Rex Minerals Limited Annual Report 2017

Plain-text annual report

2017 ANNUAL REPORT A B N 12 124 960 523 2017 ANNUAL REPORT N 12 124 960 523 B A 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 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 Street Melbourne, Victoria 3000 A A U S T R A L I A SOUTH AUSTRALIA SOUTH AUSTRALIA Wandearah Cowell Pine Point Adelaide 2017 ANNUAL REPORT 30 JUNE 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 42-45 46 1 REX MINERALS LTD LETTER FROM THE CHAIRMAN AND THE CHIEF EXECUTIVE OFFICER For the year ended 30 June 2017 A B N 12 124 960 523 A Level 19, 11 Waymouth Street Adelaide South Australia 5000 T (08) 8299 7100 F (08) 8299 7199 P PO Box 3435 Rundle Mall South Australia 5000 E rex@rexminerals.com.au W www.rexminerals.com.au Dear Fellow Shareholder, Last year was difﬁcult for the resources sector, typiﬁed by the lack of certainty and conﬁdence in the market outlook. This reality, coupled with the outstanding status of several key hurdles for Rex, summarised our operational environment during the year. This year, ongoing global uncertainty (political/geographical/social)underpins continued volatility in almost every aspect of our business landscape, providing a situation where market disruption (energy policy)and transformational change (banking/ﬁnance) continue to be the new norm. Despite this backdrop, we have steadily progressed, in a meaningful way. Corporately we continue to retain 100% ownership of the Hillside Project, remain debt free and have increased our cash-at-hand. All the while, copper prices have edged slowly higher as the emerging supply gap starts to bite. In February 2017, the South Australian Government’s Department of Premier and Cabinet (mining regulatory branch) issued its assessment report on the revised Hillside Project. This report outlined the conditions and the way forward for our Program for Environment Protection and Rehabilitation (PEPR) submission. Once this was received, management focused on delivering a compliant submission which, by any measure, is likely to be one of the most comprehensive ever completed in South Australia. In working toward completion, a key requirement is consultation. Our management team is actively engaged with our stakeholders and policy-makers to ensure comprehensive and ongoing consultation. In doing so, and upon request from the community, we applied for an extension for submission of the PEPR from mid-September until February 2018. Through this, the Board’s strategy has not changed. We continue to focus our resources on actions, which put the Company in the best possible position to leverage our exploration portfolio and seek maximum value from our Hillside Project. We continue to monitor the outlook for copper concentrate, and we are assessing several options to position the Hillside Project to beneﬁt from the long-standing forecast supply gap that is beginning to be reﬂected in the steadily increasing copper price. This positive sentiment is being accompanied by increasing interest from end users, ﬁnanciers and suppliers, as the market begins to re-focus on copper development opportunities. The Hillside Project remains of great importance to both the Company and South Australia because it can create substantial beneﬁts for shareholders, the local community and the state of South Australia. We will continue to work with the community of the Yorke Peninsula to ensure the Hillside Project strikes the right balance for all stakeholders. Yours sincerely, Dr David Carland Chairman Mr Richard Laufmann Chief Executive Ofﬁcer REX MINERALS LTD REVIEW OF OPERATIONS For the year ended 30 June 2017 HILLSIDE PROJECT, YORKE PENINSULA, SOUTH AUSTRALIA Rex Minerals Ltd’s (Rex or the Company) ﬂagship Hillside Project is situated 12 kilometres south of the township of Ardrossan on the Yorke Peninsula, South Australia (Figure 1). This Project was the ﬁrst test of a larger theory that iron-oxide-copper-gold (IOCG) style mineralisation could exist underneath the thin cover rocks on the Yorke Peninsula. This re-interpretation was rewarded with the discovery at Hillside by Rex in 2008. Figure 1: Location of the Hillside Project and Rex’s exploration licences on the Yorke Peninsula. From initial targeting, the Hillside Project has grown into a substantial deposit and ranks as one of the most signiﬁcant recent discoveries in Australia (Figure 2). Figure 2: Hillside Ore Reserve in Comparison with other Australian Copper Open Pit Ore Reserves*. * Source: Publically available data as at 24 August 2017. 3 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2017 HILLSIDE PROJECT, YORKE PENINSULA, SOUTH AUSTRALIA (CONTINUED) The Company completed its Extended Feasibility Study (EFS) on the Hillside Project in 2015. 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 Hillside Project is planned around an open pit mine, initially with a 13-year mine life, producing approximately 35,000 tonnes of copper in concentrate and 24,000 ounces of gold per annum. Rex’s Hillside Project will: (cid:129) (cid:129) (cid:129) export its concentrate through the port of Adelaide; draw its labour force from the surrounding country towns; and connect to South Australia’s main power grid and water network. > THE CASE FOR COPPER Rex owns 100% of the signiﬁcant Hillside Ore Reserve and Mineral Resource. In regard to this, the outlook for copper is crucial to gauging our Company’s future. Along with much of the mainstream commentary, it is worthwhile re-stating why we think that a positive outlook for copper is both justiﬁed and expected. Additional demand for copper will be generated by: (cid:129) China’s One Belt, One Road (OBOR) – the largest economic initiative, (with new railways, ports, energy systems and telecommunications networks), since the opening up of China. A clear indicator of a planned increase in copper consumption, linked to the OBOR infrastructure requirements, already manifesting in signiﬁcant increases in China’s smelting capacity. (cid:129) The pursuit of policies to reduce carbon emissions which is forcing electriﬁcation of motor vehicles on