Annual Report
2016
info@sheffieldresources.com.au T +61 8 6555 8777 F +61 8 6555 8787 Level 2, 41-47 Colin Street, West Perth WA 6005 PO Box 205, West Perth WA 6872 Sheffield Resources Limited ACN 125 811 083
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Table of Contents
Corporate Directory
Chairman’s Letter
Review of Operations
Ore Reserves & Mineral Resources
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
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SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Corporate Directory
Directors
Mr Will Burbury, Non-Executive Chairman
Mr Bruce McFadzean, Managing Director
Mr Bruce McQuitty, Non-Executive Director
Mr David Archer, Technical Director
Company Secretary
Mr Mark Di Silvio
Registered Office
Level 2, 41 - 47 Colin Street
West Perth WA 6005
T: +61 8 6555 8777
F: +61 8 6555 8787
E: info@sheffieldresources.com.au
Principal Place of Business
Level 2, 41 - 47 Colin Street
West Perth WA 6005
+61 8 6555 8777
Share Register
Link Market Services
178 St Georges Terrace
Perth WA 6000
+61 8 9211 6670
Solicitors
Gilbert + Tobin
1202 Hay Street
West Perth WA 6005
Bankers
Australia and New Zealand Banking Corporation
Auditors
HLB Mann Judd
Level 4, 130 Stirling Street
Perth WA 6000
Securities Exchange
Australian Securities Exchange (ASX: SFX)
Website
www.sheffieldresources.com.au
Australian Business Number (ABN)
29 125 811 083
3
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Chairman’s Letter
Dear Shareholder,
The 2016 financial year has seen a period of significant development and growth for your Company. We continue to
experience soft market conditions, however it has been pleasing to see indications of a positive shift in the minerals
sands market, particularly in the ilmenite sector during mid-2016.
Our primary focus during the year was the completion of the Pre-Feasibility Study (PFS) followed by the commencement
of the Bankable Feasibility Study (BFS) on our flagship Thunderbird mineral sands project. The results of PFS in 2015
confirmed Thunderbird as a world class, high margin project with a mine life of 40 years. In early 2016, Tier 1
engineering group Hatch Pty Ltd was appointed to deliver the BFS for the Company. The BFS scope captures the
benefit of higher head-grade in Thunderbird’s early years, to further refine the two-stage production strategy as
described in the PFS and to target reductions in project risk, capital and operating expenditure. It has been pleasing to
see positive early results from the BFS activity including the optimisation of low temperature roast (LTR) conditions to
produce a high grade 57.9% TiO2 LTR ilmenite from the BFS bulk sample, with outstanding improvements in the
FeO:Fe2O3 ratio to >1.0.
Our exploration activities continue to deliver highly encouraging results. The Night Train discovery is an exciting
prospect for the Company, and lies within 20km of Thunderbird. We undertook initial scoping metallurgical test work
results on the Night Train deposit, which returned indications of a very high zircon mineral assemblage. We have
further work planned at the Night Train deposit to pursue what is potentially shaping up to be an important area of
interest for the Company.
During 2016, we announced a Maiden Ore Reserve for our Thunderbird mineral sands project totalling 683Mt @ 11.3%
HM, underpinned by exceptionally high in-situ zircon grades. More recently, further confirmation of Thunderbird as a
globally significant zircon deposit followed the announcement of a high grade Mineral Resource Update to 1.05Bt @
12.2% heavy mineral (“HM”) with an overall Resource totalling 3.230Bt @ 6.9% HM.
Following the end of the financial year, we undertook a strategic equity raising to both complete the Thunderbird
feasibility study and continue with exploration activities, placing the Company in a solid position as we head toward
2017. The $17.1m raised introduced a number of new institutional shareholders to Sheffield and we were highly
encouraged by the support from existing shareholders during this process.
The past year has also seen an important transition to our management team. In late 2015, we welcomed our new
managing director, Mr Bruce McFadzean to the Sheffield team. Mr McFadzean is a highly experienced mining
executive and has led the financing, development and operation of several new mines around the world throughout his
career. The Company’s management team has strengthened during the year with the appointments of Mr Jim
Netterfield (BFS Study Manager), Mr Mark Di Silvio (Chief Financial Officer and Company Secretary) and Mr Neil Patten-
Williams (Marketing Manager). I’d like to personally acknowledge the significant accomplishments of our outgoing
managing director Mr Bruce McQuitty, who has performed remarkably to position your Company toward development
of Thunderbird. Mr McQuitty’s knowledge and experience will be invaluable going forward as he continues with us on
the Board in a non-executive director capacity.
I would like to thank my fellow Directors, management and our small team of dedicated employees, our consultants
and stakeholders for their valuable contributions as we set about growing a world class resources company.
Finally, on behalf of the Board, I would also like to thank our loyal shareholder base, many of whom have been
shareholders since the Company’s admission to the ASX in December 2010.
Thank you for your continued support and we look forward to an exciting year ahead as we progress Thunderbird
through the BFS.
Yours sincerely
Mr Will Burbury
Non-Executive Chairman
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SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
OVERVIEW
During the reporting period, Sheffield Resources Limited (“Company” or “Sheffield”) maintained its operational focus on its
flagship Thunderbird Mineral Sands Project (“Thunderbird”), located near Derby in the Canning Basin region of Western Australia
(Figure 1).
The Thunderbird deposit is one of the largest and highest grade mineral sands discoveries in the last 30 years. During the
period, the Company announced the results of a Pre-Feasibility Study (“PFS”) on Thunderbird and has commenced work on a
Bankable Feasibility Study (“BFS”).
Figure 1: Location of Sheffield Resources Projects in Western Australia
Sheffield maintains focus on the Thunderbird project as the key driver for growth over the coming years. The Company is
scheduled to conclude the BFS by the end of 2016 whilst continuing with Native Title negotiations, other permitting activities,
offtake opportunities and community engagement in preparation for first shipment of products in 2019.
Sheffield continues to explore the Dampier Project for new mineral sands discoveries with further drilling planned in 2016 for
the exciting Night Train deposit 20 km south-east of Thunderbird along with other targets identified in the 2015 field season.
With further exploration success, the Dampier Project could become a significant new global mineral sands province.
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SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
To a lesser extent, Sheffield will continue exploring the Fraser Range project for nickel sulphide deposits and the Eneabba and
McCalls projects north of Perth, Western Australia for mineral sands deposits. As an exploration company, Sheffield continues to
assess other regional exploration opportunities.
KEY HIGHLIGHTS FOR THE FINANCIAL YEAR
Confirmation of Thunderbird as a globally significant zircon deposit following the high grade Mineral Resource Update
to 1.05Bt @ 12.2% heavy mineral (“HM”) with an overall Resource totalling 3.230Bt @ 6.9% HM;
Delivery of the Maiden Ore Reserve for Thunderbird totalling 683Mt @ 11.3% HM, underpinned by exceptionally high
in-situ zircon grades;
Delivery of the Pre-Feasibility Study on 14 October 2015, confirming the Thunderbird project as a low risk, high margin,
long life mining project;
Completion of a $5.2m equity raise in late 2015 to facilitate execution of the Thunderbird BFS and a further $17.1m
equity raise completed on 31 August 2016, placing the Company in a solid position for the 2017 financial year;
Appointment of key executives including highly credentialed Mr Bruce McFadzean as Managing Director, Mr Jim
Netterfield as Project Manager to lead the delivery of the Bankable Feasibility Study for Thunderbird, Mr Mark Di Silvio
as CFO/Company Secretary and Mr Neil Patten-Williams as Marketing Manager. Each of the appointments
complements Sheffield’s progression toward the establishment of a long life, low risk operation at Thunderbird;
Appointment of Tier 1 engineering group Hatch Pty Ltd to deliver the BFS for the Company’s Thunderbird Project. The
scope of the BFS includes capturing the benefit of higher head-grades in the Project’s early years and by further
refining its two-stage production strategy as described in the PFS, to target further reductions in project risk, capital
and operating expenditure;
Successful optimisation of roast conditions in bench-scale batch tests in Australia to improve reactivity, and produce a
high grade 57.9% TiO2 LTR ilmenite from the BFS bulk sample. This has raised the FeO:Fe2O3 ratio of the roasted
ilmenite to >1.0;
Highly encouraging initial scoping metallurgical test work results from the Night Train deposit indicating a very high
zircon mineral assemblage, with further work planned.
THUNDERBIRD MINERAL SANDS PROJECT
Located in the Canning Basin in northern Western Australia, the Thunderbird Mineral Sands Project, wholly owned by ASX-listed
Sheffield Resources Limited, is situated midway between the port towns of Derby and Broome. Thunderbird, by virtue of its
location, size1 and quality of product2 has the potential to become a globally significant mineral sands operation. The
significance of the Project is supported by the “Lead Agency” project status afforded to Thunderbird by the Department of Mines
and Petroleum in Western Australia.
Zircon is the key value driver of the project making up 60% of forecast revenue, with the remainder generated from substantial
amounts of high grade sulphate ilmenite and HiTi leucoxene. The high proportion of zircon in the product suite sets Thunderbird
apart from many of the world’s operating and undeveloped mineral sands projects.
The PFS announced on 14 October 2015 contained the following developments and key initiatives:
12Mtpa initial throughput ramping to 18Mtpa designed to significantly lower pre-production capital expenditure;
An updated Mineral Resource, including a large increase in the Measured Resource component;
Detailed mine scheduling in early production years to incorporate high grade, shallow mineralisation;
An upgraded LTR ilmenite product (see below); and
Review of capital and operating expenditure.
1 The PFS was based on the (previous) Thunderbird Mineral Resource announced on 31 July 2015 comprising 3.240Bt @ 6.9% HM (at 3% HM cut off), including a coherent high grade zone of
1.09Bt @ 11.9% HM (at 7.5% cut off) (Measured, Indicated and Inferred). The high grade component contains 9.9Mt of zircon, 3.0Mt of high-titanium leucoxene, 2.8Mt of leucoxene and 36Mt
of ilmenite. The Maiden Ore Reserve announced to the ASX 22 January 2016 supports 40 year mine life operation outlined in the PFS.
2 Leading global mineral sands consulting group TZMI has confirmed that Sheffield’s primary zircon and LTR ilmenite are high quality products that are likely to receive strong market support.
Collectively these products represent 81% of the total projected revenue. Significant interest has been registered in these products by leading marketing specialists and industry groups.
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SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
The processing flow sheet now includes an ilmenite upgrade step using a low temperature roast (“LTR”) to upgrade the primary
ilmenite to produce a high grade sulphate ilmenite. This is expected to be one of the highest grade sulphate ilmenites in the
global market.
Figure 2: Location of Thunderbird HMS project
Thunderbird Bankable Feasibility Study (“BFS”)
The Thunderbird BFS activity is focused on confirmatory fieldwork and metallurgical test work, preliminary engineering, supply
quotation and cost estimation.
The BFS is designed to deliver reliable estimates of quantities and prices of plant, equipment, buildings and civil structures. The
key deliverables of the BFS are detailed estimates of capital and operating costs (generally defined as a Class 3 estimate,
typically ± 10 to 15%), accompanied by related risk and opportunities associated with the project. Other deliverables include a
preliminary project construction plan, legal, commercial and other factors.
Hatch remains on schedule for delivery of the BFS by the end of 2016.
IHC Robbins, responsible for providing confirmatory metallurgical test work for the BFS, have now completed work on the Feed
Preparation Plant, Wet Concentration Plant, Concentrate Upgrade Plant, and Ilmenite Processing Plant circuits and have
commenced work on the Mineral Separation Plant (HiTi and zircon circuits). The test work is being carried out an a 40-tonne
bulk sample derived from large diameter (700mm) Bauer drill hole samples collected in 2015 (refer to ASX announcement 17
September 2015). Based on the utilisation of full-scale or scalable equipment, this test work aims to confirm the PFS flowsheet
using a sample representative of the projected initial 6-7 years of feed. The metallurgical work completed to date shows
significant improvements in metallurgical performance including increased heavy mineral concentrate (HMC) grades and
increased stage recoveries, compared to those achieved in PFS test work (refer to ASX announcement 29 June 2016).
Hatch are using the metallurgical test work results to generate engineering process drawings and equipment specifications. The
test work information received to date is consistent with, and has not resulted in any significant changes to, the proposed
metallurgical flowsheet design as published in the October 2015 PFS.
Sheffield has recently optimised roast conditions during bench-scale batch tests in Australia to produce a high grade 57.9% TiO2
LTR ilmenite from the BFS bulk sample, with outstanding improvements in the FeO:Fe2O3 ratio to >1.0 (refer to ASX
announcement 29 June 2016). Following the end of the reporting period, under the management of Hatch and Sheffield, Hazen
Laboratories in Colorado, USA has commenced final BFS pilot-scale LTR batch and continuous flow test work on a 1.5 tonne
sample of ilmenite from the BFS metallurgical program. Test work at Hazen aims to replicate these improved product
specification results on a continuous basis, and to provide LTR ilmenite for customer testing.
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SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
Hatch has also commenced engineering design on the LTR ilmenite process in conjunction with the pilot program.
In June 2016, three trenches were excavated through near surface ore and waste in the “up-dip” region of the Thunderbird
deposit. The trenches of up to nine metres depth were designed to evaluate the near-surface portion of the deposit proposed
for mining during the first six years and to obtain further ore samples for materials handling studies and process test work. The
trenches, which were excavated with a D10 dozer, have confirmed dozer-trap mining as the preferred mining method at
Thunderbird.
The exposed orebody comprised highly weathered sandstone, compacted sands and minor discontinuous iron cemented bands.
The material encountered is classified as medium digging to easy ripping and the observed productivity indicates that targeted
BFS production rates will be readily achieved with D11 sized dozers. Excavation of a pit to evaluate potential dozer-trap mining
production rates through the entire orebody thickness is planned following the grant of the Mining Lease.
Thunderbird Mineral Resource Update
Subsequent to the end of the financial year, the Company announced an updated Mineral Resource of 3.23 billion tonnes @
6.9% HM at a 3% HM cut-off (Measured, Indicated and Inferred) (Table 1).
The new Mineral Resource, which was updated to include 110 infill holes drilled in the “up-dip” region of the deposit (see ASX
announcement dated 10 December 2015), includes a coherent high grade zone of 1.05Bt @ 12.2% HM at a 7.5% HM cut-off
(Measured, Indicated and Inferred). This high grade zone contains 9.7Mt of zircon, 3.0Mt of high-titanium leucoxene and 35Mt
of ilmenite.
Table 1: Thunderbird Deposit Mineral Resource3 Summary
Resource
Category
Cut-off
HM%
Mineral Resources
Material
Million
Tonnes5
HM
%
Zircon
%
Measured
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
3.0
3.0
3.0
3.0
7.5
7.5
7.5
7.5
510
2,120
600
3,230
220
640
180
1,050
8.9
6.6
6.3
6.9
14.5
11.8
10.8
12.2
0.71
0.55
0.53
0.57
1.07
0.90
0.87
0.93
Valuable HM Grade (In-situ)4
HiTi
Leucoxene
%
Leucoxene
%
Ilmenite
%
0.20
0.18
0.17
0.18
0.31
0.28
0.27
0.28
0.19
0.20
0.20
0.20
0.27
0.25
0.26
0.26
2.4
1.8
1.7
1.9
3.9
3.3
3.0
3.3
Total
VHM
%
3.5
2.8
2.6
2.9
5.5
4.7
4.4
4.8
Significantly, the Measured category of the Thunderbird Mineral Resource was doubled to 220Mt @ 14.5% HM (at a 7.5% HM
cut-off) with minimal change in the high in-situ zircon and ilmenite grades of 1.07% and 3.9% respectively (Table 1, Figure 3 and
Figure 4). The Measured component of the Mineral Resource alone places Thunderbird in the top tier of mineral sands deposits
globally, including those currently in production. Refer to Sheffield’s ASX announcement of 5 July 2016 for further information.
