
capital works that are required for a new large scale mining operation at Hillside.
Raised $42 million through the successful placement of 35.0 million ordinary fully paid
shares at $1.20 per share to institutional and sophisticated investors in Australia and
overseas. Improved cash position will enable completion of feasibility studies and for the
Company to start the transition from explorer to developer.
Discovered new large scale extensions of the Hillside Resource to the north and at depth from
the previously known location of copper mineralisation. Of particular significance is the
presence of large scale copper beyond the extent of the magnetic anomaly that first led to the
discovery of copper at Hillside.
July 2012
Announced updated Hillside Mineral Resource estimate. Hillside Resource up 33% to 2Mt
of contained copper, 1.7Mozs of gold and 44Mt of iron ore.
REX MINERALS LTD
EXPLORATION PROJECTS for the year ended 30 June 2012
HILLSIDE COPPER-GOLD PROJECT, YORKE PENINSULA, SOUTH AUSTRALIA
Figure 1: Location diagram of the Hillside Project and Rex’s exploration licences on the Yorke Peninsula,
South Australia.
Page 4
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
EXPLORATION PROJECTS (Continued) for the year ended 30 June 2012
HILLSIDE COPPER-GOLD PROJECT, YORKE PENINSULA, SOUTH AUSTRALIA (CONTINUED)
Drilling activity was focussed on the Hillside project (Figure 1) with an average of 7 drill rigs throughout the year.
This work culminated on the 30 July 2012 with the release of an updated Mineral Resource estimate.
In summary the updated Mineral Resource at Hillside has the following attributes:
At a copper cut-off of 0.2%, the total Mineral Resource at Hillside has increased by more than 33% from the previous
July 2011 estimate and now stands at 330Mt @ 0.6% copper, 0.16g/t gold and 13.7% iron, equating to approximately
2.0Mt (4.4 billion pounds) of copper, 1.7Mozs of gold and 44Mt of iron ore.
Since the announcement of the previous Hillside Mineral Resource (217Mt @ 0.7% copper, 0.2g/t gold and 12.4% iron,
reported on 27 July 2011) additions to the Mineral Resource have been on the back of two drilling programs, both of
which were completed over the past 12 months to the end of June 2012. The first program was designed as an infill
drilling program, on a 50m x 50m hole spacing to delineate the extent of the high grade component of the Hillside Mineral
Resource, whilst also upgrading material from the Inferred to Indicated categories. The second drilling campaign was
designed as an extensional drilling program on nominal 100m x 100m spacing and was designed to substantially grow the
Inferred Mineral Resource at the northern end of the Hillside deposit (Figure 3). The updated Resource, the fourth in two
years, includes all drilling results received up to 13 July 2012 inclusive of 431 diamond holes and 234 RC holes for a total
of 212,000m.
The copper mineralisation at Hillside is closely associated with the mineral magnetite and the project area has been
broadly defined by a magnetic anomaly. The Mineral Resource occupies approximately 90% - 95% of the total target area
that is defined by the magnetic anomaly down to an average depth of 400m and a maximum depth of just over
700m beneath the surface (Figures 1 & 2).
Additional activities completed in tandem with the Resource drilling for the PFS are anticipated to be available for
release in October 2012.
Table 1: Hillside Inferred and Indicated Mineral Resource Summary Table – July 2012.
Resource
Category
Indicated
Inferred
Indicated
Inferred
Indicated
Inferred
Zone
Oxide
Copper
Secondary
Sulphide
Primary
Sulphide
Total
Tonnes
(Mt)
Copper
(%)
21
1
12
1
101
193
330
0.54
0.50
0.58
0.70
0.62
0.60
0.60
Gold
(g/t)
0.23
0.10
0.20
0.10
0.16
0.10
0.16
Iron
(%)
12.81
12.10
13.72
11.00
13.66
Contained
Copper (t)
Contained
Gold (oz)
Contained
Iron ore (t)
113,400
155,288
2,549,400
5,000
3,215
111,100
69,600
77,162
1,609,200
7,000
3,215
95,900
626,200
519,556
13,515,278
13.80
1,164,000
623,724
26,345,200
13.70
1,980,000
1,697,559
44,154,000
Copper Resources reported above 0.2% cut-off grade.
Indicated Resources are rounded to two significant figures and Inferred Resources are rounded to one significant figure.
Table 2: Hillside Global Mineral Resource Summary at various cut-off grades – July 2012.
Cut-off
Grade (%
Copper)
Tonnes
(Mt)
0.20%
0.30%
0.40%
0.50%
0.60%
330
285
226
165
116
Grade
Contained Metal
Cu (%)
Au (g/t)
Iron (%) CuEq (%) Copper (t)
Gold (oz)
Iron Ore (t)
0.6
0.6
0.7
0.8
0.9
0.16
0.17
0.18
0.19
0.20
13.7
14.0
14.1
14.2
14.2
0.8
0.9
0.9
1.0
1.2
1,980,000
1,697,559
44,154,000
1,710,000
1,557,704
39,358,500
1,582,000
1,307,892
31,527,000
1,320,000
1,007,926
23,248,500
1,044,000
745,897
16,344,400
For the Iron Ore tonnage calculation, please refer to the Assessment and Reporting Criteria Table at the end of the Resource Upgrade announcement
dated 30 July 2012, available on the Company’s website.
Page 5
REX MINERALS LTD
EXPLORATION PROJECTS (Continued) for the year ended 30 June 2012
HILLSIDE COPPER-GOLD PROJECT, YORKE PENINSULA, SOUTH AUSTRALIA (CONTINUED)
> NEW HIGH GRADE ZONES
Included as part of the latest Mineral Resource update, was the definition of high grade copper, as determined by various
cut-off grades. Using a cut-off grade of 0.6% copper the updated Resource estimate defined 116Mt @ 0.9% copper
(1.2% CuEq) for an estimated 1.0Mt (2.2 billion pounds) of copper, 0.7Mozs of gold and 16Mt of iron ore (Table 2).
The high grade component is spread throughout the orebody, however, a significant portion of this material is contained
within the top 200m (29Mt @ 0.9% copper or 1.2% CuEq) and is likely suitable for extraction as part of an early stage
open pit mine plan.
Metallurgical test work and mining studies are well advanced to investigate the economic recovery of copper, gold and iron
ore and these results will be reported within the PFS. Furthermore, iron ore test work has indicated that an iron ore
concentrate produced at Hillside will be of a high quality and will possess very low impurities. Consequently, Rex has
incorporated iron ore when calculating the copper equivalent (CuEq) grade. A summary of the copper equivalent (CuEq)
metrics is provided at the end of this section.
> NORTHERN ZONE CONTINUITY AND RESOURCE EXTENSION POTENTIAL
The Resource extensional drilling program at Hillside demonstrates the orebody is open at depth and has also revealed
a significant body of copper mineralisation at the northern tip of the Hillside orebody. This mineralisation (which was
previously an exploration target), was drilled throughout the first half of 2012, and has identified a broad, thick zone of
copper mineralisation. Interestingly, the results indicate the mineralisation in this area plunges towards the north which
provides significant potential for further Resource growth over the coming year (Figure 3).
Furthermore, this new discovery implies that the copper mineralisation could also continue well beyond the boundaries
of the magnetic anomaly, and as a consequence, further discoveries in this location could have a substantial effect on the
global Mineral Resource and the long term mining options at Hillside. Further drilling is planned in this area over the
coming 12 months.
Over the past 12 months, Rex has conducted an extensive infill diamond drilling program. This has successfully identified
broad, high grade copper zones that continue for hundreds of meters along strike. Combined with earlier shallow and high
grade copper results, the infill drilling program has strengthened the project economics and the development options for
Hillside including commencing production from a shallow higher grade open pit. Such options will be detailed in the PFS.
The string of high-grade copper intersections returned since July 2011 are contained within the Dart, Zanoni, Parsee and
Songvaar structures and extend over broad areas of up to 1km. Copper mineralisation is predominantly seen as blebby to
disseminated chalcopyrite with occasional zones of massive chalcopyrite observed.
Since July 2010, Rex has steadily upgraded the Hillside Mineral Resource to the point where the total global number has
reached 2Mt of contained copper. Of this, just less than 50% is now classified as Indicated, which is a substantial increase
from July 2011. Rex is confident of discovering further copper mineralisation, both towards the northern end of the
magnetic anomaly and at depth, and consequently continues to have an aggressive growth target.
Page 6
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
EXPLORATION PROJECTS (Continued) for the year ended 30 June 2012
HILLSIDE COPPER-GOLD PROJECT, YORKE PENINSULA, SOUTH AUSTRALIA (CONTINUED)
Figure 2: Magnetic map of the Hillside project, showing the location of the Inferred Resources and remaining target
area to be targeted over the coming year.
Page 7
REX MINERALS LTD
EXPLORATION PROJECTS (Continued) for the year ended 30 June 2012
HILLSIDE COPPER-GOLD PROJECT, YORKE PENINSULA, SOUTH AUSTRALIA (CONTINUED)
Figure 3: Schematic long section of the Hillside orebody showing the depth extent of Copper Mineralisation on the
Leprena, Zanoni and Northern Parsee Structures. View looking to the west.
Graph 1 below shows the growth of the Hillside Resource between July 2010 and July 2012, as well as the anticipated
target range expected from further exploration at Hillside. The range identified as the total target for the Hillside Project
is based on the sum of the existing Mineral Resource, plus the exploration target range associated with the remaining
magnetic anomaly (and potential mineralisation at depth) that is yet to be drill tested1.
Graph 1: Hillside Resource Growth by JORC Category in copper metal (Mt), and total target range.
Page 8
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
EXPLORATION PROJECTS (Continued) for the year ended 30 June 2012
HILLSIDE COPPER-GOLD PROJECT, YORKE PENINSULA, SOUTH AUSTRALIA (CONTINUED)
> HOW DOES HILLSIDE COMPARE TO OTHER COPPER PROJECTS?
The Hillside project is one of Australia’s largest copper discoveries in the past decade. The Mineral Resource is open at
depth and towards the north and with the recent identification of copper mineralisation at the northern end of the orebody
suggests significant upside potential remains.
A comparative analysis of the Hillside deposit to other Australian copper projects in the exploration or development phase
highlights Hillside as being the largest undeveloped open pit project in Australia excluding the enormous Olympic Dam
deposit in South Australia (refer Graph 2 below). Furthermore, Hillside’s Resource size, quality and logistical advantages
provide an enviable strategic advantage compared with many other copper projects world-wide.
Graph 2: Comparison of existing undeveloped (or under development) copper projects in Australia to Hillside.
*Source: Publically available data as at 23 July 2012.
> HILLSIDE COPPER-GOLD PROJECT – FEASIBILITY STUDIES
An extensive work program has been underway throughout the year for the purposes of completing a pre-feasibility study
(PFS) which is due for release in October 2012. The following work programs are all largely complete and will form the
basis for the decisions and results of the Hillside PFS:
> Tailings Storage Facilities
> Open Pit Mine Plan and Waste Dump Design
> Hydrology (Groundwater and Surface Water)
> Waste Rock Characterisation
> Metallurgical Test Work
> Environmental and Community Studies
> Infrastructure Requirements
> Power and Water Options
The Resource drilling completed since mid-2011 has had a large influence on the amount of additional available copper
that can be accessed from within a conventional open pit mine design. In addition, new large scale discoveries at depth
imply that bulk underground mining methods may also be included in the mine design plans for Hillside. All of the required
technical parameters needed to determine the economics of the Hillside project and the ability to maximise the
opportunity from the Hillside deposit, will be included as part of the final PFS results.
Page 9
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Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
EXPLORATION PROJECTS (Continued) for the year ended 30 June 2012
PINE POINT COPPER BELT, YORKE PENINSULA, SOUTH AUSTRALIA
Regional exploration work on the Yorke Peninsula is designed to follow through with the theory that the underlying rocks
could host multiple large scale copper-gold-iron ore deposits. The Hillside project was the first test of the theory that large
scale copper deposits exist in the area and the Company considers that there could be many other similar or possibly
larger deposits that remain hidden underneath a thin layer of cover rocks.