a global scale. This has the impact of at least a three-fold increase in copper usage per vehicle. (cid:129) The gap between future copper supply and demand cannot be closed at current copper prices due to: > very few new copper projects can be justiﬁed at prices below US$3.00/lb; > declining ore grades in operating mines; and > exhaustion of ore reserves. Analysis of copper demand and supply leads to the conclusion that the outlook for copper should be very good. There is no question that demand and prices are going to increase – only when and by how much. With little fanfare, these market realities have already begun to impact and, quietly, the copper price has edged its way higher in response (Figure 3). Figure 3: One year historical Copper Price*. * Source: Publically available data as at 24 August 2017. ANNUAL REPORT 2 0 1 7 4 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2017 > REGULATORY APPROVALS AND COMMUNITY Rex holds approved Mining Lease 6438, Extractive Minerals Lease 6439 and Miscellaneous Purposes Licence 146 (collectively referred to as the “Hillside ML”) for the Hillside Project. In June 2016 and following completion of the EFS, Rex provided the Government Regulator with additional detailed information regarding the revisions to the Hillside Project to show that the Project is consistent with the Hillside ML and the conditions granted in 2014. 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) (cid:129) (cid:129) (cid:129) (cid:129) a reduced area (or footprint) from direct operations; an initial 13+ year mine life, based on the Ore Reserve (proved and probable) of 82M tonnes; a focus on copper-gold extraction; lower water and power use; and apart from an approved road diversion, power line and water pipeline, no off-site infrastructure impacts. In early 2017, the Regulator provided the Company with an updated Assessment Report on the revised Hillside Project. This Report conﬁrmed that the Regulator determined the Hillside Project can be operated in compliance with the existing Hillside ML conditions, noting areas where some additional information will be required in the submission of the Program for Environment Protection and Rehabilitation (PEPR). The PEPR is a signiﬁcant document covering areas such as environmental outcomes and strategies, description of operations and consultation, as well as related management plans for the Hillside Project. The Company attends weekly meetings with the Regulator to review progress and secure feedback. In addition to the PEPR, Rex is also required to submit a Social Management Plan (SMP), which outlines the Company’s commitment to local community and other stakeholders, and provides a description of measures to be implemented by the Company to manage social impact and enhance social beneﬁt. Rex CEO, Richard Laufmann and Kate Van Schaik (HMCV) presenting to Social Management Plan workshop. 5 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2017 > REGULATORY APPROVALS AND COMMUNITY (CONTINUED) Rex continues to meet and engage directly with government groups, local landowners and community members in the Hillside Project region. A key part of the consultation process is working through the Hillside Mine Community Voice (HMCV) which comprises representatives of landowners, business owners, interest groups, regional groups and Rex. The HMCV has co-ordinated reviews of the SMP and PEPR-related management plans through meetings of ﬁve working groups (established in response to the approval of the Hillside ML) and through public meetings held in the region. As part of this consultation process, Rex’s technical team and specialist consultants have provided a series of presentations and responded to extensive questions regarding the Hillside Project, the SMP and PEPR-related management plans. These responses are publically available along with outcomes of the HMCV meetings. During this process, the Company has received valuable feedback. Rex would like to express its appreciation to the Hillside community, and in particular to the members of the HMCV, for their signiﬁcant efforts and contribution to date. > OTHER ACTIVITIES During the year, the Company’s resources were dedicated to a signiﬁcant body of work in relation to a review undertaken by the Federal Regulator for Research and Development (R&D) expenditure registrations. A Post Registration Certiﬁcate for Finding was issued to the Company in February 2017, providing certainty over the R&D registrations lodged to date. This resulted in a refundable cash incentive to the Company of approximately $3.3 million from the Australian Taxation Ofﬁce. Hillside Project looking south towards Black Point. ANNUAL REPORT 2 0 1 7 6 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2017 TENEMENT SCHEDULE As at 30 June 2017 Tenement Location Lease Status Area Type Current Area Grant Date EL5056 EL5055 EL5683 EL5508 EL5981 EL5133 EL5883 EL5070 Moonta South Granted Moonta South Granted Moonta South Granted Moonta South Granted Moonta South Granted Wandearah Granted Wandearah Granted Cowell Granted ML6438 Hillside Granted EML6439 Hillside Granted MPL146 Hillside Granted km2 km2 km2 km2 km2 km2 km2 km2 Ha Ha Ha 416 1,262 21 74 122 72 29 42 02/08/2012 02/08/2012 10/06/2015 05/11/2014 23/06/2017 01/08/2012 13/10/2016 24/10/2012 2,998 16/09/2014 225 94 16/09/2014 16/09/2014 Hillside Project - core storage area. 7 2017 ANNUAL REPORT DIRECTORS’ REPORT For the year ended 30 June 2017 ANNUAL REPORT 2 0 1 7 8 REX MINERALS LTD DIRECTORS’ REPORT For the year ended 30 June 2017 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 2017 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. 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). 9 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2017 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. In September 2016, Mr Hooke was appointed a member of the Advisory Board of Micromine Ltd, and in June 2017, he was appointed a Director of The Menzies Research Centre Ltd. 