CORPORATE DIRECTORY ...............................................................................................................................1
DIRECTORS’ REPORT ......................................................................................................................................2
AUDITOR’S INDEPENDENCE DECLARATION ..............................................................................................30
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ..........31
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ..........................................................................32
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ..........................................................................33
CONSOLIDATED STATEMENT OF CASH FLOWS .......................................................................................34
NOTES TO AND FORMING PART OF THE ACCOUNTS ..............................................................................35
DIRECTORS’ DECLARATION .........................................................................................................................61
INDEPENDENT AUDITOR’S REPORT ...........................................................................................................62
SHAREHOLDER INFORMATION…………………………………………………………………………………....67
SCHEDULE OF MINING TENEMENTS……………………………………………………………………………..68
DIRECTORS
Jeffrey Moore
Alexander Sutherland
Scott Cuomo
COMPANY SECRETARIES
Henko Vos
Abby Siew
REGISTERED & PRINCIPAL OFFICE
Suite 1
6 Richardson Street
WEST PERTH WA 6005
Telephone: (08) 9226 0866
Facsimile: (08) 9486 7375
AUDITORS
PKF Mack
Level 5, 35 Havelock Street
WEST PERTH WA 6005
SHARE REGISTRY
Computershare Investor Services Pty Limited
Level 11, 172 St Georges Terrace
PERTH WA 6000
SECURITIES EXCHANGE LISTING
Australian Securities Exchange
(Home Exchange: Perth, Western Australia)
Code: RIE
1
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
2018.
DIRECTORS
The Directors of the Company at any time during or since the end of financial year are:
Jeffrey Moore
Qualifications
Experience
Executive Chairman (Appointed on 30 September 2010)
B.Sc, MAusIMM, MGSA
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 Cougar Metals NL from 2008 to 2012 and Wild Acre Metals Limited
from 2014 to 2016.
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 is currently Non-executive Director for Myanmar Metals
Limited.
Directorships of other listed
companies
Myanmar Metals Limited
Interest in Shares
Interest in Options
14,499,999
5,000,000
Alexander Sutherland
Qualifications
Non-executive Director (Appointed 26 July 2017)
B.Com UWA
Experience
Mr Sutherland has extensive experience in international commercial
operations, including 15 years in Europe, 8 in the Asia Pacific region and
two years in the United States. He is currently based in Switzerland and is
Vice President of Finance (Extrusion Europe) for Sapa AB, a subsidiary of
Norsk Hydro. Prior to this, he held the position of Strategy Director
(Extrusion Europe) for Sapa AB.
Mr Sutherland was previously Global Projects Manager for Alcoa Europe
and has held senior management positions in multinational firms, including
KPMG. Mr Sutherland brings his significant knowledge of international
finance and the resources sector to provide depth to the Company‘s
management team as it pursues exploration and development opportunities
outside of Australia.
2
Directorships of other listed
companies
Nil
Interest in Shares
Interest in Options
1,959,596
Nil
Scott Cuomo
Non-executive Director (Appointed 26 July 2017)
Experience
Mr Cuomo is a highly experienced and successful entrepreneur in the
mobile telecommunications sector. His career spans over 25 years and
includes establishing Vodafone’s largest Australian retail partner. Prior to
that he was the National Business Development Manager of Optus reseller,
B Digital Limited, an ASX listed company that was subject to take-over in
2007.
He offers valuable experience in strategic planning, risk management and
has vast networks in the mobile telecommunications industry.
Mr Cuomo is currently an Associate Director with Oracle Capital.
Directorships of other listed
companies
Interest in Shares
Interest in Options
Luke Matthews
Qualifications
Experience
Nil
Nil
Nil
Former Non-executive Director (Appointed 19 January 2016; Resigned 26
July 2017)
B.Com (Hons) ADA (ASX)
Mr Matthews graduated from the University of Western Australia with a
B.Com. in 1996 and commenced his career in the financial services industry
at Hartley Poynton in 1997.
Since that time, Mr Matthews has been engaged as a Senior Equities &
Derivatives Advisor, providing advice on a wide range of financial
instruments and structures including share trading, exchange traded option
strategies, superannuation and corporate finance.
Directorships of other listed
companies
Nil
Interest in Shares*
Interest in Options*
1,120,105
Nil
3
Mark Skiffington
Qualifications
Experience
Former Non-executive Director (Appointed 19 January 2016; Resigned
26 July 2017)
B.Ec (UWA) BPE (UWA)
Since graduating from the University of Western Australia with a B.Ec. in
1993, Mr Skiffington has been engaged as a financial investment adviser in
the stockbroking industry, having worked at three large brokerage houses
before co-founding Oracle Securities Pty Ltd with Luke Matthews in 2010.
Directorships of other listed
companies
Nil
Interest in Shares*
Interest in Options*
23,319,371
Nil
* Shares/options held at the time of resignation.
Henko Vos
Joint Company Secretary (Appointed 28 December 2016)
Mr Vos is a member of the Governance Institute of Australia and Certified
Practicing Accountants Australia with more than 15 years’ experience
working within public practice, specifically within the area of audit and
assurance both in Australia and South Africa. He holds similar secretarial
roles in various other listed public companies in both industrial and
resources sectors. He is currently an Associate Director with Nexia Perth, a
mid-tier corporate advisory and accounting practice.
Abby Siew
Joint Company Secretary (Appointed 28 December 2016)
Ms Siew graduated from Curtin University with a Bachelor of Commerce
majoring in Accounting and Finance. She is a member of Certified
Practicing Accountants Australia. She is currently employed by Nexia Perth,
a mid-tier corporate advisory and accounting practice.
The Directors and Company Secretaries 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 $636,758 (2017: net
profit $142,568).
4
REVIEW OF OPERATIONS
CHARTERIS CREEK
In May 2018 the cash sale of the Charteris Creek Project
(E45/2763) for A$500,000, (exclusive of GST) to LMTD Wits
Pty Ltd (‘LMTD’), was completed.
The sale provided the Company with additional funding to be
deployed towards the near-term exploration activities at
Riedel’s
in
Northern Spain.
flagship Cármenes Cobalt Copper Project
Key Terms of the Agreement
LMTD was granted a sixty-day exclusivity period
undertake all relevant due diligence work.
to
The purchase price of A$500,000 (exclusive of GST) was
payable as follows:
- A non-refundable option fee of A$25,000 was payable
within 14 days of executing the Agreement;
Figure 1 Location of Western
Australian projects
- A tranche 1 payment of A$175,000 was payable within 5
days of LMTD formally giving notice of their intention to
proceed;
- A tranche 2 payment of A$150,000 was payable within 3 months of LMTD formally giving notice of
their intention to proceed; and
- A tranche 3 payment of A$150,000 was payable within 6 months of LMTD formally giving notice of
their intention to proceed.
MARYMIA
On 21 May 2018 Riedel announced that Australian Mines Limited (ASX: AUZ; USA OTCQB: AMSLF)
had increased its interest in the Marymia Gold and Copper Project in Western Australia to 80%,
having satisfied its Stage 2 expenditure requirements (“Stage 2 Earn-in”).
Pursuant to the Stage 2 Earn-in provisions of the Heads of Agreement (“HOA”) signed on 30 April
2014, AUZ was required to spend an additional A$2 million on exploration across the Marymia
tenements, taking AUZ’s total exploration spend to A$3 million (inclusive of Stage 1 Earn-in
expenditure of A$1 million).
AUZ previously secured a 51% interest in the Marymia Project having successfully completed the
Stage 1 Earn-in requirements, with both parties commenced procedures to transfer the additional
29% aggregate share in the project to AUZ.
5
REVIEW OF OPERATIONS (con’t)
CÁRMENES COBALT-COPPER PROJECT JOINT VENTURE, NORTHERN SPAIN
Project Overview
On 21 July 2017, Riedel signed a Joint Venture Agreement with SIEMCALSA (Sociedad De
Investigación Y Exploración Minera De Castilla Y León S.A.) whereby Riedel can earn interests of up
to 90% in the Cármenes Project, with provision for Riedel to acquire the remaining 10% interest from
SIEMCALSA.
The Cármenes cobalt-copper-nickel project in Spain is host to historical high grade cobalt-copper
production with recorded concentrate grades of 14% cobalt and 33% copper. Significant historic
cobalt, copper, nickel and gold mines exist within the Project area at La Profunda and Divina
Providencia1, with additional mines at Fontun and Valverdin.
