REX MINERALS LTD
DELIVERING AUSTRALIA’S LARGEST
UNDEVELOPED COPPER PROJECT
HILLSIDE: SOUTH AUSTRALIA
ANNUAL REPORTRRRTTT
REX MINERALS LTD
ANNUAL REPORT
2014
D
DELIVERING AUSTRALIA’S LARGEST UNDEVELOPED COPPER PROJECT
CORPORATE DIRECTORY
DIRECTORS
David Carland
Steven Olsen
Richard Laufmann
Alister Maitland
COMPANY SECRETARY
Amber Rivamonte
PRINCIPAL and REGISTERED OFFICE
Level 19, 11 Waymouth Street
Adelaide South Australia 5000
CONTACT DETAILS
Rex Minerals Ltd
PO Box 3435
Rundle Mall South Australia 5000
Telephone +61 (0) 8 299 7100
Facsimile +61 (0) 8 299 7199
Email rex@rexminerals.com.au
Website www.rexminerals.com.au
OPERATION LOCATIONS
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
151 Pirie Street
Adelaide South Australia 5000
BANKERS
ANZ Banking Group Limited
Level 21, 11 Waymouth Street
Adelaide South Australia 5000
Ord Minnett Limited
120 Collins Street
Melbourne Victoria 3000
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
A
AUSTRALIA
AUSTRALIA
NEW SOUTH
WALES
VICTORIA
TABLE OF CONTENTS >>
REX MINERALS LTD : Annual Report for the year ended 30 June 2014
COMPANY OVERVIEW
LETTER FROM THE CHAIRMAN
REVIEW OF OPERATIONS
HILLSIDE PROJECT
TENEMENT SCHEDULE
DIRECTORS’ REPORT
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
2
3
4
4-12
12
13-34
35
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 36
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
LEAD AUDITOR’S INDEPENDENCE DECLARATION
INDEPENDENT AUDITOR’S REPORT
ADDITIONAL SHAREHOLDER INFORMATION
37
38
39-60
60
61
62-63
64
Page 1
REX MINERALS LTD
COMPANY OVERVIEW for the year ended 30 June 2014
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 project (“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. The most recent Mineral Resource estimate, based on the drilling completed by Rex, has contained metal of 2Mt
copper, 1.5Mozs gold and 54Mt iron ore. In 2013, Rex announced a maiden Ore Reserve in February and then in June
announced a further update to this Ore Reserve which currently has contained metal of 936,000 tonnes of copper, 752,300
ounces of gold and 25.7Mt iron ore. Hillside is now Australia’s largest open pit copper project with the first 12 years of
production covered as Ore Reserves.
Hillside is the first project in the Company’s plans to discover and develop multiple copper-gold deposits on the Yorke Peninsula.
Highlights
Near-term Objectives
> Feasibility Study – The existing work completed on the large scale
mining options will be expanded to include the potential for a
smaller scale and lower capital start up option. This work is
anticipated to link directly with opening up additional financing
options for the Company. The Rex Board believes it is in the best
interests of all shareholders to broaden the scope of the
Feasibility Study into an Extended Feasibility Study, and include
these alternate development options.
> Cost Reduction Plan – Rex will restructure the Company to
enable it to focus on its core objectives. A number of cost saving
measures are being implemented to ensure that the Company can
focus its cash reserves to support the Extended Feasibility Study,
new development plan and subsequent financing alternatives.
> 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.
Hillside Feasibility Study – Rex remains
committed to the development of a large-scale
copper-gold-iron ore project at Hillside. Rex
completed extensive work programs on all
aspects associated with a large scale mining
operation, focussing on a mining processing rate
of 15Mtpa. As part of the Feasibility Study, a
number of open pit mining options were reviewed,
resulting in the mine design associated with the
large scale open-pit. As part of this review, a
smaller scale open pit was identified which,
combined with the recent competitive pricing and
tendering, has the potential for a lower capital
start up option which represents a great
opportunity for the Company. The further
investigation of these options are part of the
Extended Feasbility Study.
Mining Lease Granted – On 29 July 2014, Rex
announced that it had received a formal offer of
mineral tenements (“Mining Lease”) from the
South Australian Government for its Hillside
Copper Project. Subsequent to this on
16 September 2014, Rex announced that it
had formally accepted the terms and conditions
associated with the Mining Lease and that the
Government had granted the Mining Lease for the
Hillside Project to Rex.
Financing Options – The Company remains free
from debt, has not given up any of its future
offtake for copper or iron ore and does not have
any commercial royalties attached to the Project.
All of these assets remain with the Company and
are a valid part of the options that the Company
can draw on when financing the Hillside Project.
As the results from the extended feasibility study
are revealed, the size of the capital required for a
smaller start-up option will determine the way in
which the Company will position the financing
options for the project. There are many interested
parties that Rex continues to engage with in this
regard and the successful financing leading to the
successful development of the Hillside project
remains the key objective for the Company.
Page 2
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
HEAD OFFICE
A 19/11 Waymouth Street
Adelaide South Australia 5000
T (08) 8299 7100
F (08) 8299 7199
P PO Box 3435 Rundle Mall
South Australia 5000
E rex@rexminerals.com.au
W www.rexminerals.com.au
minerals ltd
ABN 12 124 960 523
LETTER FROM THE CHAIRMAN
For the year ended 30 June 2014
Dear Fellow Shareholder,
We would like to take this opportunity to provide our summary of the last year, the outlook for the year ahead and reinforce our
vision to create value from the Company’s flagship assets on the Yorke Peninsula in South Australia.
Over the past 12 months your Company has been working hard to achieve some important milestones, some of which are still
underway. One area of focus has been the work with the state regulator towards the granting of the mineral tenements (Mining
Lease) for the large-scale Project.
Since year end, the Company has announced its acceptance of the offer of a Mining Lease for the Project which means that we
have now received all the necessary state and Commonwealth consents/approvals to develop the Hillside Project. This is a very
significant milestone for the Company and one to which all of the people who worked on this outcome should be proud.
While this process has taken considerable time, the work completed by both the Company and the South Australian Government
will ultimately strengthen the security of the Project in the long term which will create substantial benefits to Shareholders,
the local community and the state of South Australia. The Company takes its community interaction and responsibilities very
seriously and continued its efforts to work with the community of the Yorke Peninsula to ensure the Project strikes the right
balance for all stakeholders.
The Hillside Project is one of great importance to both the Company and the state of South Australia and I can assure you that the
conditions that your Company has agreed to in relation to the Hillside Project will allow for the safe and effective development of
the Project as we progress towards our vision to create a new large scale copper-gold-iron ore operation.
Another area of focus has been the work associated with the feasibility study for the Hillside Project.
This work is ongoing and has to date confirmed the Project’s low capital intensity, low operating cost and identified the potential
for a lower capital start-up option which represents a great opportunity for the Company.
The potential to commence production at Hillside for a much lower up-front cost is what we believe to be an important part of
maximising the inherent value that you, as Shareholders, own with the very large Hillside Mineral Resource and its future potential.
This is why the Board decided to undertake the extended feasibility study (EFS) to review intensively the several areas of
opportunity that a smaller start-up option could provide in order to reduce the Project’s start-up capital cost significantly.
The optimal value remains with the development of a large-scale, open pit mine at Hillside. However, the copper, gold and iron
at Hillside starts at a very shallow depth which provides numerous options for the Company to consider.
This is an important feature of the Hillside Project as the inclusion of smaller development options may enable the Company to
tailor a more efficient financing package and allow for either a broader range of possible partners or for the Company to ‘go it
alone’. The greater share of equity we retain for Shareholders, the more value we believe will be created and returned.
The Company remains debt free, has not given up any of its future offtake for copper or iron ore and does not have any commercial
royalties attached to the Project. All of the Hillside Resource remains with the Company, a significant factor that can be drawn on
when financing the Hillside Project.
With the currently constrained capital for new large scale projects comes a lack of future production to deliver into the world’s
expanding economies. This will, at some stage in the future, lead to a significant shortfall in copper and a period where we will see
further pressure and strengthening of the copper price.
Therefore, looking beyond the near term, we see that commencing production even at smaller scale could prepare the Company
well for what we see is the inevitable upturn in the copper market.
In the meantime, as we work through the final details of the EFS and look to establish the associated financing plan we are
working to reduce our cost base. This includes lowering overheads, ensuring that contractors either reduce costs or increase
efficiencies and reducing discretionary expenditure in areas such as exploration. This is an important part of ensuring that we
conserve our valuable cash resources and preserve the value of the assets that the Company owns.
You can be confident that the Board remains focused on delivering on its vision to position the Company well for the development
of a new large scale copper-gold-iron ore project in South Australia, with potential for many decades of production in the region.
In addition, 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.
The Company 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,
David Carland
Executive Chairman
REX MINERALS LTD
REVIEW OF OPERATIONS for the year ended 30 June 2014
Rex Minerals Ltd (“Rex”) has completed the following important milestones over the year.
September 2013
Rex announced that the ML Proposal for the Hillside Project was now available for public
comment. This was an important step and process associated with obtaining the required
Mining Lease for the development of a new mine in South Australia.
December 2013
Dr David Carland appointed to the Board and Mr Paul Chapman retires. Dr Carland was
appointed as Non-Executive Chairman on the 1 January 2014.
January 2014
February 2014
March 2014
April 2014
July 2014
August 2014
September 2014
Agreement reached with Hyundai-AMEC for Early Contractor Involvement (ECI), which
included detailed design and engineering studies, focussing on a 15Mtpa processing plant.
Water supply for the Hillside Project was secured with the co-funding of a water pipeline from
Auburn to Port Wakefield. Rex partnered and co-invested with SA Water and the Regional
Development Authority on a larger pipeline capable of delivering an additional 2 gigalitres per
annum of water into the region to allow for the water needs of the Hillside Project.
Rex announced that approval had been granted for the road realignments and upgrades to
the Ardrossan jetty and ship loader that form part of the Hillside Project development.
Rex raised $12.6 million by way of a two-tranche placement of 31,612,500 ordinary
fully paid shares at $0.40 per share to institutional and sophisticated investors in Australia
and overseas.
Rex received a formal offer for the required Mining Lease for the Hillside Project.
Rex announced that it will expand the scope of the Feasibility Study at Hillside to include a
detailed review of a lower capital, smaller start-up option. Dr David Carland appointed as
Executive Chairman as an interim appointment and Mr Steven Olsen appointed as Advisory
Board Chairman.
Rex announced that it had accepted the terms and conditions associated with the offer for
a Mining Lease at Hillside, and that the South Australian Government had subsequently
granted Rex the Mining Lease.
REX MINERALS LTD
HILLSIDE PROJECT as at 30 June 2014
HILLSIDE PROJECT, YORKE PENINSULA, SOUTH AUSTRALIA
Rex’s flagship Hillside Project is situated 12 kilometres south of the township of Ardrossan on the Yorke Peninsula, South
Australia. The Hillside deposit (discovered by Rex in 2008) is hidden by a rock sequence which is approximately 20m
thick, covering the copper, gold, and iron ore mineralisation beneath. The Hillside Project is one of many potential large-
scale copper-gold projects on the Yorke Peninsula within Rex’s wholly-owned exploration licences on the Yorke Peninsula
(Figure 1).