Thunderbird Maiden Ore Reserve
In January 2016, the Company announced its maiden Ore Reserve for the Thunderbird Project (refer ASX release dated 22
January, 2016). The maiden Ore Reserve supports the 40 year mine life as detailed in the PFS and further highlights the world
class significance of the Thunderbird project for the local Kimberley communities and Western Australia at large.
3 Refer to ASX release dated 5 July 2016 for further information.
4 The in-situ grade is determined by multiplying the percentage of HM by the percentage of each valuable heavy mineral within the heavy mineral assemblage at the resource block model scale.
5 Tonnes and grades have been rounded to reflect the relative accuracy and confidence level of the estimate, thus the sum of columns may not equal.
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SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
The Ore Reserve estimate was prepared by Entech Pty Ltd, an experienced mining engineering consultancy with appropriate
mineral sands experience. The Ore Reserve estimate is based on the July 2015 mineral resource estimate generated for the
Company by QG Pty Ltd (see ASX release dated 31 July 2015). Measured and Indicated Mineral resources were converted to
Proved and Probable Ore Reserves, subject to mine designs, modifying factors and economic evaluation (refer to ASX release
dated 22 January 2016 for further details). All Mineral Resources for Thunderbird referred to in this report are inclusive of the
Thunderbird Ore Reserves.
Ore Reserve
Valuable HM Grade (In-Situ)
Table 2: Thunderbird Ore Reserve
DEPOSIT
Reserve
Category
Material
(Mt)
Proved
115.1
Thunderbird
Probable
567.6
Total
682.7
HM
(%)
13.7
10.9
11.3
Zircon
HiTi Leuc
Leucoxene
Ilmenite
Oversize
Slimes
(%)
1.01
0.85
0.88
(%)
0.29
0.27
0.27
(%)
0.28
0.29
0.29
(%)
3.67
3.03
3.14
(%)
12.7
10.2
10.6
(%)
17.3
16.1
16.3
Calculations have been rounded to the nearest 100,000 tonne, 0.1% grade. Differences may occur due to rounding. The in-situ grade is determined by multiplying
the percentage of HM by the percentage of each valuable heavy mineral within the heavy mineral assemblage. Ore Reserve is reported by economic cut-off with
appropriate consideration of modifying factors, costs, mineral assemblage, process recoveries and product pricing.
Figure 3: Cross-section F-F’ through the Thunderbird resource block model
showing the current Resource HM grade and October 2015 PFS pit shell outline
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SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
Figure 4: Thunderbird Mineral Resource block model resource category plan, and comparison with July 2015 resource category
boundaries and October 2015 PFS pit shell, note the significant increase in Measured Resources
Environmental Approvals
The Thunderbird Mineral Sands Project Environmental Scoping Document (“ESD”) was approved by the Western Australian
Environmental Protection Authority on 4 July 2016. The ESD defines the content and detail required for the preparation of the
Project’s Public Environment Review (“PER”) which remains on target for release for public comment in the latter part of 2016.
Native Title
Native Title negotiations with respect to the Thunderbird Mining Lease continued during the period and remains on target for
completion before the end of 2016.
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SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
DAMPIER REGIONAL MINERAL SANDS
During 2015, an exploration drilling program of 34 aircore drill holes for 1,804m was completed on exploration licences
E04/2171, E04/2193, E04/2194 and E04/2084 which are part of Sheffield’s broader Dampier project.
Four holes were drilled at the Night Train prospect (E04/2171), three of which returned substantial mineralised intersections
(refer to ASX release dated 22 September 2015 for full details):
13.5m @ 5.25% HM from 46.5m (DAAC094), including 7.5m @ 8.23% HM from 48m
24m @ 3.33% HM from 37.5m (DAAC093), including 12m @ 5.48% HM from 37.5m
9m @ 2.48% HM from 31.5m (DAAC092), including 3m @ 3.44% HM from 31.5m
Night Train is located approximately 20km to the southeast of Thunderbird and is within 2km of the proposed Thunderbird haul
road (Figure 5). Results of initial metallurgical test work undertaken on a drill sample composite from the mineralised zone at
Night Train, and reported during the financial year, show high quality zircon meeting ceramic grade specifications can be
produced from Night Train using conventional mineral sands processing techniques.
The grain size of the zircon and HiTi products are fine to medium grained with a D50 of 79 microns. The composite sample
averages 4.7% HM and contains a high proportion of zircon (17.4%) in the heavy mineral assemblage. This result compares
favourably with earlier mineral assemblage analysis of 15% zircon, 53% leucoxene, 8% HiTi leucoxene and 16% ilmenite, with a
very high total valuable heavy mineral (“VHM”) content of 92%.
The primary zircon product contains 65.9% ZrO2+HfO2 and low levels of contaminants while the secondary zircon product
contains 65.5% ZrO2+HfO2 with slightly higher levels of TiO2 (Table 3). Both zircon products contain low levels of Fe2O3 and were
produced without a leaching stage. Overall ZrO2 recovery into the two zircon products, excluding semi-processed streams and
recirculation loads, is calculated at 56.8% and is considered satisfactory at the scoping level of study. The primary zircon
product comprises 78% of the total zircon produced.
Product
ZrO2+HfO2
SiO2
TiO2
Fe2O3
Al2O3
U+Th
Table 3: Night Train Zircon products – summary assay results
Primary zircon
Secondary zircon
65.9%
65.5%
32.9%
33.3%
0.15%
0.36%
0.05%
0.05%
0.37%
0.20%
481ppm
542ppm
The scoping metallurgical test work also showed the majority of titanium species comprise leucoxene and HiTi leucoxene (HiTi70
product) with minor components of rutile and altered ilmenite. This potential high titanium product contains 71.1% TiO2 with low
contaminants, apart from elevated thorium levels. Petrological and Scanning Electron Microscope (SEM) studies indicate the
elevated thorium is associated with monazite and zircon species not separated from the potential product during this scoping
level test work. Future metallurgical test work on larger samples will allow for testing of additional processing stages designed
to remove the monazite and zircon responsible for the elevated contaminant levels in this potential product stream.
Full details are contained in the ASX announcement dated 14 April 2016. Exploration drilling is forecast to commence during the
second half of 2016, and will include a program to collect additional samples for detailed metallurgical test work.
In addition to the above, regional exploration aircore drilling undertaken during the period in the Bells Tower area, approximately
20km north of Thunderbird returned the following significant results (refer to Sheffield’s December 2015 Quarterly Report dated
27 January 2016 for full details):
9m @ 3.78% HM from 46.5m (DAAC075), including 6m @ 5.18% HM from 46.5m
4.5m @ 4.27% HM from 42m (DAAC072), including 3m @ 5.49% HM from 43.5m
3m @ 5.83% HM from 19.5m (DAAC068)
9m @ 2.73% HM from 40.5m (DAAC071), including 3m @ 4.93% HM from 43.5m
7.5m @ 2.58% HM from 42m (DAAC074), including 4.5m @ 3.51% HM from 43.5m
6m @ 3.17% HM from 36m (DAAC087), including 4.5m @ 3.53% HM from 37.5m
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SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
Figure 5: Dampier Project regional plan showing location of Night Train
The drilling results within the wider Dampier project are extremely encouraging as they occur in sand units similar to those
immediately below the Thunderbird stratigraphic position. The Bells Tower results, along with the discovery outlined at Night
Train demonstrate the potential for additional deposits of the Thunderbird-type in the region.
DERBY EAST
The Derby East project comprises five granted tenements E04/2390, E04/2391, E04/2392, E04/2393 and E04/2394 with a
total area of 1,831km2. The tenements cover prospective mineral sands ground to the east of Derby (Figure 1). During the
financial year, a review of historic drilling was completed and areas prioritised for first-pass exploratory drilling in conjunction
with a field visit to brief pastoralists and other stakeholders of forthcoming proposed work programs.
FRASER RANGE NICKEL
During 2015, a short RC and diamond drilling program was completed at the Stud prospect on the Red Bull project. Stud is
located 21km to the south of the Nova nickel-copper deposit in Western Australia. One diamond drill hole with RC pre-collar
(total 453m) targeted a large bedrock conductor, whilst four RC holes (total 642m) targeted zones of IP anomalism coincident
with nickel-copper geochemical anomalism in aircore drill holes.
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SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
Figure 6: Location of Sheffield’s Fraser Range tenements
As detailed in the ASX announcement dated 23 December 2015, diamond drill hole REDD005 intersected a 12m zone of
graphitic meta-sediment from 348m depth, and a 13m interval of brecciated ultramafic with trace disseminated sulphides from
436m depth. A subsequent Down Hole Transient Electromagnetic (‘DHTEM’) survey confirmed the graphitic meta-sediment from
348m depth as the source of the target bedrock conductor. No anomalous nickel values were returned from this zone.
Anomalous nickel assay results were returned from the deeper interval in REDD005: 16.9m @ 0.13% Ni from 432.2m,
associated with a contact zone between brecciated, quartz-carbonate veined peridotite and biotite-rich meta-sediment.
Mineralogical analysis identified trace nickel sulphide (pentlandite) and pyrrhotite within the peridotite, with evidence of the
pentlandite having dissipated out of olivine silicates, indicating a magmatic source. Whilst the assay results are not considered
economic, their association with magmatic nickel sulphide in olivine-rich ultramafic intrusive does indicate the presence of rock
types and a geological setting prospective for magmatic nickel sulphide deposits.
Work at Red Bull to date has demonstrated the presence of host rocks and a geological setting highly prospective for the
formation of magmatic-hosted nickel sulphide deposits. Sheffield continues to pursue opportunities for the Fraser Range Nickel
Project whilst focussing on its flagship Thunderbird Mineral Sands Project.
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SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
ENEABBA & McCALLS HEAVY MINERAL SANDS
During 2016, a reconnaissance surface soil sampling program was completed at the Robbs Cross and Thomsons Dunal HM
prospects. Robbs Cross and Thomsons were discovered following first-pass aircore drilling testing initial HM anomalies in
surface samples (see ASX announcements dated 23 July 2015 and 30 October 2013). The latest program of surface sampling
largely confirmed the extent of mineralisation previously outlined by aircore drilling.
An updated Mineral Resource for the McCalls project 110km north of Perth in Western Australia was completed subsequent to
the end of the financial year. The update is part of an ongoing process to review Sheffield’s Mineral Resources which were first
reported under JORC (2004).
The updated Mineral Resource comprises 3.65 billion tonnes @ 1.4% HM at a 1.1% HM cut-off (Indicated and Inferred)
containing 50.4Mt of HM, and includes an additional 71 holes drilled by Sheffield in 2012 (see ASX Quarterly Report dated 31
July, 2013). The additional drill holes, and associated mineral assemblage data have contributed to an increase in the
confidence of the Mineral Resource, with over 60% now in the Indicated category.
The updated Mineral Resource contains a total 45 Mt of valuable heavy minerals (VHM), comprising 2.5 Mt of Zircon, 1.6 Mt of
Rutile, 1.5 Mt of Leucoxene and; significantly, 39 Mt of chloride grade Ilmenite (59% to 66% TiO2), ranking McCalls as one of the
largest undeveloped chloride ilmenite deposits in the world.
Table 4: McCalls Deposit Mineral Resource6 Summary (1.1% HM cut-off)
Mineral Resources
Valuable HM Grade (In-situ)7
Resource
Category
Material
Mt8
HM
%
SL
%
OS
%
Zircon
%
Rutile
%
Leucoxene
%
Ilmenite
%
Total VHM
%
Indicated
2,214
1.4 21.7
1.3
0.07
0.05
Inferred
1,436
1.3 25.5
1.1
0.06
0.04
Total
3,650
1.4 23.2
1.2
0.07
0.04
0.04
0.04
0.04
1.10
1.05
1.08
1.26
1.19
1.23
The McCalls Mineral Resource occurs near surface and is laterally extensive at 16km east-west x 13km north-south and is open
at depth. The main mineralised domains are up to 60m thick, with average thicknesses of 20m to 30m. Overburden thickness
ranges from 0m to about 27m with an average of 6m. Its large size and mineralisation characteristics suggest an estuarine-
lagoonal depositional environment. See ASX Quarterly Report dated 25 July, 2016 for additional details of the Mineral
Resource.
OAKOVER COPPER-MANGANESE PROJECT
Sheffield has 2,737 km2 of tenements under application for copper and manganese in the eastern Pilbara. Two tenements,
E46/1044 and E46/1041, were granted in early 2016 and a program comprising a review of historical exploration data and
target generation is in progress.
PILBARA IRON
In August 2015, the three project tenements; E45/3662, E45/4029 and E45/3822, were sold to Atlas Iron Ltd (ASX: AGO) for a
total consideration of $150,000 in AGO shares (5,549,390 shares).
6 Refer to Appendix 2 and Appendix 3 for further information.
7 The in-situ grade is determined by multiplying the percentage of HM by the percentage of each valuable heavy mineral within the heavy mineral assemblage at the resource block model scale.
8 Tonnes and grades have been rounded to reflect the relative accuracy and confidence level of the estimate, thus the sum of columns may not equal.
14
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Ore Reserves and Mineral Resources
Ore Reserves and Mineral Resources
Sheffield announced a maiden Ore Reserve totalling 682.7 million tonnes @ 11.3% HM for the Thunderbird heavy mineral sands
deposit, in the Kimberley Region of Western Australia, on 22 January 2016, and is currently completing a Bankable Feasibility
Study for development of the deposit (the Thunderbird Mineral Sands Project). The Proved and Probable Ore Reserve estimate is
based on that portion of the (previous) July, 2015 Thunderbird deposit Measured and Indicated Mineral Resources within mine
designs and optimisation shells that may be economically extracted, considering all “Modifying Factors” in accordance with the
JORC Code 2012.
Sheffield also has a number of Mineral Resource estimates for heavy mineral sands deposits within its Eneabba and McCalls
Projects located in the Mid-West Region of Western Australia.
Ore Reserves
Dampier Project Ore Reserves 1,4
Deposit
Ore Reserve
Category
Ore Tonnes
(millions)
Proved
Thunderbird
Probable
Total
115.1
567.6
682.7
Deposit
Ore Reserve
Category
Ore Tonnes
(millions)
Proved
Thunderbird
Probable
Total
115.1
567.6
682.7
In-situ HM
Tonnes
(millions)
15.8
61.9
77.1
In-situ HM
Tonnes
(millions)
15.8
61.9
77.1
HM
Grade
(%)
13.7
10.9
11.3
HM
Grade
(%)
13.7
10.9
11.3
Valuable HM Grade (In-situ)2
Zircon
%
1.01
0.85
0.88
Zircon
(%)
7.4
7.8
7.7
HiTi
Leuc
%
0.29
0.27
0.27
Leuc
%
0.28
0.29
0.29
Ilmenite
%
3.67
3.03
3.14
Slimes
(%)
Osize
(%)
17.3
16.1
16.3
12.7
10.2
10.6
Mineral Assemblage3
HiTi
Leuc
(%)
2.1
2.5
2.4
Leuc
(%)
Ilmenite
(%)
Slimes
(%)
Osize
(%)
2.1
2.6
2.5
26.8
27.9
27.7
17.3
16.1
16.3
12.7
10.2
10.6
1) Ore Reserves are presented both in terms of in-situ VHM grade, and HM assemblage. Calculations have been rounded to the nearest 100,000 t, 0.1 % grade.