Rex has maintained a high level of activity focussed on target generation within the Company’s tenure on the Yorke
Peninsula beyond the immediate Hillside area. Regional exploration work completed by Rex over the past 12 months
included diamond drilling, aircore drilling, soil sampling and completion of further high quality, detailed magnetic surveys.
The work that Rex completed continued to highlight the widespread potential for making a significant discovery in the
near future.
In addition to the exploration work undertaken, Rex was successful in securing funding to support diamond drilling as part
of the latest round of the South Australian Governments “PACE” program. The funding will contribute to the testing of
the Yorke Valley prospect.
The exploration work completed during the period is summarised as follows:
> Soil Sampling
65 square kilometres of soil geochemical sampling completed.
> Aircore Drilling
1,900m of drilling across key locations along the Pine Point copper belt.
> Airborne Geophysics Two surveys providing both complete tenement coverage of detailed aeromagnetic
data and ultra-detailed (25m line spaced) aeromagnetic data over priority
prospect areas.
> Ground Geophysics
Induced polarisation survey completed at the Equis prospect.
> Diamond Drilling
20 diamond drill holes completed over five separate prospect areas.
> EXPLORATION PROGRAMS COMPLETED
Aircore Drilling
Aircore drilling of existing soil geochemical anomalies and other high priority targets within the Pine Point Fault corridor
both north and south of Hillside was undertaken. Copper carbonate minerals were observed in the base of several drill
holes, and confirmed with assays of up to 0.4% copper. Whilst these intersections of copper mineralisation were hosted
within cover sequence rocks, they correlate with the interpreted position of the significant regional structure that hosts
Hillside, and potentially represent geochemical leakage from basement-hosted mineralisation into the overlying shallow
cover rocks. No diamond core drilling of the basement rocks was previously undertaken where these aircore drilling results
were obtained, and accordingly, the results represented high priority exploration targets that will be a focus for Rex’s
ongoing exploration activities. The location of key results from the aircore program is presented in Figure 6, highlighting
the potential for additional copper mineralisation to be discovered close to Hillside.
Soil Sampling
Programs of soil sampling were progressed over priority target areas, with 75 square kilometres of coverage completed.
Of particular interest were the results obtained from the Parara prospect area, where multiple coincident zones of copper
plus gold-in-soil anomalism were identified. These results reinforced the prospectivity for this target area, which remains
a focus for Rex’s proposed future exploration activities.
Aerial Magnetic Survey
During 2009, Rex acquired high quality, detailed aeromagnetic data over parts of the Pine Point project area which
provided the basis for refined geological interpretations and identified previously unrecognised exploration targets.
A survey to collect nearly 9,700 line kilometres of detailed magnetic data is planned over the remainder of Rex’s Yorke
Peninsula tenure during 2012, and accordingly, this new data will form the basis for continued geological interpretation
and identification of additional exploration targets within this highly prospective terrain.
In addition to the regional aeromagnetic survey, an additional ultra-detailed (25m line spaced) helimagnetic survey will
be undertaken over key prospect areas (Equis, Ethel and Ranald) to facilitate refined modelling and drill targeting.
Page 11
REX MINERALS LTD
EXPLORATION PROJECTS (Continued) for the year ended 30 June 2012
PINE POINT COPPER BELT, YORKE PENINSULA, SOUTH AUSTRALIA (CONTINUED)
Figure 4: Location of magnetic survey and key soil sampling and aircore drilling results completed during the year.
Page 12
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
EXPLORATION PROJECTS (Continued) for the year ended 30 June 2012
PINE POINT COPPER BELT, YORKE PENINSULA, SOUTH AUSTRALIA (CONTINUED)
Diamond Drilling
Diamond drilling was directed at five previously identified priority targets. The results continued to reinforce the potential
for discovering economic mineralisation with multiple small high grade copper intercepts and/or broad zones of copper
anomalism identified in a number diamond drill holes. Most of the drilling was undertaken in areas where no previous
drilling information existed. This work provided valuable information to improve district geological models, which have in
turn generated further priority areas for drill testing in the coming year. Results from the regional diamond drilling
program are summarised in Figure 5 below.
Figure 5: Location of significant drilling results outside of the Hillside project area.
Page 13
REX MINERALS LTD
EXPLORATION PROJECTS (Continued) for the year ended 30 June 2012
PINE POINT COPPER BELT, YORKE PENINSULA, SOUTH AUSTRALIA (CONTINUED)
Port Julia
The Port Julia prospect, located 12km south of Hillside (Figure 5), is defined by a distinct magnetic and associated subtle
gravity anomaly. Drilling by Rex intersected extensive “Hillside-style” alteration and brecciation, in a geological setting
which is also very similar to Hillside. Low levels of visible sulphides were observed, with best results of 6m @ 0.2% copper
(PJDD05), 2m @ 0.1% copper and 1m @ 0.34g/t gold (PJDD06), and 1m @ 0.3% copper and 13m @ 0.2% copper
(PJDD07) being returned. The observations from this drilling program confirmed the presence of a large hydrothermal
system that has the necessary characteristics to host economic mineralisation.
Ethel
The Ethel prospect is located 7km south-west of Hillside (Figure 5), and is characterised by multiple coincident high
intensity magnetic and gravity anomalies that are situated adjacent to the Pine Point fault. Two drill holes were completed
during the period, with a best intersection of 0.5m @ 3.8% copper returned from a zone of massive sulphides.
Additionally, the cover sequence in this area was less than 25m thick, highlighting the potential to discover shallow
positions of copper mineralisation elsewhere within the prospect.
Equis
The Equis prospect is located 3km north-west of Hillside (Figure 5). A number of discrete features were tested at Equis
over the year to test for the possible relationship between various large magnetic and gravity anomalies, along with some
results from an electromagnetic survey. The best results from Equis drilling included EQDD003, with 3m @ 1% copper
from 370m, EQDD005 with 2m @ 0.2% copper from 214m and EQDD008a with 1m @ 0.6% copper from 158m.
Some parts of Equis encountered large thicknesses of anomalous copper such as EQDD002 with 75m @ 363ppm copper
from 78m. The drilling results did not show extensive sections of high grade copper however indications of extensive low
level copper and other geological features, still suggest that high grade copper could exist in the area.
Ranald
The Ranald target area is located 12km south west of Hillside (Figure 5), and is defined by several distinct magnetic and
gravity anomalies within the Pine Point Copper Belt. Diamond drilling was completed at Ranald to test a number of the
magnetic and gravity features. The diamond drilling intersected zones of favourable alteration beneath a shallow younger
cover sequence of less than 25m, with the best intersection being from RDDD002 with 1m @ 0.5% copper and 0.3g/t
gold from 514m.
Page 14
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
EXPLORATION PROJECTS (Continued) for the year ended 30 June 2012
PINE POINT COPPER BELT, YORKE PENINSULA, SOUTH AUSTRALIA (CONTINUED)
> TARGET AREA IMMEDIATELY NORTH OF HILLSIDE GROWS
The Resource extensional drilling program at Hillside has demonstrated the orebody is open at depth and has also
revealed a significant body of copper mineralisation at the northern tip of the Hillside orebody. This mineralisation
(which was previously an exploration target), was drilled throughout the first half of 2012, and has identified a broad,
thick zone of copper mineralisation. The discovery of large-scale copper mineralisation at depth was particularly
significant, given that it has started to develop outside of the main magnetic anomaly which was previously used to define
the extent of the Hillside project area. This discovery and previous indications of copper mineralisation further north of the
magnetic feature, prompted Rex to investigate further extensions to the Hillside mineralisation with aircore drilling.
The aircore drilling immediately north of Hillside intersected shallow copper oxide minerals, and significantly, elevated
levels of copper and gold indicating that the mineralisation from Hillside could extend much further than originally
anticipated. The copper anomalism associated with the Hillside project has now been identified to exist for over 4km
in strike length (see figure 6), a substantial increase from the previous target area defined by the magnetic anomaly at
Hillside of 2.5km.
The potential to host additional copper-gold-iron ore resources within close proximity to Hillside can be supported by the
following evidence:
> Hillside Mineral Resource: 2.0Mt of contained copper metal demonstrating the project area is
significantly mineralised.
> The Hillside orebody is flanked by a major regional structure which has been the catalyst behind why the
Hillside orebody is where it is.
> This regional structure extends well beyond the Hillside orebody, in both a north and south direction, and thus
Rex believes the potential for further copper mineralisation to be present along this structure is high.
> The copper mineralisation at Hillside is “hidden” under shallow cover sediments and therefore extensions along
strike from Hillside are likely to be obscured. As a result the area is significantly under explored.
> Rex’s recent air core drilling has identified potential “hidden” extensions of the Hillside orebody along strike.
These intercepts are very exciting and Rex intends to follow these up with diamond drilling over the coming months.
> Should diamond drilling intersect significant “Hillside” style copper mineralisation, the potential to extend the
known mineralisation envelope from 2.5km to > 4km exists and accordingly, the potential to significantly add to
the Hillside Mineral Resource exists.
Page 15
REX MINERALS LTD
EXPLORATION PROJECTS (Continued) for the year ended 30 June 2012
PINE POINT COPPER BELT, YORKE PENINSULA, SOUTH AUSTRALIA (CONTINUED)
> TARGET AREA IMMEDIATELY NORTH OF HILLSIDE GROWS (CONTINUED)
Figure 6: Hillside Resource area and potential extensions identified further north of the known drilling information.
Page 16
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
EXPLORATION PROJECTS (Continued) for the year ended 30 June 2012
COWELL EXPLORATION
The Cowell project in South Australia comprises a single Exploration Licence which has the potential to host copper-gold
and uranium mineralisation. The Cowell project is located adjacent to Cowell on the east coast of South Australia’s Eyre
Peninsula, approximately mid-way between Whyalla and Port Lincoln. The project is situated within the eastern margin of
the Gawler Craton, which hosts other significant copper-gold deposits such as Olympic Dam, Prominent Hill and Hillside.
The project area is characterised by a thin cover sequence overlying Palaeoproterozoic rocks including rocks associated
with the Hiltaba event, a key component of copper-gold mineralisation elsewhere within the Gawler Craton. Previous
reconnaissance drilling by Rex intersected up to 5m @ 0.2% copper associated with hematite altered metasediments.
AERIAL MAGNETIC SURVEY
A low-level aerial magnetic survey is planned to provide complete coverage of high quality and detailed magnetic data
over Rex’s Cowell licence. The survey will be flown in conjunction with the larger survey completed over Rex’s tenements
on the Yorke Peninsula. Approximately 1000 line km of data will be collected along 100m spaced lines during the survey,
which will be used to plan and refine future drill targets.
COMPETENT PERSONS REPORT
The information in this report that relates to Exploration Results or Mineral Resources is based on information compiled
by Mr Patrick Say who is a Member of the Australasian Institute of Mining and Metallurgy and is a full time employee
of Rex Minerals Ltd. Mr Say has sufficient experience which is relevant to the style of mineralisation and type of deposit
under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004
Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Say
consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
COPPER EQUIVALENT STATEMENT
Copper equivalents have been calculated assuming the following metal prices and metal recoveries;
> Copper price used = 2.80 US$/lb.
> Gold price used = 1200 US$/ounce.
> Iron ore price used = 100 US$/tonne:
(cid:127) $100 equates to the industry benchmark at 62% iron.
(cid:127) Plus $20 premium for a concentrate grade of 67% at Hillside.
> Testing has confirmed conventional processing options.
> Total Cu grade is used in the CuEq calculation.
> Gold recoveries estimated at 77%.
> Iron recoveries estimated at 54% recovered from Iron oxides (from metallurgical test work).
> Iron Oxides grade = Total iron % – % iron with Cu – % iron with pyrite – % iron in non-sulphide gangue.
> Iron ore concentrate grade = 67%.
1
The total potential and grade is conceptual in nature. There has been insufficient exploration to define a Mineral Resource in excess of that currently
announced, and while Rex has confidence in this target range statement, it is uncertain if further exploration will result in the determination of
additional Mineral Resources.
