2017
Annual Report
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
Ashurst
Level 32, Exchange Plaza
The Esplanade
Perth WA 6000
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
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SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Chairman’s Letter
Dear Shareholder,
The 2017 financial year has culminated in a significant period of advancement for your Company. With a backdrop of
improving market conditions compared to the last 2-3 years, Sheffield was able to deliver a Company defining
Bankable Feasibility Study (BFS) during the year, delivering strong financial metrics.
The primary focus during the year was the completion of the BFS on our flagship Thunderbird mineral sands project.
The BFS outcomes confirmed Thunderbird as a world class, high margin project. Key results of the BFS demonstrate a
financially robust and technically strong project, forecast to generate EBITDA of A$5.1 billion over a 42 year mine life.
Thunderbird is located in one of the most attractive mining investment jurisdictions and is well placed to deliver a long
term, secure supply of high quality products to a range of potential customers. Completion of the BFS clears the way
for delivery of the next major milestones and the Sheffield team is working hard to secure offtake, permitting and
project financing outcomes ahead of a targeted construction start in late 2017.
In conjunction with the delivery of the BFS, we announced an update to the Thunderbird Ore Reserve, totalling 680Mt
@ 11.3% HM, underpinned by exceptionally high in-situ zircon grades of 1% in the Proved category. In terms of
production profile, 97% of the first 10 years of production and more than one-third of the Ore Reserve is in the highest
confidence category, further confirmation that in terms of grade and tonnage, the Thunderbird Ore Reserve ranks
amongst the top tier of mineral sands ore reserves in the world, including those associated with operating mines.
We also undertook a strategic equity raising to both complete the Thunderbird feasibility study and continue with
exploration activities, placing the Company in a solid financial position. 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.
Subsequent to the release of the BFS, negotiations with potential offtake partners commenced. These negotiations
have culminated in the signing of five non-binding memorandums of understanding (“MOUs”) in relation to the sale of
premium zircon and zircon concentrate. Sheffield has now established key offtake relationships across Europe, India
and China, taking total offtake volume of premium zircon and zircon concentrate to approximately 70% and 45%
respectively from Stage 1 of the Thunderbird Project. Offtake arrangements have also progressed in relation to the
sale of high quality low temperature roast (“LTR”) ilmenite, with a maiden LTR ilmenite MOU signed in May 2017
representing approximately 45% of the estimated Stage 1 production volume. The market demand shown for the
range of Thunderbird products has been pleasing.
On the exploration front, we have continued to make significant inroads and position ourselves well for the future. In
late 2016, we announced a joint venture agreement with Independence Group NL (IGO) (ASX: IGO) encompassing our
package of tenements in the Fraser Range region of Western Australia, enabling Sheffield to retain 30% exposure to
exploration success beyond the initial earn-in phase. We also announced the signing of an agreement to earn 100%
interest in the Jamieson Project (Project) from Jamieson Minerals Pty Ltd. The Project is located near the township of
Jamieson in the central Victorian Goldfields comprising Exploration Licence 5523, and this low cost farm-in represents
an exciting opportunity to add value through exploration by targeting high-grade gold mineralisation.
The 2017 financial year has also seen continued development of our management team. Following completion of the
BFS, we welcomed Mr Stuart Pether to the Sheffield team, taking on the important role of Chief Operations Officer. I
would like to personally thank each of my fellow Directors, our management team and our small team of employees,
our consultants and stakeholders for their dedication and effort in delivering valuable BFS results over the past year.
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 look progress development
of Thunderbird.
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”) continued its operational focus on the world
class Thunderbird Mineral Sand Project (Thunderbird), located near Derby in the Canning Basin region of Western Australia
(Figure 1), culminating with the completion of the Bankable Feasibility Study (BFS) for Thunderbird, delivering financially robust
metrics.
