RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
ANNUAL REPORT
30 JUNE 2015
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
CONTENTS
CORPORATE DIRECTORY ............................................................................................................................ 1
DIRECTORS’ REPORT .................................................................................................................................... 2
AUDITOR’S INDEPENDENCE DECLARATION ........................................................................................ 32
DIRECTORS’ DECLARATION ..................................................................................................................... 33
CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OTHER COMPREHENSIVE INCOME ....... 34
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................................................... 35
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ................................................................... 36
CONSOLIDATED STATEMENT OF CASH FLOWS .................................................................................. 37
NOTES TO AND FORMING PART OF THE ACCOUNTS ......................................................................... 38
INDEPENDENT AUDITOR’S REPORT ....................................................................................................... 70
CORPORATE GOVERNANCE ...................................................................................................................... 72
SHAREHOLDER INFORMATION ................................................................................................................ 81
SCHEDULE OF MINING TENEMENTS ..................................................................................................... 83
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
CORPORATE DIRECTORY
DIRECTORS
Andrew Childs
Ian Tchacos
Jeffrey Moore
Ed Turner
COMPANY SECRETARY
Leonard Math
REGISTERED & PRINCIPAL OFFICE
Suite 1
6 Richardson Street
WEST PERTH WA 6005
Telephone: (08) 9226 0866
Facsimile: (08) 9486 7375
AUDITORS
PKF Mack
Level 4
35 Havelock Street
WEST PERTH WA 6005
SHARE REGISTRY
Computershare Investor Services Pty Limited
Level 11, 172 St Georges Terrace
Perth WA 6000
STOCK EXCHANGE LISTING
Australian Securities Exchange
(Home Exchange: Perth, Western Australia)
Code: RIE
1
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT
Your directors present the following report on Riedel Resources Limited (the Company) and
the entities it controlled during or at the end of the financial year (the Group) for the financial
year ended 30 June 2015.
DIRECTORS
The Directors of the Company at any time during or since the end of financial year are:
Ian Tchacos
Qualifications
Experience
Non-executive Chairman (Appointed on 9 April 2010)
B.Eng (Mech.)
Mr Tchacos is a mechanical engineer with over 25 years international
experience in corporate development and strategy, mergers and
acquisitions, exploration, development and production operations,
marketing and finance. He has a proven management track record in a
range of international Company environments. In his last appointment
as Managing Director of Nexus Energy he was responsible for this
Company’s development from an onshore micro cap explorer to an ASX
top 200 offshore producer and operator. He is currently non-executive
Chairman of ADX Energy Limited and non executive Director of Xstate
Resources Ltd.
Directorships of other
listed companies
ADX Energy Limited
Xstate Resources Ltd
Interest in Shares
2,230,205
Jeffrey Moore
Qualifications
Executive Director (Appointed on 30 September 2010)
B.Sc, MAusIMM, MGSA
Experience
Mr Moore is a geologist with extensive technical, managerial and
project finance experience in exploration and mining for publicly listed
companies. During his career, he has generated and managed projects
for commodities including precious metals, base metals, diamonds,
nickel and industrial minerals throughout Australia, Central and South
America, Africa and Asia.
Mr Moore has held previous directorships with Allied Gold Limited from
2004 to 2008, Great Australian Resources Limited from 2005 to 2007,
Abra Mining Limited from 2006 to 2011, Alchemy Resources Limited
from 2010 to 2011 and Cougar Metals NL from 2008 to 2012.
Mr Moore is also a Corporate Member of the Australasian Institute of
Mining and Metallurgy and a Member of the Geological Society of
Australia. He was appointed as a non-executive Director of Wild Acre
Metals Limited on 8 September 2014.
Directorships of other
listed companies
Interest in Shares
Nil
2,661,305
2
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Andrew Childs
Non-executive Director (Appointed on 9 April 2010)
Experience
Mr Childs is currently Chairman of Australian Oil Company Limited and
non-executive Director of ADX Energy Limited. He also sits on the
Boards of a number of unlisted private and public companies including
AIM listed Stratic Energy Corporation. Andrew graduated from the
University of Otago, New Zealand in 1980 with a Bachelor of Science in
Geology and Zoology.
Having started his professional career as an Exploration Geologist in
the Eastern Goldfields of Western Australia, Andrew moved to
petroleum geology and geophysics with Perth-based Ranger Oil
Australia (later renamed Petroz NL). He gained technical experience
with Petroz as a Geoscientist and later commercial experience as the
Commercial Assistant to the Managing Director. Andrew is a member of
the Petroleum Exploration Society of Australia and the American
Association of Petroleum Geologists.
Directorships of other
listed companies
ADX Energy Limited
Australian Oil Company Limited
Interest in Shares
2,987,305
Ed Turner
Qualifications
Experience
Executive Director (appointed 5 December 2012)
BAppSc (Geology), MAIG
Mr Turner joined the company as Exploration Manager in July 2011. He
was appointed to the Board as Technical Director in December 2012.
Prior to this he accumulated 25 years of experience as a geologist in
Australia and overseas, with primary focus on gold, nickel, uranium and
base metals exploration and underground gold mining. He has
extensive experience in project review, due diligence and acquisition.
Mr Turner has established exploration teams and managed exploration
programmes in Romania, the Ukraine, Brazil, Burkina Faso and the
Democratic Republic of Congo for companies including RSG Global
(now Coffey Mining), Anvil Mining and Cougar Metals. In Romania Ed
led the exploration team that added five million ounces of gold to the
Rosia Montana gold resource in a twelve month period.
Directorships of other
listed companies
Nil
Interest in Shares
1,588,234
3
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Sue Symmons
Company Secretary (Resigned 28 August 2015)
Experience
Ms Symmons is a corporate services executive with GDA Corporate.
Prior to joining GDA Corporate, Ms Symmons was Company Secretary
of Jetset Travelworld Limited, Automotive Holdings Group Limited and
Evans & Tate Limited.
Ms Symmons was also Company Secretary to Heytesbury Pty Ltd, a
in property, construction and
private company with
agribusiness.
interests
Ms Symmons is a member of the Governance Institute of Australia and
Institute of Company Directors, holds a Bachelor of
Australian
Commerce majoring in Accounting and Corporate Administration and is
nearing completion of a Master of Business Law.
Leonard Math
Company Secretary (Appointed 28 August 2015)
Experience
Leonard graduated from Edith Cowan University in 2003 with a
Bachelor of Business majoring in Accounting and Information Systems.
He is a member of the Institute of Chartered Accountants. He previously
worked as an auditor at Deloitte.
He is experienced with public company responsibilities including ASX
and ASIC compliance, control and
implementation of corporate
governance, statutory financial reporting and shareholder relations. He
is a Director and Company Secretary of ASX listed companies
Elemental Minerals Limited, RMA Energy Limited and Kangaroo
Resources Limited.
The directors and Company Secretary have been in office to the date of this report unless
otherwise stated.
PRINCIPAL ACTIVITIES
The principal activity of the Group during the year was mineral exploration.
OPERATING RESULTS
The net loss of the Group for the financial period after provision for income tax was $794,639
2014: $7,715,487)
4
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
REVIEW OF OPERATIONS
Riedel Resources Limited (“Riedel”) assets include a portfolio of gold, copper and nickel
projects and significant land holdings in prospective Archaean- and Proterozoic-age terranes
of Western Australia (see Figure 1 for location of projects).
The Company has a mixture of advanced and early stage prospects, including:
Marymia – Australian Mines earning up to 80% (copper, gold, nickel and base
metals);
Charteris Creek – FMGR earning up to 80% (copper, molybdenum, gold and iron-
ore);
Cheritons Find (gold - Inferred Resources of 1.4Mt @ 2.4g/t Au for 108,000 oz);
Millrose (gold - 1Inferred Resources of 4.0Mt @ 2.4g/t Au for 309,000 oz).
Furthermore, the Western Australian Projects are augmented with a number of additional
royalty agreements.
Figure 1: Project locations
1 Phil Jones (Al Maynard & Assoc) – 2010. This information was previously prepared and disclosed on the basis
of compliance with the JORC Code – 2004 Edition. The Inferred Mineral Resources have not been subsequently
updated to satisfy compliance with the JORC Code - 2012 Edition as the information has not materially changed
since it was last reported.
5
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
MARYMIA PROJECT JOINT VENTURE
Australian Mines Limited (ASX: AUZ) earning interests up to 80%
On April 30 2014 Riedel agreed to a farm-in and joint venture with Australian Mines Limited
(“Australian Mines”) over exploration licences 52/2394 and 52/2395. If the farm-in and joint
venture arrangement proceed to its full conclusion, the earn-in will be worth up to $3.3M.
During the 2014-2015 financial year:
Australian Mines spent $150,000 in exploration on the Marymia Project within six
months from commencement (“Minimum Expenditure”) and elected to continue with
the farm-in arrangement.
Upon exercising its option to continue with the farm-in arrangement after satisfying
the Minimum Expenditure, Australian Mines made a cash payment to Riedel of
$250,000;
Australian Mines spent more
the Minimum
Expenditure) on exploration within the initial two year period from commencement
and earned a 51% interest in the Marymia Project (“Stage 1 Earn-in”);
than $1,000,000
(including
Australian Mines notified Riedel that it has elected to progress with Stage 2 in the
Marymia Project Joint Venture (“Stage 2 Earn-in”) by spending a further $2,000,000
on exploration within a further 3 year period following the Stage 1 Earn-in.
Australian Mines can earn an additional 29% interest (taking the total interest to 80%)
by completing this expenditure by July 2018.
Geological Setting
The Marymia Project is located approximately 30 kilometres east of the 4.7M oz Plutonic
gold mine, 55 kilometres north-east of Sandfire Resources NL’s DeGrussa copper-gold mine
(550,000 tonnes contained copper metal), and 12 kilometres east-north-east of Ventnor
Resources Limited’s Green Dragon and Thaduna copper deposits (100,000 tonnes
contained copper metal) in Western Australia’s Mid-West region (see Figure 2).
Significant regional structures identified in the project area include the Jenkin Fault and
prospective, mineralised geology including the Archaean-aged Baumgarten Greenstone Belt
and Proterozoic-aged sediments belonging to the Yerrida and Earaheedy Groups. The
project is prospective for copper, gold and nickel mineralisation.
6
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Work Activities
Australian Mines initially refined its exploration activities to focus on the Simmons prospect,
in response to a ground-based EM survey which identified a strongly conductive body
beneath an historic nickel-in-soil anomaly. As a result, two diamond drill holes were
completed for a total of 1,230 metres at Simmons. Two distinct sulphide zones (>10%
sulphides), were observed in drill core from both holes, with both zones appearing to contain
iron sulphides with trace amounts of other sulphides including chalcopyrite (copper sulphide)
in hole number SMDD001.
Although drilling intersected multiple sulphide zones, neither of the drill holes adequately
explain the strong nickel and copper soil anomalies previously reported across the prospect
area or the strong conductive EM anomaly.
Figure 2: Marymia Project - Location Map
Australian Mines subsequently completed a follow-up EM survey across a broader area to
investigate additional priority targets prospective for nickel sulphide mineralisation. The EM
surveys were designed to identify further Kambalda-type bedrock conductors within the
northern continuation of the Simmons ultramafic (komatiite) sequence, which included large
nickel geochemical soil anomalies MM001 and MM004 (see Figure 3).
7
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Figure 3: Marymia Project - Ground EM survey area on aeromagnetic background.
A d iscrete bedrock conductor identified below the MM001 anomaly (now named the
Wyman Prospect), represents the northern extension of the Simmons ultramafic sequence
(see Figure 4).
High-resolution MLEM surveys were also completed over other target areas within the
project and these successfully identified a strong late-time conductor, subsequently named
layer of nickel oxide
the Burton Prospect. Burton
mineralisation which was recognised by a historic scout drilling intercept of 22 metres @
0.58% nickel from 22 metres depth (see Figure 4).
located beneath a
thick
is
8
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Figure 4: Marymia Project region - Schematic geological map showing EM conductor cluster
in relation to the Burton Prospect, Wyman Prospect and the Jenkin Fault.
In April 2015 Australian Mines completed a 12 hole RC program totalling 2,237 metres
which tested six different nickel, copper and gold targets including the Burton, Wyman and
Baumgarten Prospects (see Table 1 and Figure 4). The best intersection was 21 metres @
0.05% copper and 0.21% zinc from 193 metres in MMRC003 at the Burton Prospect (see
Figure 5). Australian Mines has concluded that this drill hole was not in the optimal position
and follow up drilling is planned to commence in September 2015.
9
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Figure 5: Location of MMRC003 and EM anomalies at the Burton Prospect and along the
Jenkin Fault. Due to the Burton target’s close proximity to the tenement boundary,
Australian Mines drilled a single, sub-optimal RC hole designed to test the eastern
edge of this conductor. Following the recently announced joint venture with
Lodestar Minerals2, Australian Mines is proposing to extend the drilling of the
Burton conductor.
2 Australian Mines Limited, Australian Mines increases Marymia ground holding, released 11 June 2015
10
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Table 1: Marymia Reverse Circulation (RC) Drill Program – Drill Hole Information Summary
Hole ID
Depth
(m)
Easting
(MGA50)
Northing
(MGA50)
RL
Dip
(
Azimuth
Tenement
MMRC001
198
788477 7189772
580
-60
145
E52/2394
MMRC002
185
791249 7189460
580
-60
135
E52/2394
MMRC003
252
790652 7207945
580
-60
180
E52/2395
MMRC004
120
798572 7203541
580
-60
180
E52/2394
MMRC005
156
798827 7203543
580
-60
180
E52/2394
MMRC006
237
799805 7201241
580
-60
140
E52/2394
MMRC007
219
799325 7200730
580
-60
130
E52/2394
MMRC008
198
799330 7200732
580
-60
310
E52/2394
MMRC009
126
799347 7201207
580
-60
130
E52/2394
MMRC010
216
794855 7211721
580
-60
150
E52/2395
MMRC011
150
794816 7211751
580
-60
150
E52/2395
MMRC012
180
794861 7211675
580
-60
150
E52/2395
CHARTERIS CREEK JOINT VENTURE
FMG Resources Pty Ltd earning interests up to 80%
On 16 January 2014 Riedel announced that Fortescue Metals Group Limited, through its
wholly-owned subsidiary FMG Resources Pty Ltd (“FMGR” or “Fortescue”), has entered into
a Farm In and Joint Venture Agreement worth up to $1M over Exploration Licence 45/2763
(see Figure 1 for location of project).
Geological Setting
The Company’s 100%-owned tenement is 131km2 in area and is located approximately
45km north of Nullagine and 50km south-east of Marble Bar in the Pilbara Region of Western
Australia.
The Charteris Creek Project has very favourable geology for the discovery of mineral
deposits, as highlighted by the presence of numerous gold, copper, base metals, iron ore
and specialty metals discoveries and deposits proximal to the exploration licence (see Figure
6).
11
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Despite the strong similarities between the geological/structural setting at Charteris Creek to
that which hosts nearby mineral deposits, only limited exploration has been previously
carried out within the tenement.
Mineral deposit and mineralisation types that the Company has identified as exploration
targets in the tenement include:
─ Copper-lead-zinc and copper-molybdenum mineralisation associated with a
granodiorite intrusion has been identified in the south-east part of the exploration
licence. This mineralisation forms part of a larger cluster of base metal and specialty-
metal occurrences related to stockwork mineralisation in the Gobbos Granodiorite.