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 Pty Ltd 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 A 5 5 5 5 B 5 5 5 5 A 2 2 2 2 B 2 2 2 2 A – Number of meetings attended. B – Number of meetings held during the year whilst the Director held ofﬁce. Remuneration Committee Meetings 2 A – – – – B – – – – 1 Mr Laufmann is not a member of the Committees but attends meetings as appropriate by invitation. 2 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. ANNUAL REPORT 2 0 1 7 10 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2017 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 2017 and was approved by the Board on 14 September 2017. PRINCIPAL ACTIVITIES The principal activity of the Group during the year was minerals exploration, evaluation and development 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 and development of mineral resources. Our strategy to deliver on this objective is to: (cid:129) ﬁnalise our PEPR to ensure all approvals are in place so that the Hillside Project is positioned to start up (cid:129) (cid:129) (cid:129) coincident with the copper supply deﬁcit currently emerging; evolve the pool of corporate and ﬁnancing options available; optimise the Hillside Project through: > capital cost reductions by competitive retender of plant and equipment; > an operating effectiveness review; and further evolve the exploration target portfolio, in what we now consider as a highly-prospective IOCG land package. OPERATING AND FINANCIAL REVIEW The income statement shows a loss after tax of $0.8 million (2016: loss $5.1 million) for the year. The Group has no bank debt. As at 30 June 2017, the Group had a cash position of $5.4 million (2016: $3.2 million) and no funds on deposit (2016: $3.0 million). Operating activities resulted in a cash outﬂow for the year of $0.8 million (2016: cash outﬂow of $4.7 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 2017 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. 11 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2017 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. 2017 2016 $ $ Audit and review of ﬁnancial statements 48,175 46,125 Other services – review of research and development claim 30,000 20,000 REMUNERATION REPORT – AUDITED The Directors present the Remuneration Report for the year ended 30 June 2017, outlining key aspects of the remuneration policy and framework and the remuneration awarded during the year. In 2016, the Board and Management took a reduction in salaries to preserve cash and were issued with options under the Option Incentive Plan approved at the 2015 Annual General Meeting. ANNUAL REPORT 2 0 1 7 12 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2017 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 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. 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) 2017 $ 0.8 2016 $ 5.1 2015 $ 8.7 2014 $ 17.0 2013 $ 39.5 Closing share price at ﬁnancial year’s end 0.056 0.051 0.105 0.305 0.338 13 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2017 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. ANNUAL REPORT 2 0 1 7 14 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2017 REMUNERATION REPORT – AUDITED (CONTINUED) Directors’ and Executive Ofﬁcers’ remuneration Details of the nature and amount of each major element of remuneration of Directors and Executive Ofﬁcers for 2017 are as follows: s u n o B f o n o i t r o p o r p n o i t a r e n u m e r e c n a m r o f r e p x i m n o i t a r e n u m e R d e t a l e r % e l b a i r a V I T L k s i r t a d e x i F l a t o T $ e l b a i r a V n o i t a r e n u m e r n o i t a r e n u m e r d e x i F d e s a b e r a h S s t n e m y a p m r e t - g n o L t s o P t n e m y o l p m e m r e t - t r o h S e u l a v r i a F ) d ( s n o i t p o $ e c i v r e s g n o L ) c ( e v a e l $ - r e p u S n o i t a u n n a $ h s a c I T S ) b ( s u n o b $ & y r a l a S ) a ( s e e f $ – – – – – – % 9 % 4 1 % 4 1 % 1 9 % 6 8 % 6 8 4 6 4 , 0 2 1 4 6 9 , 0 1 4 6 6 , 6 7 4 6 9 , 0 1 4 6 6 , 6 7 4 6 9 , 0 1 – – – 0 0 5 , 9 0 0 7 , 5 0 0 7 , 5 % 0 1 % 0 9 3 6 9 , 8 2 3 3 9 8 , 2 3 0 9 0 , 3 0 5 7 , 3 2 % 5 % 6 % 5 9 % 4 9 7 4 4 , 9 8 2 7 4 4 , 6 1 – – 9 3 0 , 1 1 3 7 4 4 , 6 1 2 8 6 , 1 0 5 7 , 3 2 1 4 2 , 3 0 2 , 1 9 7 6 , 8 9 2 7 7 , 4 0 0 4 , 8 6 – – – – – – – 0 0 0 , 0 0 1 n a m r i a h C , d n a l r a C d i v a D r D s r o t c e r i D e v i t u c e x E - n o N 0 0 0 , 0 6 0 0 0 , 0 6 d n a l t i a M r e t s i l A r M e k o o H l l e h c t i M r M r o t c e r i D g n i g a n a M 0 3 2 , 9 6 2 O E C , n n a m f u a L d r a h c i R r M 0 6 1 , 9 6 2 r o t c e r i D t c e j o r P , l l a H g e r G r M 0 0 0 , 3 7 2 1 O F C , e t n o m a v i R r e b m A s M 0 9 3 , 1 3 0 , 1 : P M K n o i t a s n e p m o c l a t o T s e v i t u c e x E . t n e m e e r g a y c n a t l u s n o c a h g u o r h t d e g a g n e s i e t n o m a v R s M i . 1 n a i l a r t s u A h t i w e c n a d r o c c a n i d e r u s a e m P M K y b i d e v e c e r s t n u o m a e d u c n l i s e e f d n a y r a a S l ) a ( l a u n n a d e u r c c a d n a y r a a s l h s a c s e d u c n l i t i s r e c ﬁ f O e v i t u c e x E r o F . s d r a d n a t S g n i t n u o c c A n o i t a r e n u m e r ’ s r e c ﬁ f O e v i t u c e x E d n a ’ s r o t c e r i D f o e l b a t e h t o t n o i t a l e r n i s e t o N . r a e y l i a c n a n ﬁ 7 1 0 2 e h t o t n o i t a e r l n i l e b a y a p r o d e u r c c a e r e w s e s u n o b h s a c I T S o N . s t n e m e l t i t n e e v a e l e h t f i h s a c n i i d a p e b l y n o l l i i w h c h w e v a e l i e c v r e s g n o l r o f l a u r c c a t e n e h t s t n e s e r p e R ) b ( ) c ( . n o l i t a s g e i l d e s a b - e t a t s h t i w e c n a d r o c c a n i s n o i t i d n o c i e c v r e s d e r i u q e r e h t s t e e m e e y o p m e l m o r f d o i r e p e h t r e v o l y n e v e d o i r e p g n i t r o p e r h c a e o t d e t a c o l l a d n a l e d o m g n c i r p i n o i t p o l s e o h c S - k c a B e h t l g n s u i t n a r g f o e t a d e h t t a l d e t a u c a c l s i s n o i t p o e h t f o e u a v l r i a f e h T ) d ( s n o i t p o e h t f o e u a v l r i a f f o n o i t r o p e h t s i d e s o c s d i