Figure 1: Location of Sheffield Resources Projects in Western Australia
Sheffield continues to advance offtake and funding opportunities. Interest in both funding and offtake has been strong and
following the conclusion of the BFS in March 2017, Sheffield announced the signing of five non-binding memorandums (MOUs)
for the future sale of premium zircon and zircon concentrate, with an additional non-binding MOU signed for the future sale of
LTR ilmenite. Negotiations are progressing toward binding offtake agreements with several counterparties whilst discussions
continue with other counterparties interested in securing commercial agreement for Sheffield’s high quality zircon and ilmenite
products.
Permitting activities continued to advance throughout the year. The environmental approval process is well advanced following
the completion of a Public Environmental Review in February 2017, with significant public support provided for the Thunderbird
project. In parallel, Native Title determination continues to progress with the substantive Native Title determination being
received from the National Native Title Tribunal on 15 June 2017. The Federal Court of Australia is currently considering an
appeal by Mount Jowlaenga Polygon #2 claimant group in relation to this matter. Sheffield anticipates conclusion of all
permitting matters in 2017.
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SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
KEY HIGHLIGHTS FOR THE FINANCIAL YEAR
Completion of a placement at an issue price of 52 cents per share, raising approximately $17.1m before costs
Delivery of the Bankable Feasibility Study in March 2017, confirming the Thunderbird project as a low risk, high
margin, long life mining project;
Ore reserve updated to 680.5 million tonnes @ 11.3% heavy mineral (HM) (proved & probable)
Joint venture formed with Independence Group NL (“IGO”) to explore Sheffield’s Fraser Range tenements
Substantive Native Title determination decision received from National Native Title Tribunal (“NNTT”)
Agreement to earn 100% interest in high grade Jamieson Gold (“Jamieson”) project.
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, size and quality of product 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.
During the year Sheffield continued its operational focus on its world class Thunderbird Mineral Sands Project, culminating with
the completion of the Bankable Feasibility Study (“BFS”) for Thunderbird, delivering financially robust metrics1.
Key results of the BFS include:
Pre-tax NPV of A$676 million, IRR of 25%
Long mine life of 42 years, offering leverage to multiple pricing cycles
Stage 1 capital of A$324 million plus A$24 million contingency (A$348m, US$261m)
EBITDA of A$5.1 billion over Life of Mine (“LOM”), averaging A$123 million per annum
Ore Reserve totalling 680.5 million tonne @ 11.3% heavy mineral (“HM”) (Proved and Probable) including 235.8 million
tonnes @ 13.3% HM as Proved Ore Reserve
Almost all of the first 10 years of scheduled production (97%) is from the highest confidence Proved Ore Reserve
category.
Zircon is the key value driver of the Project making up almost 62% of forecast revenue, with the remainder generated from
substantial amounts of high grade sulphate ilmenite and “Hi-Ti88”leucoxene. The high proportion of zircon sets Thunderbird
apart from many of the world’s operating and undeveloped mineral sands projects which are dominated by lower value ilmenite.
Current Mineral Resources at Thunderbird comprise 1.05 billion tonnes @ 12.2% HM at a 7.5% HM cut off (Measured, Indicated
and Inferred) containing 9.7Mt of zircon, 3.0Mt of high-titanium leucoxene and 35Mt of ilmenite. This places Thunderbird in the
top tier of mineral sands deposits globally, including those currently in production.
In conjunction with delivery of the BFS, an updated Ore Reserve comprising 680.5Mt @ 11.3% HM was finalised during the
quarter. The March 2017 Ore Reserve is based on the BFS supports a 42 year mine life for the Project with a very low life-of-
mine strip ratio (waste:ore) of 0.78:1 and includes a Proved Ore Reserve category of 235.8Mt @ 13.3% HM2.
1 Sheffield announced the results of the Thunderbird BFS to the ASX on 24 March, 2017 and also made the BFS Report available for
interested parties. See Sheffield’s website for details: www.sheffieldresources.com.au.
2 Sheffield ASX release dated 16 March, 2017.
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SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
Figure 2: Location of the Thunderbird HMS Project in Western Australia
The BFS is based on a conventional dozer trap mineral sands mining and processing operation involving an initial 8.5 million
tonnes per annum (Mtpa) throughput (single mining unit), doubling to 17Mtpa in Year 5 via the addition of a second mining unit
and processing stream.