─ Laconia Resources’ Lennons Find VHMS deposit (3 Indicated and Inferred Mineral
Resources of 1.85M tonnes @ 5.1% Zn, 1.4% Pb, 0.2% Cu and 82g/t Ag) is located
approximately one kilometre to the north of E45/2763. Reconnaissance work by
Riedel confirms that the prospective Warrawoona Group host rocks extend into
E45/2763.
─
─
In 1968 4Conwest Australia reported significant copper intercepts from drilling in
porphyry rocks, including 50 feet @ 1.34% Cu from 40 feet in drillhole OS4 and 20
feet @ 1.38% Cu from 130 feet in drillhole OS3. The drilling was carried out several
kilometres to the south of E45/2763 in geology analogous to the granitic porphyry
within Riedel’s exploration licence.
In 1987 5Concord Mining NL completed exploration within the Bridget, Otways and
Gobbos Prospects, located several kilometres to the south and south east of
E45/2763. Concord collected 130 stream sediment samples with 20 samples being
considered anomalous. Assay results up to 1.5g/t Au at the Otways prospect,
6.92g/t Au east of Gobbos, and 1150 ppm Cu at Gobbos were reported.
Encouraging sample results from costean 1 at Otways included 21m @ 3.89% Cu
and 2.22g/t Au.
─ Numerous small but very high grade gold deposits are located adjacent to the north-
western boundary of the tenement in Warrawoona Group rocks and several
structures that control, or are associated with these gold deposits, extend into
E45/2763.
3 Laconia Resources Limited website - January 2014
4 Western Australian Mineral Exploration Index (WAMEX) Report No. a1696
5 Western Australian Mineral Exploration Index (WAMEX) Report No. a24511
12
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Figure 6: Charteris Creek Project – Geological Map highlighting known mineral occurrences
and deposits
Work Activities
FMGR continued field work around the Lightning Ridge prospect during the year. This
included further detailed geological mapping and rock chip sampling as well as stream
sediment and soil sampling. The rock chip sampling, including assays from samples taken
in the previous quarter, produced some highly anomalous results with the best summarised
in Table 2 below.
13
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Table 2: Summary of most significant rock chip assays
Sample
ID
Cu
(%)
Au
(ppb)
Mo
(ppm)
Pb
(ppm)
Ni
(ppm)
W
(ppm)
D167533
8.41
1220
59.5
D167410
7.91
413
3
D167419
5.73
D167512
3.93
D167411
3.20
D167464
2.48
D167453
1.06
D167418
0.79
D167513
0.78
D167459
0.29
95
45
120
284
95
16
16
24
12.5
288
30
9.5
202
9
13
6.5
340
123
270
90
67
339
27
7
34
20
74
106
12
52
62
70
26
54
20
24
5.5
2
9.5
1.5
19
17.5
8.5
4
4.5
81
In total 2 rock chip, 122 stream sediment and 271 soil samples were collected. Regional
geological mapping was also completed over areas identified as anomalous by the stream
sediment sampling.
To date, the empirical data acquired indicates that there are structural and porphyritic
elements interacting to control the zones of anomalous copper and molybdenum seen within
the project area. The observed alteration systems, surrounding what has historically been
believed to be the core of an Archaean copper-porphyry system, show typical alteration
assemblages although they are less prominent than those seen in younger known
porphyries.
Hydrothermal alteration at Lightning Ridge is characterised by mafic mineral-destructive
quartz- clay-mica-pyrite (i.e. phyllic) alteration. The sites of the magmatic mafic minerals
(e.g. biotite, hornblende and pyroxene) have been obscured and the feldspars replaced by
sericite and clay. This type of phyllic alteration is common in late-stage overprinting of
porphyry copper systems. Marginal to the phyllic alteration zones, sericite and chlorite
alteration as well as silicification can be observed in adjacent basalt rocks. Mafic minerals in
the basalt are commonly replaced by chlorite and/or leucoxene.
Another zone of alteration and copper mineralisation to the north-east of the main prospect
also shows signs of porphyry-style alteration. A high density of ‘B-type’ quartz veins was
observed, reaching total rock volumes of 5-20%. This high density of veining indicates a
more proximal location to the centre of a possible porphyry system. Malachite and
disseminated in-situ pitch limonite also occur, together with strong clay- and sericite
‘B-type’ quartz veins disappear underneath Archaean
alteration. Alteration and
metasediments of the Gorge Creek Group.
14
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Hence, one of the concepts being investigated is that the majority of the porphyry intrusion
may be concealed beneath Archaean sedimentary and volcanic rocks. If this is the case, the
alteration seen in the field may only be the peripheral alteration halo to a much broader
concealed system. This hypothesis is supported by the analysis of soil geochemical copper
and molybdenum values over the Lightning Ridge prospect, where coincident copper-
molybdenum enrichment can be observed. An open anomaly at the northern end of the soil
grid is of particular interest, as the observed alteration of the host rock disappears below
Archaean sediments.
CHERITONS FIND PROJECT
Riedel continued work during the year aimed at the development of the Redwing gold
deposit, potentially as a toll treatment project.
Redwing is located within Riedel’s wholly-owned Cheritons Find Gold Project in the
Forrestania-Southern Cross Greenstone Belt in the Eastern Goldfields Region of Western
Australia (see Figures 1 and 7). Importantly, Redwing is only 45 kilometres to the south of
Hanking Gold Mining Pty Ltd’s (“Hanking”) gold processing plant at Marvel Loch, which has
been recently recommissioned.
Based on 121 RC drill holes completed by Sons of Gwalia in the late 1990s and subsequent
Mineral Resource estimation work, Redwing contains an Inferred Mineral Resource of
1.4Mt @ 2.4g/t Au for 108,000 oz., which can be reported in accordance with requirements
of the 2012 Edition of the JORC Code.
Riedel considers that, given current market contract mining and toll treatment processing
costs, and assuming a toll treatment agreement can be negotiated, Redwing has potential to
generate significant value from an open-pit mining operation for a relatively low initial capital
investment.
The opportunity to develop the Cheritons Find (Redwing) gold deposit is substantially de-
risked by the recent (2015) re-commissioning of Hanking’s Marvel Loch processing facility
located only 45 kilometres to the north of Cheritons Find. Hanking has indicated to Riedel a
willingness to discuss proposals from third parties in the area who may wish to make use of
the Marvel Loch processing facilities and other infrastructure (including camp and admin
buildings where required).
In January 2015 Riedel engaged Amec Foster Wheeler to provide an independent review of
the Cheritons Find Project and to best establish realistic options to bring the gold project into
production. The review concentrated on establishing and assessing the key pre-
development components which need to be satisfactorily completed, including establishing
timelines and order of magnitude costs, to facilitate development of the Cheritons Find
project.
15
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Amec Foster Wheeler Review
Scope of Work and Deliverables
The scope of work and deliverables from Amec Foster Wheeler’s project review comprised:
Review of the Redwing Mineral Resource Estimates (“MREs”) database and MREs
model with respect to the requirements of the JORC Code 2012 Edition. From this
review Amec Foster Wheeler provided:
─ Recommendations on the steps Riedel will need to take to upgrade the MREs so
that it can be used for Ore Reserve estimation in accordance with the JORC
Code (2012) requirements.
─ An assessment of the drill hole in fill spacing that will be required to allow Ore
Resource estimation to at least an Indicated Resource category along with a
plan and budget estimate to upgrade the MREs.
Review of the mining assumptions and basis for a pit optimisation study including:
─ Geotechnical (and if necessary hydrogeological) assumptions.
─ Order of magnitude estimates of:
o Contract mining (ore and waste) and road-train haulage costs.
o Mine capital costs associated with mine set up, road-train haulage and
development approvals.
o Cost associated with converting the mine area to a Mining Lease and other
statutory approvals.
o Cost to prepare an Ore Reserve estimate in accordance with the JORC Code
2012.
o Preparation of a conceptual a project development schedule with key
milestones that must be achieved for the project to continue.
Review of ore processing assumptions including:
─ Reasonableness of assumptions regarding metallurgical recovery and/or
recommendations and cost estimates for metallurgical tests.
─ Order of magnitude estimates regarding processing costs and reasonable toll
treatment rates for the target toll treatment operations.
─ Costs to carry out metallurgical tests (if needed) to confirm the expected
metallurgical recovery and other process characteristics of the ore.
16
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Key Findings
In April 2015 Amec Foster Wheeler completed a high-level review of information provided by
Riedel relating to the prior MREs, metallurgical testing and mining studies completed for the
project by Sons of Gwalia Ltd (“SOG”) in 2000, and by Annett Consulting (“Annett”) in 2011.
Amec Foster Wheeler’s key findings from the study are as follows:
The prior MREs prepared by SOG and Annett are sufficiently robust to prepare a
Public Report as defined in the current (2012) edition of the JORC Code.
Prior mining studies indicate that the Redwing deposit could be profitably exploited
using current contract mining and ore toll treatment assumptions, however:
─ Amec Foster Wheeler cautions that these are order of magnitude estimates of
net value and are additionally sensitive to the geological risks discussed below.
Amec Foster Wheeler’s review of the metallurgical testing completed by SOG has
found:
─ The tests completed are positive with high CIL extractions (>90%) and with low
reagent consumption.
─ Coarse gold is present and this needs to be considered in any toll treatment
arrangements.
The Redwing style of gold mineralisation currently has a number of geological risks
which need to be addressed as follows:
─ The mineralised gold bearing lodes are narrow, and moderately dipping, and will
be subject to relatively high dilution during mining.
─ Much of the value in the deposit is associated with 20 very high grade assay
results (>10 ppm Au up to 100 ppm Au). The continuity of these high grade
zones is not well understood, or confirmed, in the currently available drilling.
─ The direction of grade continuity is not clear on the current drill hole spacing with
geological information suggesting a general NNW to SSE strike, while the grade
data suggests a more NNE to SSW strike.
To mitigate these geologic risks Amec Foster Wheeler proposes that:
─
Infill drilling will be required on a 20 m by 20 m collar spacing for MRE purposes
and that one high grade area of the deposit should also be tested on a 10 m by
10 m grid.
─ The estimated cost of proposed drilling to mitigate geological risk and define
Mineral Resources to Measured Mineral Resource class is estimated to be
in the order of A$500,000.
17
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
To progress the Redwing project to execution Riedel will need to:
─ Prepare a mineralisation report that can be used to support a mining lease
application (MLA) over the immediate deposit area.
─
Instigate the MLA process and associated survey works.
─ Complete the infill drilling, prepare an MRE, complete a Feasibility Study and
mine plan to develop a toll treatment project.
─ Amec Foster Wheeler estimates an order of magnitude cost to reach a decision
point to proceed to be in the order of A$1.0 million.
In summary, Amec Foster Wheeler concluded that Riedel’s Redwing toll treatment
strategy appears to offer reasonable returns at reasonable risk for the initial drilling
investment of A$500,000 to improve the Mineral Resource confidence to a level that
will support a Feasibility Study.
Project Summary
Geological Setting
Exploration Licence 77/1793 covers a west-north-west striking sequence of mafic and
ultramafic rocks, flanking the south-western part of the Parker Range Dome.
At the Redwing deposit, significant gold mineralisation has been discovered along a strike
length of 500 metres and to a vertical depth of 160 metres. The mineralised deformation
zone dips shallowly to the south and has a true thickness of between 5 metres and 30
metres although the host rock sequence and associated structural deformation zone extends
for at least a further 2,500 metres to the south of Redwing.
Within the overall mineralised/deformation zone, free gold is hosted by a series of stacked,
sheeted quartz veins ranging in thickness from one to four metres within alteration halos
which are characterised by calc-silicate, carbonate, garnet and pyrite assemblages (see
Figure 7).
Inferred Mineral Resources
In 2000, Sons of Gwalia Limited (“SOG”) estimated an Inferred Mineral Resource Estimate
for Redwing of 1.4 Mt @ 2.4g/t Au for 108,000 ounces of gold (see Table 3). Amec Foster
Wheeler has completed a high-level review of the data methodology supporting SOG
estimate and considers the SOG Inferred Resource Estimate can be reported in accordance
with the requirements of the JORC Code 2012.
18
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
Laterite gold deposit
mined 1993-1994
Lode Corridor
Quartz Lodes sub-parallel to
bedding on mafic and ultramafic
contact
Figure 7: Cheritons Find – Redwing Gold Deposit Cross-Section – All lodes projected to single
section looking west.
MILLROSE PROJECT
Subsequent to the end of the June Quarter Retention Status was granted over the part of
Exploration Licence 53/1304 that includes the Millrose Gold Deposit (Inferred Resource of
4.0Mt @ 2.4g/t Au for 309,000 oz; see Table 4) and an extension of term was also granted.
The tenement has reduced in size from 21 blocks to 8 blocks and has a new expiry date of
23 April 2019.
OTHER PROJECTS
Three tenements, E36/623, M36/670 and E36/734 near the Bronzewing Gold Mine were
returned to Riedel Resources after Metaliko Resources did not earn their Stage 1 interest in
the required time. M36/670 was relinquished and E36/734 expired and an extension of term
was not applied for.
19
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
MINERAL RESOURCE STATEMENTS
Table 3: Cheritons Find (Redwing) Gold Deposit – Inferred Mineral Resources
Material
Resource
Category
Lower
Gold
Cutoff
(g/t Au)
Tonnes
Top Gold
Cut
(g/t Au)
Gold
Grade
(g/t Au)
Contained
Gold
(oz Au)
Oxide
Inferred
0.5
Transition
Inferred
0.5
Primary
Inferred
0.5
TOTAL
Inferred
0.5
20
20
20
20
30,000 2.3
100,000 2.0
2,200
6,400
1,270,000 2.5
102,000
1,400,000 2.4
108,000
In April 2015 Amec Foster Wheeler completed a high-level review of information provided by Riedel
relating to the prior MREs, metallurgical testing and mining studies completed for the project by Sons
of Gwalia Ltd (“SOG”) in 2000, and by Annett Consulting (“Annett”) in 2011 and considers the SOG
Inferred Resource Estimate can be reported in accordance with the requirements of the JORC Code
2012. The tonnes, grade and contained ounces of gold in the Redwing Resource are the same at 30
June 2015 as they were at 30 June 2014.
Table 4: Millrose Gold Deposit – Inferred Mineral Resource
Material
Resource
Category
Lower
Gold
Cutoff
(g/t Au)
Tonnes
Top Gold
Cut
(g/t Au)
Gold
Grade
(g/t Au)
Contained
Gold
(oz Au)
Surface
Inferred
Supergene
Inferred
Primary
Inferred
0.5
0.5
0.5
TOTAL
Inferred
0.5
N/A
N/A
N/A
N/A
50,000
2.5
4,000
900,000
3.6
105,000
3,100,000
2.0
200,000
4,000,000
2.4
309,000
This resource estimate was calculated by Phil Jones (Al Maynard & Assoc) – 2010. This information
was previously prepared and disclosed on the basis of compliance with the JORC Code – 2004
Edition. The Inferred Mineral Resources have not been subsequently updated to satisfy compliance
with the JORC Code - 2012 Edition as the information has not materially changed since it was last
reported. The tonnes, grade and contained ounces of gold in the Millrose Resource are the same at
30 June 2015 as they were at 30 June 2014.
20
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
GOVERNANCE ARRANGEMENTS AND INTERNAL CONTROLS
Riedel Resources ensures that Mineral Resource estimates are subject to governance
arrangements and internal controls. Riedel Resources reports it’s Mineral Resources on an
annual basis in accordance with the ”Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves” (the JORC Code) 2012 Edition.