Differences may occur due to rounding. Ore Reserve is reported by economic cut-off with appropriate consideration of modifying factors, costs, mineral assemblage,
process recoveries and product pricing.
2) The in-situ grade is determined by multiplying the HM Grade by the percentage of each valuable heavy mineral within the heavy mineral assemblage.
3) Mineral Assemblage is reported as a percentage of HM Grade, it is derived by dividing the in-situ grade by the HM grade.
4) Ore Reserves reported for the Dampier Project were prepared and first disclosed under the JORC Code 2012
15
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Ore Reserves and Mineral Resources
Dampier Project Mineral Resources 1,2,5
Deposit
(cut-off)
Mineral
Resource
Category
Material Tonnes
(millions)
Thunderbird
(> 3% HM)
Thunderbird
(>7.5% HM)
Measured
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
510
2,120
600
3,230
220
640
180
1,050
Eneabba Project Mineral Resources 2,4,6
Mineral Resources
In-situ
HM
Tonnes
(millions)
HM
Grade
(%)
Zircon
(%)
45
140
38
223
32
76
20
127
8.9
6.6
6.3
6.9
14.5
11.8
10.8
12.2
8.0
8.4
8.4
8.3
7.4
7.6
8.0
7.6
Mineral Assemblage3
HiTi
Leuc
(%)
2.3
2.7
2.6
2.6
2.1
2.4
2.5
2.3
Leuc
(%)
Ilmenite
(%)
Slimes
(%)
Osize
(%)
2.2
3.1
3.2
2.9
1.9
2.1
2.4
2.1
27
28
28
28
27
28
28
27
18
16
15
16
16
14
13
15
12
9
8
9
15
11
9
11
Deposit
(cut-off)
Mineral
Resource
Category
Material Tonnes
(millions)
In-situ
HM
Tonnes
(millions)
HM
Grade
(%)
Mineral Assemblage3
Zircon
(%)
Rutile
(%)
Leuc
(%)
Ilmenite
(%)
Slimes
(%)
Osize
(%)
Yandanooka
(> 0.9% HM)
Durack
(>0.9% HM)
Drummond
Crossing
(>1.1% HM)
Ellengail
(>0.9% HM)
West Mine North
(>0.9% HM)
All Eneabba
(various)
Measured
Indicated
Inferred
Total
Indicated
Inferred
Total
Indicated
Inferred
Total
Inferred
Total
Measured
Indicated
Total
Measured
Indicated
Inferred
Total
3
90
3
96
50
15
65
49
3
52
46
46
6
36
43
9
225
68
302
0.1
2.1
0.03
2.2
1.0
0.2
1.2
1.0
0.05
1.1
1.0
1.0
0.4
0.8
1.2
0.5
5.0
1.3
6.8
4.1
2.3
1.2
2.3
2.0
1.2
1.8
2.1
1.5
2.1
2.2
2.2
5.6
2.3
2.8
5.2
2.2
1.9
2.2
10
12
11
12
14
14
14
14
13
14
9
9
4
7
6
6
12
10
11
1.9
3.7
3.9
3.6
2.8
2.4
2.8
10
9.9
10
8.7
8.7
9.6
9.6
9.6
7.7
5.8
7.7
6.3
2.2
3.7
4.6
3.7
4.6
6.7
4.9
3.6
2.8
3.6
1.9
1.9
9.5
5.4
6.6
7.7
4.2
2.7
4.1
72
69
68
69
70
67
70
53
55
53
64
64
54
60
58
59
64
64
64
15
16
18
16
15
14
15
16
16
16
16
16
15
13
13
15
15
15
15
14
15
21
15
21
17
20
9
8
9
2
2
1
3
3
5
13
6
11
McCalls Project Mineral Resources 2,4,6
Deposit
(cut-off)
Mineral
Resource
Category
Material Tonnes
(millions)
McCalls
(>1.1% HM)
Indicated
Inferred
Total
2,214
1,436
3,650
In-situ
HM
Tonnes
(millions)
31.7
18.7
50.4
HM
Grade
(%)
1.4
1.3
1.4
Mineral Assemblage3
Zircon
(%)
Rutile
(%)
Leuc
(%)
Ilmenite
(%)
Slimes
(%)
Osize
(%)
5.1
5.0
5.1
3.2
3.2
3.2
2.7
3.1
2.9
76.8
80.3
78.5
21.7
25.5
23.2
1.3
1.1
1.2
1) The Dampier Project Mineral Resources are reported inclusive of (not additional to) Ore Reserves. The Mineral Resource reported above 3% HM cut-off is
inclusive of (not additional to) the Mineral Resource reported above 7.5% HM cut-off.
2) All tonnages and grades have been rounded to reflect the relative accuracy and confidence level of each estimate and to maintain consistency throughout the
table, therefore the sum of columns may not equal.
3) The Mineral Assemblage is represented as the percentage of HM grade. For Dampier the mineral assemblage was determined by screening and magnetic
separation. Magnetic fractions were analysed by QEMSCAN for mineral determination as follows: >90% liberation and; Ilmenite 40-70% TiO2; Leucoxene 70-94%
TiO2; High Titanium Leucoxene (HiTi Leucoxene) >94% TiO2 and Zircon 66.7% ZrO2+HfO2. The non-magnetic fraction was analysed by XRF and minerals
determined as follows: Zircon ZrO2+HfO2/0.667 and HiTi Leucoxene TiO2/0.94. For Eneabba & McCalls determination was by QEMSCAN, with TiO2 minerals
defined according to the following ranges: Rutile >95% TiO2; Leucoxene 85-95% TiO2; Ilmenite <55-85% TiO2
4) West Mine North, Durack, Drummond Crossing and McCalls are reported below a 35% Slimes upper cut-off.
5) Mineral Resources for the Dampier Project were prepared and first disclosed under the JORC Code 2012.
6) Mineral Resources reported for the Eneabba Project were prepared and first disclosed under the JORC Code 2004. These have not been updated since to comply
with the JORC Code 2012 on the basis that the information on which the Resource estimates are based has not materially changed since it was last reported.
16
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Ore Reserves and Mineral Resources
The Company’s Ore Reserves and Mineral Resources Statement is based on information first reported in previous ASX announcements by the
Company. These announcements are
to view on Sheffield Resources Limited’s web site
www.sheffieldresources.com.au . Mineral Resources and Ore Reserves reported for the Dampier Project and Mineral Resources reported for the
McCalls Projects were prepared and first disclosed under the JORC Code 2012. Mineral Resources reported for the Eneabba Project were
prepared and first disclosed under the JORC Code 2004, these have not been updated since to comply with the JORC Code 2012 on the basis
that the information on which the Resource estimates are based has not materially changed since it was last reported.
listed below and are available
The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market
announcements and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement
continue to apply and have not materially changed.
The Competent Persons for reporting of Mineral Resources and Ore Reserves in the original market announcements are listed below. The
Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from
the original market announcement.
Item
Mineral Resources Reporting
Mineral Resources Estimation
Ore Reserves
Name
Mr Mark Teakle
Mr David Boyd
Mrs Christine Standing
Mr Tim Journeaux
Mr Trent Strickland
Mr Per Scrimshaw
Company
Professional Affiliation
Sheffield Resources
Sheffield Resources
MAIG, MAusIMM
MAIG
Optiro
QG
QG
Entech
MAusIMM
MAusIMM
MAusIMM
MAusIMM
Ore Reserves and Mineral Resources prepared and first disclosed under the JORC Code 2012:
Item
Report Title
Report Date
Competent Person(s)
Thunderbird Ore Reserve
Maiden Ore Reserve – Thunderbird Project
22 January 2016
P. Scrimshaw
Thunderbird Mineral
Resources
Sheffield Doubles Measured Mineral
Resource At Thunderbird
McCalls Mineral Resources
Quarterly Activities Report For The Period
Ended 30 June 2016
5 July 2016
20 July 2016
M. Teakle
C. Standing
D. Boyd
T. Journeaux
Mineral Resources prepared and first disclosed under the JORC Code 2004:
Item
Report Title
Ellengail Mineral Resource
1Mt Contained HM Inferred Resource at
Ellengail
Report Date
Competent Person(s)
25 October 2011 M. Teakle
West Mine North Mineral
Resource
West Mine North Mineral Resource Estimate
Exceeds Expectations
7 November
2011
Durack Mineral Resource
Eneabba Project Resource Inventory Exceeds
5Mt Heavy Mineral
28 August 2012 M. Teakle
T. Strickland
Yandanooka Mineral Resource Yandanooka Resource Upgrade and
30 January 2013 M. Teakle
Metallurgical Results
Drummond Crossing Mineral
Resource
1Mt Heavy Mineral Resource Added to
Eneabba Project
T. Strickland
30 October 2013 M. Teakle
T. Strickland
COMPLIANCE STATEMENTS
PREVIOUSLY REPORTED INFORMATION
This report includes information that relates to Exploration Results, Exploration Targets, Mineral Resources, Ore Reserves, a Pre-
feasibility Study and Technical Studies which were prepared and first disclosed under the JORC Code 2012. The information was
extracted from the Company’s previous ASX announcements as follows:
June 2016 Quarterly Report “QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 30 JUNE 2016” 25 July, 2016
Thunderbird Mineral Resource Update: “SHEFFIELD DOUBLES MEASURED MINERAL RESOURCE AT THUNDERBIRD” 5
July, 2016
Thunderbird BFS update: “THUNDERBIRD MINERAL SANDS PROJECT - BFS UPDATE” 29 June, 2016
March 2016 Quarterly report: “QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 MARCH 2016” 20 April,
2016
Night Train metallurgical scoping results: “PREMIUM ZIRCON AT NIGHT TRAIN” 14 April, 2016
Thunderbird Ore Reserve: “MAIDEN ORE RESERVE – THUNDERBIRD PROJECT” 22 January, 2016
17
T. Strickland
M. Teakle
T. Strickland
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Ore Reserves and Mineral Resources
Red Bull drilling results: “RED BULL NICKEL PROJECT UPDATE, FRASER RANGE” 23 December, 2015
Thunderbird infill drilling: “NEW HIGH-GRADE RESULTS FROM INFILL DRILLING AT THUNDERBIRD” 10 December
2015.
Thunderbird Pre-feasibility Study Update: “PRE-FEASIBILITY STUDY UPDATE CONFIRMS THUNDERBIRD AS THE
WORLD’S BEST UNDEVELOPED MINERAL SANDS PROJECT” 14 October 2015
Night Train drilling results: “NEW MINERAL SANDS DISCOVERY AT NIGHT TRAIN” 22 September, 2015
Bauer drilling program: “CONVENTIONAL DOZER TRAP MINING ASSESSED AS PREFERRED MINING METHOD AT
THUNDERBIRD” 17 September, 2015
Thunderbird Mineral Resource update: “THUNDERBIRD HIGH GRADE RESOURCE UPDATE” 31 July, 2015
Eneabba project drilling results: “NEXT GENERATION OF MINERAL SANDS DISCOVERIES AT ENEABBA” 23 July, 2015
This report also includes information that relates to Exploration Results and Mineral Resources which were prepared and first
disclosed under the JORC Code 2004. The information has not been updated since to comply with the JORC Code 2012 on the
basis that the information has not materially changed since it was last reported. The information was extracted from the
Company’s previous ASX announcements as follows:
Drummond Crossing Mineral Resource and Sampling Results from Dunal-Style HM Targets, Eneabba Project: “1Mt
HEAVY MINERAL RESOURCE ADDED TO ENEABBA PROJECT”, 30 October 2013.
McCalls 2012 drilling results: “QUARTERLY REPORT FOR PERIOD ENDING 30 JUNE 2013” 31 July, 2013.
Yandanooka Mineral Resource: “YANDANOOKA RESOURCE UPGRADE AND METALLURGICAL RESULTS”, 30 January
2013.
Durack Mineral Resource: “ENEABBA PROJECT RESOURCE INVENTORY EXCEEDS 5MT HEAVY MINERAL”, 28 August
2012.
McCalls Mineral Resource (superseded): “4.4 BILLION TONNE MAIDEN RESOURCE AT MCCALLS HMS PROJECT”, 20
February 2012.
West Mine North Mineral Resource: “WEST MINE NORTH MINERAL RESOURCE ESTIMATE EXCEEDS EXPECTATIONS”, 7
November 2011.
Ellengail Mineral Resource: “1MT CONTAINED HM INFERRED RESOURCE AT ELLENGAIL”, 25 October 2011.
These announcements are available to view on Sheffield Resources Ltd’s web site www.sheffieldresources.com.au
The Company confirms that it is not aware of any new information or data that materially affects the information included in the
original market announcements and, in the case of estimates of Mineral Resources, Ore Reserves, Pre-feasibility Study and
Technical Study results, that all material assumptions and technical parameters underpinning the estimates in the relevant
market announcement continue to apply and have not materially changed. The Company confirms that the form and context in
which the Competent Person’s findings are presented have not been materially modified from the original market
announcement.
FORWARD LOOKING AND CAUTIONARY STATEMENTS
Some statements in this report regarding estimates or future events are forward-looking statements. They involve risk and
uncertainties that could cause actual results to differ from estimated results. Forward-looking statements include, but are not
limited to, statements concerning the Company’s exploration programme, outlook, target sizes and mineralised material
estimates. They include statements preceded by words such as “anticipated”, “expected”, “target”, “scheduled”, “intends”,
“potential”, “prospective” and similar expressions.
18
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
The directors present their report together with the financial statements of the consolidated entity consisting of Sheffield
Resources Limited and the entities it controlled for the year ended 30 June 2016. Sheffield Resources Limited (‘Sheffield’ or
‘parent entity’ or ‘Company’) and its controlled entities (collectively known as the ‘Group’ or ‘consolidated entity’) are domiciled
in Australia.
PRINCIPAL ACTIVITIES
The principal activity of the Group during the course of the financial year was exploration for mineral sands and base metals
within the state of Western Australia.
DIRECTORS
The Directors of the Group during or since the end of the financial year and until the date of this report are as follows:
Name
Period of Directorship
Mr Will Burbury
Non-Executive Chairman
Mr Bruce McFadzean
Managing Director
Mr Bruce McQuitty
Non-Executive Director
Mr David Archer
Technical Director
Director since 6 June 2007
(Resigned as Company Secretary 16 February 2016)
Appointed 2 November 2015
Director since 14 December 2009
(Resigned as Managing Director 2 November 2015)
Director since 14 December 2009
The qualification, experience and special responsibilities of the Directors of the Group during or since the end of the financial
year are:
Mr Will Burbury (B.Comm, LLB)
Non-Executive Chairman
Mr. Burbury practised as a corporate lawyer with a leading Australian law firm prior to entering the mining and exploration
industry in 2003. During this time, he has been actively involved in the identification and financing of many resources projects
in Australia and on the African continent and has held the senior management positions and served on boards of several
private and publicly listed companies.
Mr. Burbury was previously Chairman of ASX listed Warwick Resources Limited prior to its merger with Atlas Iron Limited in
2009. He was also previously a director of ASX listed Lonrho Mining Limited and an executive of ASX listed NKWE Platinum
Limited.