The BFS has demonstrated a low risk, technically strong project with robust financial metrics as summarised in Table 3 below.
The financial analysis is based upon capital, cost and revenue assumptions derived from market contract and supply tenders,
industry expert product pricing, consensus foreign exchange rates and a real discount rate of 10%.
The forecast EBITDA of A$5.1 billion generated over a 42 year mine life underpins the strategic value of the Thunderbird Project.
The pre-tax NPV10 of A$676 million and significant pre-tax IRR of 25% support the Project’s viability and provide a compelling
case for financing and development.
The estimated initial development capital of A$348 million including A$24 million of contingency (7.5%) required over the first
two years to facilitate Stage 1 development is based on an Engineering, Procurement and Construction (EPC) approach to the
major process plant capital components. The Stage 2 expansion to approximately 17Mtpa throughput, expected to commence
in 2022, is estimated at A$195 million ($US146 million) (excluding contingency) and Sheffield’s current expectation is that this
will be predominantly funded from cash flows.
The mine schedule has been optimised to provide strong and consistent cash flows over the 42 year mine life. Figure 3
illustrates a consistent cost profile over the mine life with benefits of high grade, near surface ore in early production years,
resulting in superior financial metrics.
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SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
Figure 3: Annual EBITDA (real 2017 prices) and Cash Flows
Production
(Average tonnes per annum)
Financial Year
2019 – 20235
Financial Year
2024 – 20336
Premium Zircon
Zircon Concentrate
LTR Ilmenite
Hi-Ti88
51,500
49,100
88,700
80,100
264,500
481,600
12,800
23,000
Titano-magnetite
156,600
285,300
Table 1: BFS Production Assumptions
Commodity Prices (US$)4
Premium Zircon
Zircon Concentrate
LTR Ilmenite
Hi-Ti88
Titano-magnetite
Table 2: Commodity Price Assumptions
Financial Year
2019 – 20235
Financial Year
2024 – 20336
1,282
1,387
659
183
500
48
677
183
500
48
LOM7
76,100
68,500
387,800
20,300
229,800
LOM7
1,381
676
183
500
48
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SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
$AM, Real 2017 Prices
Financial Year
2019 – 20235
Financial Year
2024 – 20336
Revenue
Royalties
Net Revenue
Opex: Mining
Opex: Processing
Opex: Logistics
Opex: Site G&A
Total Opex1
EBITDA
A$ Site costs2 / tonne ore mined
A$ Revenue / tonne ore mined
US$ Site costs2 / tonne Premium Zircon
equivalent3,4
US$ Revenue / tonne Premium Zircon
equivalent3,4
854
(50)
803
(104)
(228)
(73)
(59)
(464)
339
14.65
25.99
721
3,875
(223)
3,652
(421)
(1,024)
(288)
(172)
(1,905)
1,746
11.11
22.29
692
LOM7
13,560
(781)
12,779
(1,828)
(4,093)
(1,005)
(707)
(7,633)
5,146
11.40
19.92
790
1,278
1,387
1,381
Table 3: Thunderbird Project Key Financial Metrics
Notes:
1. Excludes corporate overheads.
2.
3. Premium Zircon equivalent tonnes calculated as total revenues across all products/premium zircon price
4. AUD:USD = 0.75:1.00. USD long term commodity prices are quoted as FOB terms, sourced from TZMI (Premium
Includes sustaining capex, excludes corporate overheads and royalties.
Zircon, Zircon Concentrate, LTR Ilmenite and Hi-Ti88) and Ruidow (for Titano-magnetite).
5. Stage 1 time period depicted as Q4 FY2019 to Q3 FY2023 inclusive
6. Stage 2 first 10 years depicted as Q4 FY2023 to Q3 FY2033 inclusive
7. LOM (Life of Mine) describes the period 2018 to 2061, inclusive of the construction period.
Figure 4 depicts the Calendar Year 2020 TZMI revenue to cost (RC) ratio curve for the mineral sands industry. Thunderbird is
represented adjacent to first quartile producers, several of whom are vertically integrated and operate titanium feedstock
beneficiation plants.