Mineral Resources have been reported as a combination of JORC 2012 and 2004 compliant
estimates. The Cheritons Find (Redwing) Mineral Resource was reported to JORC 2012
standard in the ASX release dated 15 April 2015. This release contains JORC Table 1 and
details the assumptions and methodologies used. The annual review of the Redwing
Resource did not result in a change to the tonnes, grade or contained ounces of gold.
Therefore the total resource is the same as it was at 30 June 2014.
The annual review of the Millrose Gold Deposit did not result in any changes to the tonnes,
grade or contained ounces of gold. Therefore the total resource is the same as it was at 30
June 2014. The Millrose Gold Deposit resource is expected to be upgraded to JORC 2012
compliant when a material change occurs following further drilling.
Competent Person’s Statement
The information in this report that relates to Exploration Results and Mineral Resources is based on, and fairly
represents, information compiled by Mr Ed Turner, who is a Member of The Australian Institute of Geoscientists.
Mr Turner is a full time employee of Riedel Resources Limited. Mr Turner has sufficient experience which is
relevant to the style of mineralisation and type of deposit under consideration and to the activities undertaken to
qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’. Mr Turner consents to the inclusion in this report of
the matters based on his information in the form and context in which it appears.
TENEMENT SCHEDULE
Following is the schedule of Riedel Resources mining tenements as at 30 June 2015.
Area of Interest
Western Australia
Charteris Creek
Bronzewing South
Bronzewing South
Delaney Well
Cheritons Find
Marymia
Marymia
Millrose
Porphyry
West Yandal
Tenement reference Nature of interest
Interest
100%
80%
80%
100%
100%
49%
49%
100%
0%
0%
E45/2763
E36/623
M36/670
E36/734
E77/1793
E52/2394
E52/2395
E53/1304
M31/157
M36/615
Direct
Indirect
Indirect
Direct
Direct
Direct
Direct
Direct
Royalty
Royalty
21
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
On 9 July 2015, the Company issued 997,260 shares to Convertible Note holders in
consideration of interest payable for the June 2015 quarter.
On 20 August 2015, the Company issued 18,083,477 fully paid ordinary shares at an issue
price of $0.005 per share to raise $90,417 from an unrelated sophisticated investor, 5%
placement fee of $4,521 will be paid to the facilitator Oracle Securities Pty Ltd.
On 28 August 2015, the Company announced further extension to convertible note
redemption date to 30 September 2015. A further extension will be negotiated in the next
general meeting to be held in October.
On 28 August 2015, the Company announced the resignation of Company Secretary Ms Sue
Symmons and the appointment of Mr Leonard Math as the Company Secretary.
There are no other matters or circumstances that have arisen since the end of the financial
year that have significantly affected or may significantly affect the operations of the Group, the
results of those operations or the state of affairs of the Group, in future years.
DIVIDENDS PAID OR RECOMMENDED
No dividend has been paid or declared since the start of the financial year.
LIKELY DEVELOPMENT AND RESULTS
Likely developments in the operations of the Group and the expected results of those
operations in future financial years have not been included in this report, as inclusion of such
information is likely to result in unreasonable prejudice to the Group.
ENVIRONMENTAL REGULATION
The Group’s operations are not regulated by any significant environmental regulation under a
law of the Commonwealth or of a State or Territory.
22
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
INDEMNITIES
The Group has not, during or since the financial year, in respect of any person who is or has
been an officer of the Company:
Indemnified or made any relevant agreement for the indemnifying against a liability,
including costs and expenses in successfully defending legal proceedings; or
Paid or agreed to pay a premium in respect of a contract insuring against a liability for
the costs or expenses to defend legal proceedings.
During the financial year the Company paid a premium of $5,800 (excluding GST) in respect
of a contract insuring against a liability for the costs or expenses to defend legal proceedings
that may be brought against the directors and secretary of the Company.
MEETINGS OF DIRECTORS
During the financial year, 14 meetings of directors were held. The number of meetings
attended by each director during the period is stated below:
Ian Tchacos
Jeff Moore
Andrew Childs
Ed Turner
OPTIONS
Number of eligible to
attend
14
14
14
14
Number attended
13
13
14
14
Unissued shares under options
At the date of this report, the unissued ordinary shares of Riedel Resources Limited under
option are as follows:
Expiry date
31/01/2016
31/12/2016
31/12/2017
31/01/2018
Exercise price
(cents)
15
5.2
1.1
15
Quantity
9,333,329
10,000,000
23,728,195
1,250,000
44,311,524
Each option entitles the holder to one fully paid ordinary share in the Company at any time up
to expiry date. To the date of this report no shares had been issued as a result of the exercise
of options.
23
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
CONVERTIBLE NOTES
Redemption date
30/09/2015
Quantity
400,000
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the Company or to
intervene in any proceedings to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or any part of those proceedings.
The Company was not a party to any such proceedings during the period.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration for the year ended 30 June 2015 has been received
and is included in the financial report on page 31.
REMUNERATION REPORT - AUDITED
This report outlines the remuneration arrangements in place for the key management
personnel of Riedel Resources Limited (the “Company”) for the financial year ended 30 June
2015. The information provided in this remuneration report has been audited as required by
Section 308(3C) of the Corporations Act 2001.
The remuneration report details the remuneration arrangements for key management
personnel (“KMP”) who are defined as those persons having authority and responsibility for
planning, directing and controlling the major activities of the Company and the Group, directly
or indirectly, including any director (whether executive or otherwise) of the parent Company,
and includes the two executives in the Company and the Group receiving the highest
remuneration.
Key Management Personnel
Directors
Ian Tchacos (Chairman)
Jeffrey Moore (Executive Director)
Andrew Childs
Ed Turner (Executive Director)
24
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
REMUNERATION REPORT – AUDITED (con’t)
Remuneration Philosophy
The performance of the Company depends upon the quality of the directors and executives.
The philosophy of the Company in determining remuneration levels is to:
- set competitive remuneration packages to attract and retain high calibre employees;
-
link executive rewards to shareholder value creation; and
- establish appropriate, demanding performance hurdles for variable executive remuneration
Remuneration Committee
The Remuneration Committee, the role and duties of which are undertaken by the Board,
establishes human resources and compensation policies and practices for the Directors
(executive and non-executive) and senior executives, including retirement termination policies
and practices, Company share schemes and other
incentive schemes, Company
superannuation arrangements and remuneration arrangements.
Remuneration Policy
The remuneration policy of the Company has been designed to align director and executive
objectives with shareholder and business objectives by providing a fixed remuneration
component which is assessed on an annual basis in line with market rates and offering
specific long-term incentives based on key performance areas affecting the Group’s financial
results. The Board of the Company believes the remuneration policy to be appropriate and
effective in its ability to attract and retain the best directors and executives to run and manage
the Group.
The Board’s policy for determining the nature and amount of remuneration for Board
members and senior executives of the Group is as follows:
The remuneration policy, setting the terms and conditions for the executive directors and
other senior executives (if any), was developed by the Board. All executives are to receive a
base salary (which is based on factors such as length of service and experience) and
superannuation. The Board reviews executive packages annually by reference to the
Group’s performance, executive performance and comparable information from industry
sectors and other listed companies in similar industries.
The Board may exercise discretion in relation to approving incentives, bonuses and options.
The policy is to attract the highest calibre of executives and reward them for performance
that results in long-term growth in shareholder wealth.
Directors and executives are also entitled to participate in the Employee Incentive Option
Scheme and Performance Rights Plan. The executive directors and executives receive a
superannuation guarantee contribution required by the government, which was 9.5% for the
year ended 30 June 2015, and do not receive any other retirement benefits. All
remuneration paid to directors and executives is valued at the cost to the Company and
expensed. Options are valued using the Black-Scholes or Binomial Option Pricing models.
The Board policy is to remunerate non-executive directors at market rates for comparable
companies for time, commitment and responsibilities. The Board determines payments to
the non-executive directors and reviews their remuneration annually, based on market
practice, duties and accountability. Independent external advice is sought when required.
The maximum aggregate fees that can be paid to non-executive directors is $250,000 per
25
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
REMUNERATION REPORT – AUDITED (con’t)
annum as detailed in the Company’s prospectus dated 12 November 2010. Amendments to
this amount are subject to approval by shareholders at the Annual General Meeting. Fees for
non-executive directors will not be linked to the performance of the Group. However, to align
directors’ interests with shareholder interests, the directors are encouraged to hold shares in
the Company and are able to participate in the Employee Incentive Option Scheme.
The objective of the Company’s executive reward framework is set to attract and retain the
most qualified and experienced directors and senior executives.
The Board ensures that executive reward satisfies the following key criteria for good reward
governance practices:
Competitiveness
Acceptability to shareholders
Performance linkage
Capital management
Directors’ fees
A director may be paid fees or other amounts as the directors determine where a director
performs special duties or otherwise performs services outside the scope of the ordinary
duties of a director. A director may also be reimbursed for out of pocket expenses incurred as
a result of their directorship or any special duties.
Non-executive Directors are not currently paid any fee.
Bonuses
No bonuses were given to key management personnel during the 2014 and 2015 years.
Performance based remuneration
The Company currently offers eligible Directors and Key Executives participation in the
Company Performance Rights Plan and/or Incentive Option Scheme. This is in addition to
cash remuneration.
Company performance, shareholder wealth and director’s and executive’s
remuneration
The remuneration policy has been tailored to increase goal congruence between
shareholders and directors and executives. Currently, this is facilitated through the issue of
options or Performance Rights to eligible directors and executives to encourage the
alignment of personal and shareholder interests. The Company believes the policy will be
effective in increasing shareholder wealth. For details of directors and executives interests in
options and performance rights at year end, refer below for details.
In order to preserve cash in the Company, the non-executive Directors have not received
Directors fees since 1 May 2013 and the executive Directors receive Directors’ fees only in
the form of cash. All directors are entitled to participate in the Performance Rights Plan
and/or Incentive Option Scheme.
26
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
REMUNERATION REPORT – AUDITED (con’t)
Remuneration of directors and key management personnel
For the year ended 30 June 2015
Short-Term
Benefits
Directors
Fees
$
Salary and
Consulting
Fees
$
Directors
Ian Tchacos
Jeffrey Moore
Andrew Childs
Ed Turner
-
61,129
-
59,677
Total
120,806
-
-
-
-
-
For the year ended 30 June 2014
Short-Term
Benefits
Directors
Fees
$
Salary and
Consulting
Fees
$
-
69,194
-
50,000
-
-
-
-
-
20,000
Directors
Ian Tchacos
Jeffrey Moore
Andrew Childs
Ed Turner
Bruce Franzen¹
Post-
Employment
Benefits
Equity-
Settled
Share-
Based
Payments
Value of
equity as
proportion of
remuneration
Superannuation
$
-
5,807
-
5,669
$
-
5,297
-
-
Total
$
-
72,233
-
65,346
%
-
7.3%
-
-
11,476
5,297
137,579
Post-
Employment
Benefits
Equity-
Settled
Share-
Based
Payments
Value of
equity as
proportion of
remuneration
Superannuation
$
-
6,400
-
4,625
-
$
-
77,333
-
-
25,778
Total
$
-
152,927
-
54,625
45,778
%
-
51
-
-
56
Total
119,194
20,000
11,025
103,111
253,330
¹ Resigned as a Director on 31 January 2013 and Company Secretary on 1 October 2013.
The overall level of key management personnel remuneration takes into account the
performance of the Company since the Company’s incorporation on 9 April 2010.
27
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
REMUNERATION REPORT – AUDITED (con’t)
Options and rights over equity instruments granted as compensation
No options were granted to key management personnel as compensation during the period or
since the end of the financial year.
Performance rights
On 14 July 2011, 8,000,000 performance rights were issued under the Company
Performance Rights Plan to Jeffrey Moore (Managing Director) and Bruce Franzen (Director
until 31 January 2013 and Company Secretary until 1 October 2013) as incentive to align the
directors’ interests with Company objectives. The following issues of securities to related
parties were approved by shareholders as follows:
Holder
Jeffrey Moore
Bruce Franzen¹
Number of Performance
Rights
2,000,000
2,000,000
2,000,000
666,667
666,667
666,666
Exercise Price
27 cents
36 cents
45 cents
27 cents
36 cents
45 cents
¹ Resigned as a Director on 31 January 2013 and Company Secretary on 1 October 2013.
This was the balance on resignation.
The performance rights are exercisable at the conversion price determined at the grant date.
The terms and conditions relating to these performance rights including the parameters used
to value them are as follows:
Underlying security spot price
Exercise price
Volatility
Risk free rate
Grant date
Expiration date
Expiration period (years)
Number of options
Valuation per option/performance rights
Total performance rights valuation
Performance
Rights
$0.135
$0.27-$0.45
75%
5.05%
26/07/2011
25/07/2014
3 yrs
8,000,000
$0.031-$0.047
$309,333
The total value of the performance rights of $309,333 are expensed proportionately until 25
July 2014, being the vesting date. The total amount being expensed for the year ended 30
June 2015 is $7,062 (30 June 2014: $103,111).
Shares issued as compensation during the year.
No shares were issued as compensation during the year.
28
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
REMUNERATION REPORT – AUDITED (con’t)
Service agreements
Remuneration and other terms of employment for key management personnel are formalised
in service agreements. Details of these agreements are as follows:-
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Jeffrey Moore
Executive Director
4 April 2011*
3 years (Subject to re - election every 3 years from 1 May 2013)
Directors Fees of $60,000 plus super. Directors Fees are
reviewed annually by the Board. The Executive is entitled to
Performance Rights.
Ian Tchacos
Non-executive Chairman
22 October 2010
Subject to re - election every 3 years.
Base salary for the year ended 30 June 2013 of $50,000 plus
superannuation, to be reviewed annually by the Board.
Note: Salary foregone from 1 May 2013.
Andrew Childs
Non-executive Director
22 October 2010
Subject to re - election every 3 years.
Base salary for the year ended 30 June 2013 of $30,000 plus
superannuation, to be reviewed annually by the Board.
Note: Salary foregone from 1 May 2013.
Ed Turner
Executive Director and Exploration Manager
11 July 2011* (appointed as Director 5 December 2012)
Subject to re - election every 3 years.
Directors Fees of $60,000 plus super. Directors Fees are
reviewed annually by the Board. The Executive is entitled to
Company options.
* Agreements terminated effective 30 April 2013. Currently receiving Directors fees only on
an ongoing basis with no specified termination period.
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each director and
other members of key management personnel of the Group, including their personally
related parties, is set out below:
29
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
REMUNERATION REPORT – AUDITED (con’t)
Ordinary shares held in Riedel Resources Limited (number)
Balance at
beginning
of period
465,500
896,600
2,987,305
1,000,000
5,349,405
Granted as
remuneration
-
-
-
-
-
Exercise
of options
-
-
-
-
-
Net change
other*
1,764,705
1,764,705
-
588,234
4,117,644
Balance at
end of period
2,230,205
2,661,305
2,987,305
1,588,234
9,467,049
2015
Ian Tchacos
Jeffrey Moore
Andrew Childs
Ed Turner
* Acquired on market.
Option holding
The number of options over ordinary shares in the Company held during the financial year
by each director and other members of key management personnel of the Group, including
their personally related parties, is set out below:
2015
Ian Tchacos
Jeffrey Moore
Andrew Childs
Ed Turner
Total
Balance at
beginning
of period
Granted as
remuneration Exercised
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Net change
other
Balance at
end of
period
-
-
-
-
-
-
-
-
-
-
Performance Rights of Key Management Personnel
The number of performance rights in the Company held during the financial year by each
director and other key management personnel of the Group, including their personally
related parties, is set out below:
2015
Jeffrey Moore
Total
Balance at
beginning
of period
6,000,000
6,000,000
Granted as
remuneration Exercised
-
-
-
-
Net change
other
(6,000,000)
(6,000,000)
Balance at
end of period
-
-
30
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ REPORT (con’t)
REMUNERATION REPORT – AUDITED (con’t)
All equity transactions with key management personnel other than those arising from the
exercise of remuneration options have been entered into under terms and conditions no more
favourable than those the Group would have adopted if dealing at arm's length.