Figure 2 Cármenes Project Location
1 Excised from Cármenes Project joint venture tenement area.
6
REVIEW OF OPERATIONS (con’t)
Joint Venture Agreement
Riedel has exceeded the Stage 1 minimum expenditure requirements as per the SIEMCALSA-Riedel
Joint Venture Agreement, whereby Riedel can earn interests of up to 90% in the Cármenes Project
located in Northern Spain (“the Project”) by funding staged exploration and development expenditure,
with provision to acquire the remaining 10% interest.
Key Terms of the Agreement
INTEREST EARNED FROM PROJECT EXPENDITURE
Riedel has the exclusive right to acquire interests of up to 90% in the Project by staged expenditure
on exploration activities within the Tenements (i.e. by ‘Earn-in’). Furthermore, Riedel can acquire the
remaining 10% interest in the Tenements, as per the key terms outlined below.
No other payments (cash or shares) are required to be paid to SIEMCALSA.
Riedel has the right (but not the obligation) to fund the following Project expenditure to earn the
associated Project interest:
Year 1 – Stage 1 Project Expenditure – condition met
Riedel may spend a minimum of €300,000 on exploration programmes at the Cármenes Project.
Year 2 – Stage 2 Project Expenditure
Riedel may spend a minimum of €700,000 on exploration programmes at the Cármenes Project.
50% Interest Earned After Stage 1 and 2
If Riedel successfully completes the Stage 1 and 2 Project Expenditure by the end of Year 2 (or
earlier or later if force majeure determines or the parties agree to a longer timeframe), Riedel will have
earned a 50% interest in the Project (Tenements).
7
REVIEW OF OPERATIONS (con’t)
Year 3 – Stage 3 Project Expenditure
Riedel may spend a minimum of €1,000,000 on exploration programmes at the Cármenes Project.
90% Interest Earned After Stage 1, 2 and 3
If Riedel successfully completes the Stage 1, 2 and 3 Project Expenditure by the end of Year 3 (or
earlier or later if force majeure determines or the parties agree to a longer timeframe), Riedel will have
earned a 90% interest in the Project (Tenements).
Remaining 10% interest in the Tenements
Subsequent to Riedel earning its 90% interest in the Tenements, Riedel may choose to acquire the
remaining 10% interest held by SIEMCALSA in the Project in one of two ways:
Call option: Exercising its exclusive call option and acquiring the remaining 10% before its decision to
commence a Bankable Feasibility Study (BFS), by cash payment at agreed price or a net smelter
return (“NSR”) royalty or;
Undertaking: If Riedel makes a formal decision to mine (DTM), it undertakes to acquire the remaining
10% by cash payment at agreed price or NSR royalty which must occur before the end of year 6.
EXTRAORDINARY EXTENSION PROVISION
The Agreement makes provision for Riedel to request SIEMCALSA to apply for a further three year
extraordinary extension of the duration of the Tenements subject to certain conditions and minimum
expenditure commitments being satisfied.
PROJECT MANAGEMENT
Riedel will be the operator and manager of the Project for the term of the Agreement.
Riedel may choose to engage SIEMCALSA as a subcontractor to advise on exploration planning,
perform technical services, execute work programmes on agreed budgets and prepare documentation
of exploration and deliverables, thereby minimising overhead costs to Riedel associated with
mobilising an onsite geological team.
Tenement Details
The Project is held by SIEMCALSA. SIEMCALSA is a parastatal corporation established in 1988 by
initiative of the Regional Government of Castille and León (Junta de Castilla y León).
SIEMCALSA is committed to the promotion and stimulation of the mining sector in Castille and León
and strongly encourages the exploration, development and exploitation of mineral resources in the
region. The Cármenes Project is covered by two mining investigation permits (“Permits” or
“Tenements”) held by SIEMCALSA; Cármenes (n°15.107) and Valverdin (n°15.106). Cármenes is 4.8
square kilometres in area and Valverdin is 34.8 square kilometres in area (see Figure 3). The
duration of an investigation permit is three (3) years, with 3 year extensions of term available upon
request. Both tenements were granted 3 year extensions on 12 May 2017.
8
REVIEW OF OPERATIONS (con’t)
Figure 3 Cármenes Project Investigation Permits - Cármenes (15.107) and Valverdin (15.106)
Table 1 Cármenes Project Tenure
Cármenes Project
Investigation Permits
Cármenes (n°15.107)
Valverdin (n° 15.106)
Expiry Date
Coverage Area
12 May 2020
12 May 2020
4.8km2
34.7km2
Eligible to apply for 3
Year Extension2
Yes
Yes
Access and infrastructure
The Project area is strategically located near well-established local infrastructure. Access to the
Project area is via modern motorways, good local roads and rail network. The local availability of
power and other essential services is also well developed and conducive to project development.
2 Application for an extraordinary extension may be granted subject to additional conditions or may be rejected
9
REVIEW OF OPERATIONS (con’t)
Figure 4 Cármenes Project area in background with historic Villamanin concentrator building and local
rail and electricity grid in foreground
A newly constructed road along the Profunda mine trend has facilitated vehicle and equipment access
into areas previously considered difficult to explore.
10
REVIEW OF OPERATIONS (con’t)
Figure 5 The newly constructed road along Profunda mine trend showing recently completed drill hole
collars
History
The region has been subject to artisanal mining activity since Prehistoric times. Underground mining
began in 1870, with high grade ore being discovered at -100 metres in 1883. Mining continued
underground at La Profunda until 1890. Complex cobalt/copper/nickel ore was treated at the nearby
Villamanin plant and approximately 100,000 tonnes of ore produced 38,000 tonnes of concentrates,
with 3concentrate streams averaging:
Single concentrate stream (18,000 tonnes):
4% cobalt and 20% copper.
Dual concentrate streams (20,000 tonnes):
Cobalt concentrate - 14% cobalt plus 4% nickel and 5-6% copper.
Copper concentrate - 33% copper plus 1% nickel.
3 Source SIEMCALSA presentation (Cármenes project Cu-Co-Ni ± Au Deposit – September 2016)
11
REVIEW OF OPERATIONS (con’t)
Mining resumed between 1924 to 1931, including the treatment of dump material and tailings, with
average ore grades recorded of 2.2% Cu, 1.5% Ni, 0.9% Co, 0.1% Se, and up to 100 g/t Au.
Other deposits within the investigation permit areas, including Valverdin (gold) and Fontun (lead-
copper-zinc-silver) were mined by artisanal miners in the 1960’s and 1940-1950’s respectively (see
Figure 3).
Work completed in Stage 1
As at 30 June 2018, Riedel has spent a total of €453,644 on exploration in the Cármenes Project and
SIEMCALSA have acknowledged that Riedel has exceeded the Stage 1 minimum expenditure
requirements as per the Joint Venture Agreement. Under the terms of the agreement, Riedel is
required to spend a minimum of €300,000 on exploration programmes during Year 1 of the
agreement.
Exploration during this stage has included extensive geological, ground geophysical, radiometric and
geochemical surveys at the Profunda Mine Prospect area and elsewhere throughout the Cármenes
Project area. Archaeological and cultural studies have been completed, drilling permits for work were
obtained. A newly constructed road along Profunda mine trend has facilitated vehicle and equipment
access into areas previously considered difficult to explore.
Access track construction
Geological and structural mapping
Radiometric and pH surveys
Gradient array and pole-dipole IP surveys
Soil geochemistry - Ion Leach surveys
Target generation
Rock-chip sampling
Mineralogical studies
Ground magnetic surveys
Archaeological surveys
Topographic surveys
Drilling
The key focus by Riedel and SIEMCALSA during the Stage 1 joint venture programme has been on
the identification, refining and testing of new target anomalies using extensive modern geological,
geophysical, radiometric and geochemical surveys, initially at the Profunda Mine Prospect area near
the historic La Profunda cobalt mine and surrounding the historic Valverdin Mine to the south east.
Modern geophysical techniques including radiometric, gradient array induced polarisation (GAIP),
dipole-dipole induced polarisation (PDIP) and ground magnetic surveys were employed by Riedel and
SIEMCALSA using geophysical contracting company IGT. These work programmes were focused
along the prospective zones that extend to the east and west of the historical high grade Profunda
mine, and the Fontun Prospect situated 2.6km to the southwest resulting in the identification of eleven
key target areas which were selected for follow-up exploration including IP surveys, Ion-Leach soil
geochemical surveys, detailed geological and structural mapping and diamond drilling4.