Thunderbird’s position on an industry RC curve shows the Project is expected to be highly competitive and capable of operating
through multiple commodity pricing cycles, underpinning the Project’s global strategic value.
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SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
Thunderbird Ore Reserve
Figure 4: TZMI 2020 Industry Revenue to Cash Cost Curve
The Thunderbird BFS is based on one of the world’s largest and highest grade, zircon and ilmenite-rich mineral sands Ore
Reserves (Figure 5, Table 4). Approximately 97% of the first 10 years of production is scheduled from Proved Ore Reserves, the
highest confidence classification. Furthermore, Proved Ore Reserves features an exceptionally high in situ zircon grade of 1.00%
and 39% of the contained valuable heavy mineral (VHM)3.
Ore Reserve
Material (Mt)
Reserve
Category
Proved
235.8
Probable
444.8
Total
680.5
Table 4: Thunderbird Ore Reserve March 2017
Valuable HM Grade (In-Situ)
HM
(%)
13.3
10.2
11.3
Zircon
(%)
HiTi Leuc
(%)
Leucoxene
(%)
Ilmenite
(%)
Oversize
(%)
Slimes
(%)
1.00
0.80
0.87
0.29
0.26
0.27
0.26
0.26
0.26
3.55
2.85
3.10
13.7
11.0
12.0
16.5
15.2
15.7
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. 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.
3 Sheffield ASX announcement dated 16 March 2017.
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SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
Figure 5: Thunderbird Ore Reserves ranked against Ore Reserves of current mineral sands operations and projects.
BFS Product Test Work Results
Extensive test work and process design during the BFS and earlier studies has enabled Sheffield to develop a suite of high
quality mineral sands products with specifications suited to market requirements.
Premium Zircon – high quality ceramic grade zircon, >66% ZrO2;
LTR Ilmenite – pre-reduced, high grade TiO2 ilmenite with low alkalis and low chromium suitable for:
Feedstock for sulphate pigment plants - 56.1% TiO2;
Production of chloride grade and sulphate grade slag - 88% TiO2 with a high purity pig iron co-product;
Potential blended feedstock for chloride processing. LTR Ilmenite can be produced at higher grades (57-59%
TiO2) for this potential market;
Hi-Ti88 – suited to flux cored wire welding market, production of titanium sponge, or blended material for processing
via the chloride process;
Zircon concentrate – zircon rich (44% ZrO2, 20% TiO2) suited to the zirconium chemicals industry, and further
upgrading; and
Titano-magnetite – co-product from the LTR process suited to furnace protection in the steel the industry.
Test work undertaken by Roundhill Engineering Pty Ltd has determined the LTR conditions required to reduce the Fe2O3 content
of the ilmenite product to less than 13%. An ilmenite product with these specifications is expected to attract a further pricing
premium in the Chinese market4.
Marketing and Offtake
Offtake negotiations with a range of counterparties advanced during the financial year, culminating in multiple offtake MOUs
being secured for the high quality zircon and LTR ilmenite products from Thunderbird. Sheffield secured five non-binding
memorandums of understanding (MOUs) for the future sale of premium zircon and zircon concentrate with high quality industry
counterparties. The agreements account for 70% of premium zircon and 45% of zircon concentrate to be produced from Stage
4 Sheffield ASX announcement dated 13 March 2017.
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SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
1 of the Thunderbird project to European, Indian and Chinese consumers5. Additionally, a maiden LTR ilmenite MOU was
secured with the premier Chinese manufacturing entity CNNC Huayuan Titanium Dioxide Co. Ltd (CHTi). The agreement with
CHTi represents approximately 45% of the estimated total volume of LTR ilmenite to be produced from Stage 1 of Thunderbird6.
The Company remains focussed on negotiating binding offtake agreements with the counterparties whilst negotiations are
underway with a range of other parties interested in securing commercial agreement for Sheffield’s high quality zircon and
ilmenite products.