The fair value of the equity-settled share options granted is estimated as at the date of grant
using a Black Scholes or Binomial Option Pricing Models taking into account the terms and
conditions upon which the options were granted.
This concludes the remuneration report, which has been audited.
Signed in accordance with a resolution of the Board of Directors.
Jeffrey Moore
Director
Date: 23 September 2015
31
AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF RIEDEL RESOURCES LIMITED
In relation to our audit of the financial report of Riedel Resources Limited for the year ended 30 June
2015, to the best of my knowledge and belief, there have been no contraventions of the auditor
independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.
PKF MACK
SHANE CROSS
PARTNER
23 SEPTEMBER 2015
WEST PERTH,
WESTERN AUSTRALIA
32
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
DIRECTORS’ DECLARATION
The directors of the Company declare that:
1.
The attached financial statements and notes are in accordance with the Corporations Act
2001:
(a)
comply with Australian Accounting Standards, the Corporations Regulations 2001 and
other mandatory professional reporting requirements; and
(b) give a true and fair view of the Company’s and Group’s financial position as at 30 June
2015 and of their performance for the year ended on that date.
(c)
comply with International Financial Reporting Standards as issued by the International
Accounting Standards Board as described in note 1 to the financial statements.
2.
3.
In the directors’ opinion there are reasonable grounds to believe that the Company will be able
to pay its debts as and when they become due and payable.
The director’s have been given the declaration required by section 295A of the Corporations
Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors.
Jeffrey Moore
Director
Date: 23 September 2015
33
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2015
NOTES
2015
$
2014
$
Interest revenue
Other revenue
Total revenue
Administration expenses
Depreciation
Employee benefits expense
Impairment of exploration expenditure
Write-off of exploration expenditure
Loss before income tax expense
Income tax expense
Loss for the year
Other comprehensive loss
Items that may be reclassified subsequently
to profit or loss
Exchange difference on translation of foreign
operation
2(a)
2(b)
3
6,145
60,154
66,299
(645,342)
(15,351)
(27,104)
(143,704)
(29,437)
5,520
73,200
78,720
(493,658)
(15,197)
(123,203)
(2,626,294)
(4,535,855)
(794,639)
(7,715,487)
-
-
(794,639)
(7,715,487)
156
194,304
Total comprehensive loss for the year
(794,483)
(7,521,183)
Basic and diluted (loss) per share (cents)
16
(0.54)
(7.11)
The accompanying notes form part of these financial statements.
34
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
Plant and equipment
Exploration and evaluation expenditure
NOTES
5
6
7
8
2015
$
142,630
30,571
2014
$
22,947
66,273
173,201
89,220
20,418
1,737,558
30,696
1,966,415
TOTAL NON CURRENT ASSETS
1,757,976
1,997,111
TOTAL ASSETS
1,931,177
2,086,331
CURRENT LIABILITIES
Trade and other payables
Convertible note
9
10
31,265
407,978
58,993
407,999
TOTAL CURRENT LIABILITIES
439,243
466,992
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Option reserve
Share based payment reserve
Foreign currency translation reserve
Accumulated losses
439,243
466,992
1,491,934
1,619,339
11
12
12
13
14
15,452,891
290,941
525,145
652,517
(15,429,560)
15,110,833
290,941
509,458
652,361
(14,944,254)
TOTAL EQUITY
1,491,934
1,619,339
The accompanying notes form part of these financial statements.
35
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2015
Issued
Capital
Option
Reserve
$
$
Foreign
Currency
Translation
Reserve
$
Share
Based
Payments
Reserve
$
Accumulated
Losses
Total
$
$
Balance at 1 July 2014
Loss for the period
15,110,833
-
290,941
-
652,361
-
509,458 (14,944,254)
(794,639)
-
1,619,339
(794,639)
Other comprehensive loss
Total comprehensive loss for the
period
-
-
Transactions with owners, recorded
directly in equity
Issue of share capital
Less: share issue costs
Issue of options
Expiry of options
349,555
(7,497)
-
-
342,058
-
-
-
-
-
-
-
156
156
-
-
-
156
(794,639)
(794,483)
-
-
-
-
-
-
-
325,020
(309,333)
15,687
-
-
-
309,333
309,333
349,555
(7,497)
325,020
-
667,078
Balance at 30 June 2015
15,452,891
290,941
652,517
525,145
(15,429,560)
1,491,934
Balance at 1 July 2013
Loss for the period
15,083,730
-
290,941
-
458,057
-
383,060
-
(7,228,767)
(7,715,487)
8,987,021
(7,715,487)
Other comprehensive loss
Total comprehensive loss for the
period
-
-
Transactions with owners, recorded
directly in equity
Issue of share capital
Issue of options
Less: share issue costs
33,213
-
(6,110)
27,103
-
-
-
-
-
-
194,304
194,304
-
-
-
194,304
(7,715,487)
(7,521,183)
-
-
-
-
-
126,398
-
126,398
-
-
-
-
33,213
126,398
(6,110)
153,501
Balance at 30 June 2014
15,110,833
290,941
652,361
509,458
(14,944,254)
1,619,339
The accompanying notes form part of their financial statements.
36
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2015
Cash Flows from Operating Activities
Interest received
Other revenue
Payments to suppliers and employees
NOTES
2015
$
6,145
66,836
(319,543)
2014
$
5,520
66,000
(423,242)
Net cash used in operating activities
15
(246,562)
(351,722)
Cash Flows from Investing Activities
Payment for exploration and evaluation
Proceeds from term deposit
Proceeds from JV Contribution
Payments for plant and equipment
(199,505)
30,000
250,000
(5,073)
(159,502)
-
-
-
Net cash used in investing activities
75,422
(159,502)
Cash Flows from Financing Activities
Payments for share issue costs
Proceeds from issue of convertible note
(7,497)
298,320
(6,110)
240,000
Net cash provided in financing activities
290,823
233,890
Net decrease in cash and cash
equivalents held
119,683
(277,334)
Cash and cash equivalents at 1 July
22,947
300,281
Cash and cash equivalents at 30 June
5
142,630
22,947
The accompanying notes form part of these financial statements
37
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
NOTES TO AND FORMING PART OF THE ACCOUNTS
Riedel Resources Limited (the "Company") is a listed public company limited by shares,
incorporated and domiciled in Australia.
The consolidated financial statements of the Company as at and for the year ended 30 June 2015
comprise the Company and its subsidiaries (together referred to as the "Group" and individually as
"Group entities").
The Group primarily is involved in mining and exploration activity.
New, revised or amending Accounting Standards and Interpretations adopted
The Group has adopted all of the new, revised or amending Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory
for the current reporting period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory
have not been early adopted.
The adoption of these Accounting Standards and Interpretations did not have any significant
impact on the financial performance or position of the Group.
The following Accounting Standards and Interpretations are most relevant to the Group:
AASB 2012-3 Amendments to Australian Accounting Standards - Offsetting Financial Assets and
Financial Liabilities
The Group has applied AASB 2012-3 from 1 July 2014. The amendments add application
guidance to address inconsistencies in the application of the offsetting criteria in AASB 132
'Financial Instruments: Presentation', by clarifying the meaning of 'currently has a legally
enforceable right of set-off'; and clarifies that some gross settlement systems may be considered to
be equivalent to net settlement.
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial
Assets
The Group has applied AASB 2013-3 from 1 July 2014. The disclosure requirements of AASB 136
'Impairment of Assets' have been enhanced to require additional information about the fair value
measurement when the recoverable amount of impaired assets is based on fair value less costs of
disposals. Additionally, if measured using a present value technique, the discount rate is required
to be disclosed.
38
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
AASB 2014-1 Amendments to Australian Accounting Standards (Parts A to C)
The Group has applied Parts A to C of AASB 2014-1 from 1 July 2014. These amendments affect
the following standards: AASB 2 'Share-based Payment': clarifies the definition of 'vesting
condition' by separately defining a 'performance condition' and a 'service condition' and amends
the definition of 'market condition'; AASB 3 'Business Combinations': clarifies that contingent
consideration in a business combination is subsequently measured at fair value with changes in
fair value recognised in profit or loss irrespective of whether the contingent consideration is within
the scope of AASB 9; AASB 8 'Operating Segments': amended to require disclosures of
judgements made in applying the aggregation criteria and clarifies that a reconciliation of the total
reportable segment assets to the entity's assets is required only if segment assets are reported
regularly to the chief operating decision maker; AASB 13 'Fair Value Measurement': clarifies that
the portfolio exemption applies to the valuation of contracts within the scope of AASB 9 and AASB
139; AASB 116 'Property, Plant and Equipment' and AASB 138 'Intangible Assets': clarifies that on
revaluation, restatement of accumulated depreciation will not necessarily be in the same proportion
to the change in the gross carrying value of the asset; AASB 124 'Related Party Disclosures':
extends the definition of 'related party' to include a management entity that provides KMP services
to the entity or its parent and requires disclosure of the fees paid to the management entity; AASB
140 'Investment Property': clarifies that the acquisition of an investment property may constitute a
business combination.
Basis of Preparation
The accounting policies set out below have been consistently applied to all years presented.
Statement of Compliance
These general purpose financial statements have been prepared in accordance with Australian
Accounting Standards and Interpretations issued by the Australian Accounting Standards Board
('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities. These
financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board ('IASB').
The consolidated financial statements were authorised for issue by the Board of Directors on 23
September 2015. The Directors have the power to amend and revise the financial statements.
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for,
where applicable, the revaluation of available-for-sale financial assets, financial assets and
liabilities at fair value through profit or loss, investment properties, certain classes of property, plant
and equipment and derivative financial instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the process of applying the
Group's accounting policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the financial statements are disclosed
on page 40.
39
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the
Group only. Supplementary information about the parent entity is disclosed in note 26.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of
Riedel Resources Limited ('Company' or 'parent entity') as at 30 June 2015 and the results of all
subsidiaries for the year then ended. Riedel Resources Limited and its subsidiaries together are
referred to in these financial statements as the 'Group'.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity
when the Group 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 to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They
are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the
Group are eliminated. Unrealised losses are also eliminated unless the transaction provides
evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A
change in ownership interest, without the loss of control, is accounted for as an equity transaction,
where the difference between the consideration transferred and the book value of the share of the
non-controlling interest acquired is recognised directly in equity attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill,
liabilities and non-controlling interest in the subsidiary together with any cumulative translation
differences recognised in equity. The Group recognises the fair value of the consideration received
and the fair value of any investment retained together with any gain or loss in profit or loss.
Operating segments
Operating segments are presented using the “management approach”, where the information
presented is on the same basis as the internal reports provided to the directors. The directors are
responsible for the allocation of resources to operating segments and assessing their performance.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Riedel Resources Limited's
functional and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at financial year-end exchange rates of
monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
40
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the
exchange rates at the reporting date. The revenues and expenses of foreign operations are
translated into Australian dollars using the average exchange rates, which approximate the rate at
the date of the transaction, for the period. All resulting foreign exchange differences are recognised
in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net
investment is disposed of.
Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates
and assumptions that affect the reported amounts in the financial statements. Management
continually evaluates its judgements and estimates in relation to assets, liabilities, contingent
liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions
on historical experience and on other various factors, including expectations of future events,
management believes to be reasonable under the circumstances. The resulting accounting
judgements and estimates will seldom equal the related actual results. The judgements, estimates
and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
Share Based Payment Transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined
by an independent external valuation using Black-Scholes and Binomial Option Pricing models,
using the assumptions detailed in Note 12.
Exploration and Evaluation Costs
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area
of interest. These costs are carried forward in respect of an area that has not at reporting date
reached a stage which permits a reasonable assessment of the existence or otherwise of
economically recoverable reserves, and active and significant operations in, or relating to, the area
of interest are continuing.
Impairment of Exploration and Evaluation Assets and Investments in and Loans to Subsidiaries
The ultimate recoupment of the value of exploration and evaluation assets, the Company’s
investment in subsidiaries, and loans to subsidiaries is dependent on the successful development
and commercial exploitation, or alternatively, sale, of the exploration and evaluation assets.
Impairment tests are carried out on a regular basis to identify whether the asset carrying values
exceed their recoverable amounts. There is significant estimation and judgement in determining
the inputs and assumptions used in determining the recoverable amounts.
The key areas of judgement and estimation include:
Recent exploration and evaluation results and resource estimates;
Environmental issues that may impact on the underlying tenements;
Fundamental economic factors that have an impact on the operations and carrying values
of assets and liabilities.
41
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
Income tax expenses
Judgement is required in assessing whether deferred tax assets and liabilities are recognised on
the statement of financial position. Deferred tax assets, including those arising from temporary
differences, are recognised only when it is considered more likely than not that they will be
recovered, which is dependent on the generation of future assessable income of a nature and of
an amount sufficient to enable the benefits to be utilised.
Going Concern
The accounts have been prepared on the going concern basis, which contemplates continuity of
normal business activities and the realisation of assets and settlement of liabilities in the normal
course of business. The Group incurred a loss of $794,639 for the year ended 30 June 2015
(2014: $7,715,487).
The ability of the Company and the Group to continue to pay its debts as and when they fall due is
dependent upon the Company successfully raising additional share capital and ultimately
developing one of its mineral properties.
The Directors believe it is appropriate to prepare these accounts on a going concern basis
because:
the Directors have an appropriate plan to raise additional funds as and when it is required.
In light of the Group’s current exploration and evaluation projects, the Directors believe that
the additional capital required can be raised in the market; and
the Directors have an appropriate plan to contain certain operating and exploration
expenditure if appropriate funding is unavailable.
The accounts have been prepared on the basis that the Company and the Group can meet its
commitments as and when they fall due and can therefore continue normal business activities, and
the realisation of assets and liabilities in the ordinary course of business. In the event that the
Group is not successful in raising funds from the issue of new equity there exists a significant
uncertainty as to whether the Group will be able to continue as a going concern and realise its
assets and extinguish its liabilities in the normal course of business and at the amounts stated in
the financial report.
Income Tax
The charge for current income tax expense is based on the loss for the year adjusted for any non-
assessable or disallowed items. It is calculated using the tax rates that have been enacted or are
substantially enacted by the reporting date.
Deferred tax is accounted for using the liability method in respect of temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the financial
statements. No deferred income tax will be recognised from the initial recognition of an asset or
liability, excluding a business combination, where there is no effect on accounting or taxable profit or
loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is
realised or liability is settled. Deferred tax is credited in the statement of profit or loss and other
comprehensive income except where it relates to items that may be credited directly to equity, in
which case the deferred tax is adjusted directly against equity.
42
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will
be available against which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the
assumption that no adverse change will occur in income taxation legislation and the anticipation that
the economic entity will derive sufficient future assessable income to enable the benefit to be
realised and comply with the conditions of deductibility imposed by the law.
Exploration and Evaluation Expenditure
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area
of interest. These costs are carried forward only if they relate to an area of interest for which rights
of tenure are current and in respect of which:
such costs are expected to be recouped through successful development and exploitation
or from sale of the area; or
exploration and evaluation activities in the area have not, at reporting date, reached a stage
which permit a reasonable assessment of the existence or otherwise of economically
recoverable reserves, and active operations in, or relating to, the area are continuing.