Eleven radiometric target areas were recognised over 3km along the Profunda Mine Trend and over a
distance of more than 1.2km along a regional fold closure at the Fontun Prospect.
4 ASX release 15 May 2018
12
REVIEW OF OPERATIONS (con’t)
Analysis and interpretation of the data
In tandem with the geophysical programmes, Ion Leach and pH soil surveys, geological and structural
mapping, lithogeochemical and mineralogical studies were completed during the year. Rock samples
were taken at high priority radiometric targets and initially prepared for dispatch and transport at ALS
Laboratories in Spain prior to final analysis at ALS Laboratories in Vancouver, Canada. Five
mineralised vein sets and zones of alteration were selectively sampled from dolomite wallrock which
forms the rim or edge of the previously mined La Cuevona stope at the La Profunda Mine5.
Significant results compare favourably to historic sampling carried out by Riedel’s joint venture partner
SIEMCALSA (1998, 2004) and are also consistent with previous sampling carried out by Andrés
Paniagua (1993)6 as part of his PhD thesis.
High grade veins & alteration
27.2% Cu, 0.27%Co, 35.3g/t Ag, 0.32% Sb, 0.24% Ni (sample 26625)
11.2% Cu, 0.51%Co, 14.2g/t Ag, 0.33% Ni (sample 26623)
7.20% Cu, 0.28%Co, 5.7g/t Ag, 0.15% Ni (sample 26624)
SIEMCALSA (1998, 2004)
12.2% Cu, 1.06%Co, 8.4g/t Ag, 0.39% Ni, 0.22% Zn (sample 891)
6.64% Cu, 0.75%Co, 8.3g/t Ag, 0.28% Ni, 0.30% Zn (sample 887)
2.88% Cu, 0.27%Co, 5.0g/t Ag, 0.56% Ni (sample 890)
Andrés Paniagua (1993)
27.2% Cu, 1.13%Co, 22.2g/t Au, 9.2g/t Ag, 0.51% Ni (sample PF4)
9.99% Cu, 0.07%Co, 103.2g/t Au, 0.27% Zn (sample PF1)
4.50% Cu, 0.90%Co, 48.1g/t Ag, 2.07% Ni (sample PF109)
Sample 26623—11.2% Cu, 0.51%Co,
14.2g/t Ag, 0.33% Ni
Sample 26625—27.2% Cu, 0.27%Co,
35.3g/t Ag, 0.32% Sb, 0.24% Ni
5 This work is described in more detail in RIE ASX and Media Release 26 April 2018.
6 Andrés Paniagua (1993). Mineralisation associated with Late Hercinic Fractures in the Southern Branch of the Cantabrian
Zone (Spain), Universidad de Oviedo, Department de Geologia.
13
REVIEW OF OPERATIONS (con’t)
In response to the encouraging results Riedel, in conjunction with its JV Partner SIEMCALSA,
immediately commenced preparations for detailed follow-up geophysical and geochemical surveys.
Six lines and line extensions (2.7 line km) of PDIP surveys were completed at the Profunda Mine
Prospect to further investigate three target clusters within 200 metres of the historic Profunda Co-Cu-
Ni Mine workings, two of which are coincident with radiometric and geochemical anomalies.
An application for a (minimum) 750 metre Diamond Drilling programme for up to five holes to test
three significant target clusters near the Profunda cobalt-copper-nickel mine was lodged with the
relevant Spanish government and local authorities. Following notification of consent to drill Riedel
engaged experienced diamond drilling contractor SPI (Sondeos y Perforaciones Industriales del
Bierzo S. A.) for the drilling contract which commenced on 12 July and was completed on 14 August.
In total, four drill holes for a total of 1,031 metres of core drilling were completed in this first-pass
drilling programme (see Figure 6).
Drill hole locations are shown in relation to chargeability anomalies over geology in Figure 6.
Figure 6 Profunda Mine Prospect drilling programme commenced to test
chargeability and geochemical anomalies
14
REVIEW OF OPERATIONS (con’t)
Target description
The drilling programme was designed to test the geological nature of the clustered PDIP chargeability
anomalies in the three target zones.
The anomalies were repeated in multiple surveys and the chargeability responses were interpreted to
be characteristic of responses generated by metal sulphides disseminated in pipe-like structures. As
yet, assay results are outstanding.
Table 2 First-pass drilling programme details
Hole
Name
Easting7
(utm X)
Northing
(utm Y)
Elevation
(m.)
Azimuth
(º)
CMN-1
287308
4759934
CMN-2
287081
4760192
1409
1567
229
112
Dip
(º)
-45
-46
190
220
CMN-3
287286
4760159
1530
164
-42
421
CMN-4
287352
4760151
1525
177
-46
200
Coordinate System is ETRS89/UTM Zone 30
Length (m)
Chargeability anomaly
intersections
A’ @ 89m to 150m
H @ 22m; G @ 85m; F @
156m
C, C’ and C’’ @ 39m to
98m; A @ 310m to 357m
Faulted 110m to 158m
B’ @ 79; 20m Galerias @
128m
Geophysical and geochemical survey programmes have been expanded elsewhere to include other
regional target areas throughout the Cármenes Project area at Profunda East, Profunda West along
the Profunda Mine Trend, Providencia East, Fontun and Lancara (Indicio).
Highly mineralised dolomite vein material identified at a significant radiometric anomaly 1km to the
east of La Profunda mine workings (Target Area 8) exhibited similar characteristics and grade to veins
and alteration sampled in wallrock at the La Cuevona (“the Big Cave”) stope at the historic Profunda
Mine workings.
7 Coordinate projection system is ETRS89 / UTM zone 30N
15
REVIEW OF OPERATIONS (con’t)
Figure 7 Mineralised vein and Profunda Mine wallrock vein rock chip sample comparison
Ion Leach soil geochemical surveys were completed over the Profunda Mine Prospect by
SIEMCALSA during Stage 1. Results were analysed by standard statistical methods including
correlation, frequency histograms and probabilistic curves (Sigma Plots) for each element and
Factorial analysis of 28 elements (excluding elements that were frequently under detection limits) and
seven Factor maps were produced. Two of these Factor relationships (F1 and F2) were considered
noteworthy:
F1: Zn, pH, Pb, Cr, U, La, Ce, Cd and Tl
F2: Cu, As, Sb, Au, Co, Hg, Ag and Sr
Two areas showing a strong correlation between As, Au, Cu, U and, to a lesser extent, Co and Ni in
areas to the northeast of IP anomaly F and to the north-northwest of IP anomaly C’’ (see Figure 8,
Figure 9) were recognised. In both cases, high metal content occurs in soils over terrigenous bedrock
(S. Emiliano Fm.). The soil anomaly close to IP anomaly C’’ could be related to the lithological
contact of Massive Limestone with bedrock. In a similar geological position, IP anomalies E’ and G
have a lesser relationship with high metals values in soils. The anomalous area to the northeast of IP
anomaly F is close to the contact and to the main northwest-southeast fault, although on a terrigenous
bedrock.
16
REVIEW OF OPERATIONS (con’t)
Figure 8 Ion Leach soil geochemistry coloured by Factor 1 (F1) element association: Zn, pH, Pb, Cr,
U, La, Ce, Cd, Tl)
17
REVIEW OF OPERATIONS (con’t)
Figure 9 Ion Leach soil geochemistry coloured by Factor 2 (F2) element association: Cu, As, Sb, Au,
Co, Hg, Ag, Mn, U)
Next Steps
Detailed geological, structural and mineralogical logging of core from the recently completed drilling
programme at Profunda Mine prospect is underway and selected “half-core” intervals will be prepared
and dispatched for analysis.
Follow-up downhole IP surveys will be completed over selected intervals to assist to further
interrogate the depth and lateral location of the chargeability anomalies under investigation and to
determine the nature of sulphide bearing zones or mineralised horizons intersected by the drill holes
or located near drill holes.
Further discussion of the drilling results will be made available after the follow-up work programmes
and assay determination work is completed.