TENEMENT SCHEDULE for the year ended 30 June 2012
Locality
Lease Status
Area Type
Current Area
Grant Date
Tenement
EL38751
EL38741
EL45141
EL38762
EL4779
(previously 3459)
Moonta South
Granted
Moonta South
Granted
Moonta South
Granted
Wandearah
Wandearah
Granted
Granted
EL34181
Cowell
Granted
km²
km²
km²
km²
km²
km²
416
1262
24
127
81
85
02/08/2007
02/08/2007
10/06/2010
02/08/2007
13/10/2011
16/09/2005
1
2
Renewal documentation received from the Department for Manufacturing, Innovation, Trade, Resources and Energy (DMITRE)
subsequent to 30 June 2012.
This licence is currently being renewed with DMITRE.
Page 17
DIRECTORS’ REPORT
Page 18
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
DIRECTORS’ REPORT for the year ended 30 June 2012
The Directors present their report together with the financial report of Rex Minerals Ltd (“the Company”) and its
subsidiaries (the “Group” or “Rex”), for the financial year ended 30 June 2012 and the auditors’ report thereon.
1. DIRECTORS
The Board currently has 4 members, of these, 3, including the Chairman, are independent Non-Executive
Directors. The Non-Executive Directors are considered by the Board to be independent of management and free
from any business relationship or other circumstance that could materially interfere with the exercise of objective,
unfettered or independent judgement. Further information on the process for assessing independence and the
materiality level are in Board Charter available on Rex’s Website.
The Board considers that a diversity of skills, backgrounds, knowledge, experience and gender is required in order
to effectively govern the business. The Board and its Committees actively work to ensure that the Executive and
Non-Executive Directors continue to have the right balance of skills, experience, independence and Company
knowledge necessary to discharge their responsibilities in accordance with the highest standards of governance.
The Non-Executive Directors contribute international and operational experience; understanding of the sectors in
which we operate; knowledge of world capital markets; and an understanding of the health, safety, environmental
and community challenges that we face. The Board works together as a whole to oversee strategy for the Group
and monitor pursuit of the corporate objectives of the Company. In addition, the Board has extensive access to
members of senior management.
The Board believes that orderly succession and renewal is in the best interests of the Company as it transitions
from the Exploration phase into Development. During the year, there were a number of changes to the Board and
its’ Committees with Mr Alister Maitland joining the Board in September 2011. In addition, and as discussed in
further detail in section 4.4.2 and 4.8.2 of the Corporate Governance Statement, Rex established a Remuneration
Committee and implemented a succession plan for the Audit Committee. Mr Richard Laufmann stepped down as
Chair of the Audit Committee and Mr Alister Maitland was appointed to this position. Mr Richard Laufmann was
appointed Chair of the Remuneration Committee.
The Directors of the Company at any time during or since the end of the financial year are set out in the Table
on page 20.
Page 19
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2012
1. DIRECTORS (CONTINUED)
Name, qualifications and
independence status
Mr Paul Chapman
Independent Chairperson
(B.Comm, ACA, Grad.Dip.
Tax, MAICD, MAusIMM)
Mr Richard Laufmann
Independent Non-Executive
Director
(B.Eng (Mining), MAusIMM,
MAICD)
Mr Alister Maitland
Independent Non-Executive
Director
(B.Com, FAICD, FAIM,
SF Fin)
Experience, special responsibilities and other directorships
Mr Paul Chapman is a chartered accountant and has over 25 years resources
experience gained in Australia and the US. He has worked in a number of commodity
businesses including gold, nickel, manganese, bauxite/alumina and oil/gas.
Mr Chapman has held senior management roles in public companies of various sizes
and is Chairman of ASX listed explorer Encounter Resources Ltd and listed gold
producer Silver Lake Resources Ltd. Mr Chapman has been a Director and Chairman
since 2007 and is currently a member of the Audit and Remuneration Committees.
Mr Richard Laufmann is a mining engineer with a proven track record in the
resources sector both in Australia and overseas.
He was Managing Director of Ballarat Goldfields NL from 2002 until 2007,
at which time Ballarat Goldfields merged with Lihir Gold Ltd. 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.
Mr Laufmann has been a Director since 2007, is Chairman of the Remuneration
Committee and a member of the Audit Committee.
Mr Maitland is a former Executive Director of the ANZ Banking Group, with a
background in international finance whose banking experience extended beyond
Australasia to cover Asia, the Sub Continent, the Middle East, Europe and America.
His professional experience has included global business expansion, internal and
external consulting, treasury projects and international political agendas. As Chief
Executive of ANZ Bank for New Zealand he was responsible to the local board for
the countries operations.
He has been a non-executive director of a number of publicly listed ASX companies
and Government bodies covering a wide range of activities including property
services, mining, banking, asset management and health. He is a former chairman
of Ballarat Goldfields NL and director of Lihir Gold Ltd. Currently a Director of
Malayan Banking Berhad (Maybank) headquarted in Kuala Lumpur. Mr Maitland
was appointed as a Director on 16 September 2011, is Chairman of the Audit
Committee and a member of the Remuneration Committee.
Mr Steven Olsen
Managing Director
(B.Sc.(Hons), M.Sc.(MinEx),
Grad.Dip (F&I), MAusIMM)
Mr Steven Olsen has over 19 years experience in the resources industry with a
background of fourteen 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 the discovery of nickel, gold
and copper mineralisation throughout his career.
Mr Olsen’s qualifications include a B.Sc(Hons) from the University of Melbourne,
Masters in Mineral Exploration from Queens University, Ontario and a Graduate
Diploma of Applied Finance and Investment from the Securities Institute of
Australia. Mr Olsen is a Non-Executive Director of White Rock Minerals Ltd.
Mr Olsen has been a Director since 2007.
Page 20
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2012
2. COMPANY SECRETARY
Ms Amber Rivamonte CPA, B.Bus (Acc) was appointed to the position of Company Secretary in July 2007.
Ms Rivamonte is a CPA and has over 19 years experience in the financial management of publicly listed
exploration companies. She has previously held the role of company secretary and chief financial officer
for Ballarat Goldfields NL and company secretary for Indophil Resources NL.
Ms Rivamonte is currently the Company Secretary of White Rock Minerals Ltd.
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.
Board Meetings
Audit Committee Meetings
Remuneration Committee
Meetings
Mr Paul Chapman
Mr Richard Laufmann
Mr Alister Maitland1
Mr Steven Olsen2
A
12
14
11
13
B
14
14
12
14
A
1
2
2
2
B
2
2
2
2
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.
1 Mr Maitland was appointed Director on 16 September 2011.
2 Mr Olsen is not a member of the Audit Committee, but is invited to and attends meetings as appropriate.
4. CORPORATE GOVERNANCE STATEMENT
Rex has adopted comprehensive systems of control and accountability as the basis for the administration of
corporate governance. The Board is committed to administering the policies and procedures with openness and
integrity, pursuing the true spirit of corporate governance commensurate with Rex’s needs. To the extent they are
applicable; Rex has adopted the Principles of Good Corporate Governance Recommendations incorporating the
2010 Amendments as published by ASX Corporate Governance Council. As Rex’s activities develop in size, nature
and scope, the size of the Board and implementation of additional corporate governance structures will be given
further consideration.
In addition to this and consistent with ASX Listing Rule requirements, Rex has a policy concerning trading in its
shares by Directors and other designated persons. A copy of that Trading Policy is available on Rex’s website.
Page 21
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2012
4. CORPORATE GOVERNANCE STATEMENT (CONTINUED)
The following table summarises Rex’s position in regard to Corporate Governance.
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 Rex’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 Rex’s corporate strategy and monitoring
implementation of the strategy, appointing the Managing Director, monitoring
senior executives’ performance and approving Rex’s risk and audit framework.
The Board is also responsible for Rex’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
Rex. The Managing Director’s responsibilities include implementing and
monitoring (together with the Board) the strategic and financial plans for Rex,
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, Rex
and otherwise carrying out the day to day management of Rex.
This recommendation is also satisfied in as much as should a new Director be
appointed, Rex’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:
> Rex’s financial, strategic, operational and risk management position;
> each Director’s rights, duties and responsibilities; and
> the role of the Board and senior executives
4.1.2 Companies should disclose
the process for evaluating
the performance of senior
executives.
Rex’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.
4.1.3 Companies should provide
the information indicated
in the Guide to reporting
on Principle 1.
It is intended that:
> an explanation of any departure from Recommendations 4.1.1, 4.1.2 or
4.1.3 will be included in the corporate governance statement in the Annual
Report; and
> the Annual Report will disclose whether a performance evaluation for senior
executives has taken place in the reporting period and whether it was in
accordance with the process disclosed.
Page 22
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REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2012
4. CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Recommendation
Comment
4.2
Structure the Board to add value
4.2.1 A majority of the Board should
be independent Directors.
This recommendation is satisfied.
4.2.2 The Chair should be an
This recommendation is satisfied.
independent Director.
4.2.3 The roles of Chair and Chief
This recommendation is satisfied.
Executive Officer should not be
exercised by the same individual.
4.2.4 The Board should establish a
nomination committee.
The Board has not adopted a charter relevant to the specific functions of a
nomination committee. Given the size of Rex and the Board, the Directors
consider that any efficiencies achieved by the establishment of a nomination
committee would be minimal, thereby not making its establishment cost
effective. Rex has Board processes in place which raise issues that would
otherwise be considered by a nomination committee.
4.2.5 Companies should disclose the
process for evaluating the
performance of the Board, its
committees and individual
Directors.
The Directors consider that due to the size of Rex 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 its own performance.
This recommendation is satisfied in as much as the details have been
included in the Annual Report and the Board Charter.
4.2.6 Companies should provide the
The following material is included in the Annual Report:
information indicated in the
Guide to reporting on
Principle 2.
> the skills, experience and expertise relevant to the position of Director
held by each Director in office at the date of the Annual Report;
> the names of the Directors considered by the Board to constitute
independent Directors and Rex’s materiality thresholds;
> the existence of any of the relationships listed in Box 2.1 of the Guide
(regarding director independence) and an explanation of why the Board
considers a Director to be independent, notwithstanding the existence of
those relationships;
> a statement as to whether there is a procedure agreed by the Board for
Directors to take independent professional advice at the expense of Rex;
> a statement as to the mix of skills and diversity for which the Board is
looking to achieve in membership of the Board;
> the period of office held by each Director in office at the date of the
Annual Report;
> whether a performance evaluation for the Board, its committees and
directors has taken place in the reporting period and whether it was in
accordance with the process disclosed; and
> an explanation of any departures from Recommendations 4.2.1, 4.2.2,
4.2.3, 4.2.4, 4.2.5 or 4.2.6.
The following material is publicly available on Rex’s website in a clearly
marked corporate governance section:
> the Board’s policy and procedure for the selection and appointment
of directors.
Page 23
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2012
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 practices necessary to
maintain confidence in the
Company’s integrity;
> the practices necessary to take
into account their legal obligations
and the reasonable expectations of
their stakeholders; and
> the responsibility and
accountability of individuals for
reporting and investigating reports
of unethical practices.
4.3.2 Companies should establish a
policy concerning diversity and
disclose the policy or a summary
of that policy. The policy should
include requirements for the
Board to establish measurable
objectives for achieving gender
diversity and for the Board to
assess annually both the objectives
and progress in achieving them.
This recommendation is satisfied. Rex’s Code of Conduct sets out Rex’s
expectations for the conduct of Rex’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. Rex's Code of Conduct sets out Rex’s
policy concerning diversity. In summary, Rex's policy concerning diversity
is as follows:
Rex recognises that diversity is an economic driver of competitiveness
for companies and it strives to promote an environment and culture
conducive to the appointment of well qualified persons so that there is
appropriate diversity to maximise the achievement of corporate goals.
The objectives for achieving diversity are included in the corporate
governance statement in the Annual Report. In order to promote gender
diversity, Rex will engage in reviews and reporting to the Board about
the proportion of women at Rex and strategies to address diversity.
Rex intends to recruit the most qualified persons for each position and
considers persons from a diverse pool of qualified candidates.
