Rex Minerals Limited Annual Report 2016

Plain-text annual report

2 0 1 6 A N N U A L R E P O R T 3 2 0 5 6 4 9 2 2 1 N 1 B A MOVING FORWARDS HILLSIDE: SOUTH AUSTRALIA 2016 ANNUAL REPORT CORPORATE DIRECTORY DIRECTORS Dr David Carland (Non-Executive Chairman) Mr Richard Laufmann (CEO and Managing Director) Mr Alister Maitland (Non-Executive Director) Mr Mitchell H Hooke AM (Non-Executive Director) COMPANY SECRETARY Ms Kay Donehue 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 8299 7100 Facsimile: +61 (0) 8 8299 7199 Email: rex@rexminerals.com.au Website: www.rexminerals.com.au TION LOC OPERATION LOCATIONS 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 Australia 151 Pirie Street Adelaide, South Australia 5000 BANKERS ANZ Banking Group Limited Level 21, 11 Waymouth Street Adelaide, South Australia 5000 Ord Minnett Limited Level 23, 120 Collins Street Melbourne, Victoria 3000 LEGAL ADVISORS Baker & McKenzie Level 19, 181 William Sreet Melbourne, Victoria 3000 A U S T R A L I A SOUTH AUSTRALIA SOUTH AUSTRALIA Wandearah Cowell Pine Point Adelaide 2016 ANNUAL REPORT TABLE OF CONTENTS LETTER FROM THE CHAIRMAN AND THE CHIEF EXECUTIVE OFFICER REVIEW OF OPERATIONS TENEMENT SCHEDULE DIRECTORS’ REPORT CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 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 2 3-7 7 8-18 19 20 21 22 23-39 40 41 42-43 44 PAGE 1 LETTER FROM THE CHAIRMAN AND THE CHIEF EXECUTIVE OFFICER For the year ended 30 June 2016 Dear Fellow Shareholder The year in review held few surprises for the resources sector, and commodity prices have continued to drift in line with our expectations. The much discussed supply gap for copper remains on the horizon and is becoming more evident as each year passes. While we do not see many indicators of a return to strong growth in economic demand, copper supply depletion continues which lends credibility to the view of analysts that commodity prices may have bottomed. The cold hard reality is that the ore bodies of existing mines are being exhausted, copper head grades are declining and the barriers to entry for new development have become – globally – extremely high. These factors lead us to conclude that, while price correction may take some time, when it arrives (as it will) it will be volatile around a longer-term trend recovery. Market volatility remains a concern for the global minerals industry and for Rex Minerals Ltd (Rex or the Company). Timing of the recovery in commodity prices will be a material factor in the timing and the structure of the ﬁnancing of the Hillside Project. This uncertainty in the timing of a recovery reinforces our view that completing the work to ensure the Hillside Project is “shovel ready” is crucial so that we are able to capitalise on the recovery when it comes. To recap, the Extended Feasibility Study has positioned the Hillside Project in South Australia for a phased development of the Resource, with a markedly reduced start-up capital requirement. Combined with a reduced physical and existential community footprint, Hillside is now a more economically viable and attractive project, with healthier prospects of optimising shareholders’ return on equity. We are continuing to work with the relevant South Australian Government Department and the Hillside community to demonstrate that a carefully reﬁned and ﬁt-for-purpose Project is consistent with the existing Mining Lease. Now, with a smaller development footprint, the Hillside Project should enable the Company to tailor an efﬁcient ﬁnancing package, one that is to the advantage of Rex and its shareholders, that can draw on a broad range of options. Put simply, and with the longer term in mind, the greater the share of equity that we retain for shareholders, the greater the value that will be created and retained for shareholders. Rex remains debt free, has not given up any of its future offtake and does not have any commercial royalties attached to the Project. All of the Hillside Resource remains with the Company. The Hillside Project, once developed, will create substantial beneﬁts for shareholders, the local community and the South Australian economy. To ensure this happens, Rex is committed to maintaining its community engagement program, to working directly with both the local community on the Yorke Peninsula and with the wider regional and state community to ensure that the Project strikes the right balance for all stakeholders. The Rex Board remains focused on delivering on its vision to position the Company for the development of the Hillside Project, with potential – for many decades of production – in the region. We continue to progress the development of the State Government required Program for Environment Protection and Rehabilitation, and we have begun work into investigating further enhancements to the Project. Our small, but highly-experienced and skilled team, is focused on maximising the value of the Company’s assets. On behalf of the Board, we would like to thank our employees and contractors for their efforts and achievements during the year, and the continuing support of shareholders and other stakeholders. We would also like to acknowledge the support of our suppliers. Rex is 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 Hillside Project develops. Yours sincerely Dr David Carland Chairman Mr Richard Laufmann Chief Executive Ofﬁcer REX MINERALS LTD REVIEW OF OPERATIONS For the year ended 30 June 2016 Rex Minerals Ltd (Rex or the Company) released the following key appointments and announcements during the year: August 2015 August 2015 Mr Mitchell Hooke is appointed a Non-Executive Director. The South Australian Government’s Department of State Development (DSD) approves a 12-month extension for the submission of the Program for Environment Protection and Rehabilitation (PEPR) and the Social Management Plan (SMP) for Rex’s Hillside Project on the Yorke Peninsula. October 2015 Mr Gregory Hall is appointed Project Director, Hillside Project. November 2015 Ms Amber Rivamonte is appointed Chief Financial Ofﬁcer. November 2015 Ms Kay Donehue is appointed Company Secretary. December 2015 First options issued under the new Option Incentive Plan as part of a remuneration strategy, which aligns employees’ interests with shareholders, and helps retain cash funds within the Company. March 2016 June 2016 August 2016 Mr Phil Tyler is appointed by the Hillside Mine Community Voice (HMCV) to the position of Chair of the HMCV community representative group. Rex provides additional information to the DSD regarding the revised Hillside Project, based on the Extended Feasibility Study completed in mid-2015. The DSD approves a further 12-month extension for the submission of the PEPR and the SMP for the Hillside Project, to allow adequate time for engagement with all stakeholders. 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 (Figure 1). Copper-gold mineralisation was ﬁrst discovered at the Hillside Project by Rex in 2008. Targeting of the Project was based on the presence of a small historical copper mine, a broad magnetic feature and subtle gravity anomalies in the area. The Project was also the ﬁrst test of a larger theory that iron-oxide-copper-gold style mineralisation could exist underneath the thin cover rocks on the Yorke Peninsula. Figure 1: Location of the Hillside Project and Rex’s exploration licences on the Yorke Peninsula. PAGE 3 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2016 HILLSIDE PROJECT, YORKE PENINSULA, SOUTH AUSTRALIA (CONTINUED) Following the discovery of the Hillside deposit in 2008, the Company raised the funds required to drill out the Hillside deposit to a depth of approximately 600 metres, and this drilling and associated technical work is the basis for the current Mineral Resource and Ore Reserve for the Hillside Project. The latest Mineral Resource at Hillside was the starting point for the Hillside Extended Feasibility Study (EFS). The Mineral Resource, Ore Reserve and EFS assumptions announced by the Company on 25 May 2015 continue to apply and have not materially changed. The results of the EFS involve a smaller-scale, but very similar, open pit operational project focusing on copper-gold only, with the ability to expand or extend the operation at a later stage, depending on commodity pricing and overall project economics. Key aspects of the Hillside Project, based on ﬁndings from the EFS, include: (cid:129) A A$480M development, including an open pit mine and processing plant; (cid:129) An initial 13+ year mine life, based on the Ore Reserve (proved and probable) of 82M tonnes; (cid:129) An annual processing rate of six million tonnes to produce approximately 35,000 tonnes of copper and 24,000 ounces of gold; and (cid:129) A construction workforce of close to 500-550, reverting to approximately 500 when in operation. Rex’s Hillside Project has a number of key advantages, aside from sovereign risk, compared to other copper development opportunities around the world. These include: (cid:129) Infrastructure – The Hillside Project is connected by a major highway (within a two-hour drive) to the city of Adelaide (population 1.2 million); (cid:129) People and equipment – The Hillside Project has the potential to draw most of the required skilled labour and equipment from the surrounding country towns, close to the Project, as well as from Adelaide; (cid:129) Power and water – The area is connected to South Australia’s main power grid and water network; (cid:129) Nearby town – The Hillside Project is located near to the town and port of Ardrossan, which hosts an open-cut dolomite mine that ships its product through the port. The Project also has ready access to the Port of Adelaide by road, a distance of approximately 160 kilometres; and (cid:129) Freehold land – Rex has purchased freehold land, which covers all of the known and potential copper mineralisation of the Hillside Project. Rex holds an approved Mining Lease (ML) for the Hillside Project, obtained in late 2014 from the Department of State Development (DSD). In June 2016, Rex provided the DSD with additional information regarding the revised Hillside Project to show that the Project is consistent with the ML and lease conditions already granted. While many aspects of the Hillside Project have not changed compared to the original ML proposal, including the overall method of operation, some areas have changed. These include: (cid:129) A reduced area of direct operations; (cid:129) An operation that will now be less than 50% of the original mining rate, with less than half the previous mill throughput; (cid:129) A focus on copper-gold extraction only; (cid:129) Lower water and power use; and (cid:129) No off-site infrastructure impacts, apart from the approved road diversions, power line and water pipeline. A N N U A L R E P O R T 2 0 1 6 PAGE 4 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2016 > HILLSIDE PROJECT – REGULATORY APPROVALS AND COMMUNITY In August 2015, the DSD approved a 12-month extension for the submission of the Program for Environment Protection and Rehabilitation (PEPR) and the Social Management Plan (SMP) for the Hillside Project. Rex has utilised this extension period to engage further with the DSD, in relation to additional information required regarding the revised Hillside Project outlined through the EFS process, as well ongoing engagement with the local and regional community, and other stakeholders. In line with its approved Community Engagement Plan (CEP), the Company continued its direct engagement with the community through one-on-one and group meetings, with landowners, community groups and local and State Government members. In September 2015, Rex presented at a public forum on the Yorke Peninsula regarding the revised and smaller start-up Hillside Project. The Company highlighted the reduced local, physical and existential community footprint of the revised layout, which sits inside the original design of the larger Project, and detailed how this compares and ﬁts within the original ML and lease conditions. The CEP is structured to be consistent with guidelines determined by the DSD. The plan incorporates actions and activities that the Company will engage in with the community through the planning, construction, commissioning, operation and rehabilitation phases. The plan also sets out the various tools and types of engagement with the local community, including signiﬁcant engagement through the Hillside Mine Community Voice (HMCV). The HMCV includes representatives from the surrounding landowners, progress associations, businesses, the Yorke Peninsula Council, the Yorke Peninsula Land Owners Group (YPLOG), Indigenous communities and other local and regional groups, in addition to Rex representation. The HMCV was established in 2014, in response to the approval of the Hillside Project ML, and it has taken on similar tasks to the previously convened Community Consultative Group, which was established in 2011 and remained engaged during the exploration process, larger-scale feasibility studies, the ML proposal submission and the granting of the ML. During March this year, a new independent Chair of the HMCV, Mr Phil Tyler, was selected and engaged by the HMCV. Rex acknowledges and thanks Ms Kate Van Schaik for taking on the role as Acting Chair from late 2014 and appreciates her dedication and invaluable contribution to the development of the HMCV. Ms Van Schaik will continue her involvement with the HMCV through participation in working groups. In June 2016, the Company submitted to the DSD additional detailed information regarding its revised Hillside Project in the form of a full “Description of Operations” document, along with updated independent impact modelling reports and revised impact assessment documents. This information is used by the DSD to conﬁrm that the revised Project is consistent with the existing ML and lease conditions. After an initial adequacy check, the main documents will be released publicly, with all documents released after they are assessed by the DSD. Rex always intended that these documents would be publicly released. An important message that Rex has been communicating through the HMCV and other meetings is that the ML conditions, as set down by the South Australian Government in its approval of the ML, still stand, even with the revised Project. These conditions are there to ensure that a future mining operation will have minimal impact on the surrounding area and will not adversely impact on the health of employees or surrounding community. The ML and lease conditions are based on the possible larger extent of mining operations, the process and outcome of community consultation, the potential impacts both beneﬁcial and adverse, and the control/remediation measures governing mining and processing operations across the life of the mine to each of the speciﬁc phases of construction, operations, rehabilitation and post mine closure. Rex has continued to prepare information for the PEPR and the SMP, based around the revised Hillside Project. The PEPR and SMP must be submitted and approved by the DSD before operations can commence. The Company is engaged with a number of local community working groups, established within the HMCV, to obtain feedback and community input into the PEPR process. Seven working groups are currently active and have been established to inform and provide local input and expertise into key areas of the PEPR and SMP. These working groups have started involving other community members outside the HMCV, with the purpose of enabling cross-pollination of ideas. Rex has commenced providing background information and detail, where required by and within each group, and group leaders report through to the HMCV. PAGE 5 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2016 > HILLSIDE PROJECT – REGULATORY APPROVALS AND COMMUNITY (CONTINUED) The identiﬁed socio-economic beneﬁts of the Hillside Project will be in the contribution to the region and the state’s broader economic development, founded in increased direct and indirect employment opportunities, related growth in physical and social infrastructure, in business enterprises providing goods and services, stimulus for population growth, and diversiﬁcation of its current agricultural and tourism industries. To date, there have been over 2,000 expressions of interest (EOI's) for employment at Hillside with over 500 of those EOI’s being locally-based people. There are many people already living on the Yorke Peninsula who have substantial experience and skills in the resources industry, and living in the region will be an attraction to future employees. Rex is committed to working with the local Indigenous community, to mutual beneﬁt, on a platform of respecting Indigenous culture, heritage, and special connections to lands and waters. Based on heritage surveys undertaken, evidence of Indigenous cultural heritage is wide-spread throughout the region and within the vicinity of the proposed Hillside Project area. A Native Title Claim has been lodged covering the entire Yorke Peninsula. However, no Native Title agreements are required in relation to the ML, Extractive Mineral Lease or Miscellaneous Purpose Licence. > HILLSIDE PROJECT – ENVIRONMENT AND REHABILITATION The Company completed a substantial drilling program during 2011 and 2012 over its freehold land, and full rehabilitation of this impacted area was completed in 2013. Rex now has two years of compiled broad-acre cropping data from its lease farmer, which demonstrate the successful rehabilitation of the land, and Rex will be making details of this data available to the DSD and the local community in the near term. Hillside Site 2011 Extensive exploration drilling activities. Hillside Site 2014 Under crop. A N N U A L R E P O R T 2 0 1 6 PAGE 6 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2016 > HILLSIDE PROJECT – ENVIRONMENT AND REHABILITATION (CONTINUED) Rex has been working with Greening Australia on its crown land native revegetation program adjacent to the Yorke Peninsula coast and to the Rex ML. Greening Australia is an environmental not-for-proﬁt organisation, engaged by the Australian Government, specialising in conservation and restoration of natural landscapes. Rex has provided manpower and equipment to support this successful revegetation project and continues to assist with monitoring and future pest control along the coast line. The “Walk the Yorke” trail, a walking and leisure trail through Rex’s Hillside property and extending along the scenic cliff top sections of adjacent coastal land, has been completed. Direct sowing of native seed by Greening Australia. From Left to Right: Rex’s Sam Germein, Greening Australia’s Mick Durant and Yorke Peninsula Council operations manager Stephen Goldsworthy, along with members of the Greening Australia planting team, worked together to plant 2,000 trees and shrubs along the coast at Pine Point. TENEMENT SCHEDULE As at 30 June 2016 Tenement Location Lease Status Area Type Current Area Grant Date EL5056 EL5055 EL5683 EL5508 EL5133 EL4779 EL5070 ML6438 EML6439 MPL146 Moonta South Granted Moonta South Granted Moonta South Granted Moonta South Granted Wandearah Granted Wandearah Granted Cowell Hillside Hillside Hillside Granted Granted Granted Granted km² km² km² km² km² km² km² Ha Ha Ha 416 1,262 21 151 96 41 85 02/08/2012 02/08/2012 10/06/2015 05/11/2014 01/08/2012 13/10/2011 24/10/2012 2,998 16/09/2014 225 94 16/09/2014 16/09/2014 PAGE 7 2016 ANNUAL REPORT DIRECTORS’ REPORT For the year ended 30 June 2016 A N N U A L R E P O R T 2 0 1 6 PAGE 8 REX MINERALS LTD DIRECTORS’ REPORT For the year ended 30 June 2016 The Directors present their report together with the consolidated ﬁnancial statements of the Group comprising of Rex Minerals Ltd (the Company) and its subsidiaries (the Group or Rex), for the ﬁnancial year ended 30 June 2016 and the auditors’ report thereon. DIRECTORS 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 Chairman Independent Non- Executive Director (PhD (Econometrics), MEc, BEc (Hons), MAICD) Mr Richard Laufmann Chief Executive Ofﬁcer and Managing Director (B.Eng (Mining), MAusIMM, MAICD) Mr Alister Maitland Independent Non- Executive Director (B.Com, FAICD, FAIM, SF Fin) Experience, special responsibilities and other directorships Dr David Carland has been a Director since 12 December 2013 and was appointed Chairman of Rex Minerals on 1 January 2014. Dr Carland also serves as a member of the Company’s Audit Committee and its Remuneration Committee. Dr Carland has over 30 years of investment banking and commercial experience in both the private sector and government. He is the Executive Director of Australian Resources Development Limited, a company focused on the provision of specialised advice and assistance on the structuring, ﬁnancing and developing of energy and resource projects. Dr Carland was 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. 