l e u a v l e h T . e t a d g n i t s e v o t t n a r g . d o i r e p g n i t r o p e r h c a e n i e s n e p x e n a s a i d e s n g o c e r 15 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2017 REMUNERATION REPORT – AUDITED (CONTINUED) Directors’ and Executive Ofﬁcers’ remuneration (Continued) Details of the nature and amount of each major element of remuneration of Directors and Executive Ofﬁcers for 2016 are as follows: s u n o B f o n o i t r o p o r p n o i t a r e n u m e r e c n a m r o f r e p x i m n o i t a r e n u m e R d e t a l e r % e l b a i r a V I T L k s i r t a d e x i F l a t o T $ e l b a i r a V n o i t a r e n u m e r n o i t a r e n u m e r d e x i F d e s a b e r a h S s t n e m y a p m r e t - g n o L t s o P t n e m y o l p m e m r e t - t r o h S e u l a v r i a F ) d ( s n o i t p o $ e c i v r e s g n o L ) c ( e v a e l - r e p u S n o i t a u n n a $ $ h s a c I T S ) b ( s u n o b $ & y r a l a S ) a ( s e e f $ – – – – – – % 6 % 9 % 0 1 % 4 9 % 1 9 % 0 9 0 6 4 , 8 2 1 0 1 0 , 8 0 6 6 , 4 8 4 2 0 , 7 7 0 1 0 , 8 0 1 0 , 8 – – – 0 5 4 , 0 1 0 5 6 , 6 7 8 9 , 5 % 8 % 2 9 4 3 4 , 7 1 3 1 3 0 , 4 2 2 2 4 0 5 7 , 3 2 % 5 % 6 % 5 9 % 4 9 8 0 7 , 8 1 2 6 1 0 , 2 1 6 1 0 , 4 9 1 6 1 0 , 2 1 2 0 3 , 0 2 0 , 1 3 9 0 , 2 7 – 6 5 1 8 7 5 – 6 4 7 , 6 1 3 8 5 , 3 6 – – – – – – – 0 0 0 , 0 1 1 n a m r i a h C , d n a l r a C d i v a D r D s r o t c e r i D e v i t u c e x E - n o N 0 0 0 , 0 7 7 2 0 , 3 6 d n a l t i a M r e t s i l A r M 1 e k o o H l l e h c t i M r M r o t c e r i D g n i g a n a M 1 3 2 , 9 6 2 O E C , n n a m f u a L d r a h c i R r M 0 9 7 , 9 8 1 2 r o t c e r i D t c e j o r P , l l a H g e r G r M 0 0 0 , 2 8 1 8 4 0 , 4 8 8 3 O F C , e t n o m a v i R r e b m A s M : P M K n o i t a s n e p m o c l a t o T s e v i t u c e x E n o i t a r e n u m e r ’ s r e c ﬁ f O e v i t u c e x E d n a ’ s r o t c e r i D f o e l b a t e h t o t n o i t a l e r n i s e t o N ANNUAL REPORT 2 0 1 7 16 h g u o r h t d e g a g n e s i d n a 5 1 0 2 r e b m e v o N 1 n o O F C d e t n o p p a i s a w e t n o m a v R s M i . 5 1 0 2 t s u g u A 4 n o r o t c e r i D e v i t u c e x E - n o N a i d e t n o p p a s a w e k o o H . 5 1 0 2 r e b o t c O 9 1 n o r o t c e r i D j t c e o r P i d e t n o p p a s a w l l a H r M r M . 1 . 2 . 3 . t n e m e e r g a y c n a t l u s n o c a l a u n n a d e u r c c a d n a y r a a s l h s a c s e d u c n l i t i s r e c ﬁ f O e v i t u c e x E r o F . s d r a d n a t S g n i t n u o c c A n a i l a r t s u A h t i w e c n a d r o c c a n i d e r u s a e m P M K y b i d e v e c e r s t n u o m a e d u c n l i s e e f d n a y r a a S l ) a ( . n o l i t a s g e i l d e s a b - e t a t s h t i w e c n a d r o c c a n i s n o i t i d n o c i e c v r e s d e r i u q e r e h t s t e e m e e y o p m e l e h t f i h s a c n i i d a p e b l y n o l l i i w h c h w e v a e l i e c v r e s g n o l r o f l a u r c c a t e n e h t s t n e s e r p e R . r a e y l i a c n a n ﬁ 6 1 0 2 e h t o t n o i t a e r l n i l e b a y a p r o d e u r c c a e r e w s e s u n o b h s a c I T S o N . s t n e m e l t i t n e e v a e l ) b ( ) c ( m o r f d o i r e p e h t r e v o l y n e v e d o i r e p g n i t r o p e r h c a e o t d e t a c o l l a d n a l e d o m g n c i r p i n o i t p o l s e o h c S - k c a B e h t l g n s u i t n a r g f o e t a d e h t t a l d e t a u c a c l s i s n o i t p o e h t f o e u a v l r i a f e h T ) d ( s n o i t p o e h t f o e u a v l r i a f f o n o i t r o p e h t s i d e s o c s d l i e u a v l e h T . e t a d g n i t s e v o t t n a r g . d o i r e p g n i t r o p e r h c a e n i e s n e p x e n a s a i d e s n g o c e r REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2017 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 during or 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 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 been granted, lapsed, were forfeited or exercised during the year. 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. Name Held at 1 July 2016 Number of options granted Number of options vested % of options vested Held at 30 June 2017 Fair value of options granted Fair value of options expensed in 2017 Maximum fair value of options yet to vest or be expensed Dr David Carland 1,000,000 Mr Alister Maitland 1,000,000 Mr Mitchell Hooke 1,000,000 Mr Richard Laufmann 3,000,000 Mr Greg Hall 1,500,000 Ms Amber Rivamonte 1,500,000 – – – – – – 333,333 333,333 333,333 1,000,000 500,000 500,000 33 33 33 33 33 33 1,000,000 $25,100 $10,964 $6,125 1,000,000 $25,100 $10,964 $6,125 1,000,000 $25,100 $10,964 $6,125 3,000,000 $75,300 $32,893 $18,376 1,500,000 $37,650 $16,447 $9,188 1,500,000 $37,650 $16,447 $9,188 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 2016 ﬁnancial year. No options vested, lapsed, were forfeited or exercised during the 2016 ﬁnancial 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 17 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2017 REMUNERATION REPORT – AUDITED (CONTINUED) Reconciliation of options and ordinary shares held by Key Management Personnel (KMP) (Continued) Options (Continued) A total of nine million options were granted as compensation to KMP during the 2016 ﬁnancial year as detailed below. Grant date Fair value per option at grant date Exercise price per option Premium to closing share price prior to grant date Expiry date Options will vest in three equal tranches as follows: 22 December 2015 2.51 cents 6.3 cents 12.5% 30 November 2019 (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. 