Accumulated costs in respect of areas of interest which are abandoned are written off in full
against loss in the year in which the decision to abandon the area is made.
A regular review is undertaken of each area of interest to determine the appropriateness of
continuing to carry forward costs in relation to that area of interest.
The recoverability of the carrying amount of the exploration and development assets is dependent
on the successful development and commercial exploitation or alternatively sale of the respective
areas of interest.
Financial Instruments
The Company classifies its investments in the following categories: financial assets at fair value
through profit or loss, loans and receivables, and available-for-sale financial assets. The
classification depends on the purpose for which the investments were acquired. Management
determines the classification of its investments at initial recognition and re-evaluates this
designation at each reporting date.
Recognition
Financial instruments are initially measured at cost on trade date, which includes transaction costs,
when the related contractual rights or obligations exist. Subsequent to initial recognition these
instruments are measured as set out below.
(i) Financial assets at fair value through profit or loss
Financial assets are classified at ‘fair value through profit or loss’ when they are either held for
trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when
they are designated as such to avoid an accounting mismatch or to enable performance evaluation
where a Group of financial assets is managed by key management personnel on a fair value basis
in accordance with a documented risk management or investment strategy. Such assets are
subsequently measured at fair value with changes in carrying value being included in profit or loss.
43
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
(ii) Loans and receivables
Loans and receivables are non derivative financial assets with fixed or determinable payments that
are not quoted in an active market. They arise when the Company provides money, goods or
services directly to a debtor with no intention of selling the receivable. They are included in current
assets, except for those with maturities greater than 12 months after the reportingdate which are
classified as non-current assets. Loans and receivables are included in receivables in the statement
of financial position.
(iii) Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either not suitable to
be classified into other categories of financial assets due to their nature, or they are designated as
such by management. They comprise investments in the equity of other entities where there is
neither a fixed maturity nor fixed or determinable payments.
Financial liabilities
Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less
principal payments and amortisation.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or
disclosure purposes, the fair value is based on the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market participants at the measurement
date; and assumes that the transaction will take place either: in the principle market; or in the
absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the
asset or liability, assuming they act in their economic best interest. For non-financial assets, the fair
value measurement is based on its highest and best use. Valuation techniques that are appropriate
in the circumstances and for which sufficient data are available to measure fair value, are used,
maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value
hierarchy that reflects the significance of the inputs used in making the measurements.
Classifications are reviewed each reporting date and transfers between levels are determined based
on a reassessment of the lowest level input that is significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when
internal expertise is either not available or when the valuation is deemed to be significant. External
valuers are selected based on market knowledge and reputation. Where there is a significant
change in fair value of an asset or liability from one period to another, an analysis is undertaken,
which includes a verification of the major inputs applied in the latest valuation and a comparison,
where applicable, with external sources of data.
44
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-
current classification.
An asset is current when: it is expected to be realised or intended to be sold or consumed in
normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised
within twelve months after the reporting period; or the asset is cash or cash equivalent unless
restricted from being exchanged or used to settle a liability for at least twelve months after the
reporting period. All other assets are classified as non-current.
A liability is current when: it is expected to be settled in normal operating cycle; it is held primarily
for the purpose of trading; it is due to be settled within twelve months after the reporting period; or
there is no unconditional right to defer the settlement of the liability for at least twelve months after
the reporting period. All other liabilities are classified as non-current.
Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term
highly liquid investments with original maturities of three months or less, that are readily convertible
to known amounts of cash and which are subject to an insignificant risk of changes in value.
Revenue
Revenue is recognised when it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured.
Interest revenue is recognised on a proportional basis taking into account the interest rates
applicable to the financial assets. All revenue is stated net of the amount of goods and services tax
(GST).
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the
amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances
the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the
expense. Receivables and payables in the statement of financial position are shown inclusive of
GST.
Cash flows are presented in the statement of cash flow on a gross basis, except for the GST
component of investing and financing activities, which are disclosed as operating cash flows.
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.
45
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
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 effective interest rate. An impairment loss in respect of an available-for-sale
financial asset is calculated by reference to its fair value. 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 either in the income statement or revaluation reserves in the period in which the
impairment arises.
(ii) Exploration and Evaluation Assets
Exploration and evaluation assets are assessed for impairment when facts and circumstances
suggest that the carrying amount of the asset may exceed its recoverable amount at the reporting
date.
Exploration and evaluation assets are tested for impairment in respect of cash generating units,
which are no larger than the area of interest to which the assets relate.
(iii) Non-Financial Assets Other Than Exploration and Evaluation 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. For goodwill and intangible assets that have indefinite
lives or that are not yet available for use, the recoverable amount is estimated at each reporting
date.
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.
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 the income statement.
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the
carrying amount of any goodwill allocated to the units, then to reduce the carrying amount of the
other assets in the unit 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 exits. 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 has been
recognised.
Joint operations
A joint operation is a joint arrangement whereby the parties that have joint control of the
arrangement have rights to the assets, and obligations for the liabilities, relating to the
arrangement. The consolidated entity has recognised its share of jointly held assets, liabilities,
revenues and expenses of joint operations. These have been incorporated in the financial
statements under the appropriate classifications.
46
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
Investments
All investments are initially recognised at cost, being the fair value of the consideration given and
including acquisition charges associated with the investment.
After initial recognition, investments, which are classified as held for trading and available-for-sale,
are measured at fair value. Gains or losses on investments held for trading are recognised in the
profit or loss in the statement of profit or loss and other comprehensive income.
Gains or losses on available-for-sale investments are recognised as a separate component of
equity until the investment is sold, collected or otherwise disposed of, or until the investment is
determined to be impaired, at which time the cumulative gain or loss previously reported in equity
is included in the profit or loss in the statement of profit or loss and other comprehensive income.
For investments that are actively traded in organised financial markets, fair value is determined by
reference to Stock Exchange quoted market bid prices at the close of business on the reporting
date.
Trade and other payables
Liabilities for trade creditors and other amounts are carried at cost which is the fair value of
consideration to be paid in the future for goods and services received, whether or not billed to the
Group. Due to their short-term nature they are measured at amortised cost and are not discounted.
The amounts are unsecured and are usually paid within 30 days of recognition.
Share-based payment transactions
The Group provides benefits to employees (including Directors) of the Group in the form of share-
based payment transactions, whereby employees render services in exchange for shares or rights
over shares (“equity-settled transaction”).
The cost of these equity-settled transactions with employees is measured by reference to the fair
value at the date at which they are granted. The fair value is determined by an independent
external valuation using a Black-Scholes and Binomial Option Pricing models that takes into
account the exercise price, the term of the option, the impact of dilution, 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, together with non-vesting conditions that do not
determine whether the Group receives services that entitle the employees to receive payment.
The cost of equity-settled transactions is recognised, together with a corresponding increase in
equity, over the period in which the performance conditions are fulfilled, ending on the date on
which the relevant employees become fully entitled to the award (“vesting date”).
The cumulative expense recognised for equity-settled transactions at each reporting date until
vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number of
awards that, in the opinion of the Directors of the Company, will ultimately vest. This opinion is
formed based on the best available information at reporting date. No adjustment is made for the
likelihood of market performance conditions being met as the effect of these conditions is included
in the determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting
is conditional upon a market condition.
47
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised
as if the terms had not been modified. In addition, an expense is recognised for any increase in
the value of the transaction as a result of the modification, as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of
cancellation, and any expense not yet recognised for the award is recognised immediately.
However, if a new award is substituted for the cancelled award, and designated as a replacement
award on the date that it is granted, the cancelled and new award are treated as if they were a
modification of the original award, as described in the previous paragraph.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised
cost using the effective interest method, less any provision for impairment. Trade receivables are
generally due for settlement within 30 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be
uncollectable are written off by reducing the carrying amount directly. A provision for impairment of
trade receivables is raised when there is objective evidence that the Group will not be able to
collect all amounts due according to the original terms of the receivables. Significant financial
difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation
and default or delinquency in payments (more than 60 days overdue) are considered indicators
that the trade receivable may be impaired. The amount of the impairment allowance is the
difference between the asset's carrying amount and the present value of estimated future cash
flows, discounted at the original effective interest rate. Cash flows relating to short-term
receivables are not discounted if the effect of discounting is immaterial.
Other receivables are recognised at amortised cost, less any provision for impairment.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as
a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of
new shares or options, or for the acquisition of a business, are included in the cost of the
acquisition as part of the purchase consideration.
48
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
Plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment.
Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property,
plant and equipment (excluding land) over their expected useful lives as follows:
Office equipment
Exploration equipment
2 years
5 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if
appropriate, at each reporting date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future
economic benefit to the Group. Gains and losses between the carrying amount and the disposal
proceeds are taken to profit or loss.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service
leave expected to be settled within 12 months of the reporting date are recognised in current
liabilities in respect of employees' services up to the reporting date and are measured at the
amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of
the reporting date are recognised in non-current liabilities, provided there is an unconditional right to
defer settlement of the liability. The liability is measured as the present value of expected future
payments to be made in respect of services provided by employees up to the reporting date using
the projected unit credit method. Consideration is given to expect future wage and salary levels,
experience of employee departures and periods of service. Expected future payments are
discounted using market yields at the reporting date on national government bonds with terms to
maturity and currency that match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they
are incurred.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the loss attributable to the owners of Riedel
Resources Limited, excluding any costs of servicing equity other than ordinary shares, by the
weighted average number of ordinary shares outstanding during the financial year, adjusted for
bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share
to take into account the after income tax effect of interest and other financing costs associated with
dilutive potential ordinary shares and the weighted average number of shares assumed to have
been issued for no consideration in relation to dilutive potential ordinary shares.
49
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
New standards and interpretations not yet mandatory or early adopted
The AASB has issued the following new and amended accounting standards and interpretations
that have mandatory application dates for future reporting periods. The Group has decided against
early adoption of these standards, and has not yet determined the potential impact on the financial
statements from the adoption of these standards and interpretations.
AASB NO.
TITLE
APPLICATION DATE
OPERATIVE DATE
(ANNUAL REPORTING
PERIODS BEGINNING
ON OR AFTER)
AASB 9
Financial Instruments
1 January 2018
December 2010
AASB
2013-9
AASB
2014-1
AASB
2014-3
AASB
2014-4
AASB
2014-5
AASB
2014-6
AASB
2014-7
AASB
2014-8
AASB
2014-9
AASB
2014-10
Amendments to Australian Accounting
Standards - Conceptual Framework,
Materiality and Financial Instruments
Part C - Financial Instruments
Amendments to Australian Accounting
Standards
Part D - Consequential Amendments
arising from AASB 14 Regulatory
Deferral Accounts
Part E - Financial Instruments
Amendments to Australian Accounting
Standard – Accounting for Acquisition of
Interest in Joint Operations [AASB 1 &
Amendments to Australian Accounting
AASB 11]
Standard - Clarification of Acceptable
Methods of Depreciation and
Amortisation (Amendments to AASB 116
and AASB 138)
Amendments to Australian Accounting
Standard Arising From AASB 15
Amendments to Australian Accounting
Standard – Agriculture: Bearer Plants
[AASB 101, AASB 116, AASB 117,
AASB 123, AASB 136, AASB 140 &
AASB 141]
Amendments to Australian Accounting
Standard Arising From AASB 9
Amendments to Australian Accounting
Standards Arising From AASB 9
Amendments to Australian Accounting
Standard - Equity Method in Separate
Financial Statements
Amendments to Australian Accounting
Standard - Sale of Contribution of
Assets Between Investors and its
Associates or Joint Venture
50
Part C - 1 January
2015
December 2013
Part D - 1 January
2016
Part E - 1 January
2018
June 2014
1 January 2016
August 2014
1 January 2016
August 2014
1 January 2017
December 2014
1 January 2016
December 2014
1 January 2018
December 2014
1 January 2015
December 2014
1 January 2016
December 2014
1 January 2016
December 2014
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
AASB NO.
TITLE
APPLICATION DATE
OPERATIVE DATE
(ANNUAL REPORTING
PERIODS BEGINNING
ON OR AFTER)
AASB
2015-1
AASB
2015-2
AASB
2015-3
AASB
2015-4
AASB
2015-5
AASB
2015-6
Amendments to Australian Accounting
Standards – Annual Improvements to
Australian Accounting Standards 2012–
2014 Cycle
Amendments to Australian Accounting
Standards – Disclosure Initiative:
Amendments to AASB 101
Amendments to Australian Accounting
Standards arising from the Withdrawal of
AASB 1031 Materiality
Amendments to Australian Accounting
Standards – Financial Reporting
Requirements for Australian Groups with
a Foreign Parent **
Amendments to Australian Accounting
Standards – Investment Entities:
Applying the Consolidation Exception
Amendments to Australian Accounting
Standards – Extending Related Party
Disclosures to NFP Public Sector
Entities
1 January 2016
January 2015
1 January 2016
January 2015
I July 2015
January 2015
1 July 2015
January 2015
1 July 2015
January 2015
1 July 2016
March 2015
AASB 14
Regulatory Deferral Account
1 January 2016
June 2014
AASB 15
Revenues from Contracts with
Customers
AASB 1056 Superannuation Entities
1 January 2017
December 2014
1 July 2016
June 2014
NOTE 2: LOSS FROM ORDINARY ACTIVITIES
2015
$
2014
$
(a) Other Revenue
Bank interest
Other revenue – office subleasing
6,145
60,154
66,299
5,520
73,200
78,720
51
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2: LOSS FROM ORDINARY ACTIVITIES (con’t)
2015
$
2014
$
(b) Expenses
Depreciation
Convertible note – cost
Exploration expenditure written off
Equity-settled share based payments expense
Superannuation - defined contribution
Impairment of exploration expenditure
Rental expense – operating lease
NOTE 3: INCOME TAX EXPENSE
Income tax expense/(benefit):
Current tax
Prior year under provision
Deferred tax
The prima facie income tax expense/(benefit) on
pre-tax accounting loss from operations
reconciles to the income tax expense/ (benefit) in
the financial statements as follows:
15,351
317,958
29,437
342,919
11,477
143,704
99,719
15,197
80,756
4,535,855
140,798
12,792
2,626,294
112,194
-
-
-
-
-
-
-
-
Prima facie income tax benefit on loss at 30% (2014:
30%)
(238,391)
(2,314,646)
Add:
Tax effect of:
Other non-allowable items
Share based payment
Impairment of exploration expenditure
Write off exploration expenditure
Revenue losses not recognised
Accrued income
Less:
Tax effect of:
Exploration and evaluation expenditure
Capital raising costs
Website costs
Provisions and accruals
52
82
7,488
43,111
8,831
209,028
16,715
284
42,239
787,888
1,360,757
285,822
-
285,255
2,476,990
-
45,070
894
900
46,864
107,399
45,070
1,788
8,087
162,344
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 3: INCOME TAX EXPENSE (con’t)
Income tax expense/(benefit)
The applicable average weighted tax rates
are as follows:
The following deferred tax balances have not
been recognised:
Deferred Tax Assets:
At 30%:
Carry forward revenue losses
Capital raising cost
Website costs
Provisions and accruals
2015
$
2014
$
-
0%
-
0%
1,350,933
21,845
-
3,000
1,375,778
1,017,792
66,915
894
3,900
1,089,501
The tax benefits of the above Deferred Tax Assets will only be obtained if:
(a) the Company derives future assessable income of a nature and of an amount sufficient to
enable the benefits to be utilised
(b) the Company continues to comply with the conditions for deductibility imposed by law; and
(c) no changes in income tax legislation adversely affect the Company in utilising the benefits.