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. He was previously a non-executive director of Indophil Resources NL. Dr Carland has 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. Mr Richard Laufmann is a founding Director of Rex Minerals and was formerly a non-executive director (since 2007). He was appointed Chief Executive Ofﬁcer and Managing Director (CEO) of the Company on 23 April 2015. Mr Laufmann is a mining engineer with broad experience in the resources sector, both corporate and operational. Mr Laufmann’s most recent engagement was for seven years as chief executive ofﬁcer of Indophil Resources NL (until January 2015, an ASX listed company with a large copper-gold Joint Venture in the Philippines) and prior to that, ﬁve years as chief executive ofﬁcer of Ballarat Goldﬁelds NL. Mr Laufmann also previously led WMC Resources Limited’s gold business as general manager – operations and has extensive operational experience. Mr Alister Maitland was appointed a Director of Rex Minerals on 16 September 2011. He is Chairman of the Audit Committee and a member of the Remuneration Committee. Mr Maitland is a former executive director of ANZ Banking Group with a background in international ﬁnance. His 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 country’s operations. He has been a non-executive director of a number of publicly listed ASX companies and Government bodies covering a wide range of activities including property services, mining, banking, asset management and health. He is a former chairman of Ballarat Goldﬁelds NL, director of Lihir Gold Ltd and Malayan Banking Berhad (Maybank). PAGE 9 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2016 DIRECTORS (CONTINUED) Name, qualiﬁcations and independence status Mr Mitchell Hooke AM Independent Non- Executive Director (B.Rur.Sc., UNE, MAIA, MAICD) Experience, special responsibilities and other directorships Mr Mitchell H Hooke was appointed a Director of Rex Minerals on 4 August 2015. He is Chairman of the Remuneration Committee and a member of the Audit Committee. Mr Hooke is globally-recognised for his in-depth knowledge and strategic leadership in Australian and global public policy advocacy, as well as delivering on practical operational issues in the development of economic, social and environmental policy and practice across the minerals, agriculture, and food and grocery industries in Australia and internationally. Mr Hooke was the chief executive ofﬁcer of the Minerals Council of Australia from mid- 2002 until the end of 2013. He is the Chairman of Partners in Performance International, and with a long and strong rural background, he is an Independent Director of Grain Producers Australia Limited, the national not-for-proﬁt body representing Australia’s broadacre grain, pulse and oilseed producers. He is also a Non-Executive Director of coal- based technology company GTL Energy Ltd, and was formerly a non-executive director of Elgin National Industries – a then private equity minerals resources engineering and construction management and mining equipment company based in the USA. Mr Hooke was awarded an Order of Australia (AM) in the 2016 Australia Day Honours. The citation recognises Mr Hooke for signiﬁcant services to business, particularly to the mining and minerals sector, to policy development, research and trade, and to the indigenous community. COMPANY SECRETARY Ms Kay Donehue (GradDipACG, GIA(Cert), AGIA, ICSA, AAICD, Chartered Secretary) Ms Donehue has over 25 years’ experience in the mining and banking industries, and most recently has focused extensively on company secretarial and governance roles in the mining sector. Ms Donehue is an Associate of the Governance Institute of Australia. She is also the Company Secretary of Indophil Resources NL and prior to that held a range of roles with Lafayette Mining Limited and WMC Resources Limited. DIRECTORS’ MEETINGS The numbers of meetings of the Company’s Board of Directors and of each Board Committee held during the ﬁnancial year and the numbers of meetings attended by each Director were: Director Board Meetings Audit Committee Meetings Dr David Carland Mr Richard Laufmann 1 Mr Alister Maitland Mr Mitchell Hooke 2 A 5 5 5 5 B 5 5 5 5 A – Number of meetings attended. A 2 2 2 2 B 2 2 2 2 Remuneration Committee Meetings 3 A – – – – B – – – – B – Number of meetings held during the year whilst the Director held ofﬁce. 1 Mr Laufmann is not a member of the Committees but attends meetings as appropriate by invitation. 2 Mr Hooke was appointed a Director on 4 August 2015. 3 Any matters for consideration by the Remuneration Committee were managed directly by the Board and accordingly, no separate meetings were held by the Remuneration Committee during the year. A N N U A L R E P O R T 2 0 1 6 PAGE 10 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2016 CORPORATE GOVERNANCE STATEMENT Rex has adopted comprehensive systems of control and accountability as the basis for the administration and compliance of effective and practical corporate governance. These systems are reviewed regularly and revised if appropriate. The Board is committed to administering the Company’s policies and procedures with transparency and integrity, pursuing the genuine spirit of good corporate governance practice. To the extent they are applicable, Rex has adopted the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations, 3rd Edition. As the Company’s activities transform in size, nature and scope, additional corporate governance structures will be considered by the Board and assessed as to their relevance. In accordance with the ASX Principles and Recommendations and the ASX Listing Rules, the Corporate Governance Statement and a more detailed discussion of the Company’s approach can be found on its website: www.rexminerals.com.au/company-proﬁle. This Corporate Governance Statement is dated 30 June 2016 and was approved by the Board on 9 September 2016. PRINCIPAL ACTIVITIES The principal activity of the Group during the 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 the Hillside Project. There were no signiﬁcant changes in the nature of the Group’s principal activities during the year. 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, our strategy will continue to focus on: 1. Sustainable cost reduction to preserve cash across the Company, leveraging on the restructured work contracts, salaries and incentives for staff and Directors; 2. Whilst focused on preserving cash, we are progressing our approvals and engaging with the community; and 3. Preparing the Hillside Project for prompt development and ﬁnancing. OPERATING AND FINANCIAL REVIEW The income statement shows a loss after tax of $5.1 million (2015: loss $8.7 million) for the year. The Group has no bank debt. As at 30 June 2016, the Group had a cash position of $3.2 million (2015: $7.9 million) and funds on deposit of $3.0 million (2015: $3.0 million). Operating activities resulted in a cash outﬂow for the year of $4.7 million (2015: cash outﬂow of $10.7 million). SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There were no signiﬁcant changes in the state of affairs of the Group during the ﬁnancial year. 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. EVENTS SINCE THE END OF THE FINANCIAL YEAR No matters or circumstances have arisen since 30 June 2016 that have signiﬁcantly affected the Group’s operations, results or state of affairs. LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS The Group is working towards the development of the Hillside Project and continued minerals exploration on the tenements owned or controlled by the Group. Other than that which is 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. PAGE 11 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2016 ENVIRONMENTAL REGULATION The Group’s operations are subject to environmental regulation in respect of mineral tenements relating to exploration activities on those tenements. No breaches of any environmental requirements were recorded during the ﬁnancial year. 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 Directors and Executive 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. NON-AUDIT SERVICES During the year, KPMG Australia (KPMG), the Group’s auditor, has performed certain other services in addition to the audit and review of the ﬁnancial statements. 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 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. 