4.3.3 Companies should disclose in each
The objectives for achieving diversity are as follows:
Annual Report the measurable
objectives for achieving gender
diversity set by the Board in
accordance with the diversity
policy and progress towards
achieving them.
Maintain female representation at 20% of the total workforce and
senior management as Rex progresses through the next stages of
Company development.
During each Director selection and appointment process, the professional
search firm supporting the Board will provide at least one credible and
suitably experienced female candidate.
4.3.4 Companies should disclose in each
This recommendation is satisfied.
annual report the proportion of
women employees in the whole
organisation, women in senior
executive positions and women on
the Board.
At 30 June 2012, women made up 29% of the total workforce;
and 60% of senior management. There are currently no women on
the Board of Rex.
4.3.5 Companies should provide the
information indicated in the Guide
to reporting on Principle 3.
The following material is publicly available on Rex’s website in a clearly
marked corporate governance section:
> any applicable code of conduct which incorporates the diversity policy.
Page 24
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2012
4. CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Recommendation
Comment
4.4
Safeguard integrity in financial reporting
4.4.1 The Board should establish an
This recommendation is satisfied.
Audit Committee.
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 Alister Maitland, Paul
Chapman, and Richard Laufmann, who are all independent Directors.
Alister Maitland is an independent Chair of the Audit Committee (and he
is not Chair of the Board). 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
This recommendation is satisfied.
a formal charter.
4.4.4 Companies should provide the
information indicated in the Guide
to reporting on Principle 4.
The following material is included in the corporate governance statement
in the Annual Report:
> the names and qualifications of those appointed to the audit
committee and their attendance at meetings of the committee, or,
where a company does not have an audit committee, how the
functions of an audit committee are carried out
> the number of meetings of the audit committee (contained within the
Directors’ Report)
> explanation of any departures from Recommendations 4.4.1, 4.4.2,
4.4.3 or 4.4.4
The following material is made publicly available on Rex’s website in a
clearly marked corporate governance section:
> the audit committee charter, including information on procedures for
the selection and appointment of the external auditor, and for the
rotation of external audit engagement partners.
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.
4.5.2 Companies should provide the
information indicated in the Guide
to reporting on Principle 5.
This recommendation is satisfied. Rex has established written policies
and procedures designed to ensure compliance with ASX Listing Rule
disclosure requirements and accountability for compliance. Rex’s
Continuous Disclose Policy sets out Rex’s policies and procedures with
regard to the reporting of material price sensitive information to the
ASX subject to confidentiality carve-out aspects and Rex’s procedures in
this regard.
An explanation of any departures from Recommendations 4.5.1 or 4.5.2
are included in the corporate governance statement in the Annual Report.
The policies or a summary of those policies designed to guide compliance
with Listing Rule disclosure requirements are publicly available on Rex’s
website in a clearly marked corporate governance section.
Page 25
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2012
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.
4.6.2 Companies should provide the
information indicated in the Guide
to reporting on Principle 6.
4.7
Recognise and manage risk
Rex places a high priority on communications with its Shareholders.
Although Rex does not have a standalone communications policy, Rex
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 Rex’s website.
An explanation of any departure from Recommendations 4.6.1 or 4.6.2
are included in the corporate governance statement in the Annual Report.
Rex describes its communications policy with Shareholders in the
corporate governance statement in the Annual Report.
4.7.1 Companies should establish policies
for the oversight and management
of material business risks and
disclose a summary of those
policies.
Although there is no standalone risk management policy, the Board
Charter provides that it is the Board’s responsibility to approve Rex’s
risk and audit framework, systems of risk management and internal
control, as well as approving compliance with any risk and audit
policies and protocols in place at the time.
Rex Management has reported to the Board under Recommendation
4.7.2 on risk management.
4.7.2 The Board should require
This recommendation is satisfied.
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.
4.7.3 The Board should disclose whether
it has received assurance from the
chief executive officer (or
equivalent) and the chief financial
officer (or equivalent) that the
declaration provided in accordance
with section 295A of the
Corporations Act is founded on a
sound system of risk management
and internal control and that the
system is operating effectively in all
material respects in relation to
financial reporting risks.
This recommendation is satisfied.
Page 26
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2012
4. CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Recommendation
Comment
4.7
Recognise and manage risk (continued)
4.7.4 Companies should provide the
information indicated in the Guide
to reporting on Principle 7.
The following material is included in the corporate governance statement
in the Annual Report:
> explanation of any departures from Recommendations 4.7.1, 4.7.2,
4.7.3 or 4.7.4;
> whether management has reported to the Board under
Recommendation 4.7.2; and
> whether the Board has received assurance from the chief executive
officer (or equivalent) and the chief financial officer (or equivalent)
under Recommendation 4.7.3.
4.8
Remunerate fairly and responsibly
4.8.1 The Board should establish a
This recommendation is satisfied.
Remuneration Committee.
4.8.2 The remuneration committee
should be structured so that it
consists of a majority of
independent directors, is chaired
by an independent director and
has at least three members.
The members of the Remuneration Committee are Richard Laufmann,
Paul Chapman and Alister Maitland, who are all independent Directors.
Richard Laufmann is an independent Chair of the Remuneration
Committee (and he is not Chair of the Board). The Directors consider
that the Remuneration Committee is of sufficient size, independence and
technical expertise to discharge its mandate effectively.
4.8.3 Companies should clearly
This recommendation is satisfied.
distinguish the structure of Non-
Executive Director’s remuneration
from that of Executive Directors
and senior executives.
4.8.4 Companies should provide the
information indicated in the Guide
to reporting on Principle 8.
The following material or a clear cross-reference to the location of the
material is included in the corporate governance statement in the Annual
Report or elsewhere in the Annual Report (as appropriate):
> the names of the members of the remuneration committee and their
attendance at meetings of the committee, or where the company does
not have a remuneration committee, how the functions of a
remuneration committee are carried out.
> the existence and terms of any schemes for retirement benefits, other
than superannuation, for non-executive directors; and
> an explanation of any departures from Recommendations 4.8.1,
4.8.2, 4.8.3 or 4.8.4.
Page 27
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2012
5. PRINCIPAL ACTIVITIES
The principal activity of the Group during the course of the financial year was minerals exploration and evaluation
in Australia. There were no significant changes in the nature of the Group’s principal activities during the year.
Rex is focussed on the exploration and development of large-scale copper-gold projects on the Yorke Peninsula,
South Australia. Rex’s strategy is to discover large-scale copper-gold deposits which can lead to the development
of a new long-life and low-cost mining operation on the Yorke Peninsula.
Rex has made an initial discovery at the Hillside copper-gold deposit and completed a conceptual study to assess
a potential development plan for this deposit. Rex is progressing the Hillside deposit to the level of a pre-feasibility
study in conjunction with maintaining a regional exploration program for further discoveries and enhancement of
the future mine development plans on the Yorke Peninsula.
Rex applies its extensive technical experience and existing drilling capacity to progress its projects, laying solid
foundations for long term growth, enabling Rex to uncover the substantial deposits of copper that Rex interprets
to exist under shallow cover rocks on the Yorke Peninsula.
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 2013 and
later financial years.
> Pre-feasibility Study – Completion of the PFS, due for release in October 2012, will define the start-up
capital requirements, production profile and operating costs of Hillside.
> Reserves – In parallel with the PFS, Rex will release the first Reserves for Hillside and an
accompanying larger life of mine plan which should extend the potential of the Hillside project out
to 15 years and beyond.
> Financing – The Company will put in place an optimal financing package with the goal of maximising
shareholder exposure to the future cash flows from a new copper-gold-iron ore operation at Hillside.
> Exploration – Maintain a near mine and regional exploration push with the aim of identifying multiple
large-scale copper deposits that can complement the Hillside project, on Rex’s tenements on the
Yorke Peninsula, SA.
> Organisation – Plan for an organisational transition from an explorer to a developer to a producer.
6. OPERATING AND FINANCIAL REVIEW
The income statement shows a loss after tax of $544,862 (2011: profit $593,266) for the year. The Group has no
bank debt. As at 30 June 2012 the Group had a cash position of $69,742,604 (2011: $45,084,267) and nil funds
on deposit (2011: $34,000,000). Operating activities generated a cash inflow for the year of $260,344 (2011:
cash inflow of $230,899).
7. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
On 3 April 2012, Rex announced an equity raising of approximately $42 million via a share placement at $1.20
per share. This equity raising was successfully completed in two stages during April and May 2012.
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 2012.
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
The Company announced on 24 September 2012 the appointment of Mr Mark Parry to the role of Managing
Director and Chief Executive Officer. Mr Parry’s contract is for an initial term of 3 years and is due to commence
on 15 October 2012. He will be provided with a base salary of $550,000 per year inclusive of superannuation as
well as a sign on bonus of $150,000. He will also be eligible for a special project bonus of $150,000 if he is
successful in securing or substantially advancing a financing package for the Hillside project prior to 1st July
2013. In addition, Mr Parry has been issued a total of 3.0 million options with an exercise price of $0.91 with an
expiry of 31 August 2017. Current and founding Managing Director Mr Steven Olsen will remain on the Board
and will continue to play an important role for the Company as it makes the transition from an explorer to a
development company. Mr Olsen will move into the role of Executive Director for Business Development until
31 July 2013, subject to renewal by agreement.
Page 28
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2012
9. EVENTS SUBSEQUENT TO REPORTING DATE (CONTINUED)
Other than the event described on page 28, subsequent to 30 June 2012, there has not arisen in the interval
between the end of the financial year and the date of this report any other 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.
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 Alister Maitland
Mr Steven Olsen
Rex Minerals Limited
Ordinary shares
Options over ordinary shares
3,644,833
3,541,666
202,000
6,027,000
–
–
–
–
12. SHARE OPTIONS
12.1 Options granted to Directors and Officers of the Company
During or since the end of the financial year, the Company granted options for no consideration over unissued
ordinary shares in the Company to the following Directors and to the following of the five most highly
remunerated Officers of the Company as part of their remuneration:
All options to Executives were granted during the financial year. Since the end of the financial year, 3 million
options have been granted to Mr Mark Parry who will commence as Managing Director and Chief Executive
Officer on 15 October 2012.
Directors
Mr Paul Chapman
Mr Richard Laufmann
Mr Alister Maitland
Mr Steven Olsen
Executives
Ms Amber Rivamonte
Ms Janet Mason
Mr Patrick Say
Number of options
granted
Exercise price
Expiry date
–
–
–
–
160,000
80,000
160,000
–
–
–
–
$1.20
$1.20
$1.20
–
–
–
–
30 April 2015
30 April 2015
30 April 2015
Page 29
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2012
12. SHARE OPTIONS (CONTINUED)
12.2 Unissued shares under option
At the date of this report unissued ordinary shares of the Company under option are:
Expiry date
31 October 2012
24 May 2013
30 April 2014
30 April 2015
31 August 2017
Total
Exercise price
Number of shares
$2.052
$1.220
$3.000
$1.200
$0.910
240,000
528,000
1,120,000
1,520,000
3,000,000
6,408,000
All options expire on the expiry date, unless the options have not been exercised and the employee leaves
the Company in which case they will lapse if they are not exercised within 60 days of departure.
12.3 Shares issued on exercise of options
During or since the end of the financial year the Company has issued ordinary shares as a result of the
exercise of options as follows (there are no amounts unpaid on the shares issued):
Number of shares
Amount paid on each share
60,000
60,000
$0.552
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 or any
of its controlled entities (2011: nil).
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 Senior Executives.
Key management personnel comprise the Directors of the Company and Senior Executives for the
Company and the Group.
Page 30
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2012
15. REMUNERATION REPORT – AUDITED (CONTINUED)
15.1 Principles of compensation (Continued)
Compensation levels for key management personnel of the Group are competitively set to attract and retain
appropriately qualified and experienced Directors and Senior Executives. Compensation levels for the 2012
financial year were determined by considering the number of employees, market capitalisation, and Company
performance. They are also based on remuneration of Top 500 ASX listed companies. 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.