Other Current Directorships
None
Former Directorships in the Last Three Years
None
Mr Bruce McFadzean (Dip. Mining, FAusIMM)
Managing Director
A qualified mining engineer with more than 35 years’ experience in the global resources industry, Mr. McFadzean has led the
financing, development and operation of several new mines around the world. Mr. McFadzean’s technical, operating and
corporate experience includes gold, silver, nickel, diamonds and iron ore.
Mr McFadzean’s professional career includes 15 years with BHP Billiton and Rio Tinto in a variety of positions and four years
as Managing Director of successful ASX gold miner Catalpa Resources Limited. Under his management, Catalpa’s market
capitalisation grew from $10 million to $1.2 billion following the merger with Evolution Mining Limited. He has raised in excess
of A$350 million in debt and equity from Australian and overseas markets.
During the last three years, Mr. McFadzean has served on the boards of the following public listed companies:
Venture Minerals Limited (since June 2008)
Gryphon Minerals Limited (since June 2014)
Mawson West Limited (October 2012 to January 2015)
Indiana Resources Limited (formerly IMX Resources Limited, since April 2015)
19
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
Mr Bruce McQuitty (B.Sc, MEconGeol)
Non-Executive Director
Bruce McQuitty has 33 years’ experience in the mining and civil industries. During this time he has held various senior
positions in large mining houses and has been involved in exploration through to the development of mines. Mr McQuitty has
significant technical expertise in exploration, project generation, feasibility, underground mining and engineering geology and
has managed exploration teams in Australia and overseas. Mr McQuitty holds a Masters of Economic Geology and a Bachelor
of Science.
Mr McQuitty was previously Managing Director of ASX listed Warwick Resources Limited prior to its merger with Atlas Iron
Limited in 2009. Prior to that he held senior positions with ASX/AIM listed Consolidated Minerals Limited and Gympie Gold
Limited.
Other Current Directorships
None
Former Directorships in the Last Three Years
None
Mr David Archer (BSc (Hons))
Technical Director
David Archer is a geologist with 27 years’ experience in exploration and mining in Australia. He has held senior positions with
major Australian mining companies, including Renison Goldfields Consolidated Ltd, and has spent the last ten years as a
Director of Archer Geological Consulting specialising in project generation, geological mapping and project evaluation.
Mr Archer was a consultant to ASX listed Atlas Iron Limited and Warwick Resources Limited and was responsible for significant
iron ore discoveries for both companies in the Pilbara. He was also involved in the discovery of the Magellan lead mine and the
Raleigh and Paradigm gold mines.
Other Current Directorships
None
Former Directorships in the Last Three Years
None
COMPANY SECRETARY
Mr Mark Di Silvio (B.Bus, CPA, MBA)
Mr. Di Silvio was appointed Company Secretary on 16 February 2016. Mr. Di Silvio is a CPA qualified accountant with over 25
years post graduate experience in the resources sector. Mr Di Silvio held a variety of finance based roles within the gold mining
sector early in his career, before gaining, gaining oilfield experience with Woodside Energy Limited through the financial
management of joint ventures and the financial management of Woodside’s Mauritanian oilfield assets. Mr Di Silvio has held
executive positions including Central Petroleum Limited, Centamin Plc, Ausgold Limited and Mawson West Limited
DIRECTORS’ MEETINGS
The following table sets out the number of Directors’ meetings held during the financial year and the number of meetings
attended by each Director. In addition to these formal meetings, during the year the Directors considered and passed 4 Circular
Resolutions pursuant to clause 15.11 of the Company’s Constitution.
Director
Held
Attended
Mr W Burbury
Mr B McFadzean1
Mr B McQuitty
Mr D Archer
3
2
3
3
3
2
2
3
1 Mr. McFadzean was appointed on 2 November 2015.
20
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
DIRECTORS’ SHAREHOLDINGS
The relevant interest of each Director in the share capital of the Company as at the date of this report are:
Director
W Burbury1
B McFadzean2
B McQuitty
D Archer3
Balance
1 July 2015
Granted as
remuneration
Received on
exercise of
options
Other
changes
Balance
30 June 2016
7,970,000
-
7,850,000
7,730,000
-
-
-
-
-
276,333
-
-
200,000
148,500
114,091
8,170,000
424,833
7,964,091
87,000
7,817,000
Note 1: Relevant interest as director and controlling shareholder of Exergy-X Resources Pty Ltd.
Note 2: Relevant interest as director and controlling shareholder of Tardisforme Pty Ltd.
Note 3: Relevant interest as director and controlling shareholder of Archer Enterprises (WA) Pty Ltd.
DIRECTORS’ OPTION HOLDINGS
The number of options held by each Director in the Company as at the date of this report are:
Director
Balance
1 July 2015
Issued
Exercised
Other
changes
Balance
30 June 2016
Vested &
Exercisable
Unvested
B McFadzean
0
3,368,444
(276,333)
0
3,092,111
0
3,092,111
SHARE OPTIONS
Options converted during the financial year
672,500 unlisted options were exercised during the financial year to 30 June 2016. The details of these options are as follows:
Number of ordinary shares
under option
672,500
Exercise price
$
0.30
Expiry date
13 Dec 2015
The issuing entity was Sheffield Resources Limited. No amount was unpaid on these shares.
Employee options
The following options were not issued under any of the Employee Option Plans, however were issued in accordance with
employment contracts and/or agreements and are in existence at the date of this report:
Number of ordinary shares
under option
Exercise price
$
3,700,000
118,428
0.001
0.001
Expiry date
8 Feb 2020
8 Feb 2020
The holders of these options do not have the right, by virtue of the option, to participate in any share issue or interest issue of
the Company, body corporate or registered scheme. The issuing entity for all options was Sheffield Resources Limited.
21
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
Options lapsed during the financial year
A total of 2,052,500 unlisted options lapsed during the financial year to 30 June 2016. The details of these options are as
follows:
Number of ordinary shares
under option
Exercise price
$
477,500
550,000
525,000
500,000
0.30
0.44
0.44
0.53
Expiry date
13 Dec 2015
20 March 2016
30 June 2016
29 July 20171
1Expiry of options following employee cessation of employment
Options on issue at the date of this report
Number of ordinary shares
under option1
1,200,000
500,000
1,400,000
1,600,000
3,700,000
118,428
4,000,000
Grant date
1 April 2012
26 September 2013
19 March 2014
19 March 2014
8 Feb 2016
8 Feb 2016
31 August 2016
Exercise price
$
0.65
0.66
0.87
1.16
0.001
0.001
0.676
Expiry date
1 April 2017
26 September 2018
19 March 2019
19 March 2021
8 Feb 2020
8 Feb 2020
31 August 2019
Note 1: All options issued for nil consideration.
Options exercised subsequent to balance date
355,285 options have been exercised subsequent to balance date. The issuing entity was Sheffield Resources Limited. No
amount was unpaid on these shares. The details of these options are as follows:-
Number
355,285
Exercise price
$
0.001
Expiry date
8 Feb 2020
Options lapsed subsequent to balance date
No options have lapsed subsequent to balance date.
Weighted average closing price of Sheffield Resources Limited shares
The market weighted average closing price of Sheffield Resources Limited shares during the 2016 financial year was $0.44
(2015: $0.82).
DIVIDENDS
No dividends have been paid or declared during the financial year ended 30 June 2016 and the Directors do not recommend
the payment of a dividend in respect of the financial year.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There have been no significant changes in the state of affairs of the company to the date of this report.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Disclosure of information regarding likely developments in the operations of the company in future financial years and the
expected results of those operations is likely to result in unreasonable prejudice to the company. Therefore, this information has
not been presented in this report.
22
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
ENVIRONMENTAL REGULATION
The Group’s exploration activities are governed by environmental regulation. To the best of the Directors’ knowledge, the Group
believes it has adequate systems in place to ensure compliance with the requirements of applicable environmental legislation
and is not aware of any material breach of those requirements during the financial year and up to the date of the Directors’
Report.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has agreed to indemnify all the Directors and key management personnel of the Company for any liabilities to
another person (other than the Company or related body corporate) that may arise from their designated position of the
Company, except where the liability arises out of conduct involving a lack of good faith.
During the financial year the Company paid a premium in respect of a contract insuring the Directors and Officers of the
Company against any liability incurred in the course of their duties to the extent permitted by the Corporations Act 2001. The
contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
INDEMNITY AND INSURANCE OF AUDITOR
The Company has not, during or since the end of the 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 a contract to insure the auditor of the Company or any related entity.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave 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 part of those proceedings.
SIGNIFICANT EVENTS AFTER BALANCE DATE
On 31 August 2016, the Company issued a total of 32,939,994 fully paid ordinary shares at an issue price of 52 cents per
share, raising approximately $17.1 million before costs. In addition, the Company issued 4,000,000 options at an exercise
price of 67.6 cents per option, expiring 31 August 2019. The Options have been issued in equal amounts to nominees of Bridge
Street Capital Partners and Pulse Markets, as consideration for their ongoing role as Joint Capital Markets Advisers to the
Company.
23
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
REMUNERATION REPORT (AUDITED)
The Directors of Sheffield Resources Limited present the Remuneration Report prepared in accordance with the requirements of
the Corporations Act 2001 for the Company and the consolidated entity for the financial year ended 30 June 2016.
For the purposes of this report, key management personnel (“KMP”) are defined as those persons having authority and
responsibility for planning, directing and controlling the major activities of the Company and consolidated entity (“the Group”),
directly or indirectly, including any Director (whether executive or otherwise) of the parent company. This Remuneration Report
forms part of the Directors’ Report.
OVERVIEW
Remuneration levels for key management personnel are competitively set to attract the most qualified and experienced
candidates. Details of the Company’s remuneration strategy for the 2016 financial year are set out in this Remuneration Report.
This Remuneration Report:
explains the Board’s policies relating to remuneration of key management personnel;
discusses the relationship between these policies and the Company’s performance; and
sets out remuneration details for each of the key management personnel.
Remuneration philosophy
The philosophy of the Company in determining remuneration levels is to:
set competitive remuneration packages to attract and retain high calibre employees;
establish appropriate, demanding performance hurdles for variable KMP remuneration.
link executive rewards to shareholder value creation; and
Non-Executive Director Remuneration
In accordance with best practice corporate governance, the structure of Non-executive Director and Executive remuneration is
separate and distinct. The fees paid to Non-Executive Directors are set at levels that reflect both the responsibilities of, and the
time commitments required from, each Non-Executive Director to discharge their duties and are not linked to the performance of
the Company.
Remuneration of Key Management Personnel
In adopting a remuneration strategy for KMP’s, at all times the Company strives to seek a balance between preservation of cash
proceeds and an equitable remuneration structure. To align key management personnel interests with that of shareholders, key
management personnel have agreed to sacrifice a portion of their cash remuneration in lieu of share options, subject to market
disclosure requirements upon appointment and the approval of shareholders on an annual basis.
In addition to the award of share options, the remuneration strategy comprises a fixed cash salary component, statutory
superannuation contributions and where appropriate a potential merit based performance bonus or other share based
incentives in the Company.
Performance milestones are carefully nominated and weighted according to the management role and its connection with the
relevant performance milestone. This structure is intended to provide competitive rewards (subject to performance) to attract
and retain high calibre executives.
Performance based share options are offered to KMP’s at the discretion of the Board. Length of service with the Group, past
and potential contribution of the person to the Group are also factors considered when awarding shares options to employees.
For 2016, in awarding performance based share options to KMP’s, performance criteria includes, but is not limited to, the
following factors:
Securing offtake agreements in relation to the Thunderbird Mineral Sands Project;
Delivery of commercial products from the Thunderbird Mineral Sands Project.
Time and cost bound delivery of the Thunderbird Bankable Feasibility Study;
Financing of the Thunderbird Mineral Sands Project;
The award of discretionary performance bonuses are aligned with the ongoing performance assessment of the incumbent
management team, following review and assessment by the Board of Directors. Criteria used to determine potential merit
based performance bonus for the MD and other KMP’s, during the exploration phase, is the setting of key objectives for each
KMP and measuring performance against these objectives. Key objectives will normally include specific criteria where
performance will be measured against progress indicators. These key objectives will largely be determinable by the objective
assessment of performance by the MD.
24
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
The table below sets out summary information about the movements in shareholder wealth for the following financial periods:
30 June 2016
$’000
30 June 2015
$’000
30 June 2014
$’000
30 June 2013
$’000
30 June 2012
$’000
Revenue
Net (loss)/profit before tax
Net (loss)/profit after tax
Share price at start of year
Share price at end of year
Dividends
Basic loss per share (cents)
Diluted loss per share (cents)
180
(4,541)
(1,754)
$0.48
$0.41
0
(1.24)
(1.24)
265
(887)
636
$0.86
$0.48
0
0.47
0.46
171
(3,754)
(2,554)
$0.36
$0.86
0
(2.12)
(2.12)
290
(563)
121
$0.34
$0.36
0
0.12
0.12
271
(1,145)
(1,145)
$0.27
$0.34
0
(1.65)
(1.65)
KEY MANAGEMENT PERSONNEL
The following persons acted as key management personnel of the Company during or since the end of the financial year:
Mr Will Burbury (Non-Executive Chairman), resigned as Company Secretary 16 February 2016
Mr Bruce McFadzean (Managing Director), appointed 2 November 2015
Mr Bruce McQuitty (Non-Executive Director), resigned as Managing Director 2 November 2015
Mr David Archer (Technical Director)
Mr Mark Di Silvio (Company Secretary & Chief Financial Officer), appointed 16 February 2016
Mr Jim Netterfield (BFS Study Manager), appointed 16 November 2015
Mr Neil Patten-Williams (Marketing Manager), appointed 23 May 2016
REMUNERATION OF KEY MANAGEMENT PERSONNEL
The table below shows the fixed and variable remuneration for key management personnel.
2016
Directors
W Burbury3
B McFadzean
B McQuitty4
D Archer
Executives
M Di Silvio5
J Netterfield6
Short-term benefits
Post-employment
benefits
Share-based
payment
Relative proportion of
remuneration linked to
performance
Salary &
fees
$
Bonus
$
Other
fees
$2
Super-
annuation
$
Options &
rights
$1
Total
$
Fixed
%8
Performance
based
%
98,596
116,666
243,315
194,166
65,972
125,000
-
-
-
-
-
-
-
-
1,373
1,373
1,373
1,373
1,373
1,373
1,373
9,611
9,366
11,083
22,454
18,445
6,267
34,999
2,043
-
109,335
689,143
818,265
-
267,142
53,485
267,469
110,083
183,695
159,540
320,912
35,947
60,868
104,657
1,048,198
2,027,686
100%
16%
100%
80%
40%
50%
41%
0%
84%
0%
20%
60%
50%
59%
N Patten-Williams7
21,505
Total
865,220
Note 1: The fair value of the options is calculated at the date of grant using a Black-Scholes valuation model and allocated to each reporting period starting from grant date to vesting date. As
share option awards for Mr Archer, Mr Di Silvio and Mr Patten-Williams remain subject to shareholder approval, the share based payment disclosure is based upon their contractual start date
of employment which is commensurate with the assumed date of grant.
Note 2: Other fees include the attributable non-cash benefit applied by virtue of the Company’s Directors and Officers Liability policy.
Note 3: Mr Burbury’s remuneration includes accrued benefits associated with his prior employment as Executive Chairman and transition to Non-Executive Chairman.
Note 4: Mr McQuitty’s remuneration includes accrued benefits associated with his prior employment as Managing Director and transition to Non-Executive Director.
Note 5: Mr Di Silvio commenced employment on 15 February 2016.
Note 6: Mr Netterfield commenced employment on 16 November 2015.