Deferred Tax Liabilities:
At 30%:
Exploration and evaluation expenditure
521,267
589,925
The above Deferred Tax Liabilities have not been recognised as they have given rise to the carry
forward revenue losses for which the Deferred Tax Asset has not been recognised.
53
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 4: AUDITORS’ REMUNERATION
Remuneration of the auditor of the parent entity for:
- Auditing or reviewing the financial report
- Tax compliance and accounting advice
Remuneration of firms other than the auditor
- Tax compliance
- Other non-audit services
NOTE 5: CASH AND CASH EQUIVALENTS
Cash on hand
Cash at bank
Refer to note 18 for further information on financial instruments.
NOTE 6: TRADE AND OTHER RECEIVABLES
Current
Sublease income
Term deposit
Prepayments
Refer to note 18 for further information on financial instruments.
NOTE 7: PLANT & EQUIPMENT
Office Equipment
At cost
Accumulated amortisation
Total office equipment
Exploration Equipment
At cost
Accumulated amortisation
Total exploration equipment
2015
$
22,208
-
22,208
6,650
60,000
66,650
2014
$
21,375
-
21,375
1,550
55,800
57,350
1,204
141,426
142,630
1,204
21,743
22,947
1,238
20,000
9,333
30,571
7,920
50,000
8,353
66,273
36,141
(31,223)
4,918
55,304
(39,804)
15,500
31,068
(26,903)
4,165
55,304
(28,773)
26,531
Total plant and equipment
20,418
30,696
54
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 7: PLANT & EQUIPMENT (con’t)
Reconciliations
Reconciliations of the carrying amounts of each class of plant & equipment at the beginning and end
of the current and previous financial year are set out below:
Office Equipment
Carrying amount at beginning of period
Additions/(disposals)
Depreciation
Carrying amount at end of period
Exploration Equipment
Carrying amount at beginning of period
Additions/(disposals)
Depreciation
Carrying amount at end of period
NOTE 8: EXPLORATION AND EVALUATION
EXPENDITURE
2015
$
4,165
5,073
(4,320)
4,918
26,531
-
(11,031)
15,500
2014
$
8,331
-
(4,166)
4,165
37,562
-
(11,031)
26,531
Exploration and evaluation expenditure
Gross capitalised exploration and evaluation expenditure
Less provision for impairment
Net amount
7,393,348
(5,655,790)
1,737,558
7,592,709
(5,626,294)
1,966,415
Exploration and evaluation expenditure reconciliation
Opening balance
Exploration written off
Impairment
Proceed from farm in JV contribution
Exploration and development expenditure incurred
Closing balance
NOTE 9: TRADE AND OTHER PAYABLES
Trade creditors
Accruals
Payroll liabilities
GST payable
Other
1,966,415
(29,437)
(143,704)
(250,000)
194,284
1,737,558
8,770,570
(4,535,855)
(2,626,294)
-
357,994
1,966,415
12,225
12,275
2,046
2,449
2,270
31,265
35,359
13,000
2,847
5,687
2,100
58,993
Refer to note 18 for further information on financial instruments.
55
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 10: CONVERTIBLE NOTE
Convertible note payable
Interest payable
Carrying amount
2015
$
400,000
7,978
407,978
2014
$
400,000
7,999
407,999
On 27 June 2013 the Company issued a Secured Convertible Note to Oracle Securities Pty Ltd (or
its nominees). The Convertible Note (and any accrued interest) can be converted in full or any part
thereof into Shares in the Company at the lender’s sole discretion at any time after 30 June 2015.
Shares issued in lieu of accrued interest will be issued at the lower of $0.036 or 90% of the 10 day
VWAP preceding the due date for payment of that accrued interest.
The amended agreement between the parties stated that shares issued on conversion are
currently issued at the lower of 80% of the 10 day VWAP preceding the date of execution of the
Convertible Note Deeds or 80% of the 10 day VWAP preceding the date of the Conversion
Notice. Shareholders voted at the General Meeting held on 7 August 2014 to approve the
amendments to the terms of the Convertible Notes. The redemption date was 30 June 2015,
however on 31 July 2015 the Company agreed with the Convertible Noteholders to extend the
redemption date of the Convertible Note Deeds from 30 June 2015 to 31 August 2015. On 28
August 2015 the Company agreed with the Convertible Noteholders to extend the redemption date
of the Convertible Note Deeds from 31 August 2015 to 30 September 2015.
NOTE 11: ISSUED CAPITAL
(a) Share capital
Ordinary shares
Issued and paid up capital – consisting of ordinary
shares
Less: cost of issue
Closing balance at 30 June 2014
2014
Shares
2014
$
109,662,979
15,862,000
-
109,662,979
(751,167)
15,110,833
2015
Shares
2015
$
Issued and paid up capital – consisting of ordinary
shares
Less: cost of issue
Closing balance at 30 June 2015
151,020,586
16,211,556
-
151,020,586
(758,665)
15,452,891
56
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 11: ISSUED CAPITAL (con’t)
(b) Movement in ordinary shares capital
Date
Details
1 July 2013
17 October 2013
17 October 2013
10 January 2014
10 January 2014
1 April 2014
1 April 2014
30 June 2014
Opening balance
Convertible note interest
Issue of shares as broker fee
Convertible note interest
Issue of shares as broker fee
Convertible note interest
Convertible note interest
Costs of issue
Closing balance
Opening balance
1 July 2014
Convertible note interest
7 July 2014
Audax SPP
21 July 2014
Underwriting of SPP
21 July 2014
Oracle August 2014 SPP
12 August 2014
9 October 2014
Convertible note interest
11 February 2015 Convertible note interest
Convertible note interest
15 April 2015
Costs of issue
Closing balance
30 June 2015
No of Shares
$
107,489,109
600,137
275,000
547,510
125,000
375,734
250,489
-
109,662,979
15,083,730
4,024
9,900
6,899
4,500
4,734
3,156
(6,110)
15,110,833
109,662,979
1,025,461
1,764,709
33,331,784
2,105,788
806,576
1,008,219
1,315,070
-
151,020,586
15,110,833
7,999
15,000
283,320
17,899
8,066
8,066
9,205
(7,497)
15,452,891
Terms and conditions of contributed equity
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the
Company, to participate in proceeds from the sale of all surplus assets in proportion to the number
of and amounts paid up on shares held. The fully paid ordinary shares have no par value.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the
Company.
(c) Capital management
Management controls the capital of the Group by monitoring performance against budget to provide
the shareholders with adequate returns and ensure that the Group can fund its operations and
continue as a going concern.
The Group’s liabilities and capital includes ordinary share capital, options and financial liabilities,
supported by financial assets.
The Company issued 400,000 Convertible Notes. The Convertible Note (and any accrued interest)
can be converted in full or any part thereof into Shares in the Company at the lender’s sole
discretion at any time after 30 September 2015.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and
adjusting its capital structure in response to changes in these risks and in the market. These
responses include the management of debt levels, distributions to shareholders and share issues.
57
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 11: ISSUED CAPITAL (con’t)
There have been no changes in the strategy by management to control the capital of the Group
since the prior year.
NOTE 12: OPTION RESERVE AND SHARE BASED PAYMENT RESERVE
Options reserve (a)
Share based payments reserve (b)
2015
$
290,941
525,145
816,086
2014
$
290,941
509,458
800,399
(a) Refers to money received in consideration for issued 29,094,050 options.
(b) Refers to fair value of options and performance rights issued in accordance with AASB 2
Share Based Payment.
Options reserve
Movements in options reserve:
Opening balance at 1 July 2013
Options issued
Closing balance at 30 June 2014
Opening balance at 1 July 2014
Options issued
Closing balance at 30 June 2015
Share based payment reserve
Options
Performance rights
Total share based payments reserve
Options
Performance rights
Total share based payments reserve
58
2014
Options
2015
Options
-
-
-
-
-
-
2014
Quantity
22,295,662
8,000,000
30,295,662
2015
Quantity
44,311,524
-
44,311,524
2014
$
290,941
-
290,941
2015
$
290,941
-
290,941
2014
$
207,187
302,271
509,458
2015
$
525,145
-
525,145
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 12: OPTION RESERVE AND SHARE BASED PAYMENT RESERVE (con’t)
Movements in options (share based payments reserve):
Weighted
Average
Exercise
Price
2014
2014
Options
$
Opening balance at 1 July 2013
Free attached options for convertible note
holders (5.2c exercise, 31 Dec 2016)
Options lapsed on 30 June 2014
Closing balance at 30 June 2014
0.186
0.052
0.300
0.099
26,295,662
6,000,000
(10,000,000)
22,295,662
2015
Options
183,900
23,287
-
207,187
2015
$
Opening balance at 1 July 2014
0.099
22,295,662
207,187
Free attached options for convertible note
holders (1.1c exercise, 31 Dec 2017) (i)
Options lapsed on 30 April 2015
Closing balance at 30 June 2015
0.011
0.010
0.050
23,728,195
(1,712,333)
44,311,524
317,958
-
525,145
The weighted average remaining contractual life of options outstanding at the end of the financial
year was 2.59 years (2014: 2.74 years).
(i)
The value of options granted during the period was calculated using the Black-Scholes
Option Pricing Model and totalled $317,958. The values and inputs are as follows;
Options issued
Underlying share value
Exercise price
Risk free interest rate
Share price volatility
Expiration period
Valuation per option
Convertible
Note Options
23,728,195
$0.017
$0.011
2.62%
116.83%
31/12/2017
$0.0134
59
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 12: OPTION RESERVE AND SHARE BASED PAYMENT RESERVE (con’t)
Movements in performance rights:
Opening balance at 1 July 2013
Vesting expense charge for the year
Closing balance at 30 June 2014
Opening balance at 1 July 2014
Vesting expense charge for the year
Write off rights expired 25 July 2014
Closing balance at 30 June 2015
NOTE 13: FOREIGN CURRENCY TRANSLATION RESERVE
Opening balance
Foreign currency translation of foreign subsidiaries
2014
Options
8,000,000
-
8,000,000
2015
Options
8,000,000
-
(8,000,000)
-
2015
$
652,361
156
652,517
2014
$
199,160
103,111
302,271
2015
$
302,271
7,062
(309,333)
-
2014
$
458,057
194,304
652,361
The foreign currency translation reserve is used to record exchange differences arising from the
translation of the financial statements of foreign subsidiaries.
NOTE 14: ACCUMULATED LOSSES
Accumulated losses at the beginning of the year
Net loss for the year
Expired options
Accumulated losses at the end of the year
14,944,254
794,639
(309,333)
15,429,560
7,228,767
7,715,487
-
14,944,254
60
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 15: NOTES TO THE STATEMENT OF CASH FLOWS
Reconciliation of cash flow from operating activities to loss
Loss from ordinary activities after income tax
Add: non cash items:
Share based payments
Depreciation
Impairment of exploration expenditure
Exploration and evaluation expenditure written off
Convertible note costs amortised
Changes in assets and liabilities:
Decrease/(increase) in receivables
Increase/(decrease) in payables
Increase/(decrease) in provisions
2015
$
2014
$
(794,639)
(7,715,487)
24,960
15,351
29,437
143,704
351,292
16
(16,683)
-
(246,562)
140,798
15,197
2,626,294
4,535,855
80,756
5,513
(33,734)
(6,914)
(351,722)
Non-cash investing and financing activities.
(a)
There were no other non-cash investing and financing activities, except the shares and options
issued detailed in notes 11 and 12.
NOTE 16: EARNINGS PER SHARE
Loss from operations attributable to ordinary equity holders
of Riedel Resources Limited used to calculate basic loss
per share
794,639
7,715,487
2015
Number
2014
Number
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings per share
146,731,578
108,572,381
The Company has not disclosed diluted earnings per share as the effect of potential ordinary shares
is to decrease the loss per share.
NOTE 17: SEGMENT REPORTING
The Company has identified its operating segments based on the internal reports that are reviewed
and used by the chief operating decision maker to make decisions about resources to be allocated
to the segments and assess their performance.
Operating segments are identified by Management based on the mineral resource and exploration
activities in Australia and Burkina Faso. Discrete financial information about each project is reported
to the chief operating decision maker on a regular basis.
The reportable segments are based on aggregated operating segments determined by the similarity
61
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 17: SEGMENT REPORTING (con’t)
of the economic characteristics, the nature of the activities and the regulatory environment in which
those segments operate.
Operating segments are identified by management based on exploration activities in Australia and
Burkina Faso.
2015
Australia
$
Burkina Faso Unallocated
$
$
Total
$
Revenue from external sources
-
-
66,299
66,299
Net loss before tax
173,564
4,058
617,017
794,639
Reportable segment assets
1,737,557
2,358
191,262
1,931,177
Reportable segment liabilities
469
405
438,369
439,243
2014
Revenue from external sources
-
-
78,720
78,720
Net loss before tax
113,638
4,572,951
3,028,898
7,715,487
Reportable segment assets
1,961,806
237
124,288
2,086,331
Reportable segment liabilities
602
7,441
458,949
466,992
NOTE 18: FINANCIAL INSTRUMENTS
The Group’s principal financial instruments comprise cash and short term deposits. The main
purpose of the financial instruments is to earn the maximum amount of interest at a low risk to the
Group. The Group also has other financial instruments such as trade debtors, creditors and
convertible notes which arise directly from its operations. For the period under review, it has been
the Group’s policy not to trade in financial instruments
The main risks arising from the Group’s financial instruments are interest rate risk, foreign exchange
risk and credit risk. The board reviews and agrees policies for managing each of these risks and
they are summarised below:
(a)
Interest Rate Risk
The Group is exposed to movements in market interest rates on short term deposits.
The policy is to monitor the interest rate yield curve out to 180 days to ensure a balance
is maintained between the liquidity of cash assets and the interest rate return. The Group
has issued 400,000 Convertible Notes. The Convertible Notes (and any accrued interest)
can be converted in full or any part thereof into Shares in the Company at the lender’s
sole discretion at any time after 30 September 2015. The Group does not have any other
short or long term debt, and therefore this risk is minimal.
62
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 18: FINANCIAL INSTRUMENTS (con’t)
(b) Foreign exchange risk
The Group undertakes certain transactions in foreign currencies, hence exposure to
exchange rate fluctuations arise. Payments made by the Group are made at the
prevailing exchange rate at the time of payment. Loans advanced from the ultimate
holding Company to subsidiary companies are denominated in Australian dollars. The
Group does not utilise derivative instruments to hedge the exchange rate risk.
(c) Credit Risk
Credit risk refers to the risk that counterparty will default on its contractual obligations
resulting in financial loss to the Group. The Group has adopted the policy of only dealing
with credit worthy counterparties and obtaining sufficient collateral or other security
where appropriate, as a means of mitigating the risk of financial loss from defaults.
The Group does not have any significant credit risk exposure to any single counterparty or any
Group of counterparties having similar characteristics. The carrying amount of financial assets
recorded in the financial statements, net of any provisions for losses, represents the Group’s
maximum exposure to credit risk.
(a) Exposure to credit risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The
Group’s maximum exposure to credit risk at the reporting date was:
Financial assets
Cash and cash equivalents
Other receivables
Carrying
Amount
2015
$
142,630
30,571
173,201
Carrying
Amount
2014
$
22,947
66,273
89,220
(b) Impairment losses
None of the Group’s other receivables are past due hence no impairment were provided for.
(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.
The Group manages liquidity risk by maintaining adequate reserves by continuously monitoring
forecast and actual cash flows. The Group does not have any external borrowings.
The Company does anticipate a need to raise additional capital in the next 12 months to meet
forecasted operational and exploration activities.