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 Dr David Carland Mr Alister Maitland Mr Mitchell Hooke Mr Richard Laufmann Mr Greg Hall Ms Amber Rivamonte Held at 1 July 2016 Received on exercise of option Purchased or sold during the year Held at 30 June 2017 268,330 202,000 105,143 3,541,666 – 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 the ﬁnancial year. Other transactions with Key Management Personnel (KMP) 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 2017. Dated at Melbourne this 14th day of September 2017 Signed in accordance with a resolution of the Directors: Mr Richard Laufmann Chief Executive Ofﬁcer ANNUAL REPORT 2 0 1 7 18 REX MINERALS LTD CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2017 2016 Note $000 $000 Current assets Cash and cash equivalents 7(a) 5,440 3,205 Term deposits 7(b) – 3,000 Trade and other receivables 280 238 Prepayments 51 107 Total current assets 5,771 6,550 Non-current assets Exploration and evaluation expenditure 1,645 1,645 Property, plant and equipment 9 15,085 15,316 Water infrastructure 4,076 4,076 Total non-current assets 20,806 21,037 Total assets 26,577 27,587 Current liabilities Trade and other payables 10 259 756 Employee beneﬁts 298 171 Provisions 36 36 Total current liabilities 593 963 Non-current liabilities Trade and other payables 10 424 500 Employee beneﬁts 149 105 Total non-current liabilities 573 605 Total liabilities 1,166 1,568 Net assets 25,411 26,019 Equity Issued capital 11(a) 189,566 189,566 Reserves 11(c) 319 135 Accumulated losses (164,474) (163,682) Total equity 25,411 26,019 The notes on pages 23 to 39 are an integral part of these ﬁnancial statements. 19 REX MINERALS LTD CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the year ended 30 June 2017 2016 Note $000 $000 Finance income 227 181 Administrative expenses (828) (1,488) Depreciation expense 9 (234) (386) Employee beneﬁts expense 12 (2,261) (2,317) Marketing expenses (61) (121) Exploration and evaluation (948) (922) Loss on disposal of ﬁxed assets – (11) Loss before tax (4,105) (5,064) Income tax beneﬁt 13 3,313 – Total loss for the period after tax (792) (5,064) Other comprehensive income – – Total comprehensive loss attributable to members of Rex Minerals Ltd (792) (5,064) Loss per share attributable to members of Rex Minerals Ltd Basic loss per share (cents) 14 (0.36) (2.30) Diluted loss per share (cents) 14 (0.36) (2.30) The notes on pages 23 to 39 are an integral part of these ﬁnancial statements. ANNUAL REPORT 2 0 1 7 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 reserve Note $000 $000 $000 $000 Balance at 1 July 2016 189,566 135 (163,682) 26,019 Share based payments 11(c) – 184 – 184 Total comprehensive loss for the period – – (792) (792) Balance at 30 June 2017 189,566 319 (164,474) 25,411 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 The notes on pages 23 to 39 are an integral part of these ﬁnancial statements. 21 REX MINERALS LTD CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 30 June 2017 2016 Note $000 $000 Cash ﬂows from operating activities Cash paid to suppliers and employees (3,393) (2,696) Exploration and evaluation payments (904) (2,234) Interest received 222 207 Research and development incentive received 3,313 – Net cash used in operating activities 15 (762) (4,723) Cash ﬂows from investing activities Acquisition of property, plant and equipment 9 (3) (7) Proceeds from sale of property, plant and equipment – 5 Proceeds from term deposits 7(b) 3,000 – Net cash from/(used in) investing activities 2,997 (2) Cash ﬂows from ﬁnancing activities Net cash from ﬁnancing activities – – Net increase/(decrease) in cash and cash equivalents 2,235 (4,725) Cash and cash equivalents at beginning of the period 3,205 7,930 Cash and cash equivalents at period end 7(a) 5,440 3,205 The notes on pages 23 to 39 are an integral part of these ﬁnancial statements. ANNUAL REPORT 2 0 1 7 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 2017 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 consolidated ﬁnancial statements are general purpose ﬁnancial statements which have been prepared in accordance with Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated ﬁnancial statements comply with International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board (IASB). They were approved by the Board of Directors on 14 September 2017. (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) (cid:129) Note 9 Note 16 Notes 19 and 20 Recoverable value of non-current assets 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. 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. ANNUAL REPORT 2 0 1 7 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. 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 the 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. ANNUAL REPORT 2 0 1 7 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. 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 2017, and have not been applied in preparing these consolidated ﬁnancial statements: (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 new standard is not expected to have signiﬁcant impact on the ﬁnancial statements. 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. 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. ANNUAL REPORT 2 0 1 7 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. 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 2017 2016 $000 $000 Bank balances and short-term deposits 5,440 3,205 Cash and cash equivalents in the statement of cash ﬂows 5,440 3,205 (b) Term deposits 2017 2016 $000 $000 Term deposits* – 3,000 Total term deposits – 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 $5,440,000 (2016: $6,205,000) is exposed to interest rate risk and a sensitivity analysis for ﬁnancial assets and liabilities is disclosed in note 17. 