Note 7: Mr Patten-Williams commenced employment on 23 May 2016.
Note 8: KMP’s holding executive positions sacrifice a portion of salary (20% - 50%) in lieu of a share based payment, incentivising performance.
25
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
Short-term benefits
Post-employment
benefits
Share-based
payment
Relative proportion of
remuneration linked to
performance
2015
Directors
W Burbury
B McQuitty
D Archer
Total
Salary &
fees
$
96,765
240,000
198,000
534,765
Bonus
$
Other fees
$2
Superannuation
$
Options &
rights
$1
Total
$
Fixed
$
Performance
linked
$
-
-
-
-
3,600
3,600
3,600
10,800
9,192
22,800
18,810
50,802
-
-
-
-
109,557
266,400
220,410
596,367
100%
100%
100%
0%
0%
0%
NON EXECUTIVE DIRECTOR AGREEMENTS
The amount of remuneration for all Directors including the full remuneration packages, comprising all monetary and non-
monetary components of the Executive Directors and executives, are detailed in this Directors’ Report. Non-Executive Directors
may receive annual fees within an aggregate Directors’ fee pool limited to an amount which is approved by shareholders. The
Board of Directors reviews and recommends remuneration levels and policies for Directors within this overall Directors’ fee pool.
The fees which are paid are also periodically reviewed.
The current annual fee for Non-Executive Directors is a base fee of $50,000 per annum. Due to the additional time
requirements and relevant experience, the Non-Executive Chairman receives a base fee of $75,000 per annum. These amounts
include any statutory superannuation payments where applicable.
KEY MANAGEMENT PERSONNEL SHAREHOLDINGS
The relevant interest of each of the key management personnel in the share capital of the Company as at 30 June 2016 were:
Director
W Burbury1
B McFadzean2
B McQuitty
D Archer3
Balance
1 July 2015
Granted as
remuneration
Received on
exercise of
options
Other
changes
Balance
30 June 2016
7,970,000
-
7,850,000
7,730,000
-
-
-
-
-
-
-
-
200,000
116,000
114,091
8,170,000
116,000
7,964,091
55,000
7,785,000
Note 1: Relevant interest as director and controlling shareholder of Exergy-X Resources Pty Ltd.
Note 2: Relevant interest as director and controlling shareholder of Tardisforme Pty Ltd.
Note 3: Relevant interest as director and controlling shareholder of Archer Enterprises (WA) Pty Ltd.
KEY MANAGEMENT PERSONNEL OPTION HOLDINGS
The number of options issued and held by each of the key management personnel in the Company as at 30 June 2016 are:
Director
B McFadzean
J Netterfield
Balance
1 July 2015
Granted
Exercised
Other
changes
Balance
30 June 2016
Vested &
Exercisable
Unvested
-
-
3,368,444
805,269
-
-
-
-
3,368,444
184,222
3,184,222
805,269
52,634
752,635
26
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
EXECUTIVE EMPLOYMENT AGREEMENTS
Remuneration and other terms of employment for the following key management personnel are formalised in employment
agreements. All contracts with executives may be terminated early by either party with notice, per individual agreement, and
subject to the termination payments as detailed below:
Name
Position
Commencement
Start Date
Base Salary
(including
superannuation)
Share Option
Benefits1
Termination Benefit
B McFadzean
Managing Director
2 November 2015
$191,625
$175,000
3 months’ notice
D Archer
Technical Director
1 April 2010
$191,625
$75,000
4 months’ notice
M Di Silvio
CFO & Company
Secretary
15 February 2016
$191,625
$75,000
4 months’ notice
J Netterfield
BFS Study Manager
16 November 2015
$219,000
$50,000
N Patten-Williams
Marketing Manager
23 May 2016
$219,000
$50,000
4 months’ notice
4 months’ notice
1 Key Management Personnel have accepted a portion of their salary package as equity in lieu of cash, subject to shareholder approval. Award
of share options for Mr Archer, Mr Di Silvio and Mr Patten Williams remain subject to shareholder approval.
SHARES ISSUED
There were no shares issued to key management personnel during the financial year ended 30 June 2016.
OPTIONS ISSUED
Options are offered to key management personnel having regard, among other things, to the past and potential contribution of
the person to the Group. For key management personnel, the issuance of options is a combination of:
a) Performance Options: Where options are issued subject to specific performance criteria specific being met by the KMP;
and
b) Remuneration Options: Where the KMP has foregone a component of salary in favour of receiving a number of options.
The following options remained on issue as at the date of this report:
Name
Option Type
Grant date
No. of
unquoted
options
Fair value at
grant date
$
Exercise
price
$
B McFadzean1
Performance
2 November 2015
3,000,000
B McFadzean2
Remuneration
2 November 2015
92,111
J Netterfield1
Performance
16 November 2015
700,000
J Netterfield3
Remuneration
16 November 2015
26,317
0.559
0.559
0.509
0.509
0.001
0.001
0.001
0.001
Expiry date
8 February 2020
8 February 2020
8 February 2020
8 February 2020
Note 1: As at the date of this report, none of the performance based options had vested.
Note 2: Mr McFadzean was granted 368,444 remuneration options on 2 November 2015. As at the date of this report, 75% of the options had vested and Mr
McFadzean has exercised all of the options that have vested (namely 276,333 options).
Note 3: As at the date of this report, 75% of the remuneration options had vested and have been exercised (namely 78,952 options).
RECORDING OF OPTIONS ISSUED DURING THE FINANCIAL YEAR TO KEY MANAGEMENT PERSONNEL
Name
B McFadzean
B McFadzean
J Netterfield
J Netterfield
Number of
options issued
Year granted
Vested %
Forfeited %
3,000,000
368,444
700,000
105,269
2015
2015
2015
2015
0%
75%
0%
75%
0%
0%
0%
0%
27
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
OPTIONS GRANTED
The following options were granted to key management personnel as at the date of this report:
Name
Option Type
Grant date
No. of
unquoted
options
Fair value at
grant date
$
Exercise
price
$
B McFadzean1
Performance
2 November 2015
3,000,000
B McFadzean2
Remuneration
2 November 2015
92,111
J Netterfield1
Performance
16 November 2015
700,000
J Netterfield3
Remuneration
16 November 2015
26,317
D Archer4
D Archer4
Performance
1 May 2016
Remuneration
1 May 2016
M Di Silvio4
Performance
15 February 2016
M Di Silvio4
Remuneration
15 February 2016
N Patten-Williams4
Performance
23 May 2016
N Patten-Williams4
Remuneration
23 May 2016
700,000
117,739
700,000
222,187
700,000
117,116
0.559
0.559
0.509
0.509
0.464
0.464
0.354
0.354
0.409
0.409
0.001
0.001
0.001
0.001
0.001
0.001
0.001
0.001
0.001
0.001
Expiry date
8 February 2020
8 February 2020
8 February 2020
8 February 2020
1 May 2020
1 May 2020
15 February 2020
15 February 2020
23 May 2020
23 May 2020
Note 1: As at the date of this report, none of the performance based options had vested.
Note 2: Mr McFadzean was granted 368,444 remuneration options on 2 November 2015. As at the date of this report, 75% of the options had vested and Mr
McFadzean has exercised all of the options that have vested (namely 276,333 options).
Note 3: As at the date of this report, 75% of the remuneration options had vested and have been exercised (namely 78,952 options).
Note 4: Options granted to Mr Archer, Mr Di Silvio and Mr Patten-Williams have not been issued and remain subject to shareholder approval. For the purposes of
AASB 2, an estimate valuation of options granted has been performed by the Company based upon agreed award metrics. The actual quantum, fair value and expiry
date of options granted may change subject to timing and conditions of future shareholder approval.
VOTING AND COMMENTS MADE AT THE COMPANY’S 2015 ANNUAL GENERAL MEETING
Sheffield Resources Limited received more than 100% of yes votes on its remuneration report for the 2015 financial year. The
Company did not receive any specific feedback at the annual general meeting or throughout the year regarding its remuneration
practices.
USE OF REMUNERATION CONSULTANTS
Due to the size of the Company’s operations, The Company has not engaged remuneration consultants to review and measure
its remuneration policy and strategy. The Board reviews remuneration strategy periodically and may engage remuneration
consultants in future to assist with this process.
END OF AUDITED REMUNERATION REPORT
28
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Auditor Independence and Non-Audit Services
NON-AUDIT SERVICES
There were no non-audit services provided during the financial year by the auditor, HLB Mann Judd.
Details of the amount paid to the auditor and its related practices for audit and other assurance services are set out below:
Audit and other assurances services
38,500
30,500
June 2016
$
June 2015
$
AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the Directors of the Company with
an Independence Declaration in relation to the audit of the annual report.
This Independence Declaration is set out on page 30 and forms part of this Directors’ report for the year ended 30 June 2016.
Signed in accordance with a resolution of the Directors.
Mr Bruce McFadzean
Managing Director
Perth, 28 September 2016
29
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Sheffield Resources Limited for the
year ended 30 June 2016, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
28 September 2016
D I Buckley
Partner
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533.
Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of
International, a worldwide organisation of accounting firms and business advisers.
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Consolidated Statement of Comprehensive Income
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
Gain from sale of permits
Other income
Employee benefits expense
Depreciation expense
Other expenses
Share based payments
Write off exploration costs
Revaluation of financial assets
Loss from sale of permits
(Loss) before income tax benefit
Income tax benefit
(Loss)/profit for the year
Other comprehensive income
Other comprehensive income for the year, net of tax
Total comprehensive (loss)/profit for the year
Basic (loss)/profit per share (cents per share)
Dilutive (loss)/profit per share (cents per share)
Consolidated
Consolidated
Notes
2016
$
2015
$
3
2
2
9
3
4
5
5
-
1,492,043
180,214
264,670
(651,155)
(394,048)
(51,187)
(70,039)
(1,273,756)
(902,748)
(1,048,198)
-
(1,023,083)
(1,276,968)
(100,055)
(573,354)
-
-
(4,540,574)
(887,090)
2,786,673
1,523,586
(1,753,901)
636,496
-
-
(1,753,901)
636,496
(1.24)
(1.24)
0.47
0.46
The Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes
31
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
Current Assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Total Current Assets
Non-Current Assets
Plant and equipment
Deferred exploration expenditure
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Provisions
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
Consolidated
Consolidated
Notes
2016
$
2015
$
6
7
8
9
10
11
12
13
13
5,007,475
5,122,973
344,192
49,944
300,680
-
5,401,611
5,423,653
101,174
105,423
32,313,985
26,186,268
32,415,159
26,291,691
37,816,770
31,715,344
2,408,969
137,866
850,419
195,365
2,546,835
1,045,784
2,546,835
1,045,784
35,269,935
30,669,560
38,643,783
33,337,705
2,497,303
1,449,105
(5,871,151)
(4,117,250)
35,269,935
30,669,560
The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes
32
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
Balance as at 1 July 2015
Loss for the year
Total comprehensive loss for the year
Shares issued during the year
Share issue costs
Recognition of share-based payments
Balance at 30 June 2016
Balance as at 1 July 2014
Profit for the year
Total comprehensive income for the year
Shares issued during the year
Share issue costs
Recognition of share-based payments
Balance at 30 June 2015
Consolidated
Issued capital
Accumulated
losses
$
$
Reserves
$
Total
$
33,337,705
(4,117,250)
1,449,105
30,669,560
-
-
(1,753,901)
(1,753,901)
5,618,499
(312,421)
33
-
-
-
-
-
-
-
-
(1,753,901)
(1,753,901)
5,618,499
(312,421)
1,048,198
1,048,198
38,643,783
(5,871,151)
2,497,303
35,269,935
Issued capital
Accumulated
losses
$
$
Reserves
$
Total
$
32,795,388
(4,753,746)
1,449,105
29,490,747
-
-
550,000
(7,683)
-
636,496
636,496
-
-
-
-
-
-
-
-
636,496
636,496
550,000
(7,683)
-
33,337,705
(4,117,250)
1,449,105
30,669,560
The Consolidated Statement of Changes in Equity should be read in conjunction with accompanying notes
33
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Consolidated Statement of Cash Flows
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016
Cash flows from operating activities
Research and development tax refund
Payments to suppliers and employees
Interest received
Royalty payments received
Consolidated
Consolidated
Notes
2016
$
2015
$
2,786,673
1,523,586
(1,923,022)
(1,013,039)
170,806
239,453
-
50,739
Net cash provided by operating activities
6
1,034,457
800,739
Cash flows from investing activities
Proceeds from sale of prospects
Payments for exploration and evaluation expenditure
Purchase of non-current assets
Net cash (used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payments for share issue costs
Net cash provided by financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
-
2,500,000
(6,409,094)
(9,565,505)
(46,939)
(33,986)
(6,456,033)
(7,099,491)
5,618,499
550,000
(312,421)
(7,683)
5,306,078
542,317
(115,498)
(5,756,435)
5,122,973
10,879,408
Cash and cash equivalents at end of year
6
5,007,475
5,122,973
The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes
34
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2016
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(A)
CORPORATE INFORMATION
The financial statements are for the consolidated entity consisting of Sheffield Resources Limited (“Sheffield” or the
“Company”) and its subsidiaries (the “Group” or the “consolidated entity”). Sheffield is a listed for-profit public
company, incorporated and domiciled in Australia and listed on the Australian Securities Exchange (“ASX”). During the
year ended 30 June 2016, the Group conducted operations in Australia. The entity’s principal activity is exploration for
mineral sands (zircon and titanium minerals) and base metals within the state of Western Australia.
These consolidated financial statements were authorised for issue in accordance with a resolution of the Directors’ on
28 September 2016.
The financial report complies with Australian Accounting Standards, which include Australian equivalents to
International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report,
comprising the financial statements and notes thereto, complies with International Financial Reporting Standards
(IFRS).
The principal accounting policies adopted in the preparation of these consolidated financial statements are set out
below.
(B)
BASIS OF PREPARATION
The results of the Group are expressed in Australian dollars, which are the functional and presentation currency for the
consolidated financial report.
The financial report is a general purpose financial report, which has been prepared in accordance with the
requirements of the Corporations Act 2001, Accounting Standards and Interpretations and complies with other
requirements of the law.
The accounting policies detailed below have been consistently applied to all of the years presented unless otherwise
stated.
Historical Cost Convention
The financial report has also been prepared on a historical cost basis. Cost is based on the fair values of the
consideration given in exchange for assets.
(C)
ADOPTION OF NEW AND REVISED STANDARDS
Standards and Interpretations applicable to 30 June 2016
In the year ended 30 June 2016, the directors have reviewed all of the new and revised Standards and Interpretations
issued by the AASB that are relevant to the Company and effective for the current annual reporting period.
As a result of this review, the directors have determined that there is no material impact of the new and revised
Standards and Interpretations on the Company and, therefore, no material change is necessary to Group accounting
policies.
Standards and Interpretations in issue not yet adopted
The directors have also reviewed all new Standards and Interpretations that have been issued but are not yet effective
for the year ended 30 June 2016. As a result of this review the directors have determined that there is no material
impact, of the new and revised Standards and Interpretations on the Group and, therefore, no change is necessary to
Group accounting policies.
(D)
BASIS OF CONSOLIDATION
The Group financial statements consolidate those of the parent company and all of its subsidiary undertakings drawn
up to 30 June 2016. Subsidiaries are all entities over which the Group has the power to control the financial and
operating policies. The Group obtains and exercises control through more than half of the voting rights. All subsidiaries
have a reporting date of 30 June.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains
and losses on transactions between Group companies. Where unrealised losses on intra-group asset sales are
reversed on consolidation, the underlying asset is also tested for impairment from a group perspective. Amounts
reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with
the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised
from the effective date of acquisition, or up to the effective date of disposal, as applicable.