Project Financing
In conjunction with its financial advisor Azure Capital, Sheffield has commenced a process inviting a number of lenders and
strategic partners to participate in the development of the Thunderbird project. Initial screening of proposals are scheduled to
conclude in Q3 2017 and Sheffield will appraise the market of financial developments in the near future.
Project Execution Planning
Sheffield progressed the selection of an engineering, procurement and construction (“EPC”) contractor with discussions
advancing in accordance with the project schedule, with selection of a preferred contractor expected during Q3 2017.
A number of contracting activities were progressed, including:
Selection of mining services contractor
Electricity and gas supply sourcing
Accommodation village construction and facilities management
Various minor and preliminary works and owner works planning, including mining geotechnical pts and front end
engineering design work associated with the low temperature roast (“LTR”).
Tailings management studies
Sustainability
Permitting activities continued to advance throughout the period with the Environmental Protection Agency (“EPA”) Board
attending a site visit of the Thunderbird project and engaging with key community stakeholders. The environmental approval
process for Thunderbird remains on track for completion in 2017.
A positive good faith decision by the National Native Title Tribunal (“NNTT”) found in favour of Sheffield, followed by the
substantive Native Title determination by the NNTT clearing the way for the grant of the mining lease from the Western
Australian Government authorities. Subsequently, the Mount Jowlaenga Polygon #2 claimant group has lodged a notice of
appeal that is currently listed for hearing by the Federal Court of Australia in Q3 2017.
Thunderbird continues to have strong and wide local community support. Engagement with a range of stakeholders throughout
the Kimberley community continued throughout the year.
Work Ready Program
Sheffield commenced the recruitment of local Kimberley employees during the year and has committed to a construction ready
program to enable a wider cross section of traditional owners to be meaningfully engaged at Thunderbird during the
construction phase. The commencement of work ready programs during the second half of calendar 2017 shall provide
employment opportunities and skill growth pathways for up to 18 traditional owners that will focus on preparing participants for
employment and training during the project construction phase.
EXPLORATION ACTIVITIES
Dampier Regional Mineral Sands
Planning and permitting for regional exploration on the Dampier project for 2017 continued during the period. Projects are
expected to commence during the second half of 2017.
5 Sheffield ASX announcements dated 29 April 2017, 10 April 2017 and 4 April 2017.
6 Sheffield ASX announcement dated 29 May, 2017.
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Derby East Project
Sheffield is investigating the potential of the Derby East Project tenements, located 25km east of Derby, to yield commercial
quantities of sand for construction purposes.
Aircore drilling by Sheffield in October 2016 tested an area within its tenement E04/2390 with potential to yield significant
quantities of clean, angular silica sand suitable for construction, first identified by previous explorers. Sheffield’s drilling
intersected the sand unit in nine holes, beneath 0-12m of cover, over an area of about 6km by 2.5km with an average thickness
of about 34m.
A preliminary assessment of the sand unit for suitability as construction material was completed by Golder Associates Pty Ltd
with encouraging results. Sheffield intends to do further work to evaluate the opportunity.
Eneabba Mineral Sands
Figure 6: Eneabba Project Mineral Resources & Dunal HMS Targets
In May 2017 an exploration aircore drilling program was completed at the Robbs Cross and Thomsons prospects within the
Eneabba Project, near the town of Eneabba about 140km south of Geraldton in WA (Figure 6).
The drilling focussed on extension of dunal-style HMS mineralisation discovered by Sheffield in 20157. At Robbs Cross, 32 holes
were drilled for a total of 696m and at Thomsons 33 holes were drilled for a total of 1,083m.
7 Sheffield ASX announcement dated 23 July, 2015
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Both prospects have high-value heavy mineral assemblages reported from previous work: 12.5% rutile, 14.7% zircon, 4.1%
leucoxene and 47% ilmenite at Robbs Cross, and 12.3% rutile, 15.1% zircon, 3.6% leuxocene and 50% ilmenite at Thomsons,
and therefore represent opportunities to add to Sheffield’s HMS Mineral Resource base for the Eneabba Project, which currently
contains 6.76Mt of HM (Appendix 1). Results from the drilling are expected during Q3 2017.