In considering the Group’s performance and benefits for shareholder wealth, the Board has regard to the
geological finds and the following indices in respect of the current financial year and previous financial years.
Net profit/(loss) attributable
to equity holders of the parent
Closing share price at
financial years end
2012
2011
2010
2009
2008
$(544,862)
$593,266
$2,327,007 $(1,851,166) $(857,987)
$0.785
$2.31
$1.250
$0.555
$0.260
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 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. Additional details of the
use of remuneration consultants during the year are outlined in section 15.1.7.
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 determined
based on an assessment of key performance indicators, including share price performance, business growth,
exploration success and safety, environment and community related matters.
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 vest immediately and only lapse in the event of the employee leaving the Company or
the expiry date, whichever occurs earlier. Due to the nature of the Company at this time the Board believes
this is appropriate having regard to the exercise price of options being set at a premium to the share price at
the date of the grant.
Page 31
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2012
15. REMUNERATION REPORT – AUDITED (CONTINUED)
15.1 Principles of compensation (Continued)
15.1.5 Service agreements
It is the Group’s policy that employment contracts for key management personnel, excluding the Chief Executive
Officer are unlimited in term but capable of termination on 3 months’ notice and that the Group retains the right
to terminate the contract immediately, by making payment equal to 3 months’ pay in lieu of notice.
The Group has entered into contracts with each key management person, excluding the Chief Executive
Officer, that are capable of termination on three months’ 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 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 2010 with the
Company which terminates on the 30 June 2013. 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
to the Chief Executive Officer for meeting and/or exceeding performance milestones and upon approval by
the Board.
15.1.6 Non-Executive Directors
Total compensation for all Non-Executive Directors, last voted upon by shareholders at the 2011 AGM,
is not to exceed $500,000 per annum and is set based on advice from external advisors with reference to fees
paid to other Non-Executive Directors of comparable companies. Non-Executive Directors’ base fees are
presently $80,000 per annum, whilst the Chairperson’s base fee is $120,000.
The Chairperson and Non-Executive Directors do not receive performance related remuneration.
Directors’ fees cover all main Board activities and membership of committees.
15.1.7 Services of remuneration consultants
The Remuneration Committee engaged Swann Global as remuneration consultant to the Board to review the
amount and elements of the KMP remuneration and provide recommendations in relation thereto for
remuneration packages for the 2013 financial year. No specific guidance was provided by Swann in relation
to the 2012 financial year.
In addition to the remuneration recommendations, Swann Global was engaged to provide consulting services
in relation to the recruitment of key personnel at both Board and executive management levels for the mine
development stage.
Fees paid or payable to Swann Global for the remuneration recommendations in respect of reviewing the
amount and elements of the KMP remuneration for the financial year amounted to $42,500. In addition,
they were paid $45,000 in total for all other services.
The Board undertook its own inquiries and review of the processes and procedures followed by Swann Global
during the course of its assignment. These inquiries involved reviewing the details of Swann’s interaction with
the Company in relation to the assignment and other services and conducing meetings with Swann Global where
KMP were not present to discuss the progress of the engagement. The Board received a declaration from Swann
Global stating that the recommendations that they provided were free from undue influence from the people
from whom they relate.
The Board is satisfied that the remuneration recommendations made by Swann Global were free from undue
influence by members of the KMP about whom the recommendations may relate.
15.2 Directors’ and Executive Officers’ remuneration
Details of the nature and amount of each major element of remuneration of each Director of the Company
and other key management personnel appear in the Table on page 33.
Page 32
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2012
15. REMUNERATION REPORT – AUDITED (CONTINUED)
15.2 Directors’ and Executive Officers’ remuneration (Continued)
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Page 33
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2012
15. REMUNERATION REPORT – AUDITED (CONTINUED)
15.2 Directors’ and Executive Officers’ remuneration (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. As the options vested immediately the fair value of the grant is
allocated to the reporting period in which the grant occurs.
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
24 May 2012
2.54 years
$0.21
$1.20
$0.91
50%
2.33%
15.3 Equity Instruments
All options refer to options over ordinary shares of Rex Minerals Ltd, which are exercisable on a one-for-one basis.
15.3.1 Options and rights over equity instruments granted as compensation
Details on options over ordinary shares in the Company that were granted and vested as compensation
to each key management person during the reporting period are as follows:
Number of
options granted
during 2012
Grant and
vesting date
Fair value per
option at grant
date ($)
Exercise
price per
option ($)
Expiry date
Number of
options vested
during 2012
Directors
Mr Paul Chapman
Mr Richard Laufmann
Mr Alister Maitland
Mr Steven Olsen
Executives
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Ms Amber Rivamonte
160,000 24 May 2012
Ms Janet Mason
Mr Patrick Say
80,000 24 May 2012
160,000 24 May 2012
$0.21
$0.21
$0.21
$1.20 30 April 2015
$1.20 30 April 2015
$1.20 30 April 2015
160,000
80,000
160,000
Number of
options granted
during 2011
Grant and
vesting date
Fair value per
option at grant
date ($)
Exercise
price per
option ($)
Expiry date
Number of
options vested
during 2011
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Directors
Mr Paul Chapman
Mr Richard Laufmann
Mr Steven Olsen
Executives
Ms Amber Rivamonte
80,000
6 May 2011
Ms Janet Mason
Mr Patrick Say
80,000
6 May 2011
80,000
6 May 2011
$0.54
$0.54
$0.54
$3.00 30 April 2014
$3.00 30 April 2014
$3.00 30 April 2014
80,000
80,000
80,000
No options have been granted since the end of the financial year. The options were provided at no cost to the recipients.
Page 34
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2012
15. REMUNERATION REPORT – AUDITED (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
current period.
15.3.3 Exercise of options granted as compensation
During the reporting period, there were no shares issued to key management personnel on the exercise
of options previously granted as 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, is detailed below.
Granted in year
$ (A)
Value of Options
Exercised in year
$
Lapsed in year
$
Directors
Mr Paul Chapman
Mr Richard Laufmann
Mr Alister Maitland
Mr Steven Olsen
Executives
Ms Amber Rivamonte
Ms Janet Mason
Mr Patrick Say
Total
–
–
–
–
34,240
17,120
34,240
85,600
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(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 21 to the financial statements. The total value of the
options granted is included in the table above. This amount is allocated to remuneration in full on the grant
date as the options are immediately vested and exercisable.
16. LEAD AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration is set out on page 64 and forms part of the Directors’ report
for the year ended 30 June 2012.
Dated at Melbourne this 28th day of September 2012
Signed in accordance with a resolution of the Directors:
Steven Olsen
Managing Director
Page 35
FINANCIAL STATEMENTS
Page 36
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
STATEMENT OF FINANCIAL POSITION as at 30 June 2012
2012 2011
Note $ $
Current assets
Cash and cash equivalents 7(i) 69,742,604 45,084,267
Term deposits 7(ii) – 34,000,000
Trade and other receivables 8 693,585 884,677
Prepayments 9 42,688 9,420
Total current assets 70,478,877 79,978,364
Non-current assets
Exploration and evaluation expenditure 10 98,103,894 51,958,831
Property, plant and equipment 12 15,620,273 11,102,663
Total non-current assets 113,724,167 63,061,494
Total assets 184,203,044 143,039,858
Current liabilities
Trade and other payables 13 4,287,992 3,168,171
Employee benefits 14 309,823 269,438
Total current liabilities 4,597,815 3,437,609
Non-current liabilities
Employee benefits 14 168,248 –
Total liabilities 4,766,063 3,437,609
Net assets 179,436,981 139,602,249
Equity
Issued capital 15(i) 177,685,263 137,665,189
Reserves 15(iii) 1,311,000 1,137,690
Retained earnings 440,718 799,370
Total equity 179,436,981 139,602,249
The notes on pages 41 to 63 are an integral part of these financial statements.
Page 37
REX MINERALS LTD
STATEMENT OF COMPREHENSIVE INCOME for the year ended 30 June 2012
2012 2011
Note $ $
Finance income 16 3,082,412 3,816,443
Other income 639 –
Administrative expenses (1,192,010) (1,502,038)
Depreciation expense (35,946) (62,359)
Employee benefits expense 17 (1,955,280) (1,426,162)
Marketing expenses (435,926) (232,415)
Loss on disposal of fixed assets (8,751) (203)
Profit/(loss) before tax (544,862) 593,266
Income tax (expense)/benefit 18 – –
Total profit/(loss) for the period after tax (544,862) 593,266
Total comprehensive income/(loss) attributable to members of Rex Minerals Ltd (544,862) 593,266
Earnings/(loss) per share attributable to members of Rex Minerals Ltd
Basic earnings per share (cents) 19 (0.34) 0.43
Diluted earnings per share (cents) 19 (0.34) 0.42
The notes on pages 41 to 63 are an integral part of these financial statements.
Page 38
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
STATEMENT OF CHANGES IN EQUITY for the year ended 30 June 2012
Attributable to equity holders of the Group
Share Retained
Capital Reserves Earnings Total Equity
$ $ $ $
Balance at 1 July 2010 52,948,677 520,080 (40,286) 53,428,471
Issue of ordinary shares 89,627,248 – – 89,627,248
Transaction costs on share issue (4,910,736) – – (4,910,736)
Share based payments compensation – 864,000 – 864,000
Transfer from share based payments reserve – (246,390) 246,390 –
Total comprehensive income/(loss) for the period – – 593,266 593,266
Balance at 30 June 2011 137,665,189 1,137,690 799,370 139,602,249
Balance at 1 July 2011 137,665,189 1,137,690 799,370 139,602,249
Issue of ordinary shares 42,364,320 – – 42,364,320
Transaction costs on share issue (2,344,246) – – (2,344,246)
Share based payments compensation – 359,520 – 359,520
Transfer from share based payments reserve – (186,210) 186,210 –
Total comprehensive income/(loss) for the period – – (544,862) (544,862)
Balance at 30 June 2012 177,685,263 1,311,000 440,718 179,436,981
The notes on pages 41 to 63 are an integral part of these financial statements.
Page 39
REX MINERALS LTD
STATEMENT OF CASH FLOWS for the year ended 30 June 2012
2012 2011
Note $ $
Cash flows from operating activities
Cash paid to suppliers and employees (3,347,676) (3,159,025)
Interest received 3,608,020 3,389,924
Net cash from/(used in) operating activities 20 260,344 230,899
Cash flows from investing activities
Exploration and evaluation payments (44,811,133) (27,435,325)
Acquisition of property, plant and equipment (4,519,580) (8,511,209)
Proceeds from sale of property, plant and equipment 39,832 50
(Investments in)/proceeds from term deposits 7(ii) 34,000,000 (34,000,000)
Net cash from/(used in) investing activities (15,290,881) (69,946,484)
Cash flows from financing activities
Proceeds from issue of share capital 42,033,120 88,235,648
Payment of transaction costs (2,344,246) (4,910,737)
Net cash from/(used in) financing activities 39,688,874 83,324,911
Net increase in cash and cash equivalents 24,658,337 13,609,326
Cash and cash equivalents at beginning of the period 45,084,267 31,474,941
Cash and cash equivalents at period end 7(i) 69,742,604 45,084,267
The notes on pages 41 to 63 are an integral part of these financial statements.
Page 40
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS
1. REPORTING ENTITY
Rex Minerals Ltd (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 as at and for the year ended
30 June 2012 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 in Australia.
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 financial report of the Group complies 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 28 September 2012.
(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 functional currency of all
entities in 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 and their related accounting policies:
>
note 10
Exploration and evaluation expenditure
>
note 14
Employee benefits
>
note 21
Share-based payments
>
notes 23, 24
Commitments and contingencies
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.
(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 41
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 securities, 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.
(A) Receivables – other debtors
Other debtors are measured at amortised cost using the effective interest method, less impairment
losses. Other debtors are reviewed on an ongoing basis for any indicators of impairment.
An impairment loss is recognised for debts which are known to be uncollectible. An impairment
allowance is raised for any doubtful accounts.
(B) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with an original maturity of
three months or less.
(C) Term Deposits
Term Deposits comprise cash balances and call deposits with an original maturity of more than
three months.