8. DEFERRED TAX ASSETS (DTA) AND DEFERRED TAX LIABILITIES (DTL) 2017 2016 $000 $000 Exploration and evaluation assets (494) (494) Property, plant and equipment (121) (152) Provisions 114 260 Equity costs 43 85 Net DTA/(DTL) (458) (301) Tax losses recognised to the extent of the DTL 458 301 – – 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. The DTA not recognised is $50,142,000 (2016: $48,360,000). ANNUAL REPORT 2 0 1 7 30 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 9. PROPERTY, PLANT AND EQUIPMENT Land and Plant and buildings equipment Total 2017 $000 $000 $000 Cost Balance at 1 July 2016 15,074 2,118 17,192 Additions – 3 3 Balance at 30 June 2017 15,074 2,121 17,195 Depreciation and impairment losses Balance at 1 July 2016 230 1,646 1,876 Depreciation 87 147 234 Balance at 30 June 2017 317 1,793 2,110 Carrying amounts At 1 July 2016 14,844 472 15,316 At 30 June 2017 14,757 328 15,085 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 10. TRADE AND OTHER PAYABLES 2017 2016 $000 $000 Current Trade payables 13 – Accrued expenses 246 756 Total current trade and other payables 259 756 Non-current Accrued expenses – lease incentive 424 500 Total non-current trade and other payables 424 500 Total trade and other payables 683 1,256 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 2016 220,519,784 189,566 Closing balance at 30 June 2017 220,519,784 189,566 Opening balance at 1 July 2015 220,519,784 189,566 Closing balance at 30 June 2016 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 2016 16,800,000 Closing balance as at 30 June 2017 16,800,000 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 (c) Movements in share based payment reserve: $000 Opening balance at 1 July 2016 135 Share based payments 184 Closing balance at 30 June 2017 319 Opening balance at 1 July 2015 – Share based payments 135 Closing balance at 30 June 2016 135 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. ANNUAL REPORT 2 0 1 7 32 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 12. EMPLOYEE BENEFITS EXPENSE 2017 2016 $000 $000 Wages and salaries 1,961 2,159 Share based payments 129 94 Increase/(decrease) in liability for annual leave 127 39 Increase/(decrease) in liability for long service leave 44 25 Total employee beneﬁts expense 2,261 2,317 13. INCOME TAX BENEFIT NUMERICAL RECONCILIATION BETWEEN TAX BENEFIT AND PRE-TAX ACCOUNTING LOSS 2017 2016 $000 $000 Loss before tax for the period (4,105) (5,064) Income tax using the domestic corporation tax rate of 30% (2016: 30%) (1,231) (1,519) Non-deductible expenses 37 44 Research and development beneﬁt (3,313) – Net effect of tax losses not recognised 1,194 1,475 Total income tax expense/(beneﬁt) (3,313) – 14. LOSS PER SHARE 2017 2016 cents cents Loss per share Basic loss per share (0.36) (2.30) Diluted loss per share (0.36) (2.30) (a) Basic loss per share The calculation of basic loss per share at 30 June 2017 was based on the loss attributable to ordinary equity holders of $792,000 (2016: $5,064,000) and a weighted average number of ordinary shares outstanding during the ﬁnancial year ended 30 June 2017 of 220,519,784 (2016: 220,519,784). (b) Diluted loss per share The calculation of diluted loss per share at 30 June 2017 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 2017. 33 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 15. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES 2017 2016 Note $000 $000 Cash ﬂows from operating activities Loss before tax for the period (4,105) (5,064) Adjustments for non-cash items: Depreciation 9 234 386 Share based payments 11(c) 184 135 Adjustments for other items: (Proﬁt)/loss on disposal of property plant and equipment – 11 Research and development beneﬁt received 3,313 – Operating loss before changes in working capital and provisions (374) (4,532) (Increase)/decrease in trade and other receivables 14 (4) (Decrease)/increase in trade and other payables (573) (204) (Decrease)/increase in employee beneﬁts 171 64 (Decrease)/increase in provisions – (47) Net cash (used in)/from operating activities (762) (4,723) 16. SHARE BASED PAYMENTS (a) Description of share based payment arrangements No options were granted during the ﬁnancial year ending 30 June 2017. 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 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. ANNUAL REPORT 2 0 1 7 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 in the 2016 ﬁnancial year were 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 2017 2016 $000 $000 Option expense 184 135 Total recognised as share based payments 184 135 (d) Outstanding options At 30 June 2017, 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 2017 Trade and other payables 683 (259) (259) (424) 683 (259) (259) (424) 2016 Trade and other payables 1,256 (756) (756) (500) 1,256 (756) (756) (500) 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: 2017 2016 $000 $000 Cash and cash equivalents 5,440 3,205 Term deposits – 3,000 Total cash and term deposits 5,440 6,205 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 2017, 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) 2017 2016 2017 2016 $000 $000 $000 $000 Group +1% (100 basis points) 54 87 – – – 1% (100 basis points) (54) (87) – – 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 (2016: 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: 2017 2016 $000 $000 Not later than one year 407 393 Later than one year but not later than ﬁve years 1,660 1,652 Greater than ﬁve years 657 1,072 The Group leases ofﬁce space under an operating lease. The lease was for a period of 10 years (6.5 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 $429,000 was recognised as an expense in proﬁt and loss in respect of the ofﬁce lease above (2016: $430,000). ANNUAL REPORT 2 0 1 7 36 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 19. EXPLORATION EXPENDITURE COMMITMENTS In order to maintain current rights of tenure to exploration tenements, the Group is required to perform minimum exploration work to meet the minimum expenditure requirements under the various exploration licences which are held. These obligations are expected to be fulﬁlled in the normal course of operations. Mining interests may be relinquished or joint ventured to reduce this amount. The State Government has the authority to defer, waive or amend the minimum expenditure requirements. 2017 2016 $000 $000 Not later than one year 1,852 1,105 Later than one year but not later than ﬁve years 620 1,723 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 2017 (2016: $20,000). The Group’s bankers have provided guarantees amounting to $228,000 regarding ofﬁce leases as security over the Group’s obligations regarding the leases held. Under the agreements, the Group has indemniﬁed the bank in relation to these guarantees. The guarantees are backed by deposits amounting to $228,000 as at 30 June 2017 (2016: $199,000). 