Other exploration planned over the Profunda Mine Prospect, Profunda Mine Trend, Providencia
Trend, Fontun and Valverdin Prospects at the Cármenes Project will include trenching, geological
mapping at 1:100 scale (mine workings), geophysical, geochemical and radiometric surveys as well
as other supporting work such as structural, mineralogical and sedimentological studies.
18
REVIEW OF OPERATIONS (con’t)
Archaeological studies
Drilling
Geological-Mining mapping 1:100
Lithogeochemistry
Magnetometry
Mineralogical study
PDIP profiles
Radiometry
Roads
Soil geochemistry (Ionic Leach)
Structural and sedimentological studies
Trenches
Figure 10 Proposed Stage 2 work programmes
19
RIEDEL RESOURCES LIMITED
ABN: 91 143 042 022
FOR THE YEAR ENDED 30 JUNE 2018
DIRECTORS’ REPORT
REVIEW OF OPERATIONS (con’t)
TENEMENT SCHEDULE
Following is the schedule of Riedel Resources minerals tenements as at 30 June 2018.
Area of Interest
Spain
Carmenes
Valverdin
Australia
Marymia
Marymia
West Yandal
Porphyry
Tenement reference
Nature of interest
Interest
n°15,107
n°15,106
E52/2394
E52/2395
M36/615
M31/157
Joint Venture
Joint Venture
Earning 90%
Earning 90%
Direct
Direct
Royalty
Royalty
20%
20%
0%
0%
COMPETENT PERSON’S STATEMENT
The information in this report that relates to Exploration Results and Mineral Resources is based on information
compiled by Mr Jeffrey Moore, who is a Member of The Australian Institute of Mining and Metallurgy. Mr Moore is
a full-time employee of Riedel Resources Limited. Mr Moore 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 Moore consents to the inclusion in this report of the matters based on
his information in the form and context in which it appears.
20
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
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.
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 $6,500 (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 secretaries of the Company.
Indemnity and insurance of auditors
The Company has not, during or since the end of financial year, indemnified or agreed to indemnify the
auditor of the Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of the contract to insure the
auditor of the Company or any related entity.
21
MEETINGS OF DIRECTORS
During the financial year, 3 meetings of directors were held. The number of meetings attended by each
director during the period is stated below:
Jeffrey Moore
Alexander Sutherland¹
Scott Cuomo¹
Luke Matthews2
Mark Skiffington2
¹ Appointed 26 July 2017.
2 Resigned 26 July 2017.
Number of eligible to
attend
3
2
2
1
1
Number attended
3
2
2
1
1
In addition to the above, the directors met by circular resolution on 9 occasions during the financial
year.
OPTIONS
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
11/03/2019
Exercise price
(cents)
1.8
Quantity
18,000,000
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.
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 2018 has been received and is
included in the financial report on page 30.
22
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 2018. 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.
Key Management Personnel
Directors
Jeffrey Moore (Executive Chairman) (Appointed 30 September 2010)
Alexander Sutherland (Non-executive Director) (Appointed 26 July 2017)
Scott Cuomo (Non-executive Director) (Appointed 26 July 2017)
Luke Matthews (Non-executive Director) (Appointed 19 January 2016, Resigned 26 July 2017)
Mark Skiffington (Non-executive Director) (Appointed 19 January 2016, Resigned 26 July 2017)
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
23
REMUNERATION REPORT – AUDITED (con’t)
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
2018, 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 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.
Bonuses
No bonuses were given to key management personnel during the 2017 and 2018 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.
24
REMUNERATION REPORT – AUDITED (con’t)
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.
All directors are entitled to participate in the Performance Rights Plan and/or Incentive Option
Scheme.
Remuneration of directors and key management personnel
For the year ended 30 June 2018
Short-Term
Benefits
Salaries
& Fees
$
Consulting
Fees
$
Post-
Employment
Benefits
Equity-Settled
Share-Based
Payments
Value of equity
as proportion of
remuneration
Superannuation
$
$
Total
$
%
Directors
Jeffrey Moore
Alexander
Sutherland¹
Scott Cuomo²
Luke Matthews3
Mark Skiffington3
141,667
27,984
27,984
-
-
-
-
-
-
-
13,458
-
155,125
0.0%
-
2,658
-
-
-
27,984
30,642
324,000
324,000
-
324,000
324,000
0.0%
0.0%
100.0%
100.0%
Total
197,635
-
16,116
648,000
861,751
¹ Appointed 26 July 2017. $27,984 represents directors fees accrued during the year but not yet paid as at 30 June
2018.
² Appointed 26 July 2017.
3
Resigned 26 July 2017. 4,000,000 shares each were issued to Mr Matthews and Mr Skiffington in December
2017 in lieu of forgone remuneration. See note 20 for further details. The value disclosed is the fair value at grant
date of the shares.
25
REMUNERATION REPORT – AUDITED (con’t)
For the year ended 30 June 2017
Short-Term
Benefits
Post-
Employment
Benefits
Salaries
& Fees
$
Consulting
Fees
$
Superannuation
$
Directors
Jeffrey Moore
Andrew Childs¹
Luke Matthews²
Mark Skiffington²
100,000
-
-
-
-
-
-
-
9,500
-
-
-
Equity-
Settled
Share-
Based
Payments
Value of equity
as proportion
of
remuneration
$
21,433
-
-
-
Total
$
130,933
-
-
-
%
16.4%
0.0%
0.0%
0.0%
Total
100,000
-
9,500
21,433
130,933
¹ Resigned 30 March 2017.
² Resigned 26 July 2017.
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.
Options and rights over equity instruments granted as compensation
Options
In May 2018, the Board resolved to issue 5,000,000 unlisted options each to non-executive directors,
Scott Cuomo and Alexander Sutherland (10,000,000 unlisted options in total). The options have an
exercise price of $0.11 per option and will expire three years from the date of obtaining relevant
shareholder approval, which the Company will seek at the next available General Meeting. The
proposed issue of the unlisted options are to recognise the directors’ contribution to the Company and
to serve as an incentive for future performance.
As at the date of this report, these options have not been issued yet.
Shares issued as compensation during the year
Pursuant to Resolution 7 and 8 approved by the shareholders at the 2017 AGM, 4,000,000 shares
each were issued to Mr Luke Matthews and Mr Mark Skiffington, former Non-Executive Directors
(resigned 26 July 2017) or their nominees in lieu of forgone remuneration for the period 19 January
2016 to 20 July 2017.
26
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:
Jeffrey Moore
Executive Chairman
18 January 2016
3 years (Subject to re-election every 3 years from 18 January 2016)
Director’s
(effective 1
fees of $100,000 plus superannuation
September 2017 increased to $150,000 plus superannuation). The
Executive is entitled to Performance Rights.
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Alexander Sutherland (Appointed 26 July 2017)
Non-executive Director
26 July 2017
3 years (Subject to re-election every 3 years from 26 July 2017)
Director’s fees of $30,000 exclusive of superannuation (if applicable).
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Scott Cuomo
Non-executive Director
26 July 2017
3 years (Subject to re-election every 3 years from 26 July 2017)
Director’s fees of $30,000 plus superannuation.
Luke Matthews (Appointed 18 January 2016; Resigned 26 July 2017)
Former Non-executive Director
18 January 2016
Subject to re-election every 3 years.
Not entitled to director’s fees due to previous position of the Company.
Mark Skiffington (Appointed 19 January 2016; Resigned 26 July 2017)
Former Non-executive Director
18 January 2016
Subject to re-election every 3 years.
Not entitled to director’s fees due to previous position of the Company.
27
REMUNERATION REPORT – AUDITED (con’t)
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:
Ordinary shares held in Riedel Resources Limited (number)
2018
Jeffrey Moore
Alexander
Sutherland¹
Scott Cuomo¹
Mark Skiffington²
Luke Matthews²
Total
Balance at
beginning
of period
12,661,305
-
-
23,319,371
1,120,105
37,100,781
Granted as
remuneration
-
-
-
4,000,000
4,000,000
8,000,000
Exercise of
options/
performance
rights
Net change*
Other
Balance at
end of
period
- 14,499,999
-
-
-
-
-
-
1,838,694
1,959,596
-
3,798,290
-
-
(27,319,371)
(5,120,105)
1,959,596
-
-
-
(32,439,476) 16,459,595
¹ Appointed 26 July 2017.