(D) Trade and other payables
Liabilities are recognised for amounts to be paid in the future for goods and services provided to the
Group 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 42
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
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 or as capitalised exploration expenditure for items of PP&E
used directly in exploration and evaluation activities 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:
> plant and equipment 5 – 10 years
> buildings 10 – 20 years
Land is not depreciated.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and
adjusted if appropriate.
(d) Exploration and evaluation
Exploration and evaluation expenditure, including the costs of acquiring licences, are capitalised as exploration
and evaluation assets on an area of interest basis.
Accounting for exploration and evaluation expenditures is assessed separately for each ‘area of interest’.
An ‘area of interest’ is an individual geological area which is considered to constitute a favourable environment
for the presence of a mineral deposit or has been proved to contain such a deposit.
Expenditure incurred on activities that precede exploration and evaluation of mineral resources, including all
expenditure incurred prior to securing legal rights to explore an area, is expensed as incurred. For each area of
interest the expenditure is recognised as an exploration and evaluation asset where the following conditions
are satisfied:
>
>
the expenditures are expected to be recouped through successful development and exploitation of the
area of interest or alternatively by its sale; and
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 or facts and circumstances suggest that the carrying amount exceeds the
recoverable amount.
Exploration and evaluation assets are tested for impairment when any of the following facts and
circumstances exist:
>
>
>
>
the term of exploration license in the specific area of interest has expired during the reporting period
or will expire in the near future, and is not expected to be renewed;
substantive expenditure on further exploration for and evaluation of mineral resources in the specific area
are not budgeted nor planned;
exploration for and evaluation of mineral resources in the specific area have not led to the discovery of
commercially viable quantities of mineral resources and the decision was made to discontinue such activities
in the specified area; or
sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the
carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful
development or by sale.
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.
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REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(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.
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.
(ii) Non-financial assets
The carrying amounts of the Group’s non-financial 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.
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) Long term benefits
The Groups obligation in respect of long service leave is measured as the present value of the future benefit
expected to be paid to employees that has been earned in return for their service in the current and prior
periods. Consideration is given to the expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields at reporting
date on national government bonds with terms of maturity that closely match the estimated future cash flows.
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Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(f) Employee benefits (Continued)
(ii) Share-based payments
Equity-based compensation is 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
become 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 revenue.
(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 and its wholly-owned Australian resident entities are part of a tax-consolidated group. As a
consequence all members of the tax-consolidated group are taxed as a single entity. The head entity within
the tax-consolidated group is Rex Minerals Ltd.
(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.
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REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(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
The Group determines and presents operating segments based on the information that internally is provided to
the Managing Director, who is the consolidated entity’s chief operating decision maker.
An operating segment is a component of the Group that engages in exploration activities which incurs expenses.
An operating segment’s expenditures are reviewed regularly by the Managing Director to make decisions about
resources to be allocated to the segment and assess its performance.
Segment expenditure that is reported to the Managing Director includes items directly attributable to a segment
as well as those that can be allocated on a reasonable basis.
Segment capital expenditure is the total cost incurred during the period on exploration and to acquire property,
plant and equipment.
(l) Restoration and rehabilitation provision
Obligations to restore and rehabilitate certain areas of property may arise from time to time as a result of the
groups activities. A provision for rehabilitation and restoration is recognised in respect of the estimated cost of
rehabilitation, decommissioning and restoration of areas of disturbance existing at reporting date, but not yet
rehabilitated. Rehabilitation activities include dismantling infrastructure, removal and treatment of waste material,
and land rehabilitation, including recontouring, topsoiling and revegetation of the disturbed area.
Provisions for the cost of the rehabilitation program are recognised at the time that environmental disturbance
occurs (or is acquired).
A corresponding asset is recognised in Property, Plant and Equipment or Exploration and Evaluation Assets only
to the extent that it is probable that future economic benefits associated with the rehabilitation, will flow to the
entity. Determining the cost of rehabilitation and restoration of the area of disturbance requires the use of
significant estimates and assumptions, including, the timing of the cash flows and expected life of the relevant area
of interest the application of relevant environmental legislation, and the future expected costs of rehabilitation,
decommissioning and restoration. Changes in the estimates and assumptions used to determine the cost of
rehabilitation, decommissioning and restoration could have a material impact on the carrying value of the site
restoration provision and related asset. The provision is reviewed at each reporting date and updated based on the
facts and circumstances available at the time.
(m) New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are effective for annual periods
beginning after 1 July 2012, and have not been applied in preparing these consolidated financial statements:
>
>
>
AASB 9 Financial Instruments – could change the classification and measurement of financial assets.
The Group does not plan to adopt this standard early. The amendments become mandatory for the Group’s
2014 consolidated financial statements and the extent of the impact has not been determined.
IAS 19 Employee Benefits – is amended focussing on, but is not limited to the accounting for defined
benefit plans. In addition, it changes the definition of short-term and other long term employee benefits and
some disclosure requirements. The amendments, which become mandatory for the Group’s 30 June 2013
financial statements, are not expected to have a significant impact on the financial statements.
AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management
Personnel Disclosure Requirement removes the requirements to include individual key management
personnel disclosures in the notes to the financial statements. The Company will still need to provide these
disclosures in the Remuneration Report under s.300A of the Corporations Act 2001. The amendments,
which will become mandatory for the Group’s 30 June 2014 financial statements, are not expected to have
any impact on the financial statements other than removal of duplicated disclosures.
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Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(m) New standards and interpretations not yet adopted (Continued)
>
>
>
AASB 10 Consolidated Financial Statements – introduces a new approach in determining which investees
should be consolidated and whether an investor is exposed, or had the rights to, variable returns from its
involvement with the investee. Application of this standard would not have had an impact on the current
financial period. The standard becomes mandatory for the groups 2014 financial statements.
AASB 11 Joint Arrangements – is amended to determine the consolidation requirements for joint operations
and joint ventures depending on whether or not parties have rights to and obligations for underlying assets
and liabilities. Application of this standard would not have had an impact on the current financial period.
The standard becomes mandatory for the groups 2014 financial statements.
IFRC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine – has been issued to
account for production stripping costs in a surface mine and clarifies certain criteria that need to be met in
order to enable capitalisation of stripping costs. Application of this standard would not have had an impact
on the current financial period. The standard becomes mandatory for the groups 2014 financial statements.
4. DETERMINATION OF FAIR VALUES
A number of the Group’s accounting policies and disclosures require the determination of fair values 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
The fair value of options granted to employees as compensation is independently measured using a Black-
Scholes option pricing model. Measurement inputs include the exercise price of the options, 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 (based on an evaluation of the company’s historical
volatility, particularly over the historic period commensurate with the expected term), expected term of the
instruments (based on historical experience and general option holder behaviour), the expected dividend yield
and the risk-free interest rate (based on government bonds) for the term of the option.
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 and cash balances.
Page 47
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
5. FINANCIAL RISK MANAGEMENT (CONTINUED)
(iii) 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. To this end actual cash flows and forecast
future cash flows are reported to and monitored by the board on a periodic basis.
(iv) 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 consolidated entity operates in one geographical segment, being South Australia and one industry,
mineral mining and exploration.
7. CASH ASSETS
(i)
Cash and cash equivalents
2012 2011
$ $
Bank balances and short term deposits 69,742,604 45,084,267
Cash and cash equivalents in the statement of cash flows 69,742,604 45,084,267
(ii) Term deposits
2012 2011
$ $
Term deposits* – 34,000,000
Total term deposits – 34,000,000
*Term Deposits comprise cash balances with an original maturity of more than three months.
The Group’s total cash and funds on deposit $69,742,604 (2011:$79,084,267) is exposed to interest rate risk
and a sensitivity analysis for financial assets and liabilities are disclosed in note 22.
8. TRADE AND OTHER RECEIVABLES
2012 2011
$ $
Other receivables and accrued interest 626,135 843,747
Security Deposits and Rehabilitation Bonds 67,450 40,930
Total trade and other receivables 693,585 884,677
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REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
9. PREPAYMENTS
2012 2011
$ $
Prepayments 42,688 9,420
Total prepayments 42,688 9,420
10. EXPLORATION AND EVALUATION EXPENDITURE
2012 2011
$ $
Cost
Balance at 1 July 51,958,831 22,278,777
Acquisitions – –
Additions 46,145,063 29,680,054
Disposals – –
Balance at 30 June 98,103,894 51,958,831
Carrying amounts
At 1 July 51,958,831 22,278,777
At 30 June 98,103,894 51,958,831
The recoverability of the carrying amounts of exploration and evaluation assets is dependent on the successful
development and commercial exploitation or sale of the respective area of interest.
11. UNRECOGNISED DEFERRED TAX ASSETS
2012 2011
$ $
Net deferred tax assets have not been recognised in respect of the following:
Tax losses and exploration deductions 6,781,772 5,849,031
Total unrecognised deferred tax assets 6,781,772 5,849,031
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 49
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
12. PROPERTY, PLANT AND EQUIPMENT
Land and Plant and
Buildings Equipment Total
2012 $ $ $
Cost
Balance at 1 July 2011 9,978,282 1,420,202 11,398,484
Additions 4,184,041 716,116 4,900,157
Disposals – (80,218) (80,218)
Balance at 30 June 2012 14,162,323 2,056,100 16,218,423
Depreciation and impairment losses
Balance at 1 July 2011 822 294,999 295,821
Depreciation charged to the income statement 228 35,718 35,946
Depreciation charged to exploration projects 460 297,641 298,101
Disposals – (31,718) (31,718)
Balance at 30 June 2012 1,510 596,640 598,150
Carrying amounts
At 1 July 2011 9,977,460 1,125,203 11,102,663
At 30 June 2012 14,160,813 1,459,460 15,620,273
Land and Plant and
Buildings Equipment Total
2011 $ $ $
Cost
Balance at 1 July 2010 16,953 478,721 495,674
Acquisitions 9,961,329 945,228 10,906,557
Disposals – (3,747) ( 3,747)
Balance at 30 June 2011 9,978,282 1,420,202 11,398,484
Depreciation and impairment losses
Balance at 1 July 2010 114 121,889 122,003
Depreciation charged to the income statement 342 62,017 62,359
Depreciation charged to exploration projects 366 114,587 114,953
Disposals – (3,494) (3,494)
Balance at 30 June 2011 822 294,999 295,821
Carrying amounts
At 1 July 2010 16,839 356,832 373,671
At 30 June 2011 9,977,460 1,125,203 11,102,663
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REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
13. TRADE AND OTHER PAYABLES
2012 2011
$ $
Other trade payables and accrued expenses 4,287,992 3,168,171
Total trade and other payables 4,287,992 3,168,171
14. EMPLOYEE BENEFITS
2012 2011
$ $
Current
Liability for annual leave 309,823 269,438
Non-current
Liability for long service leave 168,248 –
Total employee benefits 478,071 269,438
Assumptions made with respect to the measurement of the liability for long service leave are in accordance with
accounting policy note 3f(ii).