Page 4
Rex Minerals Ltd A N N U A L R E P O R T 2 01 4
REX MINERALS LTD
HILLSIDE PROJECT (Continued) as at 30 June 2014
HILLSIDE PROJECT, YORKE PENINSULA, SOUTH AUSTRALIA (CONTINUED)
Figure 1: Location diagram of the Hillside Project and Rex’s exploration licences on the Yorke Peninsula, South Australia.
The Hillside Project and the other copper targets on the Yorke Peninsula have a number of key advantages compared to
many other new copper development opportunities around the world. These include:
> Infrastructure – The Hillside Project is connected by a major highway (within a two hour drive) to the city of
Adelaide (population 1.2 million).
> People and Equipment – The Hillside Project has the potential to draw most of the required skilled labour and
equipment from Adelaide and the surrounding country towns close to the Project.
> Power – The area is connected to the State’s main power grid.
> Port and Town – The Hillside Project is 12 kilometres from the Port and Town of Ardrossan. Ardrossan is a
community familiar with mining given that the nearby open-cut dolomite mine ships its product through the Port.
> Freehold Land – Rex has purchased freehold land which covers all of the known and potential copper
mineralisation at Hillside.
Rex started exploring on the Yorke Peninsula and at Hillside in 2007, with the discovery of the Hillside deposit in 2008.
After a period of initial drilling success, the Company raised the funds required to drill out the Hillside deposit down to a
depth of approximately 600m. The drilling completed by Rex since 2008 and associated technical work is the basis for the
current Mineral Resource and Ore Reserves for the Hillside Project.
> MINERAL RESOURCE AND ORE RESERVE
The Hillside Project contains Australia’s largest open-pit copper Ore Reserves. The Ore Reserve, announced 28 June 2013
and reported in accordance with the 2012 JORC Code, stands at 180Mt @ 0.52% copper, 0.13g/t gold and 14.4% iron
for contained metal of 936,000 tonnes of copper, 752,300 ounces of gold and 25.7Mt of iron ore. This equates to a
copper equivalent (CuEq)1 grade of 0.8%. The Mineral Resource estimate, reported in accordance with the 2012 JORC
Code, consists of 337Mt @ 0.6% copper, 0.14g/t gold and 15.7% iron, for a copper equivalent (CuEq)1 grade of 0.9%.
This equates to a total of 2Mt of copper, 1.5Mozs of gold and 54Mt of iron ore1. These estimates were independently
audited by AMC Consultants Pty Ltd (“AMC”).
Page 5
REX MINERALS LTD
HILLSIDE PROJECT (Continued) as at 30 June 2014
HILLSIDE PROJECT, YORKE PENINSULA, SOUTH AUSTRALIA (CONTINUED)
> MINERAL RESOURCE AND ORE RESERVE (CONTINUED)
Category
Proved
Probable
Total*
Tonnes
(Mt)
Copper
(%)
65
115
180
0.47
0.55
0.52
Gold
(g/t)
0.15
0.12
0.13
Iron
(%)
15.4
13.9
14.4
Contained
Copper (t)
Contained
Gold (oz)
Contained
Iron ore (t)
304,560
312,505
10,180,342
632,500
443,680
15,637,388
936,000
752,327
25,743,517
Table 1: Hillside Ore Reserve – 30 June 2014.
* Subject to rounding.
Zone
Oxide
Copper
Secondary
Sulphide
Primary
Sulphide
Total*
Resource
Category
Measured
Indicated
Inferred
Measured
Indicated
Inferred
Measured
Indicated
Inferred
Tonnes
(Mt)
Copper
(%)
16
4
0.2
9
3
0.1
48
144
113
337
0.55
0.49
0.6
0.60
0.58
0.6
0.53
0.60
0.6
0.6
Gold
(g/t)
0.23
Iron
(%)
Contained
Copper (t)
Contained
Gold (oz)
Contained
Iron ore (t)
16.69
88,000
118,315
2,804,369
0.13
14.30
19,600
16,718
566,444
0.2
0.20
0.13
0.1
0.17
0.13
0.1
0.14
14.6
18.13
14.90
7.9
1,200
1,286
29,167
54,000
57,871
1,759,993
17,400
12,539
450,185
600
322
5,147
16.95
254,400
262,350
8,588,882
15.25
864,000
601,862
22,318,757
15.6
15.7
678,000
363,303
18,071,067
2,022,000
1,516,872
54,368,007
Table 2: Hillside Measured, Indicated and Inferred Mineral Resource Summary Table – 30 June 2014.
Copper Resources reported above 0.2% cut-off grade.
Measured and Indicated Resources are rounded to two significant figures and Inferred Resources are rounded to one significant figure.
*Subject to rounding.
With an Ore Reserve of 180Mt, Rex has converted a little over 53% of the existing Mineral Resource to an Ore Reserve.
Based on a processing capacity of 15Mtpa, the Hillside Project has a 12 year production profile.
The Hillside Project is one of Australia’s largest copper discoveries in the past decade. The Mineral Resource remains
open at depth and towards the north and south (Figure 2).
Page 6
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
HILLSIDE PROJECT (Continued) as at 30 June 2014
HILLSIDE PROJECT, YORKE PENINSULA, SOUTH AUSTRALIA (CONTINUED)
> MINERAL RESOURCE AND ORE RESERVE (CONTINUED)
Figure 2: Long Section of the Hillside Project showing the deepest drill intersections that remain to be further drill tested.
> COMPARISON OF MINERAL RESERVES AND RESOURCES STATEMENT TO THE PRIOR YEAR
As at the reporting date there were no changes to any of the Mineral Resource or Ore Reserves recorded over the previous
year. Accordingly the Company has not shown in tabular format either the balances as at 30 June 2013 or the movements
between the two on account of the balances being the same.
> SUMMARY OF GOVERNANCE ARRANGEMENTS AND INTERNAL CONTROLS IN PLACE FOR
THE REPORTING OF MINERAL RESOURCES AND ORE RESERVES
Mineral Resources and Ore Reserves are estimated by suitably qualified employees and consultants in accordance with the
JORC Code, using industry standard techniques and internal guidelines for the estimation and reporting of Ore Reserves
and Mineral Resources. These estimates and the supporting documentation are then reviewed by suitably qualified
Competent Persons. The Mineral Resource estimates and the supporting documentation have also been independently
audited by AMC. All Ore Reserve estimates are prepared in conjunction with pre-feasibility studies which consider all
material factors.
The Mineral Resources and Ore Reserves Statements included in the Annual Report are reviewed by suitably qualified
Competent Persons from the Company prior to its inclusion.
Page 7
REX MINERALS LTD
HILLSIDE PROJECT (Continued) as at 30 June 2014
HILLSIDE PROJECT, YORKE PENINSULA, SOUTH AUSTRALIA (CONTINUED)
> HILLSIDE PROJECT – FEASIBILITY STUDY
The bulk of the work completed to date for the Hillside Project Feasibility Study has focused on the delivery of a large
scale mining project with the processing capacity of 15Mtpa. With access to a very large Mineral Resource at Hillside, the
Company remains focused on ultimately developing the large scale operation that will maximise the returns from
developing the Hillside Project.
As a stepping stone towards the development of the larger scale mine, the Feasibility Study has been expanded to review
opportunities to reduce the up-front capital costs of the Hillside Project with a potential smaller scale processing plant
and initial open pit mine design. A staged approach is anticipated to have a number of material advantages for both Rex
shareholders and the local community. These include:
> greater competitive tension in the contracting market;
> better use of existing infrastructure;
> staged plant build; and
> a lower initial capital requirement leading to more diverse funding options.
It is the view of the Rex Board that an economically robust and small scale start-up will be easier to finance and could
lead to more competitive financing options for Rex.
> HILLSIDE PROJECT – REGULATORY APPROVALS
The Company has received the following approvals from both the State and Federal Governments for the Hillside Project.
Federal Government Requirements
Under the Federal Government’s Environment Protection and Biodiversity Conservation Act 1999 (“EPBC Act”),
proposals including an action that may have a significant impact on a matter of national environmental significance,
or occur on Commonwealth land, must include a referral under the EPBC Act to the Commonwealth. This referral assists
the Commonwealth to decide whether the proposal is a controlled action and subsequently, whether a full assessment and
approval are required. Rex prepared and submitted documentation as required under the EPBC Act which was made
public for a period of time in 2012.
The results from this submission have confirmed that no further action is required by Rex under the EPBC Act for the
Hillside Project for the mine plan.
State Government Requirements
On 9 April 2013, Rex announced that it had commenced the approvals process by submitting the Mining Lease Proposal
documentation to the South Australian Government’s Department of State Development (“DSD”, formerly known as
DMITRE) for the Hillside Project. In the lead up to the submission of the Mining Lease documentation, Rex met regularly
with all of the government agencies involved to ensure that the documents have addressed the key issues required for
approval of the Mining Lease.
The information included in the Mining Lease Proposal was based on environmental studies completed over a period of
18 months, as well as valuable input from an independent community consultative group, which had been active for over
12 months, leading up to the submission of the Mining Lease Proposal. The community consultative group is made up of
20 members including those with interests in agriculture, potentially affected landholders, natural resource management and
the environment, small business, tourism, local government, emergency services, and various community members nearby.
After an initial period of review by the State Regulator, the Mining Lease Proposal was made available for public consultation
(announced 12 September 2013). Following the public consultation period the State Regulator commenced an additional
period of review and assessment to address the submissions that were received during the public consultation period.
Rex announced on 29 July 2014 that it had received a formal offer of a Mining Lease for the Hillside Project. Since this
formal offer was first presented to Rex, the Company has now had the time to assess all of the terms and conditions
associated with the Mining Lease. Rex has now been granted the mineral tenements associated with the Hillside Project
by accepting these terms and conditions.
In addition to the Mining Lease being granted for the Hillside Project, the Company has also received the required
approval for section 49 development applications, which include road realignments and upgrades to the Ardrossan jetty
and ship loader that form a part of the Hillside Project development plan.
Page 8
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
HILLSIDE PROJECT (Continued) as at 30 June 2014
HILLSIDE PROJECT, YORKE PENINSULA, SOUTH AUSTRALIA (CONTINUED)
> YORKE PENINSULA – EXPLORATION POTENTIAL
The Hillside Project occupies an area of approximately 2km2 within a large Exploration Licence area of over 1,700km2.
The bulk of this area is highly prospective for copper mineralisation. Many of these targets are based on geophysical
features such as a magnetic survey, which played an important role in the discovery of the Hillside Project (Figure 3).
Figure 3: Hi-res aerial magnetic data over Western Yorke Peninsula tenure with key copper targets
identified by Rex overlain.