21. RELATED PARTIES (a) Parent and ultimate controlling party Ownership Interest Country of Incorporation 2017 2016 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% 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 2017. (ii) KMP compensation KMP compensation comprised the following: 2017 2016 $ $ Short-term beneﬁts 1,031,390 884,048 Post-employment beneﬁts 68,400 63,583 Share based payments 98,679 72,093 Other long-term beneﬁts 4,772 578 1,203,241 1,020,302 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 2017 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. 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. 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 2017 2016 2017 2016 Transaction $ $ $ $ Geological Services 1 120,000 80,000 – – 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. ANNUAL REPORT 2 0 1 7 38 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 22. PARENT ENTITY DISCLOSURES As at, and throughout, the period ending 30 June 2017, the parent company of the Group was Rex Minerals Ltd. 2017 2016 $000 $000 Result of the parent entity Proﬁt/(loss) for the period (637) (4,924) Other comprehensive income – – Total comprehensive income/(loss) for the period (637) (4,924) Financial position of the parent entity at year end Current assets 5,772 6,550 Total assets 20,444 21,333 Current liabilities 530 935 Total liabilities 1,103 1,539 Total equity of the parent entity comprising of Share capital 189,566 189,566 Share based payments reserve 319 135 Accumulated losses (170,544) (169,907) Total equity 19,341 19,794 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 2017 2016 KPMG Australia $ $ Audit services 48,175 46,125 Other services 30,000 20,000 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. 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 2017 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 2017. The Directors draw attention to Note 2 to the consolidated ﬁnancial statements, 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 14th day of September 2017 ANNUAL REPORT 2 0 1 7 40 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 of Rex Minerals Limited for the financial year ended 30 June 2017 there have been: i.(cid:31) ii.(cid:31) KPMG no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and no contraventions of any applicable code of professional conduct in relation to the audit. Scott Fleming Partner Adelaide 14 September 2017 (cid:13)(cid:18)(cid:12)(cid:11)(cid:10)(cid:31)(cid:36)(cid:19)(cid:31)(cid:9)(cid:20)(cid:27)(cid:33)(cid:23)(cid:36)(cid:34)(cid:37)(cid:36)(cid:19)(cid:31)(cid:24)(cid:36)(cid:23)(cid:33)(cid:19)(cid:29)(cid:23)(cid:27)(cid:25)(cid:37)(cid:24)(cid:31)(cid:36)(cid:19)(cid:28)(cid:31)(cid:36)(cid:31)(cid:30)(cid:29)(cid:30)(cid:35)(cid:29)(cid:23)(cid:31)(cid:17)(cid:37)(cid:23)(cid:30)(cid:31)(cid:22)(cid:17)(cid:31)(cid:33)(cid:25)(cid:29)(cid:31)(cid:13)(cid:18)(cid:12)(cid:11)(cid:31) (cid:19)(cid:29)(cid:33)(cid:8)(cid:22)(cid:23)(cid:7)(cid:31)(cid:22)(cid:17)(cid:31)(cid:37)(cid:19)(cid:28)(cid:29)(cid:24)(cid:29)(cid:19)(cid:28)(cid:29)(cid:19)(cid:33)(cid:31)(cid:30)(cid:29)(cid:30)(cid:35)(cid:29)(cid:23)(cid:31)(cid:17)(cid:37)(cid:23)(cid:30)(cid:27)(cid:31)(cid:36)(cid:17)(cid:17)(cid:37)(cid:34)(cid:37)(cid:36)(cid:33)(cid:29)(cid:28)(cid:31)(cid:8)(cid:37)(cid:33)(cid:25)(cid:31)(cid:13)(cid:18)(cid:12)(cid:11)(cid:31) (cid:6)(cid:19)(cid:33)(cid:29)(cid:23)(cid:19)(cid:36)(cid:33)(cid:37)(cid:22)(cid:19)(cid:36)(cid:34)(cid:31)(cid:5)(cid:22)(cid:22)(cid:24)(cid:29)(cid:23)(cid:36)(cid:33)(cid:37)(cid:21)(cid:29)(cid:31)(cid:4)(cid:3)(cid:13)(cid:18)(cid:12)(cid:11)(cid:31)(cid:6)(cid:19)(cid:33)(cid:29)(cid:23)(cid:19)(cid:36)(cid:33)(cid:37)(cid:22)(cid:19)(cid:36)(cid:34)(cid:2)(cid:1)(cid:10)(cid:31)(cid:36)(cid:31)(cid:16)(cid:8)(cid:37)(cid:27)(cid:27)(cid:31)(cid:29)(cid:19)(cid:33)(cid:37)(cid:33)(cid:32)(cid:14)(cid:31) (cid:38)(cid:37)(cid:36)(cid:35)(cid:37)(cid:34)(cid:37)(cid:33)(cid:32)(cid:31)(cid:34)(cid:37)(cid:30)(cid:37)(cid:33)(cid:29)(cid:28)(cid:31)(cid:35)(cid:32)(cid:31)(cid:36)(cid:31)(cid:27)(cid:26)(cid:25)(cid:29)(cid:30)(cid:29)(cid:31)(cid:36)(cid:24)(cid:24)(cid:23)(cid:22)(cid:21)(cid:29)(cid:28)(cid:31)(cid:20)(cid:19)(cid:28)(cid:29)(cid:23)(cid:31) (cid:18)(cid:23)(cid:22)(cid:17)(cid:29)(cid:27)(cid:27)(cid:37)(cid:22)(cid:19)(cid:36)(cid:34)(cid:31)(cid:16)(cid:33)(cid:36)(cid:19)(cid:28)(cid:36)(cid:23)(cid:28)(cid:27)(cid:31)(cid:38)(cid:29)(cid:15)(cid:37)(cid:27)(cid:34)(cid:36)(cid:33)(cid:37)(cid:22)(cid:19)(cid:14)(cid:31) Independent Auditor’s Report To the shareholders of Rex Minerals Limited Report on the audit of the Financial Report Opinion We have audited the Financial Report of Rex Minerals Limited (the Company). In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations Act 2001, including: (cid:1) giving a true and fair view of the Group's financial position as at 30 June 2017 and of its financial performance for the year ended on that date; and (cid:1) complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion The Financial Report comprises: (cid:1) Consolidated statement of financial position as at 30 June 2017 (cid:1) 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 then ended (cid:1) Notes including a summary of significant accounting policies (cid:1) Directors' Declaration. The Group consists of the Company and the entities it controlled at the year end or from time to time during the financial year. We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code. Key Audit Matters Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Report of the current period. This matter was addressed in the context of our audit of the Financial Report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter. Recoverable value of non-current assets Property, plant and equipment $15.1m – Note 9 Water infrastructure $4.1m Exploration and evaluation expenditure $1.6m Collectively referred to as ‘non-current assets’. The key audit matter How the matter was addressed in our audit The Group’s recoverable value of non- current assets is based on either the successful development of the Hillside project or sale of the non-current