² Resigned 26 July 2017. Therefore not key management personnel at 30 June 2018. 4,000,000 shares each were
issued to Mr Matthews and Mr Skiffington in December 2017 in lieu of forgone remuneration.
* Net change represent shares that were purchased or sold during the year
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:
Options held in Riedel Resources Limited (number)
2018
Jeffrey Moore
Alexander
Sutherland¹
Scott Cuomo¹
Mark Skiffington²
Luke Matthews²
Total
Balance at
beginning
of period
5,000,000
-
-
2,966,025
-
7,966,025
Granted as
remuneration Exercised
-
-
Net change*
-
Other
-
-
-
-
-
-
-
-
-
-
-
-
(2,966,025)
-
(2,966,025)
-
-
-
-
-
Balance at
end of period
5,000,000
-
-
-
-
5,000,000
¹ Appointed 26 July 2017.
² Resigned 26 July 2017. Therefore not key management personnel at 30 June 2018.
28
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
Executive Chairman
Date: 25 September 2018
29
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 2018, 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
25 SEPTEMBER 2018
WEST PERTH,
WESTERN AUSTRALIA
30
NOTES
2018
$
2017
$
Interest revenue
Other revenue
Gain on deregistration
Reversal of impairment of exploration and
evaluation due to sale of tenement
Total revenue
Administration expenses
Depreciation
Employee benefits expense
Impairment of exploration expenditure
Exploration and evaluation expenditure incurred
Finance costs
Profit/(Loss) before income tax expense
Income tax expense
Profit/(Loss) for the year
Other comprehensive loss
Items that may be reclassified subsequently to
profit or loss
Exchange difference on translation of foreign
operation
Foreign currency translation reserve on
deregistration of foreign subsidiaries
2(a)
2(b)
3
15,533
219,467
-
210,305
445,305
(253,916)
(807)
(766,610)
(2,208)
(58,515)
(7)
21,935
10,591
652,518
-
685,044
(195,618)
(5,618)
(62,849)
(87,414)
(190,900)
(77)
(636,758)
142,568
-
-
(636,758)
142,568
(1,116)
-
-
(652,096)
Total comprehensive profit/(loss) for the year
(637,874)
(509,528)
Basic and diluted earnings per share (cents)
15
(0.17)
0.06
The accompanying notes form part of these financial statements.
31
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
Plant and equipment
Exploration and evaluation expenditure
TOTAL NON CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Option reserve
Share based payment reserve
Foreign currency translation reserve
Accumulated losses
NOTES
5
6
7
8
9
2018
$
2,339,803
136,974
2017
$
899,219
34,068
2,476,777
933,287
2,342
2,408,180
1,592
1,638,167
2,410,522
1,639,759
4,887,299
2,573,046
158,639
158,639
158,639
34,219
34,219
34,219
4,728,660
2,538,827
10
11
11
12
13
19,237,097
-
214,200
(1,116)
(14,721,521)
16,091,432
-
597,158
-
(14,149,763)
TOTAL EQUITY
4,728,660
2,538,827
The accompanying notes form part of these financial statements.
32
Issued
Capital
Option
Reserve
$
$
Foreign
Currency
Translation
Reserve
$
Share
Based
Payments
Reserve
$
Accumulated
Losses
Total
$
$
Balance at 1 July 2017
16,091,432
Profit/(Loss) for the period
Other comprehensive loss
Total comprehensive loss for the
period
Transactions with owners, recorded
directly in equity
Issue of share capital
Expiry of options
Less: Cost of capital raising
Conversion of options
-
-
-
3,027,927
-
(200,220)
317,958
3,145,665
Balance at 30 June 2018
19,237,097
-
-
-
-
-
-
-
-
-
-
597,158
(14,149,763)
2,538,827
-
(1,116)
(1,116)
-
-
-
(636,758)
-
(636,758)
(1,116)
(636,758)
(637,874)
-
-
-
-
-
-
(65,000)
-
(317,958)
(382,958)
-
65,000
-
-
65,000
3,027,927
-
(200,220)
-
2,827,707
(1,116)
214,200
(14,721,521)
4,728,660
15,981,731
-
-
290,941
-
-
652,096
-
(652,096)
827,612
-
-
(14,725,459) 3,026,921
142,568
(652,096)
142,568
-
-
-
(652,096)
-
142,568
(509,528)
Balance at 1 July 2016
Profit/(Loss) for the period
Other comprehensive loss
Total comprehensive loss for the
period
Transactions with owners, recorded
directly in equity
Issue of share capital
Issue of rights
Expiry of options
109,701
-
-
109,701
-
-
(290,941)
(290,941)
-
-
-
-
-
(109,701)
21,434
(142,187)
(230,454)
-
-
433,128
433,128
-
21,434
-
21,434
597,158
(14,149,763)
2,538,827
Balance at 30 June 2017
16,091,432
-
The accompanying notes form part of their financial statements.
33
Cash Flows from Operating Activities
Interest received
Finance costs
Other revenue
Payments to suppliers and employees
NOTES
2018
$
15,533
(7)
18,442
(437,833)
2017
$
21,935
(77)
8,780
(350,428)
Net cash used in operating activities
14
(403,865)
(319,790)
Cash Flows from Investing Activities
Payment for plant and equipments
Payment for exploration and evaluation
Proceeds from sale of tenements
(1,557)
(802,975)
500,000
-
(280,795)
-
Net cash used in investing activities
(304,532)
(280,795)
Cash Flows from Financing Activities
Payments for share issue costs
Proceeds from issued capital
Net cash provided in financing activities
Net increase/(decrease) in cash and cash
equivalents held
Cash and cash equivalents at 1 July
Effects of foreign exchange
(63,525)
2,213,807
2,150,282
-
-
-
1,441,885
(600,585)
899,219
(1,301)
1,499,804
-
Cash and cash equivalents at 30 June
5
2,339,803
899,219
The accompanying notes form part of these financial statements
34
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 2018 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.
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the
financial performance or position of the Group.
New standards and interpretations not yet mandatory or early adopted
At the date of authorisation of the financial statements, the Group’s assessment of the impact of the new
Standards and Interpretations issued but not yet effective, most relevant to the Group, are set out below:
AASB No.
Title
Application
date of
standard *
Issue date
AASB 9
Financial Instruments
1 January 2018
December 2014
AASB 16
Leases
1 January 2019
February 2016
* Annual reporting periods beginning after
The impact of these recently issued or amended standards and interpretations have been determined as not
material by the Group.
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 25 September
2018. 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.
35
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
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 in note 17.
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 25.
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 2018 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.
36
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 or Binomial Option Pricing models, using the assumptions detailed in
Note 11.
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.
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.
37
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
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.
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 consolidated
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.
38
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
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.
(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 reporting date 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.
39
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
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.
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.
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.
40
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
(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.
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.
41
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
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.
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.
42
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
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.
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 recognised 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.
43
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (con’t)
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 recognized 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 corporate 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 profit/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.
Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
44
NOTE 2: GAIN FROM ORDINARY ACTIVITIES
2018
$
2017
$
(a) Revenue
Bank interest
Gain on deregistration
Revenue from office sublease
Net gain on sale of tenement1
Reversal of impairment of exploration and evaluation expenditure
Other revenue
(b) Expenses
Loss for the year includes the following expenses:
Depreciation
Exploration and evaluation expenditure incurred
Equity-settled share based payments expense
Superannuation – defined contribution
Impairment of exploration expenditure
Rental expense – operating lease
15,533
-
18,853
200,614
210,305
-
445,305
807
58,515
648,000
21,048
2,207
45,021
21,935
652,518
9,165
-
-
1,426
685,044
5,618
190,900
21,434
15,200
87,414
38,898
1 In November 2017, LMTD Wits Pty Ltd exercised its option to purchase the Riedel’s Charteris Creek Project (E45/2763)
for $500,000 exclusive of GST. Pursuant to the Sale Agreement, all instalments have been received in full by the
Company.
NOTE 3: INCOME TAX EXPENSE
Income tax expense/(benefit):
Current tax
Prior year under provision
Deferred tax
2018
$
2017
$
-
-
-
-
-
-
-
-
45
NOTE 3: INCOME TAX EXPENSE (con’t)
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:
Prima facie income tax benefit on profit/(loss) at 30%.