15. EQUITY
(i) Movements in shares on issue:
Date of Number Issue
Issue of Shares Price $ $
Opening balance at 1 July 2011 153,635,519 137,665,189
Issue of Ordinary Shares – Property purchase 22/02/2012 211,765 1.564 331,200
Capital Raising – Placement 11/04/2012 22,600,000 1.200 27,120,000
Less costs of Placement (1,491,600)
Exercise of Employee Options – funds received 24/05/2012 60,000 0.552 33,120
Capital Raising – Placement 24/05/2012 12,400,000 1.200 14,880,000
Less costs of Placement (852,646)
Closing balance at 30 June 2012 188,907,284 177,685,263
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REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
15. EQUITY (CONTINUED)
(i) Movements in shares on issue (Continued):
Date of Number Issue
Issue of Shares Price $ $
Opening balance at 1 July 2010 114,389,460 52,948,677
Exercise of Employee Options – funds received 02/08/2010 100,000 0.102 10,200
Exercise of Employee Options – funds received 02/08/2010 60,000 0.552 33,120
Exercise of Employee Options – funds received 03/09/2010 60,000 0.552 33,120
Exercise of Employee Options – funds received 01/10/2010 90,000 0.217 19,530
Exercise of Employee Options – funds received 01/10/2010 500,000 0.102 51,000
Issue of Ordinary Shares – Placement 19/10/2010 17,000,000 2.500 42,500,000
Less costs of the Placement (2,340,000)
Exercise of Employee Options – funds received 05/11/2010 6,000 1.222 7,332
Issue of Ordinary Shares – Share Purchase Plan 24/11/2010 1,079,000 2.500 2,697,500
Issue of Ordinary Shares – Placement 03/12/2010 17,000,000 2.500 42,500,000
Less costs of the Placement (2,570,736)
Exercise of Employee Options – funds received 06/01/2011 12,300 1.222 15,031
Exercise of Employee Options – funds received 13/01/2011 20,700 1.222 25,295
Issue of Ordinary Shares – property purchase 31/03/2011 311,419 2.890 900,000
Exercise of Employee Options – funds received 31/03/2011 60,000 0.217 13,020
Exercise of Founding Options – funds received 14/04/2011 750,000 0.102 76,500
Exercise of Options – funds received 20/05/2011 1,000,000 0.152 152,000
Exercise of Founding Options – funds received 17/06/2011 1,000,000 0.102 102,000
Issue of Ordinary Shares – property purchase 24/06/2011 196,640 2.500 491,600
Closing balance at 30 June 2011 153,635,519 137,665,189
(ii) Movements in options on issue:
Date of Number Exercise Expiry
Issue of Options Price $ Date
Opening balance as at 1 July 2011 2,461,000
Lapse of Options – employees 06/05/2011 (40,000) 3.000 30/04/2014
Exercise of Options - employees 19/06/2009 (60,000) 0.552 31/05/2012
Lapse of Options – employees 06/05/2011 (280,000) 3.000 30/04/2014
Issue of Options – employees 24/05/2012 1,680,000 1.200 30/04/2015
Closing balance as at 30 June 2012 3,761,000
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REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
15. EQUITY (CONTINUED)
(ii) Movements in options on issue (Continued):
Date of Number Exercise Expiry
Issue of Options Price $ Date
Opening balance at 1 July 2010 4,520,000
Exercise of Options – founding 06/06/2007 (1,750,000) 0.102 30/06/2011
Exercise of Options – employees 31/07/2007 (600,000) 0.102 30/06/2011
Exercise of Options 12/09/2007 (1,000,000) 0.152 30/06/2011
Exercise of Options – employees 03/12/2007 (150,000) 0.217 30/06/2011
Exercise of Options – employees 19/06/2009 (120,000) 0.552 31/05/2012
Exercise of Options – employees 04/06/2010 (39,000) 1.222 24/05/2013
Issue of Options – employees 06/05/2011 1,600,000 3.000 30/04/2014
Closing balance as at 30 June 2011 2,461,000
(iii) Movements in share based payment reserve:
$
Opening balance at 1 July 2011 1,137,690
Employee share based payments 359,520
Transferred to Retained earnings (186,210)
Closing balance at 30 June 2012 1,311,000
Opening balance at 1 July 2010 520,080
Employee share based payments 864,000
Transferred to Retained earnings (246,390)
Closing balance at 30 June 2011 1,137,690
This share based payment reserve is used to recognise the fair value of options issued to employees for options
granted which have not been exercised.
16. FINANCE INCOME AND EXPENSE
2012 2011
$ $
Finance income – interest income on bank deposits 3,082,412 3,816,443
Finance expense –
–
Net finance income and expense 3,082,412 3,816,443
17. EMPLOYEE BENEFITS EXPENSE
2012 2011
$ $
Wages and salaries 1,735,467 1,104,313
Share based payments expense 94,160 194,400
Increase in liability for annual leave 31,850 127,449
Increase in liability for long service leave 93,803 –
Total employee benefits expense 1,955,280 1,426,162
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REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
18. INCOME TAX EXPENSE
NUMERICAL RECONCILIATION BETWEEN TAX EXPENSE AND PRE-TAX ACCOUNTING PROFIT
2012 2011
$ $
Profit/(Loss) before tax for the period (544,862) 593,266
Income tax using the domestic corporation tax rate of 30% (2011: 30%) (163,459) 177,980
Increase in income tax due to:
Non-deductible expenses 28,622 262,186
Decrease in income tax expense due to:
Net effect of tax assets not recognised 134,837 (440,166)
Total income tax expense/(benefit) on pre-tax net profit – –
19. EARNINGS PER SHARE
2012 2011
cents cents
Earnings Per Share
Basic EPS (0.34) 0.43
Diluted EPS per share – cents (0.34) 0.42
(a) Basic earnings per share
The calculation of basic earnings/(loss) per share (EPS) at 30 June 2012 was based on the loss attributable
to ordinary equity holders of $544,862 (2011: $593,266 profit) and a weighted average number of ordinary
shares outstanding during the financial year ended 30 June 2012 of 159,926,855 (2011: 137,764,389).
(b) Diluted earnings per share
The calculation of diluted earnings/(loss) per share (EPS) at 30 June 2012 is the same as basic diluted
earnings/(loss) per share. In accordance with AASB 133 – Earning per share, as potential ordinary
shares may result in a situation where their conversion results in a decrease in the loss per share,
no dilutive effect has been taken into account. (2011: $593,266 profit and a weighted average number
of ordinary shares outstanding after adjustment for unexercised options 140,225,389 shares).
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REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
20. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
2012 2011
$ $
Cash flows from operating activities
Profit/(Loss) before tax for the period (544,862) 593,266
(cid:127) Adjustments for non cash items:
Depreciation 35,946 62,359
Share based payment transactions 94,160 194,400
(cid:127) Adjustments for other items:
Profit/(loss) on disposal of property plant and equipment 8,751 (50)
Operating loss before changes in working capital and provisions (406,005) 849,975
(Increase)/decrease in trade and other receivables 463,222 (562,969)
(Decrease)/increase in trade and other payables (5,506) (183,556)
(Decrease)/increase in employee benefits 208,633 127,449
Net cash (used in)/from operating activities 260,344 230,899
During the current and prior years, the Group had the following non-cash investing and financing activities which
are not reflected in the statement of cash flows (refer note 15):
(a)
Issue of options to employees, some of which have been capitalised as exploration expenditure.
(b)
Issue of shares as part of the purchase consideration for land.
21. SHARE BASED PAYMENTS
The Company established a share option plan that entitles employees (other than Directors) to options to purchase
shares in the Company.
The following options were granted during the financial year ending 30 June 2012:
Grant Number Expiry
Employees Entitled Date of Options Date
Key management personnel (A) 24/05/2012 400,000 30/04/2015
Other employees (A) 24/05/2012 1,280,000 30/04/2015
Total 1,680,000
The following options were granted during the financial year ending 30 June 2011:
Grant Number Expiry
Employees Entitled Date of Options Date
Key management personnel (B) 06/05/2011 240,000 30/04/2014
Other employees (B) 06/05/2011 1,360,000 30/04/2014
Total 1,600,000
Key management personnel and employee options (A) are exercisable at a price of $1.20 each, have no vesting
period and expire on 30 April 2015. Key management personnel and employee options (B) are exercisable at a
price of $3.00 each, have no vesting period and expire on 30 April 2014. Each option entitles the holder to
subscribe for 1 ordinary share in the Company.
All options vest on the grant date. Options expire on the expiry date, unless the options have not been exercised and
the employee leaves the Company in which case the options will lapse if they are not exercised within 60 days of
departure These options do not entitle the holder to participate in any share issue of the Company or any other
related entity.
Page 55
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
21. SHARE BASED PAYMENTS (CONTINUED)
(a)
Fair value of share options and assumptions
The fair value of the unlisted options granted was calculated at the date of the grant based upon the Black
Scholes option pricing model. As the options vest on grant, the fair value of the options is allocated to the
reporting period in which they are granted.
Employees entitled (A) (B)
Fair value at grant date $0.21 $0.54
Share price at date of grant $0.91 $2.51
Exercise price $1.20 $3.00
Expected volatility 50% 38%
Option life (years) 2.54 2.49
Risk free interest rate 2.33% 4.96%
The common method for valuing options is the Black Scholes option pricing model. The Black Scholes option
pricing model looks at the past share price as an indicator of the future share price. The Black Scholes
option pricing model assumes that high volatility in the share prices is an indicator for a higher valuation as
there is a greater chance of the share price moving significantly (upwards or downwards). The model also
assumes that the options are exercised at or near the expiry date of the options.
(b) Employee expenses
2012 2011
$ $
Share options granted in 2011 – recognised in income statement – 194,400
Share options granted in 2011 – capitalised to exploration projects – 669,600
Share options granted in 2012 – recognised in income statement 94,160 –
Share options granted in 2012 – capitalised to exploration projects 265,360 –
Total recognised as share based payments 359,520 864,000
22. FINANCIAL INSTRUMENTS
Exposure to credit risk and interest rate risks arise in the normal course of the Group’s business.
(a)
Credit risk
Management monitors the exposure to credit risk on an ongoing basis through monitoring the Groups
counterparties. The Group does not require collateral in respect of financial assets.
At reporting date, cash is held with a number of reputable financial institutions. 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 their net fair values.
Page 56
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
22. FINANCIAL INSTRUMENTS (CONTINUED)
(c)
Liquidity risk
The following are the contractual maturities of financial liabilities.
Financial liabilities Carrying Contractual 1 year
Group amount cash flows or less 1–2 years
$ $ $ $
2012
Trade and other payables 4,287,992 (4,287,992) (4,287,992) –
4,287,992 (4,287,992) (4,287,992) –
2011
Trade and other payables 3,168,171 (3,168,171) (3,168,171) –
3,168,171 (3,168,171) (3,168,171) –
(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 interest rate risk:
2012 2011
$ $
Cash and cash equivalents 69,742,604 45,084,267
Term Deposits – 34,000,000
Total Cash and Term Deposits 69,742,604 79,084,267
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 2012, 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:
Profit or Loss Equity
higher/(lower) higher/(lower)
2012 2011 2012 2011
$ $ $ $
Group
+1% (100 basis points) 733,391 747,097 – –
- 1% (100 basis points) (733,391) (747,097) – –
The movements in profit or loss are due to higher/lower interest earnings on cash balances and term deposits.
The movements in equity are directly linked to movements in the Income Statement.
(e)
Impairment losses
None of the Group’s receivables are past due (2011: nil).
Page 57
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
23. EXPLORATION EXPENDITURE COMMITMENTS
In order to maintain current rights of tenure to exploration tenements, the Group is required to perform minimum
exploration work to meet the minimum expenditure requirements under the various exploration licences which are
held. 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.
2012 2011
$ $
Not later than one year 1,397,000 682,000
Later than one year but not later than five years 5,708,000 2,728,000
24. CONTINGENCIES
The Directors are of the opinion that there are no matters for which provision is required in relation to any
contingencies, 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 Group’s bankers have provided guarantees amounting to $20,000 to certain Government bodies as security
over the Group’s performance of rehabilitation obligations on certain tenements. Under the agreement, the Group
has indemnified the bank in relation to these guarantees. The guarantees are backed by deposits amounting to
$20,000 as at 30 June 2012 (2011: nil).
25. 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 Position held Appointment detail
Non-Executive Directors
Mr Paul Chapman Chairperson Appointed 18 April 2007
Mr Richard Laufmann Chairperson – Remuneration Committee Appointed 16 May 2007
Mr Alister Maitland Chairperson – Audit Committee Appointed 16 September 2011
Executive Director
Mr Steven Olsen Managing Director Appointed 13 May 2007
Executives
Ms Amber Rivamonte Company Secretary Appointed 16 July 2007
Ms Janet Mason CFO Appointed 19 December 2008
Mr Patrick Say Geology Manager Appointed 1 July 2010
Mr Mark Parry was appointed as Managing Director on 24 September 2012, with a commencement dated
of 15 October 2012.
There have been no other changes to key management personnel between 1 July 2012 and the date of this report.