assets. The recoverable value of non-current assets is a key audit matter due to: (cid:2) Significance of the balances to the financial statements (being 78% of total assets); and (cid:2) The need for management to determine the appropriate basis of assessing recoverable value which can be either: (cid:1) A ‘value in use’ assessment which requires significant judgement in determining the recoverable value of the Hillside project due to the use of a feasibility model which is highly sensitive to changes in assumptions; or (cid:1) A ‘fair value’ assessment which is based on data sourced from third parties in relation to comparable transactions which are limited in number and frequency. For the year ended 30 June 2017, a fair value basis has been adopted to determine the recoverable value of the non-current assets. Our procedures included: (cid:2) Assessing the appropriateness of the methodology used to determine the value of assets with reference to Australian Accounting standards. (cid:2) Testing the key controls over the Group’s valuation process including Board authorisation of the recoverable value assessment. (cid:2) Checking the Group’s assessment of the fair value of property, plant and equipment to data sourced by the Group from an external valuer. (cid:2) Checking the Group’s assessment of fair value of the undeveloped ore resources to data sourced by the Group from an external valuer. (cid:2) Assessing the scope, competence and objectivity of the Group’s external valuers by gaining an understanding of their experience and qualifications. (cid:2) Evaluating the scope, competence and objectivity of the Group’s internal experts who produced the Resource Statement utilised within the valuation of undeveloped resources. (cid:2) Obtaining details of comparable transactions involving the sale of undeveloped ore resources from our valuation specialists to inform our assessment of the Group’s valuation of undeveloped ore resources. (cid:2) Assessing the Group’s disclosure against the requirements of Australian Accounting Standards. Other Information Other Information is financial and non-financial information in Rex Minerals Limited’s annual reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the Other Information. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report. Responsibilities of the Directors for the Financial Report The Directors are responsible for: (cid:1) preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting (cid:1) Standards and the Corporations Act 2001 implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error (cid:1) assessing the Group and Company's ability to continue as a going concern. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Report Our objective is: (cid:1) (cid:1) to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and to issue an Auditor’s Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this Financial Report. A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_files/ar2.pdf. This description forms part of our Auditor’s Report. Report on the Remuneration Report Opinion Directors’ responsibilities In our opinion, the Remuneration Report of Rex Minerals Limited for the year ended 30 June 2017, complies with Section 300A of the Corporations Act 2001. 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 responsibilities We have audited the Remuneration Report included in pages 12 to 18 of the Directors’ report for the year ended 30 June 2017. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. KPMG Scott Fleming Partner Adelaide 14 September 2017 REX MINERALS LTD ADDITIONAL SHAREHOLDER INFORMATION Additional information required by the Australian Stock Exchange (ASX) Listing Rules and not shown elsewhere in this report is set out below and the information was applicable as at 31 July 2017. Distribution of ordinary shares The number of shareholders, by size of holding: Total % of Range Holders Units Issued Capital 1 – 1,000 685 317,720 0.14 1,001 – 5,000 1,326 3,800,201 1.72 5,001 – 10,000 715 5,720,867 2.59 10,001 – 100,000 1,303 45,894,479 20.81 100,001 – 999,999,999 323 164,786,517 74.73 Total 4,352 220,519,784 100.00 The number of shareholders holding less than a marketable parcel: 2,446 7,087,230 Twenty largest shareholders The names of the twenty largest shareholdings of quoted ordinary shares are: Number of % of Name Shares Held Issued Capital Grand South Development Limited 11,785,777 5.34 1. HSBC Custody Nominees (Australia) 6,572,986 2.98 2. S & S Olsen Pty Ltd 5,752,000 2.61 3. Greenstone Property Pty Ltd (Titeline Property A/C) 5,345,531 2.42 4. Panjeta Investment Group Pty Ltd 4,530,000 2.05 5. BNP Paribas Noms Pty Ltd (DRP) 4,303,366 1.95 6. Stone Poneys Nominees Pty Ltd (Chapman Super Fund A/C) 3,644,833 1.65 7. Mrs Natalie Laufmann 3,500,000 1.59 8. Greenstone Property Pty Ltd 2,825,000 1.28 9. 10. United Overseas Service Management Ltd 2,513,399 1.14 11. Mrs Vickie Jane Jones 2,240,000 1.02 Dr Steven G Rodwell 2,164,240 0.98 12. 13. Ms Fei Chen 2,106,200 0.96 Citicorp Nominees Pty Limited 1,991,292 0.90 14. BNP Paribas Noms Pty Ltd (UOB KH P/L AC UOB KH DRP) 1,916,979 0.87 15. HSBC Custody Nominees (Australia) 1,890,071 0.86 16. 17. Mr Parmjit Singh 1,600,000 0.73 Mr Paul Christopher Walker 1,515,024 0.69 18 19. Aquara Nominees Pty Ltd (Aquara Super Fund A/C) 1,500,000 0.68 20. Mrs Philippa Jean Laufmann (Laufmann Family A/C) 1,500,000 0.68 Total 69,196,698 31.38 Substantial shareholders There is one substantial shareholder lodged with the Company: Name Number of % of Shares Held Issued Capital 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. ANNUAL REPORT 2 0 1 7 46 REX MINERALS LTD NOTES for the year ended 30 June 2017 47 REX MINERALS LTD NOTES for the year ended 30 June 2017 ANNUAL REPORT 2 0 1 7 48 Designed and Produced by Celtink Creative info@celtink.com A B N 12 124 960 523 STAY IN TOUCH A Level 19, 11 Waymouth Street Adelaide, South Australia 5000 T +61 (0) 8 8299 7100 F +61 (0) 8 8299 7199 P PO Box 3435 Rundle Mall, South Australia 5000 E rex@rexminerals.com.au W www.rexminerals.com.au

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