(2017: 27.5%)
(191,027)
39,206
Add:
Tax effect of:
Other non-allowable items
Share based payment
Impairment of exploration expenditure
Write off exploration expenditure
Superannuation payable
Derecognition of foreign subsidiary
Other non-deductible amount
Less:
Tax effect of:
Exploration and evaluation expenditure
Impairment on sale
Capital raising costs
Revenue losses not recognised
Provisions and accruals
Tax losses deducted
Income tax expense/(benefit)
The applicable average weighted tax rates are as
follows:
35
194,400
662
17,555
986
-
2,844
216,482
3,901
63,091
15,084
(56,321)
(300)
-
25,455
-
0%
266
5,894
24,039
-
-
(179,210)
-
(149,011)
-
-
10,613
(120,280)
(138)
-
(109,805)
-
0%
The tax rate used in the above reconciliation is the corporate tax rate of 30% (2017: 27.5%) payable by
Australian corporate entities on taxable profits under Australian tax law. The full company tax rate of
30% applies to all companies that are not eligible for the lower company tax rate.
The following deferred tax balances have not been
recognised:
Deferred Tax Assets:
At 30%: (2017:27.5%)
Carry forward revenue losses
Capital raising cost
Website costs
Provisions and accruals
Exploration and evaluation expenditure
Impairment of exploration expenditure
1,567,093
53,461
-
4,676
17,555
662
1,643,447
1,462,977
7,773
-
3,108
-
-
1,473,858
46
NOTE 3: INCOME TAX EXPENSE (con’t)
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%: (2017:27.5%)
Exploration and evaluation expenditure
494,689
450,496
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.
NOTE 4: AUDITORS’ REMUNERATION
Remuneration of the auditor of the parent entity for:
- Auditing or reviewing the financial report
- Other non-audit services
Remuneration of firms other than the auditor
- Tax compliance and tax advice
- Other non-audit services
NOTE 5: CASH AND CASH EQUIVALENTS
Cash on hand
Cash at bank
Refer to note 17 for further information on financial instruments.
NOTE 6: TRADE AND OTHER RECEIVABLES
Current
Sublease income
Term deposit
Prepayments
GST/VAT paid
Refer to note 17 for further information on financial instruments.
2018
$
26,145
950
27,095
9,470
65,000
74,470
2018
$
2,102
2,337,701
2,339,803
2018
$
2,222
20,000
7,128
107,624
136,974
2017
$
23,325
-
23,325
4,350
60,000
64,350
2017
$
1,981
897,238
899,219
2017
$
1,812
20,000
6,584
5,672
34,068
47
NOTE 7: PLANT & EQUIPMENT
Office Equipment
At cost
Accumulated amortisation
Total office equipment
Exploration Equipment
At cost
Accumulated amortisation
Total exploration equipment
Total plant and equipment
2018
$
37,697
(35,355)
2,342
55,304
(55,304)
-
2,342
2017
$
36,141
(34,549)
1,592
55,304
(55,304)
-
1,592
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
Exploration and evaluation expenditure
Gross capitalised exploration and evaluation expenditure
Less: Provision for impairment
Net amount
Exploration and evaluation expenditure reconciliation
Opening balance
Exploration and development expenditure incurred
Exploration and evaluation written off
Impairment
Tenement sold
Closing balance
2018
$
2017
$
1,592
1,557
(807)
2,342
-
-
-
-
2,410,717
(2,537)
2,408,180
1,638,167
915,175
(58,515)
(2,208)
(84,439)
2,408,180
2,831
-
(1,239)
1,592
4,379
-
(4,379)
-
7,572,734
(5,934,567)
1,638,167
1,635,520
90,061
-
(87,414)
-
1,638,167
48
NOTE 9: TRADE AND OTHER PAYABLES
Trade creditors
Accruals
Payroll liabilities
Refer to note 17 for further information on financial instruments.
NOTE 10: ISSUED CAPITAL
(a) Share capital
2018
$
102,475
8,500
47,664
158,639
2017
$
20,696
7,500
6,023
34,219
2017
Shares
2017
$
Ordinary shares
Issued and paid up capital – consisting of ordinary shares
Less: Cost of issue
Closing balance at 30 June 2017
244,099,553
-
244,099,553
16,845,724
(763,292)
16,091,432
2018
Shares
2018
$
Ordinary shares
Issued and paid up capital – consisting of ordinary shares
Less: Cost of issue
Closing balance at 30 June 2018
418,069,699
-
418,069,699
20,200,609
(963,512)
19,237,097
(b) Movement in ordinary shares capital
Date
Details
No of Shares
$
1 July 2016
30 May 2017
30 June 2017
Opening balance
Exercise of performance rights following
vesting
Closing balance
1 July 2017
1 August 2017
30 August 2017
6 December 2017
6 December 2017
Opening balance
Issue of shares to sophisticated investors
through Placement
Issue of shares pursuant to Rights issue
Issue of shares for payment of underwriting
fees (pursuant to Resolution 6 approved by
shareholders at the Company’s 2017 AGM)
Issue of shares in lieu of forgone remuneration
(pursuant to Resolution 7 approved by
Shareholders at the Company’s
2017 AGM)
6 December 2017 Shares issued in lieu of cash payment to a
21 December 2017 Issue of shares upon the conversion of
consultant
unlisted options exp. 31 December 2017 ex
price of $0.011
21 December 2017 Transfer from reserve
30 June 2018
Less: capital issue costs
Closing balance
49
234,099,553
15,981,731
10,000,000
244,099,553
109,701
16,091,432
244,099,553
16,091,432
36,614,932
93,571,495
549,224
1,403,572
9,113,049
136,696
8,000,000
2,942,475
23,728,195
-
418,069,699
648,000
29,425
261,010
317,958
(200,220)
19,237,097
NOTE 10: ISSUED CAPITAL (con’t)
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.
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.
There have been no changes in the strategy by management to control the capital of the Group since the prior
year.
NOTE 11: OPTION RESERVE AND SHARE BASED PAYMENT RESERVE
Options reserve
Share based payments reserve (a)
2018
$
-
214,200
214,200
2017
$
-
597,158
597,158
(a) Refers to fair value of options issued in accordance with AASB 2 Share Based Payment.
Options reserve
Movements in options reserve:
Opening balance at 1 July 2016
Options expired
Closing balance at 30 June 2017
Movements in options reserve:
Opening balance at 1 July 2017
Options expired
Closing balance at 30 June 2018
2017
Options
2018
Options
-
-
-
-
-
-
2017
$
290,941
(290,941)
-
2018
$
-
-
-
50
NOTE 11: OPTION RESERVE AND SHARE BASED PAYMENT RESERVE (con’t)
Share based payment reserve
Options
Total share based payments reserve
Options
Total share based payments reserve
Movements in options (share based payments reserve):
2017
Quantity
42,978,195
42,978,195
2018
Quantity
18,000,000
18,000,000
2017
$
597,158
597,158
2018
$
214,200
214,200
Opening balance at 1 July 2016
Options lapsed 30 June 2014 (reclassified
between reserves)
Options lapsed on 31 December 2016
Performance rights vesting expense charge
for the year
Performance rights exercised following vesting
on 30 May 2017
Closing balance at 30 June 2017
Weighted
Average
Exercise
Price
2017
2017
Options
$
62,978,195
827,612
-
(10,000,000)
-
(68,500)
(73,687)
21,434
(10,000,000)
(109,701)
0.023
0.300
0.052
0.016
0.016
0.018
42,978,195
597,158
Weighted
Average
Exercise
Price
Opening balance at 1 July 2017
Conversion of options on 21 December 2017
Options lapsed unexercised on 31 January 2018
Closing balance at 30 June 2018
0.018
0.006
0.004
0.018
2018
Options
42,978,195
(23,728,195)
(1,250,000)
18,000,000
2018
$
597,158
(317,958)
(65,000)
214,200
The weighted average remaining contractual life of options outstanding at the end of the financial year was
0.70 years (2017: 1.01 years).