35
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2016
(E)
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the Group’s consolidated financial statements requires management to make judgements,
estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated
financial statements, and the reported amounts of revenues and expenses during the reporting period. Estimates and
assumptions are continuously evaluated and are based on management’s experience and other factors, including
expectations of future events, which are believed to be reasonable under the circumstances. However, actual
outcomes would differ from these estimates if different assumptions were used and different conditions existed.
The Group has identified the following areas where significant judgements, estimates and assumptions are required,
and where actual results were to differ, may materially affect the financial position or financial results reported in
future periods.
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 using a Black-Scholes model, using the
assumptions detailed in Note 14.
As a performance incentive, senior employees were granted options during the financial year ended 30 June 2016
which contain assumptions of a real risk of forfeiture where performance targets are not achieved. Management has
ascribed various probabilities based upon stretch criteria and operational factors toward the achievement of
nominated performance targets. Accordingly, the said probability was taken into account when calculating the share
based payment expense of the options and in the formulation of the resultant expense to profit or loss.
The Group measures the cost of cash-settled share-based payments at fair value at the grant date using the Black and
Scholes formula taking into account the terms and conditions upon which the instruments were granted, as discussed
in Note 14.
(F)
GOING CONCERN
The Group recorded a consolidated loss of $1,753,901 for the financial year ended 30 June 2016 (2015: Profit of
$636,496). At 30 June 2016, the Group has $5,007,475 in cash and cash equivalents (2015: $5,122,973).
The accounts have been prepared on a going concern basis.
(G)
SEGMENT REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker (“CODM”). The CODM is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Board of Sheffield Resources Limited.
(H)
REVENUE RECOGNITION
Revenue is measured at fair value of the consideration received or receivable. Amounts disclosed as revenue are net
of returns, trade allowances, rebates and amounts collected on behalf of third parties. Revenue is recognised to the
extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured.
The following specific recognition criteria must also be met before revenue is recognised.
(i) Interest income - Interest revenue is recognised on a time proportionate basis that takes into account the effective
yield on the financial asset.
(I)
INCOME TAX
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on
the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary difference and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of
the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in
which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of
amounts expected to be paid to the tax authorities.
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those
that are enacted or substantively enacted by the balance date.
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
36
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2016
(I)
INCOME TAX (CONTINUED)
Deferred income tax liabilities are recognised for all taxable temporary differences except:
when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in
joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that
the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets
and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:
when the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; or
when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in
joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the
temporary difference will reverse in the foreseeable future and taxable profit will be available against which the
temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset
to be utilised. Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to
the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the balance date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the
same taxation authority.
Tax consolidation legislation
Sheffield Resources Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation
legislation. As a consequence, these entities are taxed as a single entity and the deferred tax assets and liabilities of
these entities are set off in the consolidated financial statements.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income, directly in equity or as a result of a business combination. In this case, the tax is also
recognised in other comprehensive income or directly in equity, respectively.
(J)
GOODS AND SERVICES TAX (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in
which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as
applicable; and
receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising
from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as
operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or
payable to, the taxation authority.
37
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2016
(K)
BUSINESS COMBINATION
The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-
date fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, which includes
the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are
expensed as incurred.
The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of
whether they have been previously recognised in the acquiree's financial statements prior to the acquisition. Assets
acquired and liabilities assumed are generally measured at their acquisition-date fair values.
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum
of:
a) fair value of consideration transferred;
b) the recognised amount of any non-controlling interest in the acquiree; and
c) acquisition-date fair value of any existing equity interest in the acquirer over the acquisition-date fair values of
identifiable net assets.
If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (i.e. gain on a bargain
purchase) is recognised in profit or loss immediately.
(L)
IMPAIRMENT OF ASSETS
The Group assesses at each balance date whether there is an indication that an asset may be impaired. If any such
indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the
asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value
in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets and the asset's value in use cannot be estimated to be close to its fair value. In
such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying
amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is
considered impaired and is written down to its recoverable amount.
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.
Impairment losses relating to continuing operations are recognised in those expense categories consistent with the
function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is
treated as a revaluation decrease).
An assessment is also made at each balance date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is
estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used
to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the
carrying amount of the asset is increased to its recoverable amount unless the asset is carried at revalued amount, in
which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted
in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its
remaining useful life.
(M)
CASH AND CASH EQUIVALENTS
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as
defined above, net of outstanding bank overdrafts.
(N)
TRADE AND OTHER RECEIVABLES
Trade receivables are measured on initial recognition at fair value and are subsequently measured at amortised cost
using the effective interest rate method, less any allowance for impairment. Trade receivables are generally due for
settlement within periods ranging from 15 days to 30 days.
Impairment of trade receivables is continually reviewed and those that are considered to be uncollectible are written
off by reducing the carrying amount directly. An allowance account is used when there is objective evidence that the
Group will not be able to collect all amounts due according to the original contractual terms.
Factors considered by the Group in making this determination include known significant financial difficulties of the
debtor, review of financial information and significant delinquency in making contractual payments to the Group. The
impairment allowance is set equal to the difference between the carrying amount of the receivable and the present
value of estimated future cash flows, discounted at the original effective interest rate. Where receivables are short-
term, discounting is not applied in determining the allowance.
38
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2016
(M)
TRADE AND OTHER RECEIVABLES (CONTINUED)
The amount of the impairment loss is recognised in the statement of comprehensive income within other expenses.
When a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a
subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously
written off are credited against other expenses in the statement of comprehensive income.
(N)
PAYABLES
Trade and other payables represent liabilities for goods and services provided to the Group prior to the year end and
which are unpaid. These amounts are unsecured and have 30-60 day payment terms. They are recognised initially at
fair value and subsequently at amortised cost.
(O)
LEAVE BENEFITS
Wages, salaries, annual leave and sick leave
Liabilities accruing to employees in respect of wages and salaries, annual leave, long service leave and sick leave
expected to be settled within 12 months of the balance date are recognised in other payables in respect of employees’
services up to the balance date. They are measured at the amounts expected to be paid when the liabilities are
settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and are measured at the
rates paid or payable.
Liabilities accruing to employees in respect of wages and salaries, annual leave, long service leave and sick leave not
expected to be settled within 12 months of the balance date are recognised in non-current other payables in respect
of employees’ services up to the balance date. They are measured as the present value of the estimated future
outflows to be made by the Group.
Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present
value of expected future payments to be made in respect of services provided by employees up to the balance date.
Consideration is given to expect future wage and salary levels, experience of employee departures, and period of
service. Expected future payments are discounted using market yields at the balance date on national government
bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.
(P)
EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration
and evaluation asset in the year in which they are incurred where the following conditions are satisfied:
the rights to tenure of the area of interest are current; and
a)
b) at least one of the following conditions is also met:
-
-
the exploration and evaluation expenditures are expected to be recouped through successful development
and exploration of the area of interest, or alternatively, by its sale; or
exploration and evaluation activities in the area of interest have not at the balance 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 in relation to, the area of interest are continuing
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies,
exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortised
of assets used in exploration and evaluation activities. General and administrative costs are only included in the
measurement of exploration and evaluation costs where they are related directly to operational activities in a particular
area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the
carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount
of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger
than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an
impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its
recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount
that would have been determined had no impairment loss been recognised for the asset in previous years.
(Q)
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.
(R)
LEASES
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee
are classified as operating leases. Payments made under operating leases (net of any incentive received from the
lessor) are charged to profit or loss on a straight-line basis over the period of the lease.
39
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2016
(S)
PROVISIONS
Provisions for legal claims are recognised when the Group has a legal or constructive obligation as a result of past
events. It is probable that an outflow of resources will be required to settle the obligation and the amount has been
reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is
determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an
outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management best estimate of the expenditure required to settle the
present obligation at the reporting date. The discount rate used to determine the present value reflects current market
assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the
passage of time is recognised as interest expense.
(T)
SHARE BASED PAYMENTS
The Group provides benefits to employees (including senior executives) of the Group in the form of share-based
payment transactions, whereby employees render services in exchange for shares or options over shares (“equity-
settled transactions”).
The fair value of options is recognised as an expense with a corresponding increase in equity (share-based payments
reserve). The fair value is measured at grant date and recognised over the period during which the holder becomes
unconditionally entitled to the options. The fair value is determined by using a Black-Scholes model, further details of
which are given in Note 14. In determining fair value, no account is taken of any performance conditions other than
those related to the share price of the Group (“market conditions”).
The cumulative expense recognised between grant date and vesting date is adjusted to reflect the director’s best
estimate of the number of options that will ultimately vest because of internal conditions of the options, such as the
employees having to remain with the company until vesting date, or such that employees are required to meet internal
sales targets. No expense is recognised for options that do not ultimately vest because a market condition was not
met.
Where the terms of options are modified, the expense continues to be recognised from grant date to vesting date as if
the terms had never been changed. In addition, at the date of the modification, a further expense is recognised for any
increase in fair value of the transaction as a result of the change.
Where options are cancelled, they are treated as if vesting occurred on cancellation and any unrecognised expenses
are taken immediately to the statement of comprehensive income. However, if new options are substituted for the
cancelled options and designated as a replacement on grant date, the combined impact of the cancellation and
replacement options are treated as if they were a modification.
(U)
PLANT AND EQUIPMENT
Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment
losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the group and the cost of the
item can be measured reliably. The carrying amount of any component accounted for as a separate asset is
derecognized when replaced. All other repairs and maintenance are charged to profit or loss during the reporting
period in which they are incurred.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:
Motor vehicles
Plant and equipment
Impairment
4 years
2-10 years
The carrying values of plant and equipment are reviewed for impairment at each balance date, with recoverable
amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired.
The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the cash-
generating unit to which the asset belongs, unless the asset's value in use can be estimated to approximate fair value.
An impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated recoverable
amount. The asset or cash-generating unit is then written down to its recoverable amount.
40
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2016
(V)
PLANT AND EQUIPMENT (CONTINUED)
For plant and equipment, impairment losses are recognised in the statement of comprehensive income in the cost of
sales line item.
Revaluations
Fair value is determined by reference to market-based evidence, which is the amount for which the assets could be
exchanged between a knowledgeable willing buyer and a knowledgeable willing seller in an arm’s length transaction as
at the valuation date.
Any revaluation increment is credited to the asset revaluation reserve included in the equity section of the statement of
financial position, except to the extent that it reverses a revaluation decrease of the same asset previously recognised
in profit or loss, in which case the increase is recognised in profit or loss.
Any revaluation decrease is recognised in profit or loss, except that a decrease offsetting a previous revaluation
increase for the same asset is debited directly to the asset revaluation reserve to the extent of the credit balance
existing in the revaluation reserve for that asset.
An annual transfer from the asset revaluation reserve to retained earnings is made for the difference between
depreciation based on the revalued carrying amounts of the assets and depreciation based on the assets' original
costs. Additionally, any accumulated depreciation as at the revaluation date is eliminated against the gross carrying
amounts of the assets and the net amounts are restated to the revalued amounts of the assets.
Upon disposal, any revaluation reserve relating to the particular asset being sold is transferred to retained earnings.
Independent valuations are performed with sufficient regularity to ensure that the carrying amounts do not differ
materially from the assets' fair values at the balance date.
Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits
are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds
and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.
(W)
EARNINGS PER SHARE
Basic earnings per share is determined by dividing the operating loss after income tax by the weighted average
number of ordinary shares outstanding during the financial year.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share by taking into
account amounts unpaid on ordinary shares and any reduction in earnings per share that will probably arise from the
exercise of partly paid shares or options outstanding during the financial year.
(X)
PARENT ENTITY FINANCIAL INFORMATION
The financial information for the parent entity, Sheffield Resources Limited, disclosed in Note 19 has been prepared
on the same basis as the consolidated financial statements, except as set out below.
(i) Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the parent entity’s
financial statements.
(ii) Share-based payments
The grant by the company of options over its equity instruments to the employees of subsidiary undertakings in the
Group is treated as a capital contribution to that subsidiary undertaking. The fair value of employee services received,
measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment
in subsidiary undertakings, with a corresponding credit to equity.
(Y)
COMPARATIVES
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
41
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2016
NOTE 2: REVENUE AND EXPENSES
(a) Revenue
Interest received
Royalty income
(b) Expenses
Interest expense
Investor and public relations expense
Accounting fees
Operating lease rental expense
Consultancy fees
Other expenses
NOTE 3: (LOSS)/GAIN FROM SALE OF PERMITS
Proceeds from sale of permits
Expenditure incurred on permits sold
Net (loss)/gain recorded
Consolidated
2016
$
180,214
-
180,214
768
38,622
52,850
163,678
446,027
571,811
1,273,756
2015
$
213,931
50,739
264,670
673
47,241
51,092
140,249
252,849
410,644
902,748
2016
$
2015
$
150,0001
2,500,000
(723,354)
(1,007,957)
(573,354)
1,492,043
1 On 13 August 2015, three tenements were sold to Atlas Iron Limited (ASX: AGO) for a sale consideration of $150,000 payable in Atlas Iron shares based on a 15%
discount to their 5 day VWAP.
NOTE 4: INCOME TAX
2016
$
2015
$
The prima facie income tax expense on pre-tax accounting loss from operations
reconciles to the income tax expense in the financial statements as follows:
Accounting profit/(loss) before income tax
Income tax benefit calculated at 30%
(4,540,574)
(1,362,172)
(887,090)
(266,127)
Tax effect of amounts which are not deductible/(taxable) in calculating taxable
income:
Share-based payments
Accruals
Other non-deductible expenses
Share issue costs
Revaluation of financial asset
Unrecognised tax losses
R&D tax offset
314,459
(17,973)
479,769
-
30,493
1,152
(101,950)
(113,857)
30,017
657,850
-
348,339
2,786,673
1,523,586
Income tax benefit reported in the statement of comprehensive income
2,786,673
1,523,586
42
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2016
NOTE 4: INCOME TAX (CONTINUED)
The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities on
taxable profits under Australian tax law. There has been no change in this tax rate since the previous reporting period.
The Company has tax losses arising in Australia. The tax benefit of these losses of $10,154,398 (2015: $2,422,847) is
available indefinitely for offset against future taxable profits of the companies in which the losses arose, subject to ongoing
conditions for deductibility being met.
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
Deductible temporary differences
Tax losses
Adjustment in tax losses disclosures
Consolidated
2016
$
2015
$
236,163
232,345
3,080,697
2,422,847
7,073,701
-
10,390,561
2,655,192
The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets have
not been recognised in respect of these items because it is not probable that future taxable profit will be available against
which the Company can utilise the benefits thereof.
NOTE 5: EARNINGS/LOSS PER SHARE
Basic earnings/(loss) per share:
Continuing operations
Total basic (loss)/earnings per share
Consolidated
2016
Cents per
share
(1.24)
(1.24)
2015
Cents per
share
0.47
0.47
The loss and weighted average number of ordinary shares used in the calculation
of basic loss per share is as follows:
(Loss)/profit from continuing operations
(1,753,901)
636,496
Weighted average number of ordinary shares for the purposes of basic earnings per
share
141,620,398
134,298,836
Number
Number
Dilutive (loss)/earnings per share:
Continuing operations
Total dilutive earnings/(loss) per share
(1.24)
(1.24)
0.46
0.46
As the Group is in a loss position the conversion of options to shares is not considered dilutive because conversion
would cause the loss per share to decrease.
