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
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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)
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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
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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
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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
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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
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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
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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
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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
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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
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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
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