2016 2015 $ $ Audit and review of ﬁnancial statements 46,125 47,500 Other services: (cid:129) Review of research and development claim 20,000 103,800 (cid:129) Assistance with customs matters – 1,000 REMUNERATION REPORT – AUDITED The Directors present the Remuneration Report for the year ended 30 June 2016, outlining key aspects of the remuneration policy and framework and the remuneration awarded during the year. The Board considers that cash preservation is crucial in small exploration and development companies, and also recognises the importance of retaining Rex’s small but highly-experienced and skilled team. In current market conditions, ﬁnding the right balance is difﬁcult. To ﬁnd this balance, a review of all positions was undertaken with base salaries reduced by restructuring employees and contractors to part-time. Non-Executive Directors’ also agreed to a reduction in the cash component of their fees. In recognition of this reduction, Directors, employees and contractors were issued with options under the Option Incentive Plan approved at the 2015 Annual General Meeting. A N N U A L R E P O R T 2 0 1 6 PAGE 12 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2016 REMUNERATION REPORT – AUDITED (CONTINUED) Principles of compensation Remuneration is referred to as compensation throughout 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 packages may 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 charges related to employee beneﬁts including motor vehicles), as well as leave entitlements and employer contributions to superannuation funds. Compensation levels are reviewed annually through a process that considers individual, segment and overall performance of the Group. Market research provides analysis and guidance for compensation. Performance linked compensation Performance linked compensation may include 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 is an ‘at risk’ bonus provided in the form of cash, while the long-term incentive is provided as options over ordinary shares of the Company pursuant to the terms and conditions of the options. Short-term incentive The short-term incentive (STI) is a discretionary bonus provided in the form of cash. At the end of the ﬁnancial year, the Board assesses the performance of the Group and individuals. The Board determines and approves the cash incentive to be paid to the individuals. During the year, 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. The Board believes the LTI is an important component of a comprehensive remuneration strategy. It aligns participants’ interests with those of shareholders by linking their overall total rewards to the long-term success of the Company and helps retain cash funds within the Company. The Board was granted shareholder approval for an Option Incentive Plan at the Annual General Meeting on 30 November 2015. The plan is administered by the Board which has the discretion to determine eligibility to participate in the plan. Consequences of performance on shareholder wealth The variable components of the Group’s Executives’ remuneration (the STI and LTI) seek to encourage alignment of management performance and shareholders’ interests by linking remuneration to the performance of the Group. Whilst the Remuneration Committee takes into consideration the indices detailed below, the Board acknowledges that as an exploration and development company, the use of such indices does not fully reﬂect the Group’s performance. Net loss attributable to equity holders of the parent (million) 2016 $ 5.1 2015 $ 8.7 2014 $ 17.0 2013 $ 39.5 2012 $ 46.7 Closing share price at ﬁnancial year’s end 0.051 0.105 0.305 0.338 0.785 PAGE 13 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2016 REMUNERATION REPORT – AUDITED (CONTINUED) Service agreements In line with Group policy, the Group has entered into contracts with each of its Executive Ofﬁcers, and they are capable of termination on up to three months’ notice. The Group retains the right to terminate a contract immediately by making payment in lieu of notice. Executive Ofﬁcers 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 provides for no additional entitlement on termination in the event of removal for misconduct or gross negligence. The employment contract outlines the components of compensation paid to the Executive Ofﬁcers, but does not prescribe how compensation levels are modiﬁed year to year. Compensation levels are reviewed each year to meet the principles of the compensation policy. There is currently no STI plan offered to Executive Ofﬁcers. The Company has established an Option Incentive Plan, and the Board may invite Executive Ofﬁcers to participate under the terms and conditions of the plan as an LTI. Non-Executive Directors Total compensation for all Non-Executive Directors, last voted upon by shareholders at the 2011 Annual General Meeting, 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. The Chairman and Non-Executive Directors do not receive performance related remuneration. Directors’ fees cover all main Board activities and membership of Board committees. During the year, the Board agreed to a reduction in the cash component of their annual Non-Executive Director fees from $80,000 to $60,000 and in the case of the Chairman from $120,000 to $100,000. In consideration for this reduction of the cash component, shareholders approved the issue of one million options to each Non-Executive Director at the 2015 Annual General Meeting. Using the Black-Scholes option pricing model, the options are valued at 2.51 cents per option on grant date and are subject to vesting over three years. A N N U A L R E P O R T 2 0 1 6 PAGE 14 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2016 REMUNERATION REPORT – AUDITED (CONTINUED) Directors’ and Executive Ofﬁcers’ remuneration Details of the nature and amount of each major element of remuneration of Directors and Executive Ofﬁcers for 2016 are as follows: s u n o B f o n o i t r o p o r p n o i t a r e n u m e r e c n a m r o f r e p x i m n o i t a r e n u m e R d e t a l e r % e l b a i r a V I T L k s i r t a d e x i F l a t o T $ e l b a i r a V n o i t a r e n u m e r n o i t a r e n u m e r d e x i F d e s a b e r a h S s t n e m y a p m r e t - g n o L t s o P t n e m y o l p m e m r e t - t r o h S e u l a v r i a F ) d ( s n o i t p o $ e c i v r e s g n o L ) c ( e v a e l $ - r e p u S n o i t a u n n a $ h s a c I T S ) b ( s u n o b $ & y r a l a S ) a ( $ s e e f – – – – – – % 6 % 9 % 0 1 % 4 9 % 1 9 % 0 9 0 6 4 , 8 2 1 0 1 0 , 8 0 6 6 , 4 8 4 2 0 , 7 7 0 1 0 , 8 0 1 0 , 8 – – – 0 5 4 , 0 1 0 5 6 , 6 7 8 9 , 5 % 8 % 2 9 4 3 4 , 7 1 3 1 3 0 , 4 2 2 2 4 0 5 7 , 3 2 % 5 % 6 % 5 9 % 4 9 8 0 7 , 8 1 2 6 1 0 , 2 1 6 1 0 , 4 9 1 6 1 0 , 2 1 2 0 3 , 0 2 0 , 1 3 9 0 , 2 7 – 6 5 1 8 7 5 – 6 4 7 , 6 1 3 8 5 , 3 6 – – – – – – – 0 0 0 , 0 1 1 n a m r i a h C , d n a l r a C d i v a D r D s r o t c e r i D e v i t u c e x E - n o N 0 0 0 , 0 7 7 2 0 , 3 6 d n a l t i a M r e t s i l A r M 1 e k o o H l l e h c t i M r M r o t c e r i D g n i g a n a M 1 3 2 , 9 6 2 O E C , n n a m f u a L d r a h c i R r M 0 9 7 , 9 8 1 2 r o t c e r i D t c e j o r P , l l a H g e r G r M 0 0 0 , 2 8 1 8 4 0 , 4 8 8 3 O F C , e t n o m a v i R r e b m A s M : P M K n o i t a s n e p m o c l a t o T s e v i t u c e x E n o i t a r e n u m e r ’ s r e c ﬁ f O e v i t u c e x E d n a ’ s r o t c e r i D f o e l b a t e h t o t n o i t a l e r n i s e t o N h g u o r h t d e g a g n e s i d n a 5 1 0 2 r e b m e v o N 1 n o O F C d e t n o p p a i s a w e t n o m a v R s M i . 5 1 0 2 t s u g u A 4 n o r o t c e r i D e v i t u c e x E - n o N a i d e t n o p p a s a w e k o o H . 5 1 0 2 r e b o t c O 9 1 n o r o t c e r i D j t c e o r P i d e t n o p p a s a w l l a H r M r M . 1 . 2 . 3 . t n e m e e r g a y c n a t l u s n o c a l a u n n a d e u r c c a d n a y r a a s l h s a c s e d u c n l i t i s r e c ﬁ f O e v i t u c e x E r o F . s d r a d n a t S g n i t n u o c c A n a i l a r t s u A h t i w e c n a d r o c c a n i d e r u s a e m P M K y b i d e v e c e r s t n u o m a e d u c n l i s e e f d n a y r a a S l ) a ( . r a e y l i a c n a n ﬁ 6 1 0 2 e h t o t n o i t a e r l n i l e b a y a p r o d e u r c c a e r e w s e s u n o b h s a c I T S o N . s t n e m e l t i t n e e v a e l e h t f i h s a c n i i d a p e b l y n o l l i i w h c h w e v a e l i e c v r e s g n o l r o f l a u r c c a t e n e h t s t n e s e r p e R ) b ( ) c ( . n o l i t a s g e i l d e s a b - e t a t s h t i w e c n a d r o c c a n i s n o i t i d n o c i e c v r e s d e r i u q e r e h t s t e e m e e y o p m e l m o r f d o i r e p e h t r e v o l y n e v e d o i r e p g n i t r o p e r h c a e o t d e t a c o l l a d n a l e d o m g n c i r p i n o i t p o l s e o h c S - k c a B e h t l g n s u i t n a r g f o e t a d e h t t a l d e t a u c a c l s i s n o i t p o e h t f o e u a v l r i a f e h T ) d ( s n o i t p o e h t f o e u a v l r i a f f o n o i t r o p e h t s i d e s o c s d i l e u a v l e h T . e t a d g n i t s e v o t t n a r g . d o i r e p g n i t r o p e r h c a e n i e s n e p x e n a s a i d e s n g o c e r PAGE 15 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2016 REMUNERATION REPORT – AUDITED (CONTINUED) Directors’ and Executive Ofﬁcers’ remuneration (Continued) Details of the nature and amount of each major element of remuneration of Directors and Executive Ofﬁcers for 2015 are as follows: s u n o B f o n o i t r o p o r p n o i t a r e n u m e r e c n a m r o f r e p d e t a l e r % d e x i F l a t o T $ e u l a v r i a F s n o i t p o $ - n i m r e T n o i t a s t ﬁ e n e b $ g n o L e c i v r e s ) c ( e v a e l $ - r e p u S n o i t a u n n a $ - n o N y r a t e n o m s t ﬁ e n e b $ ) b ( I T S h s a c $ s u n o b - r e n u m e R x i m n o i t a e l b a i r a V n o i t a r e n u m e r d e s a b e r a h S s t n e m y a p - g n o L m r e t t s o P t n e m y o l p m e m r e t - t r o h S n o i t a r e n u m e r d e x i F ) a ( y r a l a S $ s e e f & – – – – – – – % 0 0 1 0 0 4 1 3 1 , % 0 0 1 0 0 6 7 8 , – – % 0 0 1 6 2 5 1 3 1 , – % 0 0 1 0 0 6 7 8 , % 0 0 1 7 8 3 4 9 2 , % 0 0 1 4 7 8 2 9 3 , % 0 0 1 7 1 4 1 8 2 , 4 0 8 6 0 4 , , 1 – – – – – – – – – – – – 0 0 4 , 1 1 0 0 6 , 7 8 2 3 , 2 7 7 8 , 0 1 – 0 0 6 , 7 2 9 7 , 7 1 9 6 , 4 2 – – – – – 6 5 1 , 6 3 3 ) 4 6 8 , 6 2 ( 0 0 0 , 5 3 1 6 2 , 4 1 2 ) 5 6 3 , 7 ( 7 1 9 , 8 1 7 2 5 0 6 8 7 1 4 , 0 5 5 ) 9 0 1 , 4 2 ( 5 8 0 , 6 1 1 7 8 3 , 1 – – – – – – – – 0 0 0 , 0 2 1 0 0 0 , 0 8 n a m r i a h C , d n a l r a C d i v a D r D s r o t c e r i D e v i t u c e x E - n o N d n a l t i a M r e t s i l A r M r o t c e r i D g n i g a n a M 1 2 3 , 8 1 1 1 O E C , n n a m f u a L d r a h c i R r M 0 0 0 , 0 8 2 r o t c e r i D e v i t u c e x E , n e s l O n e v e t S r M 4 0 9 , 1 6 2 3 t s i g o l o e G f e i h C , y a S k c i r t a P r M 5 5 0 , 8 4 4 4 7 , 4 5 4 2 0 , 3 6 7 : P M K n o i t a s n e p m o c l a t o T 4 O E C , y r r a P k r a M r M 5 O F C , s e e R l e h c a R s M s e v i t u c e x E r e m r o F n o i t a r e n u m e r ’ s r e c ﬁ f O e v i t u c e x E d n a ’ s r o t c e r i D f o e l b a t e h t o t n o i t a l e r n i s e t o N h t i w e n i l n i 0 2 8 , 4 6 $ f o s e e f i d e v e c e r d n a r o t c e r i D e v i t u c e x E - n o N a s a w n n a m f u a L r M . 