Page 9
REX MINERALS LTD
HILLSIDE PROJECT (Continued) as at 30 June 2014
HILLSIDE PROJECT, YORKE PENINSULA, SOUTH AUSTRALIA (CONTINUED)
> YORKE PENINSULA – EXPLORATION POTENTIAL (CONTINUED)
Geochemical techniques similarly have subsequently shown to be an effective exploration tool at Hillside, and there are a
number of features that are the basis for new targets in the region. In 2013, a review of historical calcrete sampling data
was undertaken with the aim to provide an initial evaluation of several priority target areas, including the historical Yorke
Valley copper mine and a series of newly identified targets. One stand-out target, predominantly based on geochemical
work is called Westbrook which lies to the NW of Hillside. Westbrook exhibits a strong calcrete anomaly which when
compared to the Hillside soil anomaly is larger in amplitude. (Figure 4).
Figure 4: Westbrook Calcrete sampling results compared to Hillside soil results.
Page 10
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
HILLSIDE PROJECT (Continued) as at 30 June 2014
HILLSIDE PROJECT, YORKE PENINSULA, SOUTH AUSTRALIA (CONTINUED)
NOTES
1 CuEq Grade – Commodity Prices and Recoveries:
(cid:129) Copper price used = 3.00 US$/lb
(cid:129) Gold price used = 1250 US$/ounce
(cid:129)
Iron ore price used = 100 US$/tonne:
1) US$100 equates to the industry benchmark at 62% iron
2) Plus US$25 premium for a concentrate grade of 67% at Hillside
(cid:129) Testing has confirmed conventional processing options.
(cid:129) Total Cu grade is used in the CuEq calculation
(cid:129) Gold recoveries estimated at 84%
(cid:129)
(cid:129)
(cid:129)
Iron ore recoveries estimated at 43%
Iron ore concentrate grade = 67%
It is the Company’s opinion that all elements included in the metal equivalents calculation
have a reasonable potential to be recovered.
(cid:129) Formula for calculating copper equivalent = 1 + 2 + 3
1) Copper Grade = Cu
2) Copper Equivalent grade for Au = (Au/10000)*((1250/0.06857142)/3.00)*84%
3) Copper Equivalent grade for Iron Ore = ((Fe*43%)/67%)*((125/2204.623)/3.00)
*0.06857142 = conversion from oz’s to lb’s
*2204.623 = conversion from tonnes to lb’s
2 Forward looking statements
The results contained within this announcement from the Hillside PFS contain “forward-looking statements”.
All statements other than those of historical facts included in this announcement are forward-looking statements.
Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief is
expressed in good faith and believed to have a reasonable basis. However, forward-looking statements are subject to risks,
uncertainties and other factors, which could cause actual results to differ materially from future results expressed,
projected or implied by such forward-looking statements. Such risks include, but are not limited to, copper and other metals
price volatility, currency fluctuations, increased production costs and variances in ore grade or recovery rates from those
assumed in mining plans, as well as political and operational risks and governmental regulation and judicial outcomes.
The Company does not undertake any obligation to release publicly any revisions to any “forward-looking statement”.
The estimates of production and cash flow as reported here are within the Company’s 12 year Ore Reserve and represent
the best estimate to date of the production profile of the Hillside Project over an initial 10 year period.
Revenues are based on the increased production schedule and commodity price forecasts shown in Table A on Page 12.
Rex has also completed further refinements and confirmation of the costs identified in the Hillside PFS which has given
Rex further confidence in the potential cash flows reported in this announcement.
Whilst the current estimates of production and cash flows from Hillside represent the best estimate from existing
information and work completed to date, Rex will continue to refine and optimise the financial outcomes from the
development of the Hillside Project. These forecasts are all dependant on the timely and successful completion of the
required mining approvals and permits, financing and successful commissioning of the Hillside Project.
Page 11
REX MINERALS LTD
HILLSIDE PROJECT (Continued) as at 30 June 2014
NOTES (CONTINUED)
Copper Price (US$/lb)
Gold Price (US$/oz)
Iron Ore Price (US$/t)
*for 62% Fe content
USD:AUD exchange rate
Inflation
2016
3.2
1300
100
0.9
2.5%
2017
3.0
1300
100
0.8
2.5%
2018
3.0
1250
100
0.8
2.5%
Long Term
3.0
1250
100
0.8
2.5%
Table A: Table of Commodity prices used in estimates of cash flow.
Commodity price assumptions have been based on a review of broker consensus and research on the projected supply and demand for each
commodity supplied to Rex Minerals by CRU strategies.
Competent Persons’ Report – Ore Reserves
The information in this report that relates to Ore Reserves is based on information compiled by Mr Colin McVie and
Mr Ben Brown who are Members of the Australasian Institute of Mining and Metallurgy and are full time employees of
Mining Plus Pty Ltd. Mr McVie and Mr Brown have sufficient experience which is relevant to the style of mineralisation
and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person
as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves’. Mr McVie and Mr Brown consent to the inclusion in the report of the matters based on their information
in the form and context in which it appears.
Competent Persons’ Report – Mineral Reserves
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 2012
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.
TENEMENT SCHEDULE for the year ended 30 June 2014
Tenement
Locality
Lease Status
Area Type
Current Area
Grant Date
EL5056
EL5055
EL4514
EL5133
EL4779
EL5070
MC4346
MC4354
Moonta South
Moonta South
Moonta South
Wandearah
Wandearah
Cowell
Granted
Granted
Granted
Granted
Granted
Granted
Moonta South
Registered
Moonta South
Registered
km²
km²
km²
km²
km²
km²
km²
km²
416
1262
24
127
81
85
30.3
2.5
02/08/2012
02/08/2012
10/06/2010
01/08/2012
13/10/2011
24/10/2012
N/A
N/A
On 16 September 2014, Rex was granted a ML6438 (registered as MC4346); EML 6439 (registered as MC4354)
and MPL 146.
Page 12
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
DIRECTORS’ REPORT 2014
Page 13
REX MINERALS LTD
DIRECTORS’ REPORT for the year ended 30 June 2014
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 2014 and the auditors’ report thereon.
1. DIRECTORS
The Board, at 30 June 2014, had five members, of these, three, including the Chairman, were independent Non-
Executive Directors. These 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 materiality
levels is located in the 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 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 the Company operates; knowledge of world capital markets; and an understanding of the health, safety,
environmental and community challenges that the Company faces. 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.
Due to the resignation of the Managing Director, announced on the 8 August 2014, the Chairman has assumed
the role of the Managing Director, in the interim period, until a suitable replacement is found. Mr Olsen also now
qualifies as an Executive Director as he provides services of an executive nature.
The Directors of the Company at any time during or since the end of the financial year are:
Name, qualifications and
independence status
Dr David Carland
Executive Chairman
(PhD (Econometrics), MEc,
BEc (Hons), MAICD)
Experience, special responsibilities and other directorships
Dr David Carland has over 30 years of investment banking and commercial
experience in both the private sector and government. He is the co-founder and part
owner of BurnVoir Corporate Finance Limited (“BurnVoir”), an independent
specialist investment banking firm focusing on the energy, resource and infrastructure
sectors. BurnVoir also provides advisory services to Rex.
Prior to establishing BurnVoir, Dr Carland was executive vice president and head of
energy and power at Bankers Trust, and before that he was deputy managing director
and head of corporate finance at UBS Australia.
Dr Carland has also held senior executive roles with the CRA Group (now Rio Tinto),
including management of the commercial arrangements for the purchase of the
Gladstone Power Station. His roles have seen him based in the US and London.
Dr Carland is also a non-executive director of Indophil Resources NL. Dr Carland
was appointed Director on 12 December 2013 and Chairman 1 January 2014,
he is a member of the Audit and Remuneration Committees.
Mr Richard Laufmann
Independent Non-Executive
Director
(B.Eng (Mining), MAusIMM,
MAICD)
Mr Richard Laufmann is a mining engineer, with an extensive operations background
in the resources sector both in Australia and overseas. Mr Laufmann spent 11 years
with Western Mining Corporation in the Nickel, Gold and Copper divisions in various
senior management roles. Mr Laufmann refinanced and spent five years as Managing
Director of Ballarat Goldfields NL at which time Ballarat Goldfields merged with
Lihir Gold Limited.
Mr Laufmann is currently the Managing Director of Indophil Resources NL,
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.
Page 14
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2014
1. DIRECTORS (CONTINUED)
Name, qualifications and
independence status
Mr Alister Maitland
Independent Non-Executive
Director
(B.Com, FAICD, FAIM,
SF Fin)
Mr Steven Olsen
Executive Director
(B.Sc.(Hons), M.Sc.(MinEx),
Grad.Dip (F&I), MAusIMM)
Mr Mark Parry
Managing Director and CEO
(Met Cert, BCom, HBS
(AMP), GAICD)
Mr Paul Chapman
Former Independent
Chairperson
(B.Comm, ACA, Grad.Dip.
Tax, MAICD, MAusIMM)
Experience, special responsibilities and other directorships
Mr Alister 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.
Mr Maitland 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. Mr Maitland was
appointed Director in 2011, is Chairman of the Audit Committee and a member of
the Remuneration Committee.
Mr Steven Olsen has over 20 years’ experience in the resources industry with a
background of 14 years working as a mine geologist and exploration geologist,
predominantly in Western Australia and Canada, on nickel and gold deposits.
Mr Olsen has had continued exploration success for both nickel and gold mineralisation
throughout his career and Mr Olsen was the founding managing director (2007)
of Rex until October 2012 and remains on the Board as an Executive Director.
Mr Olsen’s qualifications include a B.Sc. (Hons) University of Melbourne, a Masters in
Mineral Exploration from Queens University, Ontario and a Graduate Diploma of
Applied Finance and Investment from the Securities Institute of Australia. Mr Olsen
was also a Non-Executive Director of White Rock Minerals Ltd (resigned 15
September 2014).
Mr Parry was appointed Managing Director and CEO on 15 October 2012 and
resigned from the Board effective 8 August 2014.
Mr Chapman has been a Director and Chairman since 2007 and resigned from the
Board effective 31 December 2013. He was a member of the Audit and
Remuneration Committees.
Page 15
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2014
2. COMPANY SECRETARY
Ms Amber Rivamonte has over 20 years’ experience in the Resources Industry covering the fields of commercial,
strategic management, corporate governance and financial management experience. Ms Rivamonte has a
background in accounting, is a certified practicing accountant (CPA) in Australia. She has previously held the roles
of CFO and company secretary at Ballarat Goldfields NL and also previously held the role of company secretary at
Indophil Resources NL and White Rock Minerals Ltd and CFO with Rex Minerals Ltd.
Ms Rivamonte’s experience includes the structure, set up and listing of Rex Minerals Ltd and White Rock Minerals
Ltd, including raising capital from seed through to public raisings of up to $A82 million. Ms Rivamonte’s
experience covers all aspects of managing Resources companies, from project acquisition, mergers, de-mergers,
take overs, schemes and various forms of fund raisings.
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
Dr David Carland1
Mr Richard Laufmann
Mr Alister Maitland
Mr Mark Parry2
Mr Steven Olsen3
Mr Paul Chapman4
A
11
16
17
17
15
6
B
11
17
17
17
17
6
A
1
2
2
2
2
1
B
1
2
2
2
2
1
A
2
4
4
1
2
1
B
2
4
4
4
4
1
A – Number of meetings attended
B – Number of meetings held during the year whilst the Director held office.