43
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2016
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short-term deposits
Consolidated
2016
$
2015
$
2,007,475
5,122,973
3,000,000
-
5,007,475
5,122,973
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash
requirements of the Group, and earn interest at the respective short-term deposit rates.
(i) Reconciliation of (loss)/profit after tax for the year to net cash flows from
operating activities
(Loss)/profit after tax for the year
Equity settled share based payment
Depreciation
Write off of exploration expenditure
Profit/(loss) on sale of permits
Financial asset revaluation
(Increase)/decrease in assets:
Current receivables
Increase/(decrease) in liabilities:
Current payables
Provision for employee benefits
Net cash from operating activities
NOTE 7: TRADE AND OTHER RECEIVABLES
Trade receivables
GST recoverable
Prepaid expenses
Bank guarantees (i)
Accrued interest
Consolidated
2016
$
2015
$
(1,753,901)
636,496
1,048,198
-
51,187
70,039
1,023,083
1,276,968
573,354
(1,492,043)
100,055
-
(26,008)
247,792
75,988
(57,499)
1,034,457
978
146,392
54,847
134,362
7,613
(13,537)
75,024
800,739
978
197,243
28,022
73,195
1,242
344,192
300,680
(i) Bank guarantees are made up of the following:
-
-
$101,099 is held as security for the office lease and bears 2.85% interest.
$33,263 is held as security for the credit card facility and bears 2.90% interest
In determining the recoverability of a trade receivable, the Company considers any changes in the credit quality of the
trade receivable from the date credit was initially granted up to the balance date. The directors believe that there is no
allowance for impairment required.
44
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2016
NOTE 8: PLANT AND EQUIPMENT
Non-Current Assets
At 1 July 2015, net of accumulated depreciation and impairment
105,423
141,675
Consolidated
2016
$
2015
$
Additions
Adjustment to depreciation
Depreciation charge for the year
At 30 June 2016, net of accumulated depreciation and impairment
Non-Current Assets
Cost or fair value
Accumulated depreciation and impairment
Net carrying amount
46,938
-
(51,187)
101,174
32,871
916
(70,039)
105,423
572,590
528,316
(471,416)
(422,893)
101,174
105,423
The carrying value of plant and equipment held under finance leases and hire purchase contracts at 30 June 2016 is Nil.
(2015: Nil).
NOTE 9: DEFERRED EXPLORATION AND EVALUATION EXPENDITURE
Costs carried forward in respect of:
Exploration and evaluation phase – at cost
Balance at beginning of year
Expenditure incurred
Sale of tenements
Expenditure written off
Total exploration and evaluation expenditure
Consolidated
2016
$
2015
$
26,186,268
18,730,709
7,874,154
9,740,484
(723,354)
(1,007,957)
(1,023,083)
(1,276,968)
32,313,985
26,186,268
The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phases is
dependent on the successful development and commercial exploitation or sale of the respective areas. Capitalised
exploration expenditure relating to the surrender of exploration licences has been written off in full during the year.
45
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2016
NOTE 10: TRADE AND OTHER PAYABLES (CURRENT)
Trade creditors
Accruals
Other creditors
Consolidated
2016
$
1,484,120
907,503
17,346
2,408,969
2015
$
422,293
402,739
25,387
850,419
Trade payables are non-interest bearing and are normally settled on 30-day terms. Information regarding the interest rate,
foreign exchange and liquidity risk exposure is set out in Note 16.
NOTE 11: PROVISIONS (CURRENT)
Employee benefits
137,866
195,365
The provision for employee benefits represents annual leave payable.
NOTE 12: ISSUED CAPITAL
147,414,062 (2015: 134,430,747) Ordinary shares issued and fully paid
38,643,783
33,337,705
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in proportion
to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and
upon a poll each share is entitled to one vote.
Ordinary shares have no par value and the company does not have a limited amount of authorised capital.
Consolidated
2016
2015
No.
$
No.
$
Movement in ordinary shares on issue
Balance at beginning of financial year
134,430,747
33,337,705
133,385,685
32,795,388
Issue of fully paid ordinary shares at $0.44 each
12,310,815
5,416,749
-
-
Issue of fully paid ordinary shares at $0.81 each
-
-
395,062
320,000
Issued for cash on exercise of share options
672,500
201,750
650,000
230,000
Share issue costs
-
(312,421)
-
(7,683)
Balance at end of financial year
147,414,062
38,643,783
134,430,747
33,337,705
46
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2016
NOTE 12: ISSUED CAPITAL (continued)
Movements in options over ordinary shares on issue
Balance at beginning of financial year
Issue of unlisted options exercisable at $0.001 each on or before 8 February
2020
Exercise of unlisted options exercisable at $0.30 each on or before 13
December 2015
Exercise of unlisted options exercisable at $0.44 each on or before 6
September 2014
Lapsing of unlisted options
Balance at end of financial year
2016
No.
2015
No.
7,425,000
8,075,000
4,173,713
-
(672,500)
(400,000)
-
(250,000)
(2,052,500)
-
8,873,713
7,425,000
Employee Share options
The company has an Employee Share Option Plan under which options to subscribe for the company's shares have been
granted to certain employees (refer to Note 14).
NOTE 13: ACCUMULATED LOSSES AND RESERVES
Accumulated losses
Balance at beginning of financial year
Profit/(loss) for the year
Balance at end of financial year
Share-based payments reserve
Balance at beginning of financial year
Share based payments
Balance at end of financial year
(i) Nature and purpose of reserves
Consolidated
2016
$
2015
$
(4,117,250)
(4,753,746)
(1,753,901)
636,496
(5,871,151)
(4,117,250)
1,449,105
1,449,105
1,048,198
-
2,497,303
1,449,105
Share-based payments reserve
This reserve is used to record the value of equity benefits provided to employees and directors as part of their remuneration.
Refer to note 14 for further details of these plans.
47
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2016
NOTE 14 : SHARE BASED PAYMENT PLANS
There were no unlisted options issued during the year to employees in accordance with the Employee Share Option Plan
of the Company. The following share-based payment arrangements were granted during the year ended 30 June 2016:
SERIES 5
SERIES 6
SERIES 7
SERIES 8
SERIES 9
Number
Grant date
Expiry date
Exercise
price
Fair value at
grant date
3,368,444
02/11/2015
02/02/2020
805,269
16/11/2015
02/02/2020
817,739
01/05/2016
01/05/2020
817,116
23/05/2016
23/05/2020
922,187
15/02/2016
15/02/2020
0.001
0.001
0.001
0.001
0.001
1,883,226
409,945
379,492
334,255
326,520
Series 7, 8 and 9 have been granted, subject to shareholder approval. Shareholder approval shall be sought at the
Company’s 2016 annual general meeting of shareholders.
The following share-based payment arrangements were granted in prior periods and were in place during the current
period:
SERIES 1
SERIES 2
SERIES 3
SERIES 4
Number
Grant date
Expiry date
Exercise
price
Fair value at
grant date
1,200,000
02/04/2012
01/04/2017
500,000
26/09/2013
26/09/2018
1,400,000
20/03/2013
19/03/2019
1,600,000
20/03/2013
19/03/2021
0.65
0.66
0.87
1.16
222,805
94,466
297,928
358,671
The following table illustrates the number (No.) and weighted average exercise prices of and movements in share options
in existence during the year:
Outstanding at the beginning of the year
Granted during the year
Exercised during the year
Lapsed during period
2016
No.
7,425,000
6,730,755
(672,500)
2015
No.
2016
Weighted
average
exercise
price
0.71
8,075,000
0.001
-
(0.30)
(650,000)
(2,052,500)
(0.43)
-
Outstanding at the end of the year
11,430,755
0.37
7,425,000
Exercisable at the end of the year
8,873,713
0.16
7,425,000
2015
Weighted
average
exercise
price
0.68
-
(0.35)
-
0.71
-
The outstanding balance as at 30 June 2016 is represented by 11,430,755 options over ordinary shares with a weighted
average exercise price of $0.37 each, exercisable upon meeting the above conditions and until the relevant expiry dates.
The weighted average remaining contractual life for the share options outstanding as at 30 June 2016 is 3.34 years
(2015: 2.77).
The weighted average share price at the date of options exercised during the year ended 30 June 2016 was $0.30
(2015: $0.35).
The range of exercise prices for options outstanding at the end of the year is $0.001 - $1.16 (2015: $0.30 - $1.16).
48
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2016
NOTE 14 : SHARE BASED PAYMENT PLANS (continued)
The fair value of the equity-settled share options granted under the option is estimated as at the date of grant using the
Black-Scholes model taking into account the terms and conditions upon which the options were granted.
SERIES
1
SERIES
2
SERIES
3
SERIES
4
SERIES
5
SERIES
6
SERIES
7
SERIES
8
SERIES
9
-
70
-
50
-
75
-
55
-
40
-
40
-
87
-
87
-
87
3.63
4.75
2.82
3.40
2.00
2.00
2.00
1.75
2.00
5
5
5
5
4.2
4.2
4
4
4
Dividend yield (%)
Expected volatility
(%)
Risk-free interest
rate (%)
Expected life of
option (years)
Exercise price
0.65
0.66
0.87
1.16
0.001
0.001
0.001
0.001
0.001
Grant date share
price (cents)
29
29
48
68
56
51
46.5
41
35.5
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that
may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends,
which may also not necessarily be the actual outcome. No other features of options granted were incorporated into the
measurement of fair value.
The carrying amount of the liability relating to the cash-settled share-based payment at 30 June 2016 is nil (2015: nil)
NOTE 15: FINANCIAL INSTRUMENTS
(a) Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while
maximising the return to stakeholders through the optimisation of the debt and equity balance. The Group’s overall
strategy remains unchanged from 2015.
The capital structure of the Group consists of cash and cash equivalents, debt and equity attributable to equity holders of
the Group, comprising issued capital, reserves and retained earnings. None of the Group’s entities are subject to
externally imposed capital requirements.
Operating cash flows are used to maintain and expand operations, as well as to make routine expenditures such as tax,
dividends and general administrative outgoings.
Gearing levels are reviewed by the Board on a regular basis in line with its target gearing ratio, the cost of capital and the
risks associated with each class of capital.
(b) Categories of financial instruments
Financial assets
Receivables
Cash and cash equivalents
Available-for-sale financial assets
Financial liabilities
Trade and other payables
Consolidated
2016
$
2015
$
344,192
300,680
5,007,475
5,122,973
49,944
-
2,408,969
850,419
49
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2016
NOTE 15: FINANCIAL INSTRUMENTS (continued)
(c) Financial risk management objectives
The main risks arising from the Group’s financial instruments are interest risk, credit risk and liquidity risk. The Group does
not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.
(d) Interest rate risk management
The Group’s exposure to risks of changes in market interest rates relates primarily to the Group cash balances. The Group
constantly analyses its interest rate exposure. Within this analysis consideration is given to potential renewals of existing
positions, alternative financing positions and the mix of fixed and variable interest rates. As the Group has no interest
bearing borrowing, its exposure to interest rate movements is limited to the amount of interest income it can potentially
earn on surplus cash deposits.
2016
2015
Weighted
Average
Interest
Rate
%
≤6 months
$
6-12
months
$
1-5
Year
$
Total
$
Weighted
Average
Interest
Rate
%
≤6 months
$
6-12
months
$
1-5
Year
$
Total
$
Financial assets
Variable interest rate
instruments
Fixed Interest
bearing
1.96
2,007,475
2.37
3,134,363
Non-interest bearing
-
259,773
Total Financial
Assets
Financial liabilities
Non-interest bearing
Total Financial
Liabilities
5,401,611
2,408,969
2,408,969
-
-
-
-
-
-
-
-
-
-
-
-
2,007,475
2.29
5,122,974
3,134,363
3.13
73,195
259,773
5,401,611
2,408,969
2,408,969
-
-
227,484
5,423,653
850,419
850,419
-
-
-
-
-
-
-
-
-
-
-
-
5,122,974
73,195
227,484
5,423,653
850,419
850,419
Interest rate risk sensitivity analysis
Exposure arises predominantly from assets and liabilities bearing variable interest rates as the Group intends to hold fixed
rate assets and liabilities to maturity. Interest rate risk is considered unlikely to be material.
(e) Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral
where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group only transacts with entities
that are rated the equivalent of investment grade and above. This information is supplied by independent rating agencies
where available and, if not available, the Group uses publicly available financial information and its own trading record to
rate its major customers. The Group’s exposure and the credit ratings of its counterparties are continuously monitored and
the aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by
counterparty limits that are reviewed and approved by the Board of Directors periodically.
The Group does not have any significant credit risk exposure to any single counterparty or any Group of counterparties
having similar characteristics. The credit risk on liquid funds and derivative financial instruments is limited because the
counterparties are banks with high credit ratings assigned by international credit rating agencies.
The carrying amount of financial assets recorded in the financial statements, net of any allowance for losses, represents
the Group’s maximum exposure to credit risk without taking account of the value of any collateral obtained.
(f) Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the board of directors, who have built an appropriate
liquidity risk management framework for the management of the Group’s short, medium and long-term funding and
liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities
and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity
profiles of financial assets and liabilities.
50
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2016
NOTE 15: FINANCIAL INSTRUMENTS (continued)
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the
impact of netting agreements:
2016
Carrying
amount
$
Total
Contractual cash
flows
6 months or
less
6-12
months
1-2 years
2-5 years
More than
5 years
$
$
$
$
$
$
Trade and other payables
2,408,969
2,408,969
2,408,969
2,408,969
2,408,969
2,408,969
-
-
-
-
-
-
-
-
2015
Carrying
amount
$
Total
Contractual cash
flows
$
6 months or
less
6-12
months
1-2 years
2-5 years
More than
5 years
$
$
$
$
$
Trade and other payables
850,419
850,419
850,419
850,419
850,419
850,419
-
-
-
-
-
-
-
-
NOTE 16: COMMITMENTS AND CONTINGENCIES
Exploration commitments
The Group has certain obligations to perform minimum exploration work and to spend minimum amounts on exploration
tenements. The obligations may be varied from time to time subject to approval and are expected to be fulfilled in the
normal course of the operations of the Group.
Due to the nature of the Group’s operations in exploring and evaluating areas of interest, it is difficult to accurately forecast
the nature and amount of future expenditure beyond the next year. Expenditure may be reduced by seeking exemption
from individual commitments, by relinquishing of tenure or any new joint venture agreements. Expenditure may be
increased when new tenements are granted.
Commitment contracted for at balance date but not recognised as liabilities are as follows:
Within one year
Consolidated
2016
$
2015
$
2,532,683
1,682,184
Operating lease commitments
The Group entered in to a lease agreement in relation to new offices premises on 10 August 2015. The commitments in
relation to this, inclusive of floor space and parking bays are as follows:
Within one year
After one year but not more than three years
Consolidated
2016
$
2015
$
243,693
112,430
-
243,693
108,636
221,066
Other commitments
Sheffield Resources Limited has bank guarantees totalling $134,362 (see details per Note 7) at 30 June 2016.
51
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2016
NOTE 17: RELATED PARTY DISCLOSURE
Subsidiary Entities
The consolidated financial statements include the financial statements of Sheffield Resources Limited and the subsidiaries
listed in the following table.
Name
Country of
Equity Interest
Investment
Incorporation
Moora Talc Pty Ltd
Ironbridge Resources Pty Ltd
Australia
Australia
2016
%
100
100
2015
%
100
100
2016
$
100
100
2015
$
100
100
Moora Talc Pty Ltd and Ironbridge Resources Pty Ltd were incorporated on 17 November 2011.