The contractual maturities of financial liabilities, including estimated interest payments and
excluding the impact of netting agreements are shown at (f) below.
63
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 18: FINANCIAL INSTRUMENTS (con’t)
(d) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest
rates and equity prices will affect the Group’s income or the value of its holdings of financial
instruments.
The objective of market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the return.
(e) Currency risk
The Group is exposed to fluctuations in foreign currencies arising from exploration commitments
in currencies in other than the Group measurement currency. The Group operates internationally
and is exposed to foreign exchange risk arising from currency exposures to the US Dollar and the
Burkina Faso CFA. The Group has not formalised a foreign currency risk management policy,
however it monitors its foreign currency expenditure in light of exchange rate movements.
The carrying amount of the Group’s foreign currency denominated monetary assets and monetary
liabilities at the reporting date are as follows:
Liabilities
Assets
2015
$
2014
$
2015
$
2014
$
Burkina Faso CFA
405
1,967
-
237
Sensitivity analysis
The Group’s main foreign currency risk arises from cash and cash equivalents held in foreign
currency bank accounts and trade and other payable amounts denominated in currencies other
than the functional currency. At 30 June 2015 and 30 June 2014 the Group’s exposure to foreign
currency risk is not considered material.
Interest rate risk
(f)
The Group is exposed to interest rate risk (primarily on its cash and cash equivalents), which is
the risk that a financial instrument's value will fluctuate as a result of changes in the market
interest rates on interest-bearing financial instruments. The Group does not use derivatives to
mitigate these exposures.
The Group adopts a policy of ensuring that as far as possible it maintains excess cash and cash
equivalents in short terms deposit at interest rates maturing over 30-180 day rolling periods.
64
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 18: FINANCIAL INSTRUMENTS (con’t)
Interest Rate Risk Exposure Analysis
Weighted
Average
Fixed Interest Rate
Maturing
Effective
Interest Rate
Floating
Interest
Rate
Within 1
year
Over 1
year
Non
Interest
Bearing
Total
%
$
2.10
134,438
$
-
2.40
-
134,438
20,000
20,000
-
8.00
-
-
-
-
400,000
400,000
2.25
16,084
-
2.76
-
16,084
50,000
50,000
-
8.00
-
-
-
-
400,000
400,000
$
$
$
-
-
-
-
-
-
-
-
-
-
-
-
8,192
142,630
10,571
18,673
30,571
173,201
31,265
31,265
7,978
407,978
39,243
439,243
6,863
22,947
16,273
23,136
66,273
89,220
58,993
7,999
58,993
407,999
66,992
466,992
2015
FINANCIAL ASSETS
Cash and cash
equivalents
Trade and other
receivables
Total Financial Assets
FINANCIAL
LIABILITIES
Trade and other
payables
Convertible note
Total Financial
Liabilities
2014
FINANCIAL ASSETS
Cash and cash
equivalents
Trade and other
receivables
Total Financial Assets
FINANCIAL
LIABILITIES
Trade and other
payables
Convertible note
Total Financial
Liabilities
65
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 18: FINANCIAL INSTRUMENTS (con’t)
Cash flow sensitivity analysis for variable rate instruments
(h)
A change of 100 basis points in interest rates at the reporting date would have increased
(decreased) profit or loss by the amounts shown below. The analysis is performed on the same
basis for 2014.
Change in profit
Increase in interest rate by 1%
(100 basis points)
Decrease in interest rate by 1%
(100 basis points)
Change in equity
Increase in interest rate by 1%
(100 basis points)
Decrease in interest rate by 1%
(100 basis points)
2015
$
1,544
(1,544)
1,544
(1,544)
2014
$
661
(661)
661
(661)
NOTE 19: COMMITMENTS AND CONTINGENCIES
Operating lease commitments
Future minimum rentals payable under non-cancellable operating leases as at 30 June are as
follows:
Within one year
After one year but not more than five years
More than five years
-
-
-
-
52,800
-
-
52,800
The lease of Company offices at Suite 1, 6 Richardson Street, West Perth is settled on monthly
basis from March 2015.
Sublease commitments
Committed at the reporting date but not recognised as receivable:
Within one year
After one year but not more than five years
More than five years
-
-
-
-
64,800
-
-
64,800
66
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 19: COMMITMENTS AND CONTINGENCIES (con’t)
Exploration commitments
Future minimum commitments in relation to exploration and mining tenements as at 30 June are as
follows:
Within one year
After one year but not more than five years
More than five years
2015
$
131,500
148,214
-
279,714
2014
$
348,641
292,954
152,334
793,929
NOTE 20: INTERESTS IN CONTROLLED ENTITIES
The consolidated financial statements include the financial statements of Riedel Resources Limited
and the subsidiaries listed in the following table.
Name
Country of
Equity Interest %
Incorporation
2015
2014
AuDAX Minerals Pty Ltd
Riedel (Burkina Faso) Limited
Australia
Mauritius
BF Exploration SARL
Burkina Faso
100
100
100
100
100
100
Riedel Resources Limited is the ultimate Australian parent entity and ultimate parent of the Group.
NOTE 21: RELATED PARTY DISCLOSURE
Entity with significant influence over the Group
ADX Energy Limited owns 18% of the ordinary shares in Riedel Resources Limited (2014: 23%).
Terms and conditions of transactions with related parties
Sales to and purchases from related parties are made in arm's length transactions both at normal
market prices and on normal commercial terms.
Outstanding balances at year-end are unsecured, interest free and settlement occurs in cash. The
following balances were outstanding at the reporting date in relation to transactions with related
parties:
Loans to related parties:
Audax Minerals Pty Ltd
Riedel (Burkina Faso) Limited
2015
$
2,686,580
5,283,717
7,970,297
2014
$
2,737,133
4,285,035
7,022,168
Key management personnel compensation
Detailed remuneration disclosures are provided in the Remuneration Report on pages 23 to 30.
67
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 21: RELATED PARTY DISCLOSURES (con’t)
Compensation
The aggregate compensation made to directors and other members of key management personnel
of the Group is set out below:
Short term employee benefits
Post-employment benefits
Share-based payments
Total
2015
$
120,806
11,476
5,297
137,579
2014
$
119,194
11,025
103,111
233,330
NOTE 22: EVENTS AFTER THE REPORTING DATE
On 9 July 2015, the Company issued 997,260 shares to Convertible Note holders in consideration of
interest payable for the June 2015 quarter.
On 20 August 2015, the Company issued 18,083,477 fully paid ordinary shares at an issue price of
$0.005 per share to raise $90,417 from an unrelated sophisticated investor, 5% placement fee of
$4,521 will be paid to the facilitator Oracle Securities Pty Ltd.
On 28 August 2015, the Company announced further extension to convertible note redemption date
to 30 September 2015. A further extension will be negotiated in the next general meeting to be held
in October.
On 28 August 2015, the Company announced the resignation of Company Secretary Ms Sue
Symmons and the appointment of Mr Leonard Math as the Company Secretary.
There are no other matters or circumstances that have arisen since the end of the financial year that
have significantly affected or may significantly affect the operations of the Group, the results of those
operations or the state of affairs of the Group, in future years.
NOTE 23: CONTINGENT ASSETS AND LIABILITIES
The Company is not aware of any contingent assets or liabilities.
The Company also has a $20,000 (2014: $20,000) term deposit against a credit card facility that
expires 2 December 2015.
NOTE 24: DIVIDENDS
No dividends were paid or declared during the year.
NOTE 25: COMPANY DETAILS
The registered office and principal place of business of the Company is Suite 1, 6 Richardson
Street, West Perth, WA 6005.
68
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
NOTES TO AND FORMING PART OF THE ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 26: PARENT ENTITY DISCLOSURES
Financial Position
Assets
Current Assets
Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Total Liabilities
Equity
Issued Capital
Reserves
Accumulated Losses
Financial Performance
Loss for the year
Total comprehensive loss
Commitments
For details see note 19.
2015
$
173,201
20,418
193,619
438,370
438,370
2014
$
87,906
30,697
118,603
453,263
453,263
15,452,891
816,086
(16,513,728)
(244,751)
15,110,833
800,399
(16,245,892)
(334,660)
2015
$
577,169
577,169
2014
$
2,701,721
2,701,721
Contingent Liabilities/Guarantees
For details see note 23.
NOTE 27: FAIR VALUE MEASUREMENT
The carrying amounts of trade and other receivables and trade and other payables and convertible
notes are assumed to be approximately the fair value due to their short term nature.
69
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
RIEDEL RESOURCES LIMITED
Report on the Financial Report
We have audited the accompanying financial report of Riedel Resources Limited (the company), which
comprises the statement of financial position as at 30 June 2015, the statement of profit or loss and other
comprehensive income, the statement of changes in equity and the statement of cash flows for the year
then ended, notes comprising a summary of significant accounting policies and other explanatory
information, and the directors’ declaration of the company and the consolidated entity. The consolidated
entity comprises the company and the entities it controlled at the year’s end or from time to time during the
financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of
Financial Statements, that the financial statements comply with International Financial Reporting
Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report. The procedures selected depend on the auditor’s judgement, including the assessment of
the risks of material misstatement of the financial report, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the company’s preparation of the
financial report that gives a true and fair view in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s
internal control. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act
2001.
70
Opinion
In our opinion:
(a)
the financial report of Riedel Resources Limited is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the company’s and consolidated entity’s financial positions as at
30 June 2015 and of their performance for the year ended on that date; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b)
the financial report also complies with International Financial Reporting Standards as disclosed in
Note 1.
Emphasis of Matters
Without modifying our opinion, we draw attention to Note 1 in the financial report, which indicated that the
consolidated entity incurred a net loss after tax of $794,639 during the year ended 30 June 2015 (2014:
$7,715,487). These conditions, along with other matters as set for in Note 1, indicate the existence of a
material uncertainty that may cast significant doubt about the company’s and consolidated entity’s ability to
continue as a going concern and therefore, the company and consolidated entity maybe unable to realise
its assets and discharge its liabilities in the normal course of business.
The financial report of the consolidated entity does not include any adjustments in relation to the
recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities
that might be necessary should the company and/or the consolidated entity not continue as going
concerns.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 24 to 31 of the directors’ report for the year
ended 30 June 2015. The directors of the company are responsible for the preparation and presentation of
the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Riedel Resources Limited for the year ended 30 June 2015,
complies with section 300A of the Corporations Act 2001.
PKF MACK
SHANE CROSS
PARTNER
23 SEPTEMBER 2015
WEST PERTH,
WESTERN AUSTRALIA
71
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
CORPORATE GOVERNANCE
The Company’s Board governs the business on behalf of shareholders as a whole with the prime
objective of protecting and enhancing shareholder value. The Board is committed to, and ensures
that the:-
(i) executive management runs the Group in accordance a high level of ethics and integrity;
(ii) Board and management complies with all applicable laws and regulations;
(iii) Company continually reviews the governance framework and practices to ensure it fulfils its
corporate governance obligations.
Good corporate governance will evolve with the changing circumstances of a company and must
be tailored to meet these circumstances. The Board endorses the ASX Corporate Governance
Principles and Recommendations (‘ASX CGP’) however, as a junior exploration company, at this
stage of the Company’s corporate development, implementation of the ASX CGP is not practical in
every instance given the modest size and scale of the Company operations.
During the year ended 30 June 2015, the Company considered the 3rd Edition of the ASX CGP.
This Statement reports on the revised recommendations and outlines the main corporate
governance practices employed by the Board. Where it has not adopted a particular
recommendation, an explanation is provided.
This Corporate Governance Statement was approved by the Board on 17 September 2015 and is
current as at that date in accordance with ASX Listing Rule 4.10.3.
1. Laying solid foundations for management and oversight
Role and Responsibility of Board and Management
The relationship between the Board and senior management is critical to the Company’s long term
success. The Board is responsible for the performance of the Company in both the short and
longer term and seeks to balance sometimes competing objectives in the best interests of the
Group as a whole. The key aims of the Board are to enhance the interests of shareholders and
other key stakeholders and to ensure the Company is properly managed.
Day to day management of the Company’s affairs and the implementation of the corporate strategy
and policy initiatives are formally delegated by the Board to the Chief Executive Officer and senior
management.
The responsibilities of the Board as a whole, the Chairman and individual Directors are set out in
the Company’s Board Charter and are consistent with ASX CGP 1. A copy of the Board Charter is
available in the Corporate Governance section of the Company’s website.
72
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
CORPORATE GOVERNANCE (Cont’)
Before appointing a new director, the Company will undertake appropriate checks such as a
character reference, police clearance certificate, bankruptcy check and any other check it deems
appropriate. Where a director is to be re-elected or a candidate is put up for election to
shareholders, all material information will be provided to shareholders for consideration.
To ensure that Directors clearly understand the requirements of their role, formal letters of
appointment are provided to them. The content of the appointment letter is consistent with that set
out in ASX CGP 1.
To ensure that Executive Directors clearly understand the requirements of the role, service
contracts and formal job descriptions are provided to them, the content of which is consistent with
ASX CGP1.
Access to information
Directors may access all relevant information required to discharge their duties in addition to
information provided
in Board papers and regular presentations delivered by executive
management on business performance and issues. With the approval of their Chairman, Directors
may seek independent professional advice, as required, at the Company’s expense.
Company Secretary
The Company Secretary, Leonard Math is accountable directly to the Board, through the
Chairman, on all matters to do with the proper functioning of the Board. The role of the Company
Secretary is consistent with ASX CGP1.
Diversity
The Board has established a diversity policy which supports the commitment of the Company to an
inclusive workplace that embraces and promotes diversity and provides a framework for new and
existing diversity-related initiatives, strategies and programs within the business. A copy of the
policy is available in the Corporate Governance section of the Company’s website and terms are
consistent with ASX CGP
In accordance with this policy and ASX CGP, the Board has established the following measurable
objectives in relation to gender diversity:-
- Recruiting from a diverse pool of candidates for all positions, including senior management
-
and the Board;
Identifying specific factors to take account of in recruitment and selection processes to
encourage gender diversity;
- Developing programs to develop a broader pool of skilled and experienced senior
including workplace development programs,
management and board candidates,
mentoring programs and targeted training and development; and
- Developing a culture which takes account of domestic responsibilities of employees.
73
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
CORPORATE GOVERNANCE (Cont’)
The Company currently has 2 employees, neither of whom are female. Further, there are no
females on the Company’s Board. If and when an opportunity to recruit at Board or Company level
arises, the Company will consider such recruitment in accordance with its measurable objectives.
Board performance
The Board undertakes an annual self-assessment of its collective performance by way of a series
of questionnaires. The results are collated and discussed at a Board meeting and any action plans
are documented together with specific performance goals which are agreed for the coming year.
The Chairman undertakes an annual assessment of the performance of individual directors and
meets privately with each director to discuss this assessment. A director is nominated to review
the individual performance of the Chairman and meets privately with him to discuss this
assessment. The 2015 Board review will be undertaken in accordance with this process in
December 2015.
Senior executive performance
The Managing Director undertakes an annual review of the performance of his direct reports and
provides a report to the Board for consideration.
The Chairman undertakes an annual review of the CEO and provides a report to the Board for
consideration. The 2015 senior executive review will be undertaken in accordance with this
process in December 2015.
2. Structure of the Board
Board composition
The Directors determine the composition and size of the Board in accordance with the Company’s
Constitution. The Constitution empowers the Board to set upper and lower limits with the number
of Directors not permitted to be less than three. There are currently four Directors appointed to the
Board and their skills and experience, qualifications, term of office and independence status is set
out in the Directors’ Report.