5 1 0 2 l i r p A 3 2 n o O E C s a t n e m t n o p p a i i s h l i t n u s r o t c e r i D e v i t u c e x E - n o N r e h t o , d r a o B y r o s v d A e h t i f o , d r a o B y r o s v d A e h t i f o n o l i t u o s s d i d n a y d u t S y t i l i i b s a e F d e d n e t x E e h t f o n o l i t e p m o c . 5 1 0 2 e n u J 0 3 e v i t c e f f e r o t c e r i D a s a d e n g s e r i n e s O l n o l i t u o s s d i d n a y d u t S y t i l i i b s a e F d e d n e t x E e h t f o n o l i t e p m o c n O r M n O . 5 1 0 2 e n u J 0 3 e v i t c e f f e e v i t u c e x E n a d e r e d s n o c i r e g n o l o n s i y a S r M . 4 1 0 2 t s u g u A 1 3 d e h s n ﬁ i d n a t n a d n u d e r e d a m s a w s e e R s M . 4 1 0 2 t s u g u A 8 e v i t c e f f e y n a p m o C e h t d e t r a p e d y r r a P r M . 1 . 2 . 3 . 4 . 5 d n a y r a a s l h s a c s e d u c n l i t i s r e c ﬁ f O e v i t u c e x E r o F . s d r a d n a t S g n i t n u o c c A n a i l a r t s u A h t i w e c n a d r o c c a n i d e r u s a e m P M K y b i d e v e c e r s t n u o m a e d u c n l i s e e f d n a y r a a S l ) a ( d e s a b - e t a t s h t i w e c n a d r o c c a n i s n o i t i d n o c i e c v r e s d e r i u q e r e h t s t e e m e e y o p m e l e h t f i h s a c n i i d a p e b l y n o l l i i w h c h w e v a e l i e c v r e s g n o l r o f l a u r c c a t e n e h t s t n e s e r p e R . r a e y l i a c n a n ﬁ 5 1 0 2 e h t o t n o i t a e r l n i l e b a y a p r o d e u r c c a e r e w s e s u n o b o N . s t n e m e l t i t n e e v a e l l a u n n a d e u r c c a ) b ( ) c ( . n o l i t a s g e i l A N N U A L R E P O R T 2 0 1 6 PAGE 16 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2016 REMUNERATION REPORT – AUDITED (CONTINUED) Shares under option All options refer to unquoted options over ordinary shares of Rex Minerals Ltd, which are exercisable on a one-for-one basis under the terms and conditions of the Option Incentive Plan. The options do not entitle the holder to participate in any share issue of the Company. All options expire on the earlier of their expiry date or in the case of termination as deﬁned in the terms and conditions of the plan. No options have been granted since the end of the ﬁnancial year. At the date of this report, there were 16.8 million unquoted options over ordinary shares of the Company. 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. Reconciliation of options and ordinary shares held by Key Management Personnel (KMP) Options During the reporting period, a total of nine million options were granted as compensation to KMP as detailed below. Grant date 22 December 2015 Fair value per option at grant date 2.51 cents Exercise price per option 6.3 cents Premium to closing share price prior to grant date 12.5% Expiry date 30 November 2019 Options will vest in three equal tranches as follows: (cid:129) Tranche 1 – one third vest on 30 November 2016, during the ﬁnancial year ending 30 June 2017; (cid:129) Tranche 2 – one third vest on 30 November 2017, during the ﬁnancial year ending 30 June 2018; (cid:129) Tranche 3 – one third vest on 30 November 2018, during the ﬁnancial year ending 30 June 2019. All options expire on the earlier of their expiry date or in the case of termination as deﬁned in the Option Incentive Plan. On termination, in the event that a KMP is deemed to be a good leaver, then all unvested options will immediately vest. In the event that a KMP is deemed to be a bad leaver, the options (whether vested or unvested) expire shortly thereafter. The table below shows a reconciliation of unquoted options over ordinary shares in the Company held, directly, indirectly or beneﬁcially by each KMP including their related parties, during the ﬁnancial year. No options have vested, lapsed, were forfeited or exercised during the year. Name Held at 1 July 2015 or date appointed Number of options granted Number and % of options vested Held at 30 June 2016 Fair value of options granted Fair value of options expensed in 2016 Maximum fair value of options yet to vest or be expensed Dr David Carland Mr Alister Maitland Mr Mitchell Hooke Mr Richard Laufmann Mr Greg Hall Ms Amber Rivamonte – – – – – – 1,000,000 1,000,000 1,000,000 3,000,000 1,500,000 1,500,000 – – – – – – 1,000,000 $25,100 $8,010 $17,090 1,000,000 $25,100 $8,010 $17,090 1,000,000 $25,100 $8,010 $17,090 3,000,000 $75,300 $24,031 $51,269 1,500,000 $37,650 $12,016 $25,634 1,500,000 $37,650 $12,016 $25,634 The fair value of the options is calculated at the date of grant, using the Black-Scholes option pricing model and allocated to each reporting period evenly over the period from grant to vesting date. PAGE 17 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2016 REMUNERATION REPORT – AUDITED (CONTINUED) Shareholdings The table below shows a reconciliation of ordinary shares in the Company held, directly, indirectly or beneﬁcially by each KMP including their related parties, during the ﬁnancial year. Name Held at 1 July 2015 or date appointed Received on exercise of option Purchased or sold during the year Held at 30 June 2016 Dr David Carland Mr Alister Maitland Mr Mitchell Hooke 268,330 202,000 105,143 Mr Richard Laufmann 3,541,666 Mr Greg Hall – Ms Amber Rivamonte 850,000 – – – – – – – – – – – – 268,330 202,000 105,143 3,541,666 – 850,000 At the date of this report, there has been no movement in shares in the Company held, directly, indirectly or beneﬁcially by each KMP including their related parties, since the end of ﬁnancial year. Other transactions with Key Management Personnel (KMP) A number of KMP hold positions in other companies that result in them having control or signiﬁcant inﬂuence over those companies. During the year, a KMP related company transacted with the Group. The terms and conditions of these transactions were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-KMP related companies on an arm’s length basis. Rounding The Group is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 dated 24 March 2016 and in accordance with that Financial Instrument, amounts in the consolidated ﬁnancial statements and Directors’ Report have been rounded off to the nearest thousand dollars, unless otherwise stated. All currencies are in Australian dollars unless stated otherwise. Lead Auditor’s Independence Declaration The lead auditor’s independence declaration is set out on page 41 and forms part of the Directors’ Report for the year ended 30 June 2016. Dated at Melbourne this 9th day of September 2016 Signed in accordance with a resolution of the Directors: Mr Richard Laufmann Chief Executive Ofﬁcer A N N U A L R E P O R T 2 0 1 6 PAGE 18 REX MINERALS LTD CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2016 2015 Note $000 $000 Current assets Cash and cash equivalents 7 3,205 7,930 Term deposits 7 3,000 3,000 Trade and other receivables 238 290 Prepayments 107 51 Total current assets 6,550 11,271 Non-current assets Exploration and evaluation expenditure 1,645 1,645 Property, plant and equipment 9 15,316 15,711 Water infrastructure 4,076 4,076 Total non-current assets 21,037 21,432 Total assets 27,587 32,703 Current liabilities Trade and other payables 10 756 884 Employee beneﬁts 171 132 Provisions 36 83 Total current liabilities 963 1,099 Non-current liabilities Trade and other payables 10 500 576 Employee beneﬁts 105 80 Total non-current liabilities 605 656 Total liabilities 1,568 1,755 Net assets 26,019 30,948 Equity Issued capital 11(a) 189,566 189,566 Reserves 11(c) 135 – Accumulated losses (163,682) (158,618) Total equity 26,019 30,948 The notes on pages 23 to 39 are an integral part of these ﬁnancial statements. PAGE 19 REX MINERALS LTD CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the year ended 30 June 2016 2015 Note $000 $000 Finance income 181 444 Other income – 12 Administrative expenses (1,488) (1,469) Depreciation expense 9 (386) (445) Employee beneﬁts expense 12 (2,317) (3,432) Marketing expenses (121) (347) Exploration and evaluation (922) (3,497) Loss on disposal of ﬁxed assets (11) – Loss before tax (5,064) (8,734) Income tax beneﬁt 13 – – Total loss for the period after tax (5,064) (8,734) Other comprehensive income – – Total comprehensive loss attributable to members of Rex Minerals Ltd (5,064) (8,734) Loss per share attributable to members of Rex Minerals Ltd Basic loss per share (cents) 14 (2.30) (3.96) Diluted loss per share (cents) 14 (2.30) (3.96) The notes on pages 23 to 39 are an integral part of these ﬁnancial statements. A N N U A L R E P O R T 2 0 1 6 PAGE 20 REX MINERALS LTD CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 30 June Attributable to equity holders of the Group Share Share based Accumulated Total capital payments losses equity Note reserve Balance at 1 July 2015 189,566 – (158,618) 30,948 Share based payments 11(c) – 135 – 135 Total comprehensive loss for the period – – (5,064) (5,064) Balance at 30 June 2016 189,566 135 (163,682) 26,019 Balance at 1 July 2014 189,566 890 (150,774) 39,682 Transfer from share based payments reserve 11(c) – (890) 890 – Total comprehensive loss for the period – – (8,734) (8,734) Balance at 30 June 2015 189,566 – (158,618) 30,948 The notes on pages 23 to 39 are an integral part of these ﬁnancial statements. PAGE 21 REX MINERALS LTD CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 30 June 2016 2015 Note $000 $000 Cash ﬂows from operating activities Cash paid to suppliers and employees (2,696) (3,799) Exploration and evaluation payments (2,234) (7,448) Interest received 207 566 Net cash used in operating activities 15 (4,723) (10,681) Cash ﬂows from investing activities Acquisition of property, plant and equipment 9 (7) (1) Proceeds from sale of property, plant and equipment 5 22 Investments in term deposits - 16,000 Net cash from/(used in) investing activities (2) 16,021 Cash ﬂows from ﬁnancing activities Net cash from ﬁnancing activities - - Net increase/(decrease) in cash and cash equivalents (4,725) 5,340 Cash and cash equivalents at beginning of the period 7,930 2,590 Cash and cash equivalents at period end 7(a) 3,205 7,930 The notes on pages 23 to 39 are an integral part of these ﬁnancial statements. A N N U A L R E P O R T 2 0 1 6 PAGE 22 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 2016 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 and evaluation 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) adopted by the International Accounting Standards Board (IASB). The ﬁnancial statements were approved by the Board of Directors on 9 September 2016. (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 Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191and in accordance with that Rounding Instrument, all ﬁnancial information is presented in Australian dollars and 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: (cid:129) (cid:129) Note 16 Notes 19 and 20 Share based payments 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 all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board that are relevant to the Group and effective for the current annual reporting period. The adoption of these new and revised Australian Accounting Standards has had no signiﬁcant impact on the Group’s accounting policies. (a) Basis of consolidation (i) Subsidiaries Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. 