Loans made by Sheffield Resources Limited to wholly-owned subsidiaries are contributed to meet required expenditure
payable on demand and are not interest bearing.
Transactions with other Related Parties
There were no other transactions entered into with related parties for the June 2016 financial year.
NOTE 18: DIRECTORS AND EXECUTIVES DISCLOSURES
(A)
DETAILS OF KEY MANAGEMENT PERSONNEL
The following persons acted as Directors of the Company during the financial year:
Mr Will Burbury (Non-Executive Chairman)
Mr Bruce McFadzean (Managing Director)
Mr David Archer (Technical Director)
Mr Bruce McQuitty (Non-Executive Director)
The following persons are the key management personnel of the Company during the financial year:
Mr Jim Netterfield (BFS Study Manager), appointed 16 November 2015
Mr Mark Di Silvio (Company Secretary & Chief Financial Officer), appointed 16 February 2016
Mr Neil Patten-Williams (Marketing Manager), appointed 23 May 2016
(B)
KEY MANAGEMENT PERSONNEL COMPENSATION
The aggregate compensation made to directors and other key management personnel of the Group is set out below:
Short-term employee benefits
Post-employment benefits
Total
Consolidated
2016
$
874,831
104,657
1,048,198
2,027,686
2015
$
545,565
50,802
-
596,367
Detailed remuneration disclosures are provided in the Remuneration Report on pages 23 to 26.
(C)
EQUITY HOLDINGS
Number of shares and options held by Directors and Key Management Personnel, including their personally related parties,
are set out in the Remuneration Report on pages 24 to 28.
52
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2016
NOTE 19: PARENT ENTITY DISCLOSURES
ASSETS
Current assets
Non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
TOTAL LIABILITIES
EQUITY
Contributed equity
Reserves
Retained earnings
TOTAL EQUITY
Financial performance
(Loss)/Profit for the year
Other comprehensive income
Total comprehensive income
2016
$
2015
$
5,351,667
5,423,653
32,465,103
26,291,691
37,816,770
31,715,344
2,546,835
1,045,784
2,546,835
1,045,784
38,643,783
33,337,705
2,497,303
1,449,105
(5,871,151)
(4,117,250)
35,269,935
30,669,560
(1,753,901)
636,496
-
-
(1,753,901)
636,496
Contingent liabilities
As at 30 June 2016 and 2015, the Company had no contingent liabilities.
Contractual commitments
As at 30 June 2016 and 2015, the Company had no contractual commitments other than those commitments disclosed in
Note 16.
Guarantees entered into by parent entity
As at 30 June 2015, the Group has the following financial guarantees:
$101,099 is held as security for the office lease and bears 2.85% interest.
$33,263 is held as security for the credit card facility and bears 2.90% interest
NOTE 20: AUDITOR’S REMUNERATION
The auditor of Sheffield Resources Limited is HLB Mann Judd.
2016
$
2015
$
Amounts received or due and receivable by HLB Mann Judd for:
An audit or review of the financial report of the entity
38,500
30,500
NOTE 21: EVENTS AFTER THE REPORTING PERIOD
On 31 August 2016, the Company issued a total of 32,939,994 fully paid ordinary shares at an issue price of 52 cents per
share, raising approximately $17.1 million before costs. In addition, the Company issued 4,000,000 options at an exercise
price of 67.6 cents per option, expiring 31 August 2019. The Options have been issued in equal amounts to nominees of
Bridge Street Capital Partners and Pulse Markets, as consideration for their ongoing role as Joint Capital Markets Advisers
to the Company.
53
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Declaration
1.
In the opinion of the directors of Sheffield Resources Limited (the ‘Company’):
a.
the accompanying financial statements and notes are in accordance with the Corporations Act 2001 including:
i.
ii.
giving a true and fair view of the Group’s financial position as at 30 June 2016 and of its performance
for the year then ended; and
complying with Australian Accounting Standards, the Corporations Regulations 2001, professional
reporting requirements and other mandatory requirements.
b.
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
c.
the financial statements and notes thereto are in accordance with International Financial Reporting Standards
issued by the International Accounting Standards Board.
2.
This declaration has been made after receiving the declarations required to be made to the directors in accordance
with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2016.
This declaration is signed in accordance with a resolution of the Board of Directors.
Mr Bruce McFadzean
Managing Director
28 September 2016
54
INDEPENDENT AUDITOR’S REPORT
To the members of Sheffield Resources Limited
Report on the Financial Report
We have audited the accompanying financial report of Sheffield Resources Limited (“the company”), which
comprises the consolidated statement of financial position as at 30 June 2016, the consolidated statement of
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 Group comprising the company and the entities
it controlled at the year’s end or from time to time during the financial year.
Directors’ responsibility for the financial report
The directors of the company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In Note 1(a), the directors also state, in accordance with Accounting Standard AASB 101: Presentation of
Financial Statements, the consolidated financial statements comply with International Financial Reporting
Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit
in accordance with Australian Auditing Standards. Those standards require that we comply with relevant
ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable
assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report. The procedures selected depend on the auditor’s judgement, including the assessment of
the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the Group’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,
An audit also includes
but not for the purpose of expressing an opinion on the effectiveness internal control.
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.
Our audit did not involve an analysis of the prudence of business decisions made by directors or
management.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act
2001.
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533.
Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of
International, a worldwide organisation of accounting firms and business advisers.
Auditor’s opinion
In our opinion:
(a)
the financial report of Sheffield Resources Limited is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2016 and its performance
for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b)
the financial report also complies with International Financial Reporting Standards as disclosed in Note
1(a).
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2016.
The directors of the company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
Auditor’s opinion
In our opinion, the Remuneration Report of Sheffield Resources Limited for the year ended 30 June 2016
complies with section 300A of the Corporations Act 2001.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
28 September 2016
D I Buckley
Partner
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
ASX Additional Information
The Company was admitted to the official list of ASX on 15 December 2010. Since Listing, the Company has used its cash
(and assets in a form readily convertible to cash) in a manner consistent with its business objectives. In accordance with
the ASX Listing Rules, the Company is required to disclose the following information which was prepared based on share
registry information processed up to 27 September 2016.
Ordinary Share Capital
At 27 September 2016, 180,709,341 fully paid ordinary shares are held by 1,545 individual shareholders.
Spread of Holdings
Total Holders
Ordinary Shares
1
1,001
5,001
10,001
100,001
-
-
-
-
-
1,000
5,000
10,000
100,000
and over
Number of Holders/Shares
85
274
214
743
229
1,545
40,406
932,907
1,780,782
28,462,858
149,492,388
180,709,341
Unmarketable parcels at 27 September 2016 amount to 15,076 shares held by 59 shareholders.
Substantial Shareholders
Ordinary Shareholders
Fully Paid Ordinary Shares
Number
Percentage
BlackRock Group1
16,250,000
Mr Walter Mick George Yovich & Mrs Jeanette Julia Yovich
11,221,986
8.99
6.21
1 BlackRock Group, has control over a total of 16,250,000 shares representing 8.99% of the issued fully paid shares in the
Company via the following entitles:
Entity
BlackRock (Isle of Man) Limited
BlackRock International Limited
BlackRock Investment Management (UK) Limited
Number
1,750,000
9,000,000
5,500,000
Voting rights
All ordinary shares carry one vote per share without restriction. Options for ordinary shares do not carry any voting rights.
Statement of Quotation and Restrictions
Listed on the ASX are 180,709,341 fully paid shares. All fully paid shares are free of escrow conditions.
All 12,518,428 options are not quoted on the ASX. All options are free of escrow conditions.
57
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
ASX Additional Information
Twenty Largest Shareholders
Details of the 20 largest shareholders by registered shareholding as at the date of this report are:
Ordinary Shareholders
NATIONAL NOMINEES LIMITED
MR WALTER MICK GEORGE YOVICH & MRS JEANETTE JULIA YOVICH
MR WALTER MICK GEORGE YOVICH
MR BRUCE MORRISON MCQUITTY
MR WILLIAM BURBURY
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
SATORI INTERNATIONAL PTY LTD
ARCHER ENTERPRISES (WA) PTY LTD
CRESCENT NOMINEES LIMITED
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
MR REES HOLLIER JOHN JONES & MRS MOIRA MARGUERITE JONES & MR WALTER
MICK GEORGE YOVICH
YAN GANG (HONG KONG) CO. LIMITED
ARCHER ENTERPRISES (WA) PTY LTD
BNP PARIBAS NOMS PTY LTD
PENMAEN LIMITED
MR BRIAN HENRY MCCUBBING & MRS ADRIANA MARIA MCCUBBING
NORONEKE MASTER FUND LTD
MR DAVID LINDSAY ARCHER & MRS SIMONE ELIZABETH ARCHER
DUBRAVA PROPERTIES LIMITED
TATTERSFIELD SECURITIES LIMITED
TOTAL
Fully Paid Ordinary Shares
Number
Percentage %
14,000,000
11,221,986
9,236,554
7,964,091
7,548,500
4,636,502
4,375,385
3,680,000
3,437,085
3,068,900
2,624,300
2,272,728
1,790,000
1,750,000
1,750,000
1,700,000
1,585,000
1,582,000
1,524,664
1,442,307
7.75
6.21
5.11
4.41
4.18
2.57
2.42
2.04
1.90
1.70
1.45
1.26
0.99
0.97
0.97
0.94
0.88
0.88
0.84
0.80
87,190,002
48.27
Options
Outstanding as at the date of this report were 12,518,428 unquoted options. Details are set out below:
-
-
-
-
-
-
1,200,000 options over ordinary shares with exercise price $0.65 each, expiring on 1 April 2017.
500,000 options over ordinary shares with exercise price $0.66 each, expiring on 26 September 2018.
1,400,000 options over ordinary shares with exercise price $0.87 each, expiring on 19 March 2019.
1,600,000 options over ordinary shares with exercise price $1.16 each, expiring on 19 March 2021.
3,818,428 options over ordinary shares with exercise price $0.001 each, expiring on 8 February 2020.
4,000,000 options over ordinary shares with exercise price $0.676 each, expiring on 31 August 2019.
58
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
ASX Additional Information
Interests in Mining Tenements
Project
Tenement
Holder
Interest
Location
Status
Mineral Sands
E04/2081
Sheffield Resources Ltd
Mineral Sands
E04/2083
Sheffield Resources Ltd
Mineral Sands
E04/2084
Sheffield Resources Ltd
Mineral Sands
E04/2159
Sheffield Resources Ltd
Mineral Sands
E04/2171
Sheffield Resources Ltd
Mineral Sands
E04/2192
Sheffield Resources Ltd
Mineral Sands
E04/2193
Sheffield Resources Ltd
Mineral Sands
E04/2194
Sheffield Resources Ltd
Mineral Sands
E04/2348
Sheffield Resources Ltd
Mineral Sands
E04/2349
Sheffield Resources Ltd
Mineral Sands
E04/2350
Sheffield Resources Ltd
Mineral Sands
E04/2386
Sheffield Resources Ltd
Mineral Sands
E04/2390
Sheffield Resources Ltd
Mineral Sands
E04/2391
Sheffield Resources Ltd
Mineral Sands
E04/2392
Sheffield Resources Ltd
Mineral Sands
E04/2393
Sheffield Resources Ltd
Mineral Sands
E04/2394
Sheffield Resources Ltd
Mineral Sands
E04/2399
Sheffield Resources Ltd
Mineral Sands
E04/2400
Sheffield Resources Ltd
Mineral Sands
E04/2401
Sheffield Resources Ltd
Mineral Sands
M04/459
Sheffield Resources Ltd
Mineral Sands
L04/82
Sheffield Resources Ltd
Mineral Sands
L04/83
Sheffield Resources Ltd
Mineral Sands
L04/84
Sheffield Resources Ltd
Mineral Sands
L04/85
Sheffield Resources Ltd
Mineral Sands
L04/86
Sheffield Resources Ltd
Mineral Sands
L04/92
Sheffield Resources Ltd
Mineral Sands
L04/93
Sheffield Resources Ltd
Mineral Sands
E70/3762
Sheffield Resources Ltd
Mineral Sands
E70/3813
Sheffield Resources Ltd
Mineral Sands
E70/3814
Sheffield Resources Ltd
Mineral Sands
E70/3929
Sheffield Resources Ltd
Mineral Sands
E70/3931
Sheffield Resources Ltd
Mineral Sands
E70/3967
Sheffield Resources Ltd
Mineral Sands
E70/4190
Sheffield Resources Ltd
Mineral Sands
E70/4292
Sheffield Resources Ltd
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Pending
Pending
Granted
Granted
Granted
Granted
Pending
Pending
Pending
Pending
Pending
Pending
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
59
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
ASX Additional Information
Interests in Mining Tenements
Project
Tenement
Holder
Interest
Location
Mineral Sands
E70/3859
Sheffield Resources Ltd
Mineral Sands
L70/150
Sheffield Resources Ltd
Mineral Sands
E70/4719
Sheffield Resources Ltd
Mineral Sands
E70/4747
Sheffield Resources Ltd
Nickel
Nickel
Nickel
Nickel
Nickel
Gold
E69/3033
Sheffield Resources Ltd
E69/3052
Sheffield Resources Ltd
E39/1733
Sheffield Resources Ltd
E28/2374-I
Sheffield Resources Ltd
E28/2563
Sheffield Resources Ltd
E63/1696
Sheffield Resources Ltd
Nickel/Gold
E28/2481
Sheffield Resources Ltd
Copper/Manganese
E46/1041
Sheffield Resources Ltd
Copper/Manganese
E46/1042
Sheffield Resources Ltd
Copper/Manganese
E46/1044
Sheffield Resources Ltd
Copper/Manganese
E45/4558
Sheffield Resources Ltd
Copper/Manganese
E45/4573
Sheffield Resources Ltd
Copper/Manganese
E45/4574
Sheffield Resources Ltd
Copper/Manganese
E46/1069
Sheffield Resources Ltd
Copper/Manganese
E46/1070
Sheffield Resources Ltd
Copper/Manganese
E46/1099
Sheffield Resources Ltd
Copper/Manganese
E45/4600
Sheffield Resources Ltd
Copper/Manganese
E46/1116
Sheffield Resources Ltd
Copper/Manganese
E46/1119
Sheffield Resources Ltd
Copper/Manganese
E45/4717
Sheffield Resources Ltd
Copper/Manganese
E45/4719
Sheffield Resources Ltd
Notes:
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Fraser Range
Fraser Range
Fraser Range
Fraser Range
Fraser Range
Tropicana Belt
Tropicana Belt
Pilbara
Pilbara
Pilbara
Pilbara
Pilbara
Pilbara
Pilbara
Pilbara
Pilbara
Pilbara
Pilbara
Pilbara
Pilbara
Pilbara
1Iluka Resources Ltd (ASX:ILU) retains a gross sales royalty of 1.5% in respect to tenements R70/35, M70/872, M70/965 & M70/1153.
2All tenements are located in the state of Western Australia
Status
Pending
Granted
Pending
Pending
Granted
Granted
Granted
Granted
Pending
Granted
Granted
Granted
Pending
Granted
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
60
info@sheffieldresources.com.au T +61 8 6555 8777 F +61 8 6555 8787 Level 2, 41-47 Colin Street, West Perth WA 6005 PO Box 205, West Perth WA 6872
Sheffield Resources Limited ACN 125 811 083
sheffieldresources.com.au