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:
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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:
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ANNUAL REPORT
2 0 1 7
16
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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
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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
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STAY IN TOUCH
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