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. PAGE 23 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (a) Basis of consolidation (Continued) (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. (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, ie. 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 uncollectable. 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. A N N U A L R E P O R T 2 0 1 6 PAGE 24 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (c) Property, plant and equipment (i) Recognition and measurement Items of property, plant and equipment (PP&E) 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 PP&E 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 PP&E are recognised in proﬁt or loss as incurred. (iii) Depreciation Depreciation is recognised in the proﬁt or loss for items of PP&E on a straight-line basis over the estimated useful lives of each part of an item of PP&E. The estimated useful lives for the current and comparative periods are as follows: (cid:129) (cid:129) Plant and equipment 3 – 10 years Buildings 10 – 20 years Land is not depreciated. Water infrastructure will be depreciated over the life of the Hillside Project, upon commencement of production. 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, excluding the costs of acquisition, are expensed within the proﬁt and loss as incurred. Costs incurred in acquiring rights, the entry premiums paid to gain access to areas of interest and amounts payable to third parties to acquire interests in existing projects are capitalised as incurred and assessed for impairment triggers annually. (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. PAGE 25 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (e) Impairment (Continued) (ii) Non-ﬁnancial assets The carrying amounts of the Group’s non-ﬁnancial assets 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 generate 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 12 months of the reporting date represent obligations resulting from employee services provided to reporting date, and 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 Group’s 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 Australian corporate bond rates. (iii) Share based payments Equity-based compensation is recognised as an expense in respect of the services received. The fair value of options granted is recognised as an expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the participants become unconditionally entitled to the options. The fair value at grant date is independently determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the options, the vesting and performance criteria, the impact of dilution, the non-tradeable 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 statement of proﬁt or loss 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 goods and services tax (GST). Exchanges of goods or services of the same nature and value without any cash consideration are not recognised as revenue. A N N U A L R E P O R T 2 0 1 6 PAGE 26 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (h) Tax (i) Income taxes Income tax expense comprises current and deferred tax. Income tax expense is recognised in proﬁt or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for ﬁnancial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable proﬁt, and differences relating to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognised for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities, will be realised simultaneously. A deferred tax asset is recognised to the extent that it is probable that future taxable proﬁts will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax beneﬁt will be realised. Research and development beneﬁts are recognised in the year the beneﬁt is received. (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 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 Australian Taxation Ofﬁce (ATO) is included as a current asset or liability in the balance sheet. Cash ﬂows are included in the statement of cash ﬂows on a gross basis. The GST components of cash ﬂows arising from investing and ﬁnancing activities which are recoverable from, or payable to, the ATO are classiﬁed as operating cash ﬂows. (i) Finance income Finance income comprises interest income on funds invested. Interest income is recognised as it accrues in proﬁt or loss, using the effective interest method. (j) Earnings/loss per share The Group presents basic and diluted earnings per share data for its ordinary shares. Basic earnings per share 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 earnings per share 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. PAGE 27 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (k) Segment reporting The Group determines and presents operating segments based on the information that internally is provided to the CEO, 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 CEO to make decisions about resources to be allocated to the segment and to assess its performance. Segment expenditure that is reported to the CEO 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 to acquire PP&E. (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 Group’s 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, top-soiling 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 PP&E 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 updated based on the facts and circumstances at the reporting date. (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 2016, and have not been applied in preparing these consolidated ﬁnancial statements: (cid:129) (cid:129) (cid:129) (cid:129) AASB 9 Financial Instruments will be effective for the Group’s 2019 ﬁnancial statements. The new standard addresses the classiﬁcation, measurement and derecognition of ﬁnancial assets and ﬁnancial liabilities and sets out new rules for hedge accounting. It is likely to affect the Group's accounting for its ﬁnancial assets and ﬁnancial liabilities. The Group has not yet decided when to adopt AASB 9 and has not yet determined the potential effect of the standard. AASB 15 Revenue from Contracts with Customers which will be effective for the Group’s 2019 ﬁnancial statements. The new standard is not expected to have signiﬁcant impact on the ﬁnancial statements. Amendments to AASB 116 Property, Plant and Equipment and AASB 138 Intangible Assets detail acceptable methods of depreciation and amortisation. These amendments will be effective for the Group’s 2017 ﬁnancial statements. The new standard is not expected to have signiﬁcant impact on the ﬁnancial statements. AASB 16 Leases removes the classiﬁcation of leases as either operating or ﬁnances leases for the lessee, effectively treating all leases on balance sheet. Short-term leases and leases of low value assets are exempt from the lease accounting requirements. These amendments will be effective for the Group’s 2020 ﬁnancial statements with early adoption permitted. The Group has not yet decided when to adopt AASB 16 and has not yet determined the potential effect of the standard. A N N U A L R E P O R T 2 0 1 6 PAGE 28 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. (a) 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. (b) 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. (c) Share based payments The fair value of options granted to participants 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-tradeable 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), 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 (a) 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 an adequate capital base sufﬁcient to maintain future exploration and progress 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 and contractors to be shareholders through the Option Incentive 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. (b) Credit risk Credit risk is the risk of ﬁnancial loss to the Group if a customer or counter-party to a ﬁnancial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables and cash balances. (c) 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. (d) Market risk Market risk is the risk that changes in market prices (such as foreign exchange rates), interest rates and equity prices that 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 29 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, minerals mining and exploration. 7. CASH ASSETS (a) Cash and cash equivalents 2016 2015 $000 $000 Bank balances and short term deposits 3,205 7,930 Cash and cash equivalents in the statement of cash ﬂows 3,205 7,930 (b) Term deposits 2016 2015 $000 $000 Term deposits* 3,000 3,000 Total term deposits 3,000 3,000 * Term Deposits comprise cash balances with an original maturity of more than three months. The Group’s total cash and funds on deposit of $6,205,000 (2015: $10,930,000) is exposed to interest rate risk and a sensitivity analysis for ﬁnancial assets and liabilities are disclosed in note 17. 