Page 58
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
25. KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED)
The key management personnel compensation included in “Employee Benefits Expenses” (see note 17)
and “Exploration and Evaluation” (see note 10) are as follows:
2012 2011
$ $
Short term employee benefits 1,243,766 1,054,919
Post employment benefits 103,332 78,449
Share based payments 85,600 129,600
Other long term benefits 90,447 -
1,523,145 1,262,968
(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 are provided in the Remuneration Report
section of the Directors’ Report on pages 30 to 35.
No member of 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.
(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:
Vested and
Held at Exercised Granted as Vested Held at Exercisable
1 July during compen- during 30 June at 30 June
2012 Note 2011 year sation year 2012 2012
Directors
Mr Paul Chapman – – – – – –
Mr Richard Laufmann – – – – – –
Mr Alister Maitland – – – – – –
Mr Steven Olsen – – – – – –
Executives
Ms Amber Rivamonte 153,800 – 160,000 160,000 313,800 313,800
Ms Janet Mason 153,800 – 80,000 80,000 233,800 233,800
Mr Patrick Say 153,800 – 160,000 160,000 313,800 313,800
Page 59
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
25. KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED)
(b)
Options over equity instruments (Continued)
Vested and
Held at Exercised Granted as Vested Held at Exercisable
1 July during compen- during 30 June at 30 June
2011 Note 2010 year sation year 2011 2011
Directors
Mr Paul Chapman (i) 250,000 250,000 – – – –
Mr Richard Laufmann (ii) 1,000,000 1,000,000 – – – –
Mr Steven Olsen (iii) 500,000 500,000 – – – –
Executives
Ms Amber Rivamonte 73,800 – 80,000 80,000 153,800 153,800
Ms Janet Mason 73,800 – 80,000 80,000 153,800 153,800
Mr Patrick Say 73,800 – 80,000 80,000 153,800 153,800
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. All of these options were acquired in 2007 as founding options and not
granted as compensation to key management personnel.
(ii) Held indirectly through Natalie Laufmann. All of these options were acquired in 2007 as founding options
and not granted as compensation to key management personnel.
(iii) Held indirectly through S&S Olsen Pty Ltd as trustee for the Olsen Family Trust. All of these options were
acquired in 2007 as founding options and not granted as compensation to key management personnel.
(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 personnel, including their related parties, is as follows:
Held at
1 July 2011
or date Received
appointed as on Exercise Held at
Note a director Purchases of options Sales 30 June 2012
2012
Directors
Mr Paul Chapman
(i) 3,524,000 120,833 – – 3,644,833
Mr Richard Laufmann
(ii) 3,500,000 41,666 – – 3,541,666
Mr Alister Maitland
(iii) 202,000 – – – 202,000
Mr Steven Olsen
(iv) 6,002,000 25,000 – – 6,027,000
Executives
Ms Amber Rivamonte
850,000 – – – 850,000
Ms Janet Mason
130,000 – – – 130,000
Mr Patrick Say
(v) 120,000 18,667 – – 138,667
Page 60
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
25. KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED)
(c) Movements in shares (Continued)
Held at
1 July 2010
or date Received
appointed as on Exercise Held at
Note a director Purchases of options Sales 30 June 2011
2011
Directors
Mr Paul Chapman
3,270,000 4,000 250,000 – 3,524,000
Mr Richard Laufmann
2,500,000 – 1,000,000 – 3,500,000
Mr Steven Olsen
5,500,000 2,000 500,000 – 6,002,000
Executives
Ms Amber Rivamonte
850,000 – – – 850,000
Ms Janet Mason
130,000 – – – 130,000
Mr Patrick Say
120,000 – – – 120,000
Shares that were held by related parties of key management personnel are disclosed below.
(i)
1,876,166 held indirectly through Stone Poneys Nominees Pty Ltd as trustee for the Chapman
Superannuation Fund 1,768,667 held indirectly through Stone Poneys Nominees Pty Ltd as
trustee for the Chapman Investment Fund.
(ii) 3,500,000 held indirectly through Natalie Laufmann. 41,666 held by Laufman Long term
investments Pty Ltd.
(iii) Held indirectly through the Alister Maitland Superannuation Fund.
(iv) 6,002,000 held indirectly through S&S Olsen Pty Ltd as trustee for the Olsen Family Trust.
25,000 held through SSO Super Pty Ltd as Trustee for the SSO Super fund.
(v) 16,667 held indirectly through the Say Family Super Fund.
(d) Director related entities
There were no other transactions with Director related entities.
26. RELATED PARTIES
(a)
Identity of related parties
The Group has a related party relationship with its subsidiaries (see note 27), and with its key management
personnel (see note 25).
(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.
As at 30 June 2012, such loans totalled $110,455,579 (2011: $59,786,815).
27. GROUP ENTITIES
Country of
Incorporation 2012 2011
Ownership Interest
Parent entity
Rex Minerals Ltd Australia
Subsidiaries
Rex Minerals (SA) Pty Ltd Australia 100% 100%
Rex Minerals (Iron Ore) Pty Ltd Australia 100% 100%
Rex Hillside (Property) Pty Ltd Australia 100% 100%
Page 61
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
28. PARENT ENTITY DISCLOSURES
As at, and throughout, the period ending 30 June 2012 the parent company of the Group was Rex Minerals Ltd.
2012 2011
$ $
Result of the parent entity
Profit/(loss) for the period (544,862) 593,266
Other comprehensive income – –
Total comprehensive income/(loss) for the period (544,862) 593,266
Financial position of the parent entity at year end
Current assets 180,935,769 139,765,179
Total assets 181,333,528 140,184,642
Current liabilities 1,896,148 581,993
Total liabilities 1,896,148 581,993
Total equity of the parent entity comprising of:
Share capital 177,685,263 137,665,189
Reserves 1,311,000 1,137,690
Retained earnings 441,118 799,770
Total equity 179,437,381 139,602,649
Parent entity contingent liabilities
The Directors are of the opinion that there are no matters for which provision is required in relation to any
contingencies, as it is not probable that a future sacrifice of economic benefit will be required or the amount in not
capable or reliable measurement.
The Company’s bankers have provided guarantees amounting to $20,000 to certain Government bodies as security
over the Company’s performance of rehabilitation obligations on certain tenements. Under the agreement, the
Company has indemnified the bank in relation to these guarantees. The guarantees are backed by deposits
amounting to $20,000 as at 30 June 2012 (2011: nil).
29. SUBSEQUENT EVENTS
The Company announced on 24 September 2012 the appointment of Mr Mark Parry to the role of Managing
Director and Chief Executive Officer. Mr Parry’s contract is for an initial term of 3 years and is due to commence
on 15 October 2012. He will be provided with a base salary of $550,000 per year inclusive of superannuation as
well as a sign on bonus of $150,000. He will also be eligible for a special project bonus of $150,000 if he is
successful in securing or substantially advancing a financing package for the Hillside project prior to 1st July 2013.
In addition, Mr Parry has been issued a total of 3.0 million options with an exercise price of $0.91 with an expiry
of 31 August 2017. Current and founding Managing Director Mr Steven Olsen will remain on the Board and will
continue to play an important role for the Company as it makes the transition from an explorer to a development
company. Mr Olsen will move into the role of Executive Director for Business Development until 31 July 2013,
subject to renewal by agreement.
Other than the events described above, subsequent to 30 June 2012 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 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.
30. AUDITORS’ REMUNERATION
2012 2011
$ $
KPMG Australia
Audit services 42,200 40,000
Other services – –
Page 62
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
DIRECTORS’ DECLARATION
1 In the opinion of the directors of Rex Minerals Ltd (the Company):
(a)
the consolidated financial statements and notes and the Remuneration report, identified within the Directors’
report, are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2012 and of its performance
for the financial year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations)
and the Corporations Regulations 2001; and
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
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 2012.
3 The directors draw attention to Note 2 to the consolidated financial statements, which includes a statement of
compliance with International Financial Reporting Standards.
Dated at Melbourne this 28th day of September 2012
Signed in accordance with a resolution of the Directors:
Steven Olsen
Managing Director
Page 63
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 2012 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
28 September 2012
KPMG, an Australian partnership and a member firm of the KPMG network
of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under
Professional Standards Legislation.
Page 64
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
REX MINERALS LTD
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF REX MINERALS LTD
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 consolidated statement of financial position as at 30 June 2012, and consolidated
statement of comprehensive income, consolidated statement of changes in equity and consolidated
statement of cash flows for the year ended on that date, notes 1 to 30 comprising a summary of significant
accounting policies and other explanatory information 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 of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial report
that is free from material misstatement whether due to fraud or error. In note 2, the directors also state, in
accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements, that the
financial statements of the Group comply with International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. 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 of the financial report
that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. 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, a true and fair view
which is consistent with our understanding of the Group’s financial position and of its 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 Cooperative
(“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under
Professional Standards Legislation.
Page 65
REX MINERALS LTD
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF REX MINERALS LTD
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
Auditor’s opinion
In our opinion:
(a) the financial report of the Group is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2012
and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
(b) the financial report also complies with International Financial Reporting Standards as disclosed
in note 2.
Report on the remuneration report
We have audited the Remuneration Report identified within the directors’ report for the year ended
30 June 2012. 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 2012,
complies with Section 300A of the Corporations Act 2001.
KPMG
Alison Kitchen
Partner
Melbourne
28 September 2012
KPMG, an Australian partnership and a member firm of the KPMG network
of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under
Professional Standards Legislation.
Page 66
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
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 19 September 2012
Name of Ordinary Shareholder Number of Shares % of Shares Held
BlackRock Investment Management (Australia) Limited 13,139,171 6.96%
JP Morgan Chase & Co 12,955,481 6.86%
Grand South Development 11,785,777 6.24%
Northward Capital Pty Ltd 9,655,626 5.11%
b) Listing of 20 largest shareholders as at 19 September 2012
Number of % of
Rank Name Designation Shares Held Issued Capital
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Total
J P Morgan Nominees Australia Ltd 37,268,908 19.73%
National Nominees Ltd 24,592,824 13.02%
HSBC Custody Nominees Aust Ltd 13,912,059 7.36%
Grand South Development Limited 11,785,777 7.67%
Greenstone Property Pty Ltd 6,194,960 3.28%
S & S Olsen PL 6,002,000 3.18%
Natalie Laufmann 3,500,000 1.85%
Greenstone Property Pty Ltd 2,825,000 1.50%
Stone Poneys Nominees PL Chapman S/F A/C 1,876,166 0.99%
Stone Poneys Nominees PL Chapman Inv Fund 1,768,667 0.94%
Citicorp Nom PL 1,715,848 0.91%
JP Morgan Nominees Australia Ltd Cash Income A/C 1,058,432 0.56%
Avoca Resources Ltd 1,000,000 0.53%
James Gardiner 1,000,000 0.53%
Citicorp Nominees Pty Ltd 911,597 0.48%
HSBC Custody Nominees NT-Commonwealth
(Australia) Ltd Super Corp A/C 908,602 0.48%
Philippa Jean Laufmann Laufmann Family A/C 900,000 0.48%
Amber Rivamonte 850,000 0.45%
James Ronald Selkirk 800,000 0.42%
RBC Investor Services Australia
Nominees Pty Limited BKCust A/C 749,348 0.40%
119,620,187 63.32%
c) Distribution of shareholders as at 19 September 2012
% of
Range Total Holders Units Issued Capital
1-1,000 853 468,212 0.25%
1,001-5,000 1,684 4,892,846 2.59%
5,001-10,000 804 6,377,315 3.38%
10,001-100,000 1,101 31,542,390 16.69%
100,001 - over 138 145,626,521 77.09%
4,580 153,635,519 100.00%
Total
d) Number of shareholders holding less than a marketable parcel as at 19 September 2012
538
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 67
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Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 2
CONTACT
ANNUAL REPORT
A 209 Dana Street Ballarat
Victoria 3350 Australia
P PO Box 626W Ballarat West
Victoria 3350 Australia
2012
T +61 (0) 3 5337 4000
F +61 (0) 3 5331 1776
E
info@rexminerals.com.au
W www.rexminerals.com.au