51
NOTE 11: OPTION RESERVE AND SHARE BASED PAYMENT RESERVE (con’t)
The value of 18,000,000 options was calculated using the Black-Scholes Option Pricing Model and totalled
$214,200. 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
Movements in performance rights:
Opening balance at 1 July 2016
Vesting expense charge for the year
Performance rights exercised following vesting on 30
May 2017
Closing balance at 30 June 2017
NOTE 12: FOREIGN CURRENCY TRANSLATION RESERVE
Opening balance
Foreign currency translation of deregistration of foreign
subsidiaries
Foreign exchange reserve
Closing balance
Options
18,000,000
$0.015
$0.018
2.045%
150%
11/03/2019
$0.0119
2017
$
88,267
21,434
2017
Options
10,000,000
-
(10,000,000)
(109,701)
-
-
2018
$
-
-
(1,116)
(1,116)
2017
$
652,096
(652,096)
-
-
The foreign currency translation reserve is used to record exchange differences arising from the translation
of the financial statements of foreign subsidiaries.
52
NOTE 13: ACCUMULATED LOSSES
Accumulated losses at the beginning of the year
Net profit/(loss) for the year
Expired options
Accumulated losses at the end of the year
2018
$
2017
$
(14,149,763)
(636,758)
65,000
(14,721,521)
(14,725,459)
142,568
433,128
(14,149,763)
NOTE 14: NOTES TO THE STATEMENT OF CASH FLOWS
Reconciliation of cash flow from operating activities to profit/(loss)
Profit/(loss) from ordinary activities after income tax
(636,758)
142,568
2018
$
2017
$
Add: non-cash items:
Foreign exchange loss
Share based payments
Depreciation
Gain on sale of tenements
Impairment of exploration expenditure
Exploration and evaluation expenditure written off
Gain on deconsolidation
Reversal of impairment
Changes in assets and liabilities:
Decrease/(increase) in receivables
Increase/(decrease) in payables
185
648,000
807
(200,614)
2,208
58,515
-
(210,305)
(102,904)
37,001
(403,865)
-
21,434
5,618
-
87,414
190,900
(652,518)
-
(6,146)
(109,060)
(319,790)
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 10 and 11.
53
NOTE 15: EARNINGS PER SHARE
Basic earnings per share
Profit/(Loss) from operations attributable to ordinary equity holders
of Riedel Resources Limited used to calculate basic loss per
share
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings per share
2018
$
Cents
(0.17)
2017
$
Cents
0.06
(636,758)
142,568
2018
Number
2017
Number
379,173,608
234,948,868
The Company has not disclosed diluted earnings per share as the effect of potential ordinary shares is to
increase/(decrease) the profit/(loss) per share.
NOTE 16: 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 Spain. 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 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 Spain.
2018
Revenue
Australia
$
Spain
$
Unallocated
$
Total
$
445,305
-
-
445,305
Net profit/(loss) before tax
(217,979)
(9,481)
(409,298)
(636,758)
Reportable segment assets
3,979,114
931,033
(22,848)
4,887,299
Reportable segment liabilities
70,106
941,629
(853,095)
158,640
Australia
$
Burkina Faso
$
Unallocated
$
Total
$
2017
Revenue
Net profit/(loss) before tax
685,044
597,129
Reportable segment assets
1,638,834
Reportable segment liabilities
-
54
-
-
-
-
-
685,044
(454,561)
142,568
934,212
2,573,046
34,219
34,219
NOTE 17: 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)
(b)
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 does not have any
other short or long term debt, and therefore this risk is minimal.
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
2018
$
2,339,803
129,845
2,469,648
Carrying Amount
2017
$
899,219
34,068
933,287
Impairment losses
(b)
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.
55
NOTE 17: FINANCIAL INSTRUMENTS (con’t)
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 (e) below.
(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.
Interest rate risk
(e)
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.
Interest Rate Risk Exposure Analysis
Weighted
Average
Effective
Interest
Rate
2018
FINANCIAL ASSETS
Cash and cash equivalents
Trade and other receivables
Total Financial Assets
%
0.39%
0.36%
Floating
Interest
Rate
$
2,271,683
-
2,271,683
Fixed Interest Rate
Maturing
Within 1
year
Over 1
year
$
-
20,000
20,000
0.00%
-
-
Total
Non
Interest
Bearing
$
68,120
109,845
177,965
$
2,339,803
129,845
2,469,648
123,569
123,569
123,569
123,569
$
-
-
-
-
FINANCIAL LIABILITIES
Trade and other payables
Total Financial Liabilities
2017
FINANCIAL ASSETS
Cash and cash
equivalents
Trade and other
receivables
Total Financial Assets
2.35
73,416
823,822
1,981
899,219
2.00
73,416
20,000
843,822
FINANCIAL LIABILITIES
Trade and other payables
Total Financial Liabilities
-
-
-
-
-
56
14,068
34,068
34,068
933,287
34,219
34,219
34,219
34,219
-
-
-
NOTE 17: FINANCIAL INSTRUMENTS (con’t)
Cash flow sensitivity analysis for variable rate instruments
(f)
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 2018.
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)
2018
$
22,917
(22,917)
22,917
(22,917)
2017
$
8,438
(8,438)
8,438
(8,438)
NOTE 18: 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
2018
$
7,500
-
-
7,500
2017
$
7,500
-
-
7,500
The lease of Company offices at Suite 1, 6 Richardson Street, West Perth is settled on a monthly basis from
March 2015.
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
2018
$
861,511
1,576,830
-
2,438,341
2017
$
453,930
2,673,887
-
3,127,817
57
NOTE 19: 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
AuDAX Minerals Pty Ltd
Riedel Resources (Spain) Pty Ltd
Country of
Equity Interest %
Incorporation
2018
Australia
Australia
100
100
2017
100
-
Riedel Resources Limited is the ultimate Australian parent entity and ultimate parent of the Group.
Riedel Resources (Spain) Pty Ltd was incorporated on 14 September 2017.
NOTE 20: RELATED PARTY DISCLOSURE
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.
During the financial year, the Company subleased its office at Suite 1, 6 Richardson Street, West Perth, WA
6005 to Virtual Curtain Limited and Myanmar Metals Limited, both related entities of Mr Jeffrey Moore. Virtual
Curtain Limited (for the full financial year) and Myanmar Metals Limited (from July 2017 till Feb 2018) each
paid 25% of Riedel’s monthly rental and outgoings.
Pursuant to Resolution 6 approved by shareholders at the 2017 AGM, the Company issued 9,113,049
shares at a deemed issue price of $0.015 for payment of underwriting fees to Oracle Securities Pty Ltd, a
company associated with former Non-executive Directors, Mr Luke Matthews and Mr Mark Skiffington
(resigned 26 July 2017). Oracle Securities Pty Ltd acted as underwriters to the Company's Placement and
Rights Issues in July and August 2017 respectively.
Pursuant to Resolution 7 and 8 approved by the shareholders at the 2017 AGM, 4,000,000 shares each
were issued to Mr Luke Matthews and Mr Mark Skiffington, former Non-executive Directors (resigned 26 July
2017) or their nominees in lieu of forgone remuneration for the period 19 January 2016 to 20 July 2017.
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
2018
$
830,246
830,246
2017
$
1,239,544
1,239,544
58
NOTE 20: RELATED PARTY DISCLOSURE (con’t)
Key management personnel compensation
Detailed remuneration disclosures are provided in the Remuneration Report on pages 23 to 29.
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
2018
$
197,635
16,116
648,000
861,751
2017
$
100,000
9,500
21,433
130,933
NOTE 21: EVENTS AFTER THE REPORTING DATE
There are no 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 22: CONTINGENT ASSETS AND LIABILITIES
The Company is not aware of any contingent assets or liabilities.
The Company has a $20,000 (2017: $20,000) term deposit against a credit card facility that expires 20
November 2018.
NOTE 23: DIVIDENDS
No dividends were paid or declared during the year.
NOTE 24: COMPANY DETAILS
The registered office and principal place of business of the Company is Suite 1, 6 Richardson Street, West
Perth, WA 6005.
59
NOTE 25: 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
Profit/(Loss) for the year
Total comprehensive profit/(loss)
Commitments
For details see note 18.
Contingent Liabilities/Guarantees
For details see note 22.
NOTE 26: FAIR VALUE MEASUREMENT
2018
$
2,308,606
855,437
3,164,043
62,045
62,045
2017
$
932,619
1,592
934,211
33,930
33,930
19,237,097
214,200
(16,349,299)
3,101,998
16,091,433
597,158
(15,788,310)
900,281
2018
$
(625,988)
(625,988)
2017
$
322,258
322,258
The carrying amounts of trade and other receivables and trade and other payables are assumed to be
approximately the fair value due to their short term nature.