8. DEFERRED TAX ASSETS (DTA) AND DEFERRED TAX LIABILITIES (DTL) 2016 2015 $000 $000 Exploration and evaluation assets (494) (494) Property, plant and equipment (152) (181) Provisions 260 217 Equity costs 85 278 Net DTA/(DTL) (301) (180) Tax losses recognised to the extent of the DTL 301 180 DTA not recognised – – – – The tax losses do not expire under current tax legislation. A DTA has not been recognised in respect of these items because it is not probable within the immediate future that taxable proﬁts will be available, against which the Company can utilise the beneﬁts. A N N U A L R E P O R T 2 0 1 6 PAGE 30 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 9. PROPERTY, PLANT AND EQUIPMENT Land and Plant and buildings equipment Total 2016 $000 $000 $000 Cost Balance at 1 July 2015 15,084 2,256 17,340 Additions – 7 7 Disposals (10) (145) (155) Balance at 30 June 2016 15,074 2,118 17,192 Depreciation and impairment losses Balance at 1 July 2015 142 1,487 1,629 Depreciation 88 298 386 Disposals – (139) (139) Balance at 30 June 2016 230 1,646 1,876 Carrying amounts At 1 July 2015 14,942 769 15,711 At 30 June 2016 14,844 472 15,316 Land and Plant and buildings equipment Total 2015 $000 $000 $000 Cost Balance at 1 July 2014 15,084 2,347 17,431 Additions – 1 1 Disposals – (92) (92) Balance at 30 June 2015 15,084 2,256 17,340 Depreciation and impairment losses Balance at 1 July 2014 54 1,212 1,266 Depreciation 88 357 445 Disposals – (82) (82) Balance at 30 June 2015 142 1,487 1,629 Carrying amounts At 1 July 2014 15,030 1,135 16,165 At 30 June 2015 14,942 769 15,711 10. TRADE AND OTHER PAYABLES 2016 2015 $000 $000 Current Trade payables – 60 Accrued expenses 756 824 Total current trade and other payables 756 884 Non-current Accrued expenses – lease incentive 500 576 Total non-current trade and other payables 500 576 Total trade and other payables 1,256 1,460 PAGE 31 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 11. EQUITY (a) Movements in shares on issue: Number of shares $000 Opening balance at 1 July 2015 220,519,784 189,566 Closing balance at 30 June 2016 220,519,784 189,566 Opening balance at 1 July 2014 220,519,784 189,566 Closing balance at 30 June 2015 220,519,784 189,566 (b) Movements in options on issue: Date of Number of Exercise Expiry issue options price $ date Opening balance as at 1 July 2015 – Option issue 22/12/2015 16,800,000 0.063 30/11/2019 Closing balance as at 30 June 2016 16,800,000 Opening balance as at 1 July 2014 3,840,000 Lapse of options – employees* 24/09/2012 (3,000,000) 0.91 31/08/2017 Lapse of options – employees 24/05/2012 (200,000) 1.20 30/04/2015 Lapse of options – employees 24/05/2012 (640,000) 1.20 30/04/2015 Closing balance as at 30 June 2015 – * Options lapsed on employee departure. (c) Movements in share based payment reserve: $000 Opening balance at 1 July 2015 – Share based payments 135 Transferred to accumulated losses – Closing balance at 30 June 2016 135 Opening balance at 1 July 2014 890 Share based payments – Transferred to accumulated losses (890) Closing balance at 30 June 2015 – This share based payment reserve is used to recognise the fair value of options issued to participants for options granted which have not been exercised. A N N U A L R E P O R T 2 0 1 6 PAGE 32 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 12. EMPLOYEE BENEFITS EXPENSE 2016 2015 $000 $000 Wages and salaries 2,159 3,594 Share based payments 94 – Increase/(decrease) in liability for annual leave 39 (141) Increase/(decrease) in liability for long service leave 25 (21) Total employee beneﬁts expense 2,317 3,432 13. INCOME TAX EXPENSE NUMERICAL RECONCILIATION BETWEEN TAX EXPENSE AND PRE-TAX ACCOUNTING LOSS 2016 2015 $000 $000 Loss before tax for the period (5,064) (8,734) Income tax using the domestic corporation tax rate of 30% (2015: 30%) (1,519) (2,620) Decrease in income tax due to: Non-deductible expenses 44 1 Increase in income tax expense due to: Net effect of tax losses not recognised 1,475 2,619 Total income tax expense/(beneﬁt) on pre-tax net loss – – 14. LOSS PER SHARE 2016 2015 cents cents Loss per share Basic loss per share (2.30) (3.96) Diluted loss per share (2.30) (3.96) (a) Basic loss per share The calculation of basic loss per share at 30 June 2016 was based on the loss attributable to ordinary equity holders of $5,064,000 (2015: $8,734,000) and a weighted average number of ordinary shares outstanding during the ﬁnancial year ended 30 June 2016 of 220,519,784 (2015: 220,519,784). (b) Diluted loss per share The calculation of diluted loss per share at 30 June 2016 is the same as basic diluted loss per share. In accordance with AASB 133 Earning per share, as potential ordinary shares may result in a situation where their conversion results in a decrease in the loss per share, no dilutive effect has been taken into account. Potential ordinary shares relating to the Option Incentive Plan totalled 16,800,000 at 30 June 2016. PAGE 33 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 15. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES 2016 2015 Note $000 $000 Cash ﬂows from operating activities Loss before tax for the period (5,064) (8,734) Adjustments for non-cash items: Depreciation 9 386 445 Share based payments 11(c) 135 – Adjustments for other items: (Proﬁt)/loss on disposal of property plant and equipment 11 (12) Operating loss before changes in working capital and provisions (4,532) (8,301) (Increase)/decrease in trade and other receivables (4) 323 (Decrease)/increase in trade and other payables (204) (2,588) (Decrease)/increase in employee beneﬁts 64 (162) (Decrease)/increase in provisions (47) 47 Net cash (used in)/from operating activities (4,723) (10,681) 16. SHARE BASED PAYMENTS (a) Description of share based payment arrangements The Board received shareholder approval for an Option Incentive Plan at the Annual General Meeting on 30 November 2015. The plan is administered by the Board, which has the discretion to determine eligibility to participate in the plan. The Board believes the issue of options is an important component of a comprehensive remuneration strategy. It aligns Option Incentive Plan participants’ interests with those of shareholders by linking their overall total rewards to the long-term success of the Company and helps retain cash funds within the Company. All options refer to unquoted options over ordinary shares of Rex Minerals Ltd, which are exercisable on a one-for-one basis under the terms and conditions of the Option Incentive Plan. The options do not entitle the holder to participate in any share issue of the Company. All options expire on the earlier of their expiry date or in the case of termination, as deﬁned in the Option Incentive Plan. The following options were granted during the ﬁnancial year ending 30 June 2016: Grant Number of Expiry Employees entitled date options date Key Management Personnel (KMP) 22/12/2015 9,000,000 30/11/2019 Other plan participants 22/12/2015 7,800,000 30/11/2019 Total 16,800,000 All options are exercisable at a price of 6.3c each and options will vest in three equal tranches as follows: (cid:129) Tranche 1 – one third vest on 30 November 2016, during the ﬁnancial year ending 30 June 2017; (cid:129) Tranche 2 – one third vest on 30 November 2017, during the ﬁnancial year ending 30 June 2018; (cid:129) Tranche 3 – one third vest on 30 November 2018, during the ﬁnancial year ending 30 June 2019. A N N U A L R E P O R T 2 0 1 6 PAGE 34 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 16. SHARE BASED PAYMENTS (CONTINUED) (b) Measurement of fair values The fair value of the unlisted options granted has been measured independently at the date of the grant based upon the Black-Scholes option pricing model. The inputs used in the measurement of the fair value at grant date are as follows: 2016 Fair value at grant date (cents) 2.51 Share price at date of grant (cents) 5.6 Exercise price (cents) 6.3 Expected volatility (percentage) 70 Option life (years) 3.1 Risk free interest rate (percentage) 2.02 The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any expected changes to the future volatility due to publicly available information. (c) Option expense 2016 2015 $000 $000 Option expense 135 – Total recognised as share based payments 135 – (d) Outstanding options At 30 June 2016, there were 16,800,000 unlisted options outstanding, at an exercise price of 6.3 cents. 17. 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. Carrying Contractual 1 year 1-2 Financial liabilities amount cash ﬂows or less years Group $000 $000 $000 $000 2016 Trade and other payables 1,256 (756) (756) (500) 1,256 (756) (756) (500) 2015 Trade and other payables 1,460 (884) (884) (576) 1,460 (884) (884) (576) PAGE 35 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 17. FINANCIAL INSTRUMENTS (CONTINUED) (d) Interest rate risk The Group’s exposure to market interest rates relates primarily to the Group’s short-term deposits. At balance date, the Group had the following ﬁnancial assets exposed to interest rate risk: 2016 2015 $000 $000 Cash and cash equivalents 3,205 7,930 Term deposits 3,000 3,000 Total cash and term deposits 6,205 10,930 At balance date, the Group has no ﬁnancial liabilities exposed to variable interest rate risks. The following sensitivity analysis is based on the interest rate risk exposure in existence at the balance sheet date. At 30 June 2016, 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) 2016 2015 2016 2015 $000 $000 $000 $000 Group +1% (100 basis points) 87 291 – – – 1% (100 basis points) (87) (291) – – 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 Consolidated statement of proﬁt or loss and other comprehensive income. (e) Impairment losses None of the Group’s receivables are past due (2015: nil). 18. OPERATING LEASES At the end of the reporting period, the future minimum lease payments under non-cancellable operating leases are payable as follows: 2016 2015 $000 $000 Not later than one year 393 380 Later than one year but not later than ﬁve years 1,652 1,630 Greater than ﬁve years 1,072 1,487 The Group leases ofﬁce space under an operating lease. The lease was for a period of 10 years (7.5 years remain), with an option to renew the lease after that date. Lease payments increase by a ﬁxed percentage every year and are adjusted to the prevailing market rate after ﬁve years. During the year, an amount of $430,000 was recognised as an expense in proﬁt and loss in respect of this lease (2015: $424,000). A N N U A L R E P O R T 2 0 1 6 PAGE 36 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 19. 