Nominations committee
Due to the Company’s size and scale, the Board has not established a sub-committee to
undertake the responsibilities normally undertaken by a Nomination Committee. The Board is
charged to undertake the responsibilities normally undertaken by a Nomination Committee.
Board succession/Board skills matrix
The Board has adopted a Board skills matrix which identifies its collective mix of skills and
diversity. The Board’s collective skills include financial, fundraising, industry knowledge,
leadership,
strategic planning,
technology/IT.
lobbying/networking, marketing/PR,
risk management,
74
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
CORPORATE GOVERNANCE (Cont’)
The Board skills matrix also identifies the demographic background of the Board as follows:-
Male
Female
Age
25-40
41-55
56-70
Over 70
4
0
1
3
The current composition of the Board is regarded as balanced with a complementary range of
skills, independence, diversity and experience to enable it to discharge its duties and
responsibilities effectively.
Should the Company be in the position where it believes that it or a new director does not have the
requisite skills and experience, the Company will ensure that appropriate training or development
is provided to ensure that the current or new director has sufficient knowledge, skills and
understanding of their responsibilities.
Director independence
Based on the definition of independence published in ASX CGP 2, no Directors are deemed
Independent Directors. The Board are not independent for the following reasons:-
Ian Tchacos – Director of a substantial shareholder
Jeff Moore – Executive Director
Ed Turner – Executive Director
Andrew Childs – Director of a substantial shareholder
Independent Decision Making
A Board is not independent and the Company recognises that this is a departure from ASX CGP 2.
All Directors bring to the Board the requisite skills which are complementary to those of the other
Directors and enable them to adequately discharge their responsibilities and bring independent
judgments to bear on their decisions.
The Board Charter sets out the criteria the Board uses to determine director independence.
Materiality thresholds used to assess director independence have not as yet been established
however the Board considers a director to be independent where he or she is not a member of
management and is free of any business or other relationship that could materially interfere with, or
could reasonably be perceived to materially interfere with, the director’s ability to act in the best
interests of the Company. The Board believes that the interests of the shareholders are best
served by the current composition of the Board which is regarded as balanced with a
complementary range of skills, diversity and experience as detailed in the Directors’ Report.
75
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
CORPORATE GOVERNANCE (Cont’)
The following measures are in place to ensure the decision making process of the Board is subject
to independent judgments:-
- The role of the Chair and CEO are not exercised by the same individual;
- A standard item on each Board Meeting agenda requires Directors to focus on and declare
any conflicts of interest in addition to those already declared;
- Directors are permitted to seek the advice of independent experts at the Company’s
expense, subject to the approval of the Chairman;
- All Directors must act all times in the interest of the Company; and
- Directors meet as required independently of executive management.
Adoption of these measures ensure that the interests of shareholders, as a whole, are pursued
and not jeopardised by a lack of independence.
Inducting new directors
New Non Executive Directors will be provided with a pack of information and documents relating to
the Company including the Constitution, Group structure, financial statements, recent Board
papers and the various Board policies and charters. Site visits are arranged at an appropriate and
cost effective time.
3. Ethical and Responsible Decision Making
Code of Conduct
A Code of Conduct Policy is in place to promote ethical and responsible practices and standards
for directors, employees and consultants of the Company to discharge their responsibilities. This
Policy reflects the directors’ and key officers’ intention to ensure that their duties and
responsibilities to the Company are performed with the utmost integrity. A copy of the Standards
of Conduct policy is available to all employees and is also available in the Corporate Governance
section of the Company’s website. The terms are consistent with ASX CGP 3.
4. Integrity of corporate reporting
Audit Committee
Due to the size and scale of the Company, during the year the Board has not established a sub-
committee to undertake the responsibilities normally undertaken by an Audit Committee.
The full Board undertakes all Audit Committee responsibilities in accordance with its Audit
Committee Charter located on the Company’s website. The responsibilities include the following:-
- Reviewing and approving statutory financial reports and all other financial information
distributed externally;
- Monitoring the effective operation of the risk management and compliance framework;
- Reviewing the effectiveness of the Company’s internal control environment including
compliance with applicable laws and regulations;
- The nomination of the external auditors and the review of the adequacy of the existing
external audit arrangements; and
- Considering whether non audit services provided by the external auditor are consistent with
maintaining the external auditor’s independence.
76
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
CORPORATE GOVERNANCE (Cont’)
The Company will give consideration at an appropriate time in the Company’s development, for the
creation of an Audit Committee.
CEO/CFO Sign Off
Before the Board approves the Company’s financial statements it receives a declaration from its
CEO and CFO in accordance with ASX CGP 4.
External Auditor
The lead audit partner responsible for the Group’s external audit is required to attend each Annual
General Meeting and to be available to answer shareholder questions about the conduct of the
audit and the preparation and content of the auditor’s report.
A summary of procedures for the selection and appointment of external auditors and rotation of
external audit engagement partners is contained in the Audit Committee Charter located on the
Company’s website.
5. Timely and balanced disclosure
Continuous Disclosure Policy
The Company has a written policy on information disclosure that focuses on continuous disclosure
of any information concerning the Group that a reasonable person would expect to have a material
effect on the price of the Company’s securities.
A copy of the Continuous Disclosure Policy is located in the Corporate Governance section of the
Company’s website and the terms are consistent with ASX CGP 5.
The Company Secretary has been nominated as the person responsible for communications with
the Australia Securities Exchange (ASX). This role includes responsibility for ensuring compliance
with the continuous disclosure requirements in the ASX Listing Rules and overseeing and co-
ordinating information disclosure to the ASX, analysts, brokers, shareholders, the media and the
public.
6. Rights of Securityholders
Website
The Company maintains a website at www.riedelresources.com.au. The website contains
information consistent with ASX CGP 6.
Communication
The Company’s Shareholder Communications Policy promotes effective communication with the
Company’s shareholders and encourages shareholder participation at general meetings. A copy
of this Policy, which deals with communication through the ASX, the Share Registry, shareholder
meetings and the annual report, may be found in the Corporate Governance section of the
Company’s website. All of the Company’s announcements to the market may also be accessed
through the Company’s website. The Company’s annual reports are posted on the Company’s
website.
77
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
CORPORATE GOVERNANCE (Cont’)
Shareholders are provided with the opportunity to question the Board concerning the operation of
the Company at the annual general meeting. They are also afforded the opportunity to question
the Company’s auditors at that meeting concerning matters related to the audit of the Company’s
financial statements.
Shareholders are also encouraged and given the opportunity to receive electronic communications
from, and send electronic communications to, the Company and its share registry.
7. Recognising and Managing Risk
Risk Committee
Due to the size and scale of the Company, during the year the Board has not established a sub-
committee to undertake the responsibilities normally undertaken by a Risk Committee.
The Board is responsible for ensuring that risks, as well as opportunities are identified on a timely
basis and receive an appropriate and measured response, recognising however that no cost
effective internal control system will preclude all errors and irregularities. Areas of significant
business risk and the effectiveness of internal controls are monitored and reviewed regularly. The
Board has adopted a Risk Management Strategy document, a copy of which is located on the
Company’s website.
The Board has undertaken a review of its significant business risks and the effectiveness of
internal controls for the year ended 30 June 2015.
Internal Audit
The Company does not currently have an internal audit function. Once the Company is at a size
and scale that warrants an internal auditor or nears production status, the Board will be
responsible for the appointment and overseeing of the internal auditor.
Specific internal control processes include the review of monthly management accounts with
analysis of the differences between actual and budgeted expenditures, weekly cash flow review
and delegation of authority.
Exposure to Economic, Environmental and Social Sustainability Risks
The Company’s corporate ethics includes a strong focus on environmental responsibility. This
approach is integral to ensuring the long-term sustainability of the Company’s mining and
exploration operations. An Environmental Policy has been established to ensure that its field
operations comply with permits and licenses, and have minimal impact on the surrounding
environments. A copy of this policy is available on the Company’s website.
An important key to the Company’s current and future success is open communications with all
stakeholders. The Company acknowledges its responsibility towards local communities and are
committed to being a good neighbor. An Indigenous Affairs Policy has been established to ensure
that effective and positive communication is established with indigenous groups and a copy is
available on the Company’s website. The policy recognises cultural traditions, historical
association occupation, social and economic needs and the requirement to deal with those groups
on the basis of their interest in accordance with Government policy.
78
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
CORPORATE GOVERNANCE (Cont’)
Part of the Company’s long-term approach towards community relations includes:
Recognise and observe all State and Commonwealth laws in respect to Indigenous and
cultural matters;
Establish and make effective and positive communication with Indigenous groups the
Company comes in contact with in the course of its activities;
Recognise the desire of Indigenous people to fulfil their responsibilities as demanded by
their traditional culture;
Where possible and appropriate, provide local Indigenous groups with the opportunity to
participate directly or indirectly in employment opportunities.
Where appropriate, provide the opportunity for qualified Indigenous people to tender for the
supply of goods and services for the Company’s exploration and mining activities.
8. Remunerating Fairly and Responsibly
Remuneration and Nominations Committee
Due to the size and scale of the Company, during the year the Board has not established a sub-
committee to undertake the responsibilities normally undertaken by a Remuneration & Nomination
Committee.
The full Board approves all management remuneration including the allocation of options (if any)
and involves itself in the nomination, selection and retirement of directors.
The Company will give consideration at an appropriate time in the Company’s development, for the
creation of sub-committees.
The Board seeks to ensure that collectively its membership represents an appropriate balance
between Directors with experience and knowledge of the Company and Directors with an external
or fresh perspective. It shall review the range of expertise of its members on a regular basis and
seeks to ensure that it has operational and technical expertise relevant to the operation of the
Company.
Directors are re-elected, nominated and appointed to the Board in accordance with the Board’s
policy on these matters set out in the Remuneration Committee Charter, the Company’s
Constitution and ASX Listing Rules. In considering appointments to the Board, the extent to which
the skills and experience of potential candidates complement those of the Directors in office is
considered.
The Company’s remuneration philosophy, objectives and arrangements are detailed in the
Remuneration Report which forms part of the Directors’ Report.
79
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
CORPORATE GOVERNANCE (Cont’)
Remuneration of Non Executive Directors
The annual total of fees to Non Executive Directors is set by the Company’s shareholders and
allocated as Directors’ Fees by the Board on the basis of the roles undertaken by the Directors.
Full details of Directors’ remuneration appear in the Remuneration Report. These fees are
inclusive of statutory superannuation contributions. No retirement benefits are paid to Non
Executive Directors.
Remuneration of Executive Management
Remuneration packages for Executive management are generally set to be competitive so as to
both retain executives and attract experienced executives to the Company. Packages comprise a
fixed (cash) element and variable incentive components. Payment of the variable components will
depend on the Company’s financial and the executive’s personal performance.
Current Director Remuneration
In order to preserve cash in the Company, the Non Executive Directors have not received
Directors’ fees since 1 May 2013 and the executive Directors receive Directors’ fees only in the
form of cash. All Directors are entitled to participate in the Performance Rights Plan and/or
Incentive Option Scheme.
Equity Based Remuneration Scheme
The Company has an equity-based remuneration scheme. The Company’s Share Trading Policy
provides that participants in the scheme must not enter into any transaction which would have the
effect of hedging or otherwise transferring to any other person the risk of any fluctuation in the
value of any unvested equity interest. The Share Trading Policy is available on the Company’s
website.
80
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
SHAREHOLDER INFORMATION
Additional information required by the Australian Securities Exchange Limited Listing Rules and not
disclosed elsewhere in this report is set out below. The information is as at 2 September 2015
Shareholdings as at 2 September 2015
Substantial shareholders
The names of substantial shareholders who have notified the Company in accordance with section
671B of the Corporations Act are:
Shareholder Name
ADX ENERGY LIMITED
FLOURISH SUPER PTY LTD
SATORI INTERNATIONAL PTY LTD
SKIFFINGTON SUPER PTY LTD
MR JAMES WALLACE HOPE
MERIWA STREET PTY LTD
Number of
Shares
26,764,709
18,083,477
17,815,621
9,381,982
9,336,479
5,760,769
Percentage
15.73%
10.63%
10.47%
5.52%
5.49%
3.39%
Unmarketable parcels
The number of shareholders holding less than a marketable parcel at 31 August 2015 is 198. There
is only one class of share and all ordinary shareholders have equal voting rights.
Voting rights
All ordinary shares carry one vote per share without restriction.
Unquoted securities
Securities
Options exercisable at $0.15 on or before
31 January 2016
9,333,329
Options exercisable at $0.15 on or before
31 January 2018
1,250,000
Options exercisable at $0.052 on or before
31December 2016
10,000,000
Options exercisable at $0.011 on or before
31 December 2017
23,728,195
Convertible Notes
400,000
On-market buyback
There is no current on-market buy-back.
Number of
Options
Number of
Holders
Holders with
more than 20%
refer note 23
9
1
10
10
10
Statement in relation to Listing Rule 4.10.19
The Directors of Riedel Resources Limited confirm in accordance with ASX Listing Rule 4.10.19 that
during the financial year ended 30 June 2015, the Company has used its cash, and assets that are
readily convertible to cash, in a way consistent with its business objectives.
Stock Exchange listing
Quotation has been granted for the Company’s Ordinary Shares.
81
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
SHAREHOLDER INFORMATION (con’t)
Securities subject to escrow
There are no securities that are subject to escrow.
Distribution of security holders
Category
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Number of Holders
8
8
54
153
114
337
Number of Shares
1091
34,054
519,720
6,877,946
162,668,512
170,101,323
Twenty largest shareholders – Ordinary Shares
Name
ADX ENERGY LIMITED
FLOURISH SUPER PTY LTD
SATORI INTERNATIONAL PTY LTD
SKIFFINGTON SUPER PTY LTD
MR JAMES WALLACE HOPE
MERIWA STREET PTY LTD
QUINLYNTON PTY LTD
BOND STREET CUSTODIANS LIMITED
PROVISTA HOLDINGS PTY LTD
MR GARY TATASCIORE
MR PETER CHARLES MOREY + MRS VALMAI ANN MOREY
MR JEFFREY JOHN MOORE + MRS JULIA ROSALIND MOORE
CAMPEON PTY LTD
MR WILLIAM RICHARD BROWN
WARROORAH PTY LTD
MR MICHAEL ANTHONY BROWN + MRS JOANNA ELIZABETH BROWN
MR ANDREW ROSS CHILDS
MR EDWARD JAMES TURNER + MRS ADINA LARISA TURNER
M & K KORKIDAS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
Number of
ordinary shares
held
Percentage of
capital held
26,764,709
18,083,477
17,815,621
9,381,982
9,336,479
5,760,769
3,968,418
3,113,504
3,093,544
3,093,544
2,891,858
2,661,305
2,560,072
2,300,033
2,230,205
2,199,488
1,697,305
1,588,234
1,443,062
1,406,917
15.73
10.63
10.47
5.52
5.49
3.39
2.33
1.83
1.82
1.82
1.7
1.56
1.51
1.35
1.31
1.29
1
0.93
0.85
0.83
TOTAL
121,390,526
71.36
82
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
SCHEDULE OF MINING TENEMENTS
Area of Interest
Western Australia
Cheritons Find
Marymia
Marymia
Charteris Creek
Millrose
Bronzewing South
West Yandal
Porphyry
Tenement
reference
E77/1793
E52/2395
E52/2394
E45/2763
E53/1304
E36/623
M36/615
M31/157
Nature of interest
Interest
Direct
Direct
Direct
Direct
Direct
Indirect
Royalty
Royalty
100%
49%
49%
100%
100%
80%
0%
0%
83