60
The directors of the Company declare that:
1.
The attached financial statements and notes are in accordance with the Corporations Act 2001:
(a)
(b)
(c)
comply with Australian Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting requirements; and
give a true and fair view of the Group’s financial position as at 30 June 2018 and of its
performance for the year ended on that date.
comply with International Financial Reporting Standards as issued by the International
Accounting Standards Board as described in note 1 to the financial statements.
2.
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.
3.
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
Executive Chairman
Date: 25 September 2018
61
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF RIEDEL RESOURCES LIMITED
Report on the Financial Report
Opinion
We have audited the accompanying financial report of Riedel Resources Limited (the company), which
comprises the consolidated statement of financial position as at 30 June 2018, the consolidated statement
of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated 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 comprising the company and the entities it controlled at the year’s end or from time to
time during the financial year.
In our opinion 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 consolidated entity’s financial position as at 30 June 2018
and of its performance for the year ended on that date; and
ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
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. Our
responsibilities under those standards are further described in the Auditor’s Responsibility section of our
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the consolidated entity in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the code) that are relevant to our audit of the financial report in Australia. We
have also fulfilled our other ethical responsibilities in accordance with the Code.
62
Key Audit Matter
Key audit matter is that matter that, in our professional judgement, was of most significance in our audit of
the financial report of the current year. This matter was addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this
matter. Our description of how our audit addressed the matter is provided in that context below.
1. Carrying value of capitalised exploration expenditure
Why significant
How our audit addressed the key audit matter
As at 30 June 2018 the carrying value of exploration
and evaluation assets was $2,408,180
(2017:
$1,638,167), as disclosed in Note 8. This represents
49.2% of the total assets of the consolidated entity.
Our work included, but was not limited to, the following
procedures:
to assess whether there are indicators of impairment:
The consolidated entity’s accounting policy in respect
of exploration and evaluation expenditure is outlined in
Note 1.
Significant judgement is required:
facts
whether
determining
in
and
circumstances indicate that the exploration
and evaluation assets should be tested for
impairment
in accordance with Australian
Accounting Standard AASB 6 Exploration for
and Evaluation of Mineral Resources (“AASB
6”); and
in determining the treatment of exploration
and evaluation expenditure in accordance with
the consolidated entity’s
AASB 6, and
accounting policy. In particular:
o whether
the particular areas of
recognition
the
interest meet
conditions for an asset; and
o which elements of exploration and
evaluation expenditures qualify for
for each area of
capitalisation
interest.
o
o
o
assessing whether the rights to tenure of the
areas of interest remained current at reporting
date as well as confirming that rights to tenure
are expected to be renewed for tenements that
will expire in the near future;
holding discussions with the directors and
to the status of ongoing
management as
exploration programmes
the areas of
interest, as well as assessing if there was
evidence that a decision had been made to
discontinue activities in any specific areas of
interest; and
for
obtaining and assessing evidence of
the
consolidated entity’s future intention for the
areas of interest, including reviewing future
budgeted expenditure and
related work
programmes;
considering whether exploration activities for the
areas of interest had reached a stage where a
reasonable assessment of economically recoverable
reserves existed;
testing, on a sample basis, exploration and
evaluation expenditure incurred during the year for
compliance with AASB 6 and the consolidated
entity’s accounting policy; and
assessing
the appropriateness of
the
related
disclosures in Note 1 and 8.
63
Other Information
Other information is financial and non-financial information in the annual report of the consolidated entity
which is provided in addition to the Financial Report and the Auditor’s Report. The directors are responsible
for Other Information in the annual report.
The Other Information we obtained prior to the date of this Auditor’s Report was the Director’s report. The
remaining Other Information is expected to be made available to us after the date of the Auditor’s Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, the auditor does
not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of
the Remuneration Report.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or
our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information in
the Financial Report and based on the work we have performed on the Other Information that we obtained
prior the date of this Auditor’s Report we have nothing to report.
Directors’ Responsibilities 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 Australian Accounting Standard AASB 101 Presentation of
Financial Statements, that the financial report complies with International Financial Reporting Standards.
In preparing the financial report, the Directors are responsible for assessing the consolidated entity’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using a
going concern basis of accounting unless the Directors either intend to liquidate the consolidated entity or to
cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our responsibility is to express an opinion on the financial report based on our audit. Our objectives are to
obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue and auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individual or in aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit.
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 assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the entity’s preparation of the financial report that gives a true
and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control.
64
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
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 conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the consolidated entity’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the consolidated entity to cease to continue as a going concern.
We evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the consolidated entity to express an opinion on the financial report. We are responsible for
the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit
engagements. We also provide the Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be communicated
in our report because the adverse consequences of doing so would reasonably be expected to outweigh the
public interest benefits of such communication.
Report on the Remuneration Report
Opinion
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2018.
In our opinion, the Remuneration Report of Riedel Resources Limited for the year ended 30 June 2018,
complies with section 300A of the Corporations Act 2001.
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Responsibilities
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.
PKF MACK
SHANE CROSS
PARTNER
25 SEPTEMBER 2018
WEST PERTH
WESTERN AUSTRALIA
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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 14 September 2018.
Shareholdings as at 14 September 2018
Substantial shareholders
The names of substantial shareholders listed on the Company’s register are:
Shareholder Name
SATORI INTERNATIONAL PTY LTD
FLOURISH SUPER PTY LTD
SKIFFINGTON SUPER PTY LTD
QUINLYNTON PTY LTD
Number of
Shares
51,513,316
25,000,000
22,330,000
21,200,000
Percentage
12.32
5.98
5.34
5.07
Unmarketable parcels
The number of shareholders holding less than a marketable parcel at 14 September 2018 is 116. 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.
Options over ordinary shares do not carry voting rights.
Unquoted securities
Securities
Options exercisable $0.018 on or before
11 March 2019
Number of
Options Number of Holders Holders with more than 20%
18,000,000
4
Note 1
Note 1 - JJ Moore (JJ Moore Family A/c), Andrew Ross Childs and Edward James Turner each holds
5,000,000 options (representing a 27.8% holding each).
On-market buyback
There is no current on-market buy-back.
Securities Exchange listing
Quotation has been granted for all ordinary shares of the Company on the Australian Securities Exchange.
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
26
6
56
183
174
445
Number of Shares
3,623
20,387
517,959
8,741,027
408,786,703
418,069,699
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Twenty largest shareholders – Ordinary Shares
Name
Number of ordinary
shares held
Percentage of
capital held
SATORI INTERNATIONAL PTY LTD
MR JAMES WALLACE HOPE
FLOURISH SUPER PTY LTD
SKIFFINGTON SUPER PTY LTD
QUINLYNTON PTY LTD
MERIWA STREET PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
ALMESH PTY LTD
MR JEFFREY JOHN MOORE
CAMPEON PTY LTD
PROVISTA HOLDINGS PTY LTD
MR GARY TATASCIORE
ORITOR PTY LTD
MR PAUL GABRIEL SHARBANEE
SHAH NOMINEES PTY LTD
ORACLE SECURITIES PTY LTD
MR JAYDEN MATTHEW WALLIS
WILKS SUPER PTY LTD
MS SONIA LEE SIEMER
BOND STREET CUSTODIANS LIMITED
51,513,316
29,469,924
25,000,000
22,330,000
21,200,000
20,500,000
12,159,771
11,714,607
11,000,000
10,545,825
9,857,589
9,857,589
9,502,027
9,200,000
8,995,532
7,460,070
6,538,653
4,444,444
4,300,000
4,151,339
12.32
7.05
5.98
5.34
5.07
4.90
2.91
2.80
2.63
2.52
2.36
2.36
2.27
2.20
2.15
1.78
1.56
1.06
1.03
0.99
TOTAL
289,740,686
69.30
SCHEDULE OF MINING TENEMENTS AS AT 14 SEPTEMBER 2018
Area of Interest
Tenement reference
Nature of interest
Interest
Spain
Carmenes
Valverdin
Australia
Marymia
Marymia
West Yandal
Porphyry
n°15,107
n°15,106
E52/2394
E52/2395
M36/615
M31/157
Joint Venture
Joint Venture
Earning 20%
Earning 20%
Direct
Direct
Royalty
Royalty
20%
20%
0%
0%
MINERAL RESOURCE STATEMENT
At 30 June 2018, the Company does not have any mineral resource.
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