1
Dr Carland was appointed Director on 12 December 2013.
2 Mr Parry is not a member of the Audit or Remuneration Committee, but is invited and attends meetings as appropriate.
Mr Parry resigned as Managing Director on 8 August 2014.
3 Mr Olsen is not a member of the Audit or Remuneration Committees, but is invited to and attends meetings as appropriate.
4 Mr Chapman retired from the Board on 31 December 2013.
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 16
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2014
4. CORPORATE GOVERNANCE STATEMENT (CONTINUED)
The following table summarises Rex’s position in regard to Corporate Governance as at 30 June 2014.
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 17
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2014
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 was satisfied at 30 June 2014 and for the whole
of the year ending 30 June 2014.
4.2.2 The Chair should be an
independent Director.
This recommendation was satisfied at 30 June 2014 and for the whole
of the year ending 30 June 2014.
4.2.3 The roles of Chair and Chief
Executive Officer should not be
exercised by the same individual.
4.2.4 The Board should establish a
nomination committee.
This recommendation was satisfied at 30 June 2014 and for the whole
of the year ending 30 June 2014.
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
information indicated in the
Guide to reporting on
Principle 2.
The following material is included in the Annual Report or on the
Company’s website:
> 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 independence 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 18
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2014
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 2014, women made up 37% of the total workforce; and
33% 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 19
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2014
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,
David Carland, and Richard Laufmann, who are all independent
Directors at 30 June 2014. 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 20
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2014
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 21
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2014
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,
David Carland and Alister Maitland, who are all independent Directors,
at 30 June 2014. 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 22
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2014
5. PRINCIPAL ACTIVITIES
The principal activity of the Group during the course of the financial year was minerals exploration and evaluation
in Australia. Rex intends to make the best use of and fully exploit, the Hillside Resource and remains committed to
the development of a large-scale copper-gold-iron ore project at Hillside. There were no significant changes in the
nature of the Group’s principal activities during the year.
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 2015 and
later financial years:
> Feasibility Study – The existing work completed on the large scale mining options will be expanded to
include the potential for a smaller scale and lower capital start up option. This work is anticipated to
link directly with opening up additional financing options for the Company. The Rex Board believes it is
in the best interests of all shareholders to broaden the scope of the Feasibility Study into an Extended
Feasibility Study, and include these alternate development options.
> Cost Reduction Plan – Rex will restructure the Company to enable it to focus on its core objectives.
A number of cost saving measures are being implemented to ensure that the Company can focus its
cash reserves to support the Extended Feasibility Study, new development plan and subsequent
financing alternatives.
> 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 near mine and regional exploration 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.
> Safety – Develop and adapt safety systems and processes to enable a proactive approach to risk
assessment and risk management as the company transitions into construction and mining
related production.
> Regulatory Approval – Secure the required State Government regulatory approvals to allow for the
commencement of mining and all aspects associated with construction to secure operating licences for
the 15 plus year copper mine at Hillside.
> Infrastructure – Finalise access to and upgrading of infrastructure required to support the Hillside Mine
(water, power and port).
6. OPERATING AND FINANCIAL REVIEW
The income statement shows a profit after tax of $531 thousand (2013: loss $1,179 thousand) for the year.
The Group has no bank debt. As at 30 June 2014 the Group had a cash position of $2,590 thousand (2013:
$24,816 thousand) and funds on deposit of $19,000 thousand (2013: nil). Operating activities resulted in a
cash inflow for the year of $3,166 thousand (2013: cash outflow of $1,785 thousand).
7. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
On 5 March 2014, Rex announced an equity raising of approximately $12.6 million via a share placement at
$0.40 per share. This equity raising was successfully completed in two stages during March and April 2014.
In the opinion of the Directors, there were no other significant changes in the state of affairs of the Group during
the year ended 30 June 2014, not otherwise disclosed with this annual report.
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.
Page 23
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2014
9. EVENTS SUBSEQUENT TO REPORTING DATE
On 8 August 2014, the Company announced that Mr Mark Parry resigned as Managing Director of the Company,
effective 8 August 2014, and that Dr David Carland would assume the role of Executive Chairman until a
permanent replacement is found.
On 29 July 2014, Rex announced that it had received a formal offer of mineral tenements (“Mining Lease”) from
the South Australian Government for its Hillside Copper Project. Subsequent to this on 16 September 2014, Rex
announced that it had formally accepted the terms and conditions associated with the Mining Lease and that the
Government had granted the Mining Lease for the Hillside Project to Rex.
Other than the events described above, subsequent to 30 June 2014, 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.
Other than those disclosed throughout the annual report, 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:
Dr David Carland
Mr Richard Laufmann
Mr Alister Maitland
Mr Steven Olsen
Mr Mark Parry1
Rex Minerals Limited
Ordinary shares
Options over ordinary shares
268,330
3,541,666
202,000
6,027,000
–
–
–
–
–
3,000,000
1 As per the option terms and conditions options will lapse if not exercised within 90 days of resignation. Exercise price on issue 91 cents.
12. SHARE OPTIONS
12.1 Options granted to Directors and Officers of the Company
During the financial year, the Company did not grant any options over unissued ordinary shares in the
Company to the Directors and Key Management Personnel as part of their remuneration.
12.2 Unissued shares under option
At the date of this report unissued ordinary shares of the Company under option are:
Expiry date
30 April 2015
31 August 2017
Total
Exercise price
Number of shares
$1.200
$0.910
840,000
3,000,000
3,840,000
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 or 90 days of departure.
12.3 Shares issued on exercise of options
During or since the end of the financial year the Company has not issued any ordinary shares as a result
of the exercise of options.
Page 24
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2014
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 Group’s auditor, has performed other services which are listed in the table below
in addition to their statutory duties.
The Board has considered the non-audit services provided during the year by the auditor and is satisfied that the
provision of those non-audit services during the year by the auditor is compatible with, and did not compromise,
the auditor independence requirements of the Corporations Act 2001. The non-audit services provided do not
undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a
management or decision making capacity for the Group, acting as an advocate for the Group or jointly sharing
risks and rewards.
Details of amounts paid to the auditor of the Group, KPMG, and its related practices for audit and non-audit
services during the year are set out below.
2014 2013
KPMG Australia $ $
Audit and review of financial statements 47,500 44,400
Other services
>
>
Review of Research and Development Claim 106,535 81,130
Assistance with Customs Matters 37,920 8,182
15. REMUNERATION REPORT – AUDITED
15.1 Principles of compensation
Remuneration is referred to as compensation through this report.
Key management personnel (“KMP”) comprise the Directors of the Company and Senior Executives for
the Group. KMP have authority and responsibility for planning, directing and controlling the activities of
the Company and the Group.
Compensation levels for KMP of the Group are competitively set to attract and retain appropriately
qualified and experienced Directors and Senior Executives. Whilst in the exploration phase, there are to
date no revenues and the expenditure commitments and key milestones dictate a flexible approach to
remuneration which conserves cash.
The Remuneration Committee may obtain independent advice of the appropriateness of compensation
packages of the Group given trends in comparative companies and the objectives of the Group’s
compensation strategy, which includes the need to transition the Group’s salary structure from that of an
exploration company to one of a developer and producer. No such advice was obtained during the 2014 year.
Page 25
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2014
15. REMUNERATION REPORT – AUDITED (CONTINUED)
15.1 Principles of compensation (Continued)
The compensation structures explained below are designed to attract suitably qualified candidates,
reward the achievement of strategic objectives, and achieve the broader outcome of creation of value
for shareholders. The compensation structures take into account:
> the capability and experience of the KMP; and
> the Group’s performance against its stated objectives.
Objectives for the 2014 financial year which continued to be focussed on the work required to secure
funding and regulatory approvals to allow for the development of the Hillside Project, included:
Objective
Status
Completion of the Feasibility Study. Rex has broadened the scope of the Feasibility Study into an
Extended Feasibility Study. The existing work completed on the
large scale mining options will be expanded to include the potential
for a smaller scale and lower capital start up.
Approvals in relation to key infrastructure (road relocations and
upgrades to Ardrossan jetty and shiploader) were received and
announced to the ASX 3 March 2014.
Formal offer of the Mining Lease for the Hillside Project received
and announced to the ASX 29 July 2014. Offer accepted by Rex
and announced 16 September 2014.
Korea-based Hyundai and Australia-based AMEC were awarded
ECI (Early Contractor Involvement) in the Hillside Project,
announced to the ASX 9 January 2014. This work has now been
completed and an indicative price received (announced as part of
the June 2014 quarterly report, released to the ASX 29 July 2014).
However, studies have identified other options that the Company
believes should be investigated.
The water supply required has been secured through an agreement
with SA Water, ASX announcement 24 Feb 2014.
Rex is reviewing its project requirements while it evaluates
alternative development options.
Activities continue to fully assess information related to a number
of targets within the Exploration Licences.
Secure the required State
Government regulatory approvals
to allow for the commencement of
mining and all aspects associated
with construction to secure
operating licences for the 15 plus
year copper mine at Hillside.
Secure a fixed price turnkey
Engineering Procurement and
Construction (“EPC”) contract,
to commence construction during
calendar year 2015.
Finalise commercial terms associated
with access to and upgrading of
infrastructure required to support
the development of the Hillside
Project (water, power and port).
Continue to secure and develop
internal capability and capacity to
undertake an organisational
transformation from explorer to
developer/producer.
Maintain a near mine and regional
exploration push with the aim of
identifying multiple larger scale
copper deposits that can
complement the Hillside Project,
on Rex’s tenements on the Yorke
Peninsula, SA.
Page 26
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2014
15. REMUNERATION REPORT – AUDITED (CONTINUED)
15.1 Principles of compensation (Continued)
Compensation packages include a mix of fixed and variable compensation, and short-term and long-term
performance-based incentives.
Fixed compensation
Fixed compensation consists of base compensation (which is calculated on a total cost basis and includes any
Fringe Benefits Tax (“FBT”) charges related to employee benefits including motor vehicles), as well as leave
entitlements and employer contributions to superannuation funds.
Compensation levels are reviewed annually by the Remuneration Committee through a process that considers
individual, segment and overall performance of the Group. External consultants and market research provide
analysis and guidance to ensure the Directors’ and senior executives’ compensation is competitive in the
market place. A senior executive’s compensation is also reviewed on promotion. There have been no changes
to base compensation for continuing executives since 2012.
Performance linked compensation
Performance linked compensation includes both short-term and long-term incentives, and is designed to
reward senior executives for meeting or exceeding their financial and personal objectives. The short-term
incentive (STI) is an ‘at risk’ bonus provided in the form of cash, while the long-term incentive (LTI) is
provided as options over ordinary shares of the Company under the rules of the Employee Share Option Plan.
Short-term incentive bonus
The STI is a discretionary bonus provided in the form of cash. At the end of the financial year, the
Remuneration Committee assesses the performance of the Group and individuals. Individual performance
evaluations in respect of the year ended 30 June 2014 have taken place.
The Remuneration Committee recommends the cash incentive to be paid to the individuals for approval by
the Board. The Board retains the discretion to vary the final cash incentive if performance is considered to
be deserving of either a greater or lessor amount.
STIs were previously provided for and paid in the year subsequent to the performance year upon the
completion of performance reviews and Board approval.
During 2014, Rex moved to finalise performance evaluations earlier and provide for any STI entitlements in
the performance year. Due to all the performance objectives not being met for the year ended 30 June 2014,
no STI cash bonuses were paid or payable.
Long-term incentive
The long-term incentive (LTI) is provided as options over ordinary shares of the Group. Options granted to
employees currently vest immediately and only lapse in the event of the employee leaving the Group or the
expiry date, whichever occurs earlier. Due to the nature of the Company at this time the Board believes this
incentive is appropriate having regard to the exercise price of options being set at a premium to the share
price at grant date.
Consequences of performance on shareholder wealth
The variable components of the Group’s executives’ remuneration (the short and long term incentives) seek
to encourage alignment of management performance and shareholders’ interests by linking remuneration to
the performance of the Group, (per the objectives above). Whilst the remuneration committee takes into
consideration the indices detailed below, the Board acknowledges that as an exploration company the use of
such indices does not fully reflect the Group’s performance.
Net profit/(loss) attributable to equity
holders of the parent
Closing share price at financial
year’s end
2014
2013
2012
2011
2010
$531,179
$(1,178,518) $(544,862)
$593,266
$2,327,007
$0.305
$0.338
$0.785
$2.31
$1.250
Page 27
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2014
15. REMUNERATION REPORT – AUDITED (CONTINUED)
15.1 Principles of compensation (Continued)
Service agreements
The Group has entered into contracts with KMP which are consistent with the Group’s policy, excluding the
Chief Executive Officer, which are capable of termination on three months’ notice. The Group retains the right to
terminate a contract immediately by making payment equal to between three and six month’s pay in lieu of
notice. The KMP 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 KMP 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.
The following summarises the service agreements with KMP:
>
Executive Director
(cid:129) Mr Mark Parry – Chief Executive Officer
Mr Parry has a contract of employment dated 24 September 2012 with the Company which terminates on the
15 October 2015. 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 terms of his current contract are:
Base remuneration of $550,000 (inclusive of statutory superannuation), and Mr Parry is eligible to be
considered for a STI of up to 25% of his base remuneration in any given financial year.
A sign-on payment of $300,000, in lieu of foregone benefits from his previous employment, payable as follows:-
$150,000 paid on commencement of employment; and $150,000 being held over until the substantially
advancing of a financing package and/or EPC contract for the Hillside Project. The Board approved the second
payment in December 2013, following the Remuneration Committee’s recommendation that substantial progress
had been made towards the financing of the Hillside Project.
Either the Company or Mr Parry may terminate the contract by giving 12 months’ notice. The Company may
terminate the contract on the grounds of unsatisfactory conduct or performance by giving three months’ notice.
The Chief Executive Officer has no entitlement to termination payment in the event of removal for misconduct
or gross negligence.
Mr Parry resigned from the Company, effective 8 August 2014 under a mutually agreed arrangement.
No STI cash bonus was paid or payable for the year ending 30 June 2014.
>
Executives
(cid:129) Ms Rachel Rees – Chief Financial Officer
Ms Rees was appointed as Chief Financial Officer on 9 September 2013. Either Ms Rees or the Company may
terminate the contract for any reason by giving three months’ prior notice to the other party. Ms Rees is eligible
to be considered for an STI of up to 20% of her salary.
In the event that Ms Rees’ employment is terminated following redundancy, she is entitled to a payment
equivalent to a minimum of six months’ salary.
Ms Rees was made redundant in August 2014.
No STI cash bonus was paid or payable for the year ending 30 June 2014.
(cid:129) Mr Patrick Say – Chief Geologist
Mr Say was appointed as Chief Geologist on 1 July 2011. Mr Say may resign from the Company by giving four
weeks’ notice and the Group may terminate his employment by providing three months’ notice.
In the event that Mr Say’s employment is terminated following redundancy, he is entitled to a payment
equivalent to three months’ salary.
No STI cash bonus was paid or payable for the year ending 30 June 2014.
Page 28
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2014
15. REMUNERATION REPORT – AUDITED (CONTINUED)
15.1 Principles of compensation (Continued)
Service agreements (Continued)
>
Former Executives
(cid:129) Mr Steven Olsen – Executive Director
Mr Olsen was the Managing Director of the Company until 15 October 2012. Mr Olsen was appointed to
Executive Director for Business Development on 15 October 2012 with a contract of employment, which
terminated on 31 July 2013, this was subsequently renewed until 30 September 2013. On 1 October 2013,
Mr Olsen was appointed as a Non-Executive Director. Mr Olsen continues to provide consulting services to the
Company under a contractor agreement. Due to an extension of Mr Olsen’s provision of consulting services of an
executive nature, from 8 August 2014 Mr Olsen no longer satisfies the definition of a Non-Executive Director.
(cid:129) Ms Amber Rivamonte – Company Secretary
Ms Rivamonte was appointed as Company Secretary on 17 July 2007.
In the event that Ms Rivamonte’s employment is terminated following redundancy, she is entitled to a payment
equivalent to 12 months’ salary.
Ms Rivamonte finished her employment with the Group on 30 September 2013, following the closure of the
Ballarat Office. Transitional arrangements are in place and she continues to provide services to the Company
under a contractor agreement.
(cid:129) Ms Janet Mason – Financial Controller
Ms Mason was appointed as Chief Financial Officer on 8 January 2010 and was appointed as Financial
Controller on 9 September 2013. Ms Mason may resign from the Company by giving four weeks’ notice and
the Group may terminate her employment by providing three months’ notice.
In the event that Ms Mason’s employment is terminated following redundancy, she is entitled to a payment
equivalent to three months’ salary.
Following Ms Rees appointment as Chief Financial Officer, Ms Mason assumed her role as Financial Controller.
All key executives are entitled to participate in both the short term and long term incentives plans.
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, while the Chairman’s base fee is $120,000.
The Chairman and Non-Executive Directors do not receive performance related remuneration.
Directors’ fees cover all main Board activities and membership of committees.
Page 29
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2014
15. REMUNERATION REPORT – AUDITED (CONTINUED)
15.2 Directors’ and Executive Officers’ remuneration
Details of the nature and amount of each major element of remuneration of each Director of the Company
and other KMP are as follows:
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REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2014
15. REMUNERATION REPORT – AUDITED (CONTINUED)
15.2 Directors’ and Executive Officers’ remuneration (Continued)
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N
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2014
15. REMUNERATION REPORT – AUDITED (CONTINUED)
15.3 Equity Instruments
All options refer to options over ordinary shares of Rex Minerals Ltd, which are exercisable on a one-for-one basis.
15.3.1 Options and rights over equity instruments granted as compensation
Details on options over ordinary shares in the Company that were granted and vested as compensation
to KMP during the reporting period are as follows:
Number of
options granted
during 2014
Grant and
vesting date
Fair value per
option at grant
date ($)
Exercise
price per
option ($)
Expiry date
Number of
options vested
during 2014
Directors
Dr David Carland
Mr Richard Laufmann
Mr Alister Maitland
Mr Mark Parry
Mr Steven Olsen
Executives
Ms Rachel Rees
Mr Patrick Say
Former
Mr Paul Chapman
Ms Amber Rivamonte
Ms Janet Mason
Directors
Mr Paul Chapman
Mr Richard Laufmann
Mr Alister Maitland
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Number of
options granted
during 2013
Grant and
vesting date
Fair value per
option at grant
date ($)
Exercise
price per
option ($)
Expiry date
Number of
options vested
during 2013
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Mr Mark Parry
3,000,000
24 Sept 2012
$0.24
$0.91
31 Aug 2017
3,000,000
Mr Steven Olsen
Executives
Ms Amber Rivamonte
Ms Janet Mason
Mr Patrick Say
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
No options have been granted since the end of the financial year. The options were provided at no cost to the recipients.
15.3.2 Modification of terms of equity-settled share-based payment transactions
No terms of equity-settled share-based payment transactions (including options and rights granted as
compensation to KMP) 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 KMP on the exercise of options previously
granted as compensation.
Page 32
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2014
15. REMUNERATION REPORT – AUDITED (CONTINUED)
15.3 Equity Instruments (Continued)
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 KMP, is detailed below:
Granted in year
$ (A)
Value of Options
Exercised in year
$
Lapsed in year
$
Directors
Dr David Carland
Mr Richard Laufmann
Mr Alister Maitland
Mr Mark Parry
Mr Steven Olsen
Executives
Ms Rachel Rees
Mr Patrick Say
Former
Mr Paul Chapman
Ms Amber Rivamonte
Ms Janet Mason
Total
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(43,200)
–
(43,200)
(43,200)
(129,600)
(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 22 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.
15.4 Key management personnel transactions
15.4.1 Other transactions with key management personnel
A number of key management persons hold positions in other entities that result in them having control
or joint control over the financial or operating policies of those entities.
A number of these entities transacted with the Group during the year. The terms and conditions of those
transactions with key management personnel and their related parties were no more favourable than those
available, or which might reasonably be expected to be available, on similar transactions to no-key
management personnel related entities on an arm’s length basis.
Page 33
REX MINERALS LTD
DIRECTORS’ REPORT (Continued) for the year ended 30 June 2014
15. REMUNERATION REPORT – AUDITED (CONTINUED)
15.4 Key management personnel transactions (Continued)
15.4.2 Movements in shares
The movement during the reporting period in the number of ordinary share in Rex Minerals Ltd held, directly,
indirectly or beneficially, by each key management person, including their related parties is as follows:
Held at 1 July
2013 or date
appointed
Received on
exercise of
options
Other changes*
Held at
30 June 2014
Directors
Dr David Carland
Mr Richard Laufmann
Mr Alister Maitland
Mr Mark Parry
Mr Steven Olsen
Executives
Ms Rachel Rees
Mr Patrick Say
Former
Mr Paul Chapman
Ms Amber Rivamonte
Ms Janet Mason
–
3,541,666
202,000
–
6,027,000
–
138,667
3,644,833
850,000
130,000
–
–
–
–
–
–
–
–
–
–
268,330
–
–
–
–
24,727
–
–
–
–
268,330
3,541,666
202,000
–
6,027,000
24,727
138,667
3,644,833
850,000
130,000
*Other changes represent shares that were purchased or sold during the year.
16. ROUNDING
The Group is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with that
Class Order, amounts in the consolidated financial statements and Directors’ Report have been rounded off to the
nearest thousand dollars, unless otherwise stated.
17. LEAD AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration is set out on page 61 and forms part of the Directors’ Report
for the year ended 30 June 2014.
Dated at Melbourne this 29th day of September 2014
Signed in accordance with a resolution of the Directors:
David Carland
Executive Chairman
Page 34
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 30 June 2014
2014 2013
Note $000 $000
Current assets
Cash and cash equivalents 7 2,590 24,816
Term Deposits 7 19,000 –
Trade and other receivables 8 491 3,310
Prepayments 9 173 44
Total current assets 22,254 28,170
Non-current assets
Exploration and evaluation expenditure 10 153,344 135,799
Property, plant and equipment 12 16,165 15,668
Water infrastructure 4,076 3,631
Total non-current assets 173,585 155,098
Total assets 195,839 183,268
Current liabilities
Trade and other payables 13 3,396 3,505
Employee benefits 14 273 404
Provisions 15 36 320
Total current liabilities 3,705 4,229
Non-current liabilities
Trade and other payables 13 652 –
Employee benefits 14 101 69
Total non-current liabilities 753 69
Total liabilities 4,458 4,298
Net assets 191,381 178,970
Equity
Issued capital 16(i) 189,566 177,686
Reserves 16(iii-iv) 3,912 1,421
Retained earnings/(Accumulated losses) (2,097) (137)
Total equity 191,381 178,970
The notes on pages 39 to 60 are an integral part of these financial statements.
Page 35
REX MINERALS LTD
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME for the year ended 30 June 2014
2014 2013
Note $000 $000
Finance income 17 686 1,808
Administrative expenses (3,006) (1,753)
Depreciation expense 12 (159) (142)
Employee benefits expense 18 (2,581) (3,305)
Marketing expenses (510) (867)
Loss on disposal of fixed assets (9) (1)
Profit/(loss) before tax (5,579) (4,260)
Income tax (expense)/benefit 19 6,110 3,081
Total profit/(loss) for the period after tax 531 (1,179)
Other comprehensive income – –
Total comprehensive income/(loss) attributable
to members of Rex Minerals Ltd 531 (1,179)
Earnings/(loss) per share attributable
to members of Rex Minerals Ltd
Basic earnings per share (cents) 20 0.27 (0.62)
Diluted earnings per share (cents) 20 0.27 (0.62)
The notes on pages 39 to 60 are an integral part of these financial statements.
Page 36
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2014
Attributable to equity holders of the Group
Share Retained
Based Earnings/
Share Payments Profit (Accumulated Total
Capital Reserve Reserve Losses) Equity
Note $000 $000 $000 $000 $000
Balance at 1 July 2012 177,686 1,311 – 441 179,438
Share based payments compensation 16 – 711 – – 711
Transfer from share based payments reserve 16 – (601) – 601 –
Total comprehensive income/(loss) for the period – – – (1,179) (1,179)
Balance at 30 June 2013 177,686 1,421 – (137) 178,970
Balance at 1 July 2013 177,686 1,421 – (137) 178,970
Issue of ordinary shares 16 12,645 – – – 12,645
Transaction costs on share issue 16 (765) – – – (765)
Transfer from share based payments reserve 16 – (531) – 531 –
Transfer from retained earnings – – 3,022 (3,022) –
Total comprehensive income/(loss) for the period – – – 531 531
Balance at 30 June 2014 189,566 890 3,022 (2,097) 191,381
The notes on pages 39 to 60 are an integral part of these financial statements.
Page 37
REX MINERALS LTD
CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 30 June 2014
2014 2013
Note $000 $000
Cash flows from operating activities
Cash paid to suppliers and employees (6,580) (3,571)
Interest received 555 1,786
Research and development benefit received 9,191 -
Net cash from/(used in) operating activities 21 3,166 (1,785)
Cash flows from investing activities
Exploration and evaluation payments (17,647) (39,106)
Acquisition of property, plant and equipment (242) (412)
Payment for water infrastructure (400) (3,631)
Proceeds from sale of property, plant and equipment 17 7
Investments in term deposits 7(ii) (19,000) -
Net cash from/(used in) investing activities (37,272) (43,142)
Cash flows from financing activities
Proceeds from issue of share capital 16 12,645 -
Payment of transaction costs 16 (765) -
Net cash from/(used in) financing activities 11,880 -
Net increase /(decrease) in cash and cash equivalents (22,226) (44,927)
Cash and cash equivalents at beginning of the period 24,816 69,743
Cash and cash equivalents at period end 7(i) 2,590 24,816
The notes on pages 39 to 60 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 4
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 Level 19, 11 Waymouth Street, Adelaide, South Australia 5000. The Group financial statements as at
and for the year ended 30 June 2014 comprise the Company and its subsidiaries (together referred to as the
“Group” and individually as “Group entities”). The Group is a for profit entity primarily 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 29 September 2014.
(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.
The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with
that Class Order, all financial information presented in Australian dollars has been rounded to the nearest
thousand unless otherwise stated.
(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
>
notes 25 and 26 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. The Group has adopted the following
new standards and amendments to standards, including any consequential amendments to other standards, with a
date of initial application of 1 July 2013: Disclosures – Offsetting Financial Assets and Financial Liabilities
(Amendments to AASB 7); AASB 10 Consolidated Financial Statements (2011); AASB 11 Joint Arrangements;
AASB 12 Disclosure of Interests in Other Entities; AASB 13 Fair Value Measurement; Presentation of Items of
Other Comprehensive Income (Amendments to AASB 101); AASB 119 Employee Benefits (2011) and
Recoverable Amount Disclosures for Non-Financial Assets (Amendments to AASB 136) (2013). There has been
no impact upon adoption.
(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 39
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.
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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 3 – 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 proven 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.
Page 41
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.
(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.
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Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(f) Employee benefits (Continued)
(ii) Share-based payments (Continued)
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.
Research and development benefits are recognised in the year the claim is lodged.
(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. The tax-consolidated group has entered into tax funding and
tax sharing agreements.
(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.
Page 43
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 2014, and have not been applied in preparing these consolidated financial statements:
>
AASB 9 Financial Instruments, AASB 2009-11 Amendments to Australian Accounting Standards arising
from AASB 9, AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9
(December 2010) and AASB 2012-6 Amendments to Australian Accounting Standards – Mandatory
Effective Date of AASB 9 and Transitional Disclosures. The new standards which become mandatory for the
Group’s 2016 financial statements could change the classification and measurement of financial assets and
financial liabilities.
>
AASB 15 Revenue from Contracts with Customers which will be effective for the Group’s 2018
Financial Statements.
The new standards are not expected to have significant impact on the financial statements.
Page 44
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
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.
(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.
Page 45
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
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
2014 2013
$000 $000
Bank balances and short term deposits 2,590 24,816
Cash and cash equivalents in the statement of cash flows 2,590 24,816
(ii) Term deposits
2014 2013
$000 $000
Term deposits* 19,000 –
Total term deposits 19,000 –
*Term Deposits comprise cash balances with an original maturity of more than three months.
The Group’s total cash and funds on deposit $21,590,000 (2013: $24,816,000) is exposed to interest rate risk
and a sensitivity analysis for financial assets and liabilities are disclosed in note 23.
8. TRADE AND OTHER RECEIVABLES
2014 2013
$000 $000
Other receivables and accrued interest 260 158
Research and development benefit receivable – 3,081
Security deposits and rehabilitation bonds 231 71
Total trade and other receivables 491 3,310
9. PREPAYMENTS
2014 2013
$000 $000
Prepayments 173 44
Total prepayments 173 44
Page 46
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
10. EXPLORATION AND EVALUATION EXPENDITURE
2014 2013
$000 $000
Cost
Balance at 1 July 135,799 98,104
Additions 17,545 37,695
Balance at 30 June 153,344 135,799
Carrying amounts
At 1 July 135,799 98,104
At 30 June 153,344 135,799
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. DEFERRED TAX ASSETS (LIABILITIES)
2014 2013
$000 $000
Exploration and evaluation assets (46,000) (40,740)
Property, plant and equipmnet (284) (245)
Provisions 222 316
Equity loss 760 1,121
Tax losses recognised 45,302 39,548
– –
Total losses unrecognised 2,896 5,099
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 47
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
12. PROPERTY, PLANT AND EQUIPMENT
Land and Plant and
Buildings Equipment Total
2014 $000 $000 $000
Cost
Balance at 1 July 2013 14,309 2,287 16,596
Additions 775 182 957
Disposals – (122) (122)
Balance at 30 June 2014 15,084 2,347 17,431
Depreciation and impairment losses
Balance at 1 July 2013 9 919 928
Depreciation charged to the income statement 35 124 159
Depreciation charged to exploration projects 10 265 275
Disposals – (96) (96)
Balance at 30 June 2014 54 1,212 1,266
Carrying amounts
At 1 July 2013 14,300 1,368 15,668
At 30 June 2014 15,030 1,135 16,165
Land and Plant and
Buildings Equipment Total
2013 $000 $000 $000
Cost
Balance at 1 July 2012 14,162 2,056 16,218
Additions 147 265 412
Disposals – (34) (34)
Balance at 30 June 2013 14,309 2,287 16,596
Depreciation and impairment losses
Balance at 1 July 2012 2 597 599
Depreciation charged to the income statement – 142 142
Depreciation charged to exploration projects 7 207 214
Disposals – (27) (27)
Balance at 30 June 2013 9 919 928
Carrying amounts
At 1 July 2012 14,160 1,459 15,619
At 30 June 2013 14,300 1,368 15,668
Page 48
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
13. TRADE AND OTHER PAYABLES
2014 2013
$000 $000
Current
Other trade payables and accrued expenses 3,396 3,505
Total current trade and other payables 3,396 3,505
Non-current
Other trade payables and accrued expenses 652 –
Total non-current trade and other payables 652 –
Total trade and other payables 4,048 3,505
14. EMPLOYEE BENEFITS
2014 2013
$000 $000
Current
Liability for annual leave 273 404
Non-current
Liability for long service leave 101 69
Total employee benefits 374 473
Assumptions made with respect to the measurement of the liability for long service leave are in accordance with
accounting policy note 3f(ii).
15. PROVISIONS
2014 2013
$000 $000
Current
Provision for office relocation 36 320
Total provisions 36 320
16. EQUITY
(i) Movements in shares on issue:
Date of Number Issue
Issue of Shares Price $ $000
Opening balance at 1 July 2013 188,907,284 177,686
Capital Raising – Placement 12/03/2014 28,000,000 0.40 11,200
Less costs of Placement (640)
Capital Raising – Placement 22/04/2014 3,612,500 0.40 1,445
Less costs of Placement (125)
Closing balance at 30 June 2014 220,519,784 189,566
Date of Number Issue
Issue of Shares Price $ $000
Opening balance at 1 July 2012 188,907,284 177,686
Closing balance at 30 June 2013 188,907,284 177,686
Page 49
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
16. EQUITY (CONTINUED)
(ii) Movements in options on issue:
Date of Number Exercise Expiry
Issue of Options Price $ Date
Opening balance as at 1 July 2013 5,040,000
Lapse of Options – employees 06/05/2011 (200,000) 3.00 30/04/2014
Lapse of Options – employees 24/05/2012 (240,000) 1.20 30/04/2015
Lapse of Options – employees 06/05/2011 (640,000) 3.00 30/04/2014
Lapse of Options – employees 24/05/2012 (120,000) 1.20 30/04/2015
Closing balance as at 30 June 2014 3,840,000
Date of Number Exercise Expiry
Issue of Options Price $ Date
Opening balance as at 1 July 2012 3,761,000
Lapse of Options – employees 04/06/2010 (33,000) 1.222 24/05/2013
Lapse of Options – employees 06/05/2011 (160,000) 3.000 30/04/2014
Lapse of Options – employees 24/05/2012 (160,000) 1.200 30/04/2015
Issue of Options – employees 24/09/2012 3,000,000 0.910 31/08/2017
Lapse of Options – employees 03/12/2012 (240,000) 2.052 31/10/2012
Lapse of Options – employees 06/05/2011 (40,000) 3.000 30/04/2014
Lapse of Options – employees 24/05/2012 (40,000) 1.200 30/04/2015
Lapse of Options – employees 04/06/2010 (528,000) 1.222 24/05/2013
Lapse of Options – employees 06/05/2011 (240,000) 3.000 30/04/2014
Lapse of Options – employees 24/05/2012 (280,000) 1.200 30/04/2015
Closing balance as at 30 June 2013 5,040,000
(iii) Movements in share based payment reserve:
$000
Opening balance at 1 July 2013 1,421
Employee share based payments –
Transferred to Retained earnings (531)
Closing balance at 30 June 2014 890
Opening balance at 1 July 2012 1,311
Employee share based payments 711
Transferred to Retained earnings (601)
Closing balance at 30 June 2013 1,421
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.
(iv) Profit reserve:
The Group’s profit for the half year ended 31 December 2013 of $3,022 thousand was transferred from Retained
Earnings to the Profit Reserve.
Page 50
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
17. FINANCE INCOME AND EXPENSE
2014 2013
$000 $000
Finance income – interest income on bank deposits 686 1,808
Finance expense –
–
Net finance income and expense 686 1,808
18. EMPLOYEE BENEFITS EXPENSE
2014 2013
$000 $000
Wages and salaries 2,680 2,599
Share based payments expense – 711
Increase in liability for annual leave (131) 94
Increase in liability for long service leave 32 (99)
Total employee benefits expense 2,581 3,305
In addition, wages and salaries of $2,521 thousand (2013: $3,214 thousand) are capitalised into exploration
and evaluation expenditure.
19. INCOME TAX EXPENSE
NUMERICAL RECONCILIATION BETWEEN TAX EXPENSE AND PRE-TAX ACCOUNTING PROFIT
2014 2013
$000 $000
Profit/(Loss) before tax for the period (5,579) (4,260)
Income tax using the domestic corporation tax rate of 30% (2013: 30%) (1,674) (1,278)
Decrease in income tax due to:
Non-deductible expenses 6 214
Research and Development benefit (6,110) (3,081)
Adjustment from prior year (1,883) –
Increase in income tax expense due to:
Net effect of tax losses not recognised 3,551 1,064
Total income tax expense/(benefit) on pre-tax net profit (6,110) (3,081)
Page 51
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
20. EARNINGS PER SHARE
2014 2013
cents cents
Earnings Per Share
Basic EPS 0.27 (0.62)
Diluted EPS per share – cents 0.27 (0.62)
(a) Basic earnings per share
The calculation of basic earnings/(loss) per share (EPS) at 30 June 2014 was based on the profit
attributable to ordinary equity holders of $531 thousand (2013: $1,179 thousand) and a weighted average
number of ordinary shares outstanding during the financial year ended 30 June 2014 of 196,512,675
(2013: 188,907,284).
(b) Diluted earnings per share
The calculation of diluted earnings/(loss) per share (EPS) at 30 June 2014 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 earnings/(loss) per share, no
dilutive effect has been taken into account.
21. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
2014 2013
$000 $000
Cash flows from operating activities
Profit/(Loss) before tax for the period (5,579) (4,260)
Adjustments for non cash items:
Depreciation 159 142
Share based payment transactions – 711
Adjustments for other items:
(Profit)/loss on disposal of property plant and equipment 9 1
Operating loss before changes in working capital and provisions (5,411) (3,406)
(Increase)/decrease in trade and other receivables 2,727 865
(Decrease)/increase in trade and other payables 138 418
(Decrease)/increase in employee benefits (113) 18
(Decrease)/increase in provisions (285) 320
Research and development benefit received 6,110 –
Net cash (used in)/from operating activities 3,166 (1,785)
Page 52
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
22. SHARE BASED PAYMENTS
The Company established a share option plan that entitles employees (other than Directors) to options to purchase
shares in the Company.
No options were granted during the financial year ending 30 June 2014.
The following options were granted during the financial year ending 30 June 2013:
Grant Number Expiry
Employees Entitled Date of Options Date
Key management personnel 24/09/2012 3,000,000 31/08/2017
Total
3,000,000
Key management personnel (KMP) options are exercisable at a price of $0.91 each, have no vesting period and
expire on 31 August 2017. 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.
(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
Fair value at grant date $0.24
Share price at date of grant $0.68
Exercise price $0.91
Expected volatility 50%
Option life (years) 4.43
Risk free interest rate 2.56%
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.
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REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
22. SHARE BASED PAYMENTS (CONTINUED)
(b) Employee expenses
2014 2013
$000 $000
Share options granted in 2014 – recognised in income statement – –
Share options granted in 2014 – capitalised to exploration projects – –
Share options granted in 2013 – recognised in income statement – 711
Share options granted in 2013 – capitalised to exploration projects – –
Total recognised as share based payments – 711
23. 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 Group’s
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.
(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
$000 $000 $000 $000
2014
Trade and other payables 4,048 (3,396) (3,396) (652)
4,048 (3,396) (3,396) (652)
2013
Trade and other payables 3,505 (3,505) (3,505) –
3,505 (3,505) (3,505) –
(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:
2014 2013
$000 $000
Cash and cash equivalents 2,590 24,816
Term deposits 19,000 –
Total cash and term deposits 21,590 24,816
At balance date, the Group has no financial liabilities exposed to variable interest rate risks.
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Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
23. FINANCIAL INSTRUMENTS (CONTINUED)
(d)
Interest rate risk (Continued)
The following sensitivity analysis is based on the interest rate risk exposure in existence at the balance sheet
date. At 30 June 2014, 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)
2014 2013 2014 2013
$000 $000 $000 $000
Group
+1% (100 basis points) 159 460 – –
- 1% (100 basis points) (159) (460) – –
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 (2013: nil).
24. OPERATING LEASES
At the end of the reporting period, the future minimum lease payments under non-cancellable operating leases are
payable as follows:
2014 2013
$000 $000
Not later than one year 367 –
Later than one year but not later than five years 1,595 –
Greater than five years 2,075 –
The Group leases an office space under an operating lease. The lease runs for a period of 10 years, with an option
to renew the lease after that date. Lease payments are increased by a fixed percentage every year and adjusted to
the prevailing market rate after 5 years.
During the year an amount of an amount of $218 thousand was recognised as an expense in profit and loss in
respect of the office lease (2013: $0).
25. 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.
2014 2013
$000 $000
Not later than one year 1,650 1,152
Later than one year but not later than five years 4,460 5,071
26. CAPITAL EXPENDITURE COMMITMENTS
During the year ended 30 June 2014, the Group has not entered into any capital expenditure commitments.
The commitment from 2013 was settled during the period.
2014 2013
$000 $000
Not later than one year – 3,631
Later than one year but not later than five years – –
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REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
27. 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 $30,000 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 $30,000
as at 30 June 2014 (2013: $30,000).
The Group’s bankers have provided a guarantee amounting to $198,903 to the Landlord regarding the new office at
Level 19, 11 Waymouth Street, Adelaide, South Australia as security over the Group's obligations regarding the lease
held. Under the agreement, the Group has indemnified the bank in relation to this guarantee. The guarantee is backed
by a deposit amounting to $198,903 as at 30 June 2014.
In December 2013, the Group entered into a land purchase agreement. An initial deposit has been paid in connection
with the agreement, subject to obtaining regulatory approval and obtaining financial close which represents project
funding, the Group will be required to pay the remaining consideration. Should the agreement expire, the deposit will
be forfeited and will be expensed.
28. RELATED PARTIES
28.1 Key management personnel (KMP) disclosures
The following were KMP of the Group at any time during the reporting period and unless otherwise indicated were
KMP for the period ending 30 June 2014.
Name Position held Appointment detail
Non-Executive Directors
Dr David Carland Chairman Appointed 12 December 2013
Appointed Chairman 1 January 2014
Mr Richard Laufmann Chairman – Remuneration Committee Appointed 16 May 2007
Mr Alister Maitland Chairman – Audit Committee Appointed 16 September 2011
Mr Steven Olsen1 Executive Director Appointed 13 May 2007
Executive Director
Mr Mark Parry Managing Director/CEO Appointed 15 October 2012
Executives
Ms Rachel Rees Chief Financial Officer Appointed 9 September 2013
Mr Patrick Say Geology Manager Appointed 1 July 2010
Former
Mr Paul Chapman Chairman Appointed 18 April 2007
Resigned 31 December 2013
Ms Amber Rivamonte2 Company Secretary Appointed 16 July 2007
Ceased KMP 30 September 2013
Ms Janet Mason3 Acting Chief Financial Officer Appointed 19 December 2008
Ceased KMP 8 September 2013
1.
Mr Steven Olsen ceased being an Executive Director
on 30 September 2013. From 8 August 2014,
Mr Olsen re-qualifies as an Executive Director as he
provides services of an executive nature.
2.
Ms Amber Rivamonte finished with the Group
following the closure of the Company’s Ballarat Office
on 30 September 2013.
3.
Ms Janet Mason ceased being KMP upon the
commencement of Ms Rachel Rees on
9 September 2013.
On 8 August 2014, Mr Mark Parry resigned as Managing Director of the Company, effective from that date and
Dr David Carland became Executive Chairman.
Effective 31 August 2014, Ms Rachel Rees was made redundant.
Other than the above, there have been no other changes to KMP between 1 July 2014 and the date of this report.
The KMP compensation included in “Employee Benefits Expenses” (see note 18) and “Exploration and
Evaluation” (see note 10) are as follows:
2014 2013
$ $
Short term employee benefits 1,854,248 2,222,152
Post employment benefits 157,562 138,284
Share based payments – 711,000
Other long term benefits (11,963) 24,716
Termination Benefits 239,800 –
2,239,647 3,096,152
Page 56
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
28. RELATED PARTIES (CONTINUED)
28.1 Key management personnel (KMP) disclosures (Continued)
(a) KMP 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 25-34.
No member of the KMP 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 KMP, including their related parties, is as follows:
Vested and
Held at Exercised Granted as Vested Lapsed Held at Exercisable
1 July during compen- during during 30 June at 30 June
2014 Note 2013 year sation year year 2014 2014
Directors
Dr David Carland – – – – – – –
Mr Richard Laufmann – – – – – – –
Mr Alister Maitland – – – – – – –
Mr Steven Olsen – – – – – – –
Mr Mark Parry 3,000,000 – – – – 3,000,000 3,000,000
Executives
Ms Rachel Rees – – – – – – –
Mr Patrick Say 240,000 – – – 80,000 160,000 160,000
Former
Mr Paul Chapman – – – – – – –
Ms Amber Rivamonte* 240,000 – – – 80,000 160,000 160,000
Ms Janet Mason 160,000 – – – 80,000 80,000 80,000
Vested and
Held at Exercised Granted as Vested Lapsed Held at Exercisable
1 July during compen- during during 30 June at 30 June
2013 Note 2012 year sation year year 2013 2013
Directors
Mr Paul Chapman – – – – – – –
Mr Richard Laufmann – – – – – – –
Mr Alister Maitland – – – – – – –
Mr Mark Parry – – 3,000,000 3,000,000 – 3,000,000 3,000,000
Mr Steven Olsen – – – – – – –
Executives
Ms Amber Rivamonte* 313,800 – – – 73,800 240,000 240,000
Ms Janet Mason 233,800 – – – 73,800 160,000 160,000
Mr Patrick Say 313,800 – – – 73,800 240,000 240,000
*Although Ms Rivamonte finished with the Group, the Board resolved to vary the terms of the options to reflect that they
do not lapse on termination of the employment contract, but on termination of the services agreement.
Page 57
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
28. RELATED PARTIES (CONTINUED)
28.1 Key management personnel (KMP) disclosures (Continued)
(c) Movements in shares
The movement during the reporting period in the number of ordinary shares in Rex Minerals Ltd held,
directly, indirectly or beneficially, by KMP, including their related parties, is as follows:
Held at
1 July 2013
or date Received
appointed as on Exercise Held at
Note a director Purchases of options Sales 30 June 2014
(i) – 268,330 – – 268,330
(ii) 3,541,666 – – – 3,541,666
(iii) 202,000 – – – 202,000
(iv) 6,027,000 – – – 6,027,000
– – – – –
(v) – 24,727 – – 24,727
(vi) 138,667 – – – 138,667
(vii) 3,644,833 – – – 3,644,833
850,000 – – – 850,000
130,000 – – – 130,000
2014
Directors
Dr David Carland
Mr Richard Laufmann
Mr Alister Maitland
Mr Steven Olsen
Mr Mark Parry
Executives
Ms Rachel Rees
Mr Patrick Say
Former
Mr Paul Chapman
Ms Amber Rivamonte
Ms Janet Mason
Held at
1 July 2012
or date Received
appointed as on Exercise Held at
Note a director Purchases of options Sales 30 June 2013
(vii) 3,644,833 – – – 3,644,833
(ii) 3,541,666 – – – 3,541,666
(iii) 202,000 – – – 202,000
– – – – –
(iv) 6,027,000 – – – 6,027,000
850,000 – – – 850,000
130,000 – – – 130,000
(vi) 138,667 – – – 138,667
2013
Directors
Mr Paul Chapman
Mr Richard Laufmann
Mr Alister Maitland
Mr Mark Parry
Mr Steven Olsen
Executives
Ms Amber Rivamonte
Ms Janet Mason
Mr Patrick Say
Shares that were held by related parties of KMP are disclosed below.
(i) 268,330 held indirectly through Program Images Pty Ltd as trustee for The Carland Super Fund.
(ii) 3,500,000 held indirectly through Natalie Laufmann. 41,666 held by Laufmann Long Term Investments Pty Ltd.
(iii) 202,000 held indirectly through the Alister Maitland Superannuation Fund.
(iv) 5,752,000 held indirectly through S&S Olsen Pty Ltd as trustee for the Olsen Family Trust. 275,000 held through
SSO Super Pty Ltd as Trustee for the SSO Super fund.
(v) 24,727 held indirectly through Cascade Trading Trust.
(vi) 16,667 held indirectly through Say Family Super Fund.
(vii) 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.
Page 58
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
28. RELATED PARTIES (CONTINUED)
28.2 Director related entities
A number of KMP hold positions in other entities that result in them having joint control over the financial
or operating policies of those entities.
A number of these entities transacted with the Group during the year. The terms and conditions of the transactions
with KMP and their related parties were no more favourable than those available, or which might reasonably be
expected to be available, on similar transactions to non-KMP related entities on an arm’s length basis.
The aggregate value of transactions and outstanding balances relating to KMP and entities over which they
have joint control were as follows:
Transaction values Balance outstanding
year ended 30 June as at 30 June
Transaction Note 2014 2013 2014 2013
Key management person
Dr David Carland Corporate Advisory (i) 240,000 – 40,000 –
Mr Steven Olsen Corporate Advisory (ii) 450,000 – 45,000 –
Total and current liabilities 85,000 –
(i)
(ii)
The Group used the advisory services of BurnVoir Corporate Finance Limited in relation to funding options for the project,
a company jointly controlled by Dr David Carland. The contract terms are based on normal market rates for this type of service
and amounts are payable under normal payment terms. The transactions represent the period from Dr Carland’s appointment as
Director on 12 December 2013 to the end of the financial year.
The Group used the advisory services of Cedar River Services Pty Ltd in relation to business development, investor relations,
geological services and company secretarial services, a company jointly controlled by Mr Steven Olsen. The contract terms are
based on normal market rates for these types of services and amounts are payable under normal payment terms.
29. GROUP ENTITIES
Country of
Incorporation 2014 2013
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%
30. PARENT ENTITY DISCLOSURES
As at, and throughout, the period ending 30 June 2014 the parent company of the Group was Rex Minerals Ltd.
2014 2013
$000 $000
Result of the parent entity
Profit/(loss) for the period 531 (1,179)
Other comprehensive income – –
Total comprehensive income/(loss) for the period 531 (1,179)
Financial position of the parent entity at year end
Current assets 22,154 28,170
Total assets 193,637 180,817
Current liabilities 1,503 1,778
Total liabilities 2,256 1,847
Total equity of the parent entity comprising of:
Share capital 189,566 177,686
Reserves 3,912 1,421
Retained earnings (2,097) (137)
Total equity 191,381 178,970
Parent entity contingencies
The Parent entity’s contingencies are the same as the Group’s contingencies as detailed in Note 27.
Page 59
REX MINERALS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
31. SUBSEQUENT EVENTS
On 8 August 2014, the Company announced that Mr Mark Parry resigned as Managing Director of the Company,
effective 8 August 2014, and that Dr David Carland would assume the role of Executive Chairman until a
permanent replacement is found.
On 29 July 2014, Rex announced that it had received a formal offer of mineral tenements (“Mining Lease”)
from the South Australian Government for its Hillside Copper Project. Subsequent to this on 16 September 2014,
Rex announced that it had formally accepted the terms and conditions associated with the Mining Lease and that
the Government had granted the Mining Lease for the Hillside Project to Rex.
In addition to the above, 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.
32. AUDITORS’ REMUNERATION
2014 2013
$000 $000
KPMG Australia
Audit services 48 44
Other services 144 89
During the current year KPMG, the Company’s auditor, provided non-audit services to the Group in the form of
review of the Group’s research and development claim and assistance with customs matters.
The review of the research and development claim assisted the Company with the submission of a $6.1m claim,
which was received during the financial year (2013:$3.1m).
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)
(ii)
giving a true and fair view of the Group’s financial position as at 30 June 2014 and of its performance
for the financial year ended on that date; and
complying with Australian Accounting Standards (including the Australian Accounting Interpretations)
and the Corporations Regulations 2001; 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
3
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 2014.
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 29th day of September 2014
Signed in accordance with a resolution of the Directors:
David Carland
Executive Chairman
Page 60
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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 2014 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
Scott Fleming
Partner
Adelaide
29 September 2014
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 61
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 2014, and consolidated statement
of profit or loss and other comprehensive income, consolidated statement of changes in equity and
consolidated statement of cash flows for the year ended on that date, notes 1 to 32 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 62
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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 2014
and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Report on the remuneration report
We have audited the Remuneration Report included in section 15 of the directors’ report for the year
ended 30 June 2014. 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 2014,
complies with Section 300A of the Corporations Act 2001.
KPMG
Scott Fleming
Partner
Adelaide
29 September 2014
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 63
REX MINERALS LTD
ADDITIONAL SHAREHOLDER INFORMATION
Additional information required by the ASX Limited Listing Rules and not disclosed elsewhere in this report is set out below.
a) Substantial shareholders lodged with the Company as at 31 August 2014
Name of Ordinary Shareholder Number of Shares % of Shares Held
Acorn Capital Ltd 20,380,807 9.24%
J P Morgan Chase 17,299,247 7.84%
Grand South Development Ltd 11,785,777 5.34%
b) Listing of 20 largest shareholders as at 31 August 2014
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 38,927,870 17.65%
Grand South Development Limited 11,785,777 5.34%
HSBC Custody Nominees Australia 10,554,106 4.79%
National Nominees Ltd 8,178,250 3.71%
S & S Olsen Pty Ltd 5,752,000 2.61%
Greenstone Property Pty Ltd Titeline Property A/C 5,344,531 2.42%
Natalie Laufmann 3,500,000 1.59%
Citicorp Nominees Pty Ltd 2,889,233 1.31%
Greenstone Property Pty Ltd 2,825,000 1.28%
HSBC Custody Nominees NT-Commonwealth
(Australia) Ltd Super Corp A/C 2,345,588 1.06%
UBS Wealth Management
Australia Nominees Pty Ltd 2,195,136 1.00%
HSBC Custody Nominees Australia 2,165,876 0.98%
Ms Fei Chen 2,106,200 0.96%
Stone Poneys Nominees Pty Ltd Chapman S/F A/C 1,876,166 0.85%
Ramco Investments Pty Ltd Ramcop Family A/C 1,836,000 0.83%
Citicorp Nominees Pty Ltd Colonial First State Inv A/C 1,835,420 0.83%
Stone Poneys Nominees Pty Ltd Chapman Inv Fund A/C 1,768,667 0.80%
James Gardiner 1,300,000 0.59%
Mr Tony Akara + Ms Sandra Poore Tony Karas Private S/F A/C 1,000,000 0.45%
Mladen Marusic 1,000,000 0.45%
109,185,820 49.51%
c) Distribution of shareholders as at 31 August 2014
% of
Range Total Holders Units Issued Capital
1-1,000 760 380,931 0.17%
1,001-5,000 1,800 5,207,746 2.36%
5,001-10,000 920 7,390,954 3.35%
10,001-100,000 1,533 49,697,963 22.54%
100,001 - over 219 157,842,190 71.58%
5,232 220,519,784 100.00%
Total
d) Number of shareholders holding less than a marketable parcel as at 31 August 2014
1,072
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 64
Rex Minerals Ltd A N N U A L R E P O R T 2 0 1 4
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CONTACT
A Level 19, 11 Waymouth Street
Adelaide South Australia 5000
P PO Box 3435
Rundle Mall South Australia 5000
T +61 (0) 8 299 7100
F +61 (0) 8 299 7199
E rex@rexminerals.com.au
W www.rexminerals.com.au