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 State Government has the authority to defer, waive or amend the minimum expenditure requirements. 2016 2015 $000 $000 Not later than one year 1,477 1,095 Later than one year but not later than ﬁve years 4,815 5,023 20. CONTINGENCIES The Directors are of the opinion that there are no matters for which provision is required in relation to any contingencies, as it is not probable that a future sacriﬁce of economic beneﬁt will be required or the amount is not capable of reliable measurement. The Group’s bankers have provided guarantees amounting to $20,000 to certain government bodies as security over the Group’s performance of rehabilitation obligations on certain tenements. Under the agreement, the Group has indemniﬁed the bank in relation to these guarantees. The guarantees are backed by deposits amounting to $20,000 as at 30 June 2016 (2015: $20,000). The Group's bankers have provided a guarantee amounting to $199,000 to the landlord regarding the 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 $199,000 as at 30 June 2016 (2015: $199,000). 21. RELATED PARTIES (a) Parent and ultimate controlling party Ownership Interest Country of Incorporation 2016 2015 Parent entity Rex Minerals Ltd Australia Subsidiaries Rex Minerals (SA) Pty Ltd Australia 100% 100% Rex Minerals (Iron Ore) Pty Ltd Australia 100% 100% Rex Hillside (Property) Pty Ltd Australia 100% 100% PAGE 37 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 21. RELATED PARTIES (CONTINUED) (b) Transactions with Key Management Personnel (KMP) (i) Loans to Directors There were no loans advanced to Directors for the year ending 30 June 2016. (ii) KMP compensation KMP compensation comprised the following: 2016 2015 $ $ Short-term beneﬁts 884,048 764,411 Post-employment beneﬁts 63,583 116,085 Share based payments 72,093 – Other long-term beneﬁts 578 (24,109) Termination beneﬁts – 550,417 1,020,302 1,406,804 Information regarding individual Directors’ and Executive Ofﬁcers’ compensation and some equity instrument disclosures as permitted by Corporations Regulations 2M.3.03 are provided in the Remuneration Report section of the Directors’ Report on pages 12 to 18. There have been no changes to KMP between 1 July 2016 and the date of this report. (iii) Other KMP transactions A number of KMP hold positions in other companies that result in them having control or signiﬁcant inﬂuence over those companies. A number of these companies have transacted with the Group. The terms and conditions of these transactions were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-KMP related companies on an arm’s length basis. Information regarding individual Directors’ and Executive Ofﬁcers’ compensation are provided in the Remuneration Report section of the Directors’ Report on pages 12 to 18. The aggregate value of transactions and outstanding balances related to KMP companies were as follows: Transaction values Balance payable year ended 30 June as at 30 June 2016 2015 2016 2015 Transaction $ $ $ $ Geological Services 1 80,000 – – – Corporate Advisory 2 – 240,000 – – Management Services 3 – 670,500 – – 1 During the year, geological consulting services were independently provided by a company jointly controlled by the Chief Financial Ofﬁcer. The contract terms are based on normal market rates for this type of service and amounts are payable under normal market terms. 2 In the prior year, the Group used the corporate advisory ﬁrm of one of its Directors in relation to funding options for the Hillside Project. The contract ended on 31 December 2014 and contract terms were based on normal market rates for this type of service and amounts were payable under normal market terms. 3 In the prior year, the Group engaged the consulting ﬁrm of one of its Directors to perform executive and ﬁnancial management services. The Director resigned on 30 June 2015 and contract terms were based on normal market rates for this type of service and amounts were payable under normal market terms. A N N U A L R E P O R T 2 0 1 6 PAGE 38 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 22. PARENT ENTITY DISCLOSURES As at, and throughout, the period ending 30 June 2016, the parent company of the Group was Rex Minerals Ltd. 2016 2015 $000 $000 Result of the parent entity Proﬁt/(loss) for the period (4,924) (166,798) Other comprehensive income – – Total comprehensive income/(loss) for the period (4,924) (166,798) Financial position of the parent entity at year end Current assets 6,550 11,271 Total assets 21,333 26,216 Current liabilities 935 977 Total liabilities 1,539 1,633 Total equity of the parent entity comprising of Share capital 189,566 189,566 Share based payments reserve 135 – Accumulated losses (169,907) (164,983) Total equity 19,794 24,583 Parent entity contingencies The Parent entity’s contingencies are the same as the Group’s contingencies as detailed in Note 20. 23. SUBSEQUENT EVENTS 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. 24. AUDITORS’ REMUNERATION 2016 2015 KPMG Australia $ $ Audit services 46,125 47,500 Other services 20,000 104,800 During the current year, KPMG, the Company’s auditor, provided non-audit services to the Group in the form of specialist R&D Tax Incentive services in relation to the Group’s research and development claims. PAGE 39 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 in the Directors’ Report, set out on pages 12 to 18, are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the Group’s ﬁnancial position as at 30 June 2016 and of its performance for the ﬁnancial year ended on that date; and (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001. (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 2001from the Chief Executive Ofﬁcer and Chief Financial Ofﬁcer for the ﬁnancial year ended 30 June 2016. The Directors draw attention to Note 2 to the consolidated ﬁnancial statement, which includes a statement of compliance with International Financial Reporting Standards. Signed in accordance with a resolution of the Directors: Mr Richard Laufmann Chief Executive Ofﬁcer Dated this 9th day of September 2016 A N N U A L R E P O R T 2 0 1 6 PAGE 40 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 2016 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 9 September 2016 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 41 REX MINERALS LTD INDEPENDENT AUDIT 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 2016, 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 24 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 judgment, 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 their performance. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. A N N U A L R E P O R T 2 0 1 6 PAGE 42 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. REX MINERALS LTD INDEPENDENT AUDIT 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 2016 and of its performance for the year ended on that date; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001. (b) the financial report also complies with International Financial Reporting Standards as disclosed in note 2. Report on the remuneration report We have audited the Remuneration Report included in pages 12 to 18 of the directors’ report for the year ended 30 June 2016. 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 2016, complies with Section 300A of the Corporations Act 2001. KPMG Scott Fleming Partner Adelaide 9 September 2016 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 43 REX MINERALS LTD ADDITIONAL SHAREHOLDER INFORMATION Additional information required by the Australian Securities Exchange (ASX) Listing Rules and not shown elsewhere in this report is set out below and the information was applicable as at 31 July 2016. Distribution of ordinary shares The number of shareholders, by size of holding: Total % of Range Holders Units Issued Capital 1 – 1,000 706 333,493 0.15 1,001 – 5,000 1,443 4,140,572 1.88 5,001 – 10,000 784 6,274,122 2.85 10,001 – 100,000 1,392 47,123,068 21.37 100,001 – 999,999,999 300 162,648,529 73.75 Total 4,625 220,519,784 100.00 The number of shareholders holding less than a marketable parcel: 2,617 7,656,166 Twenty largest shareholders The names of the twenty largest shareholdings of quoted ordinary shares are: Number of % of Name Shares Held Issued Capital 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. HSBC Custody Nominees (Australia) 11,913,919 5.40 Grand South Development Limited 11,785,777 5.34 S & S Olsen Pty Ltd 5,752,000 2.61 JP Morgan Nominees Australia Limited 5,601,131 2.54 Greenstone Property Pty Ltd (Titeline Property A/C) 5,345,531 2.42 National Nominees Limited 4,811,550 2.18 Panjeta Investment Group Pty Ltd 4,500,000 2.04 Mrs Natalie Laufmann 3,500,000 1.59 Greenstone Property Pty Ltd 2,825,000 1.28 HSBC Custody Nominees (Australia) Limited (NT-Comnwlth Super Corp A/C) 2,614,535 1.19 Citicorp Nominees Pty Ltd (Colonial First State Inv A/C) 2,455,747 1.11 11. 12. Mr Ram Shanker Kangatharan 2,160,000 0.98 13. Ms Fei Chen 2,106,200 0.96 BNP Paribas Noms Pty Ltd (UOB KH P/L AC UOB KH DRP) 1,916,979 0.87 14. BNP Paribas Noms Pty Ltd (DRP) 1,903,366 0.86 15. HSBC Custody Nominees (Australia) 1,890,071 0.86 16. Stone Poneys Nominees Pty Ltd (Chapman Super Fund A/C) 1,876,166 0.85 17. Stone Poneys Nominees Pty Ltd (Chapman Investment Fund A/C) 1,768,667 0.80 18 BNP Paribas Nominees Pty Ltd (Agency Lending DRP A/C) 1,689,532 0.77 19. United Overseas Service Management Ltd 1,513,399 0.69 20. Total 77,929,570 35.34 Substantial shareholders There are two substantial shareholders in the Company: Name Number of % of Shares Held Issued Capital Acorn Capital Ltd 20,380,807 9.24 Grand South Development Limited 11,785,777 5.34 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. Stock exchange listing Rex Minerals Ltd is listed on the ASX. The Company’s ASX code is RXM. A N N U A L R E P O R T 2 0 1 6 PAGE 44 Designed and Produced by Celtink Creative info@celtink.com ABN 12 124 960 523 STAY IN TOUCH A Level 19, 11 Waymouth Street Adelaide, South Australia 5000 T +61 (0) 8 8299 7100 F +61 (0) 8 8299 7199 P PO Box 3435 Rundle Mall, South Australia 5000 E rex@rexminerals.com.au W www.rexminerals.com.au

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