Carawine Resources Pty Ltd
Carawine Resources Pty Ltd (Carawine) a wholly owned subsidiary of Sheffield, was created to hold Sheffield’s substantial non-
mineral sands exploration projects. These now include four gold, copper and base metal projects, each targeting high-grade
deposits in well-established mineralised provinces throughout Australia (Figure 7):
Jamieson Au-Cu-Ag-Zn-Pb project, VHMS targets
Oakover Cu-Co project, Zambian style Cu-Co targets
Paterson Au-Cu-Co(Zn-Pb) project, Nifty Cu-Co and Telfer Au-Cu targets
Fraser Range Ni-Cu-Co project (Independence Group NL (ASX:IGO) 51%, earning 70% by spending A$5 million), Nova-
Bollinger Ni-Cu-Co targets
Sheffield will consider options to unlock the value of these assets for shareholders in the near term. Current work planned for
Carawine’s projects include low-cost exploration programs aimed at defining and prioritising targets.
Figure 7: Carawine’s Project locations
Jamieson Project
In June 2017, Carawine secured an agreement to earn 100% of the Jamieson Project from Jamieson Minerals Pty Ltd (Figure 7)
by incurring $190,000 of exploration expenditure within the next two years, followed by a further $200,000 as a cash payment
or issue of shares. The project is located near the township of Jamieson in the central Victorian Goldfields and comprises
Exploration Licence 5523, containing the Hill 800 gold and Rhyolite Creek zinc-gold-silver prospects8.
Hill 800 was discovered by New Holland Mining NL (“New Holland”) in 1994, following sampling of outcropping gold-rich
gossans. The prospect is a volcanic-hosted massive sulphide (VHMS) gold-copper (Au-Cu) system with similar host rock, age and
mineralisation style to the Henty gold and Hellyer lead-zinc-silver-gold deposits in Western Tasmania.
8 Sheffield ASX announcement dated 28 June, 2017
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Review of Operations
New Holland drilled 51 RC and 6 diamond holes at Hill 800 (6,309m total) between 1996 and 1999, returning high-grade gold
results including:
33m @ 4.31g/t Au, from surface (HEC1)
13m @ 10.9g/t Au, from surface (HEC13), including 3m @ 38.8 g/t Au from surface
23.4m @ 4.56g/t Au, from 0.5m (HED1)
25m @ 4.72g/t Au, from 3m (HEC45), including 1m @ 24.0g/t Au from 16m
21m @ 4.04g/t Au, from 76m (HEC49), including 1m @ 20.9g/t Au from 80m
4m @ 7.03g/t Au, from 91m (HEC12), including 1m @ 28.9g/t Au from 184m and 1m @ 122g/t Au from 188m
(Figure 8; down hole widths may not represent true thickness.)
Gold mineralisation is associated with silica-sericite-pyrite alteration in intermediate volcanic rocks at the core of a well-defined
alteration zonation plunging approximately 70 degrees to the north. Within this zone, higher gold grades occur in a main, sub-
vertical lode, and two parallel mineralised trends in the footwall to the main lode. The effectiveness of prior drilling was
restricted by limited site preparation and the use of large truck-mounted drill rigs, leading to a number of oblique intersections
and holes missing mineralisation. The use of small diamond drill rigs and better drill site preparation presents an opportunity for
Carawine to more effectively test the interpreted lode geometry and target down-plunge extensions and potential parallel lodes.
The Rhyolite Creek Zn (Au-Ag) prospect, located about 5km south of Hill 800, was discovered by Goldsearch in 2008.
Goldsearch drilled one diamond hole in 2008 (RCD001), targeting a linear magnetic anomaly in an area of gold-silver-base
metal anomalism in surface geochemical samples.
The discovery diamond core hole RCD001 intersected a zone of strong albite-chlorite-silica alteration and sulphide
mineralisation (Figure 9), returning an interval of:
8m @ 3.7% Zn, 0.3% Pb, 0.1% Cu, 1.6g/t Au and 29g/t Ag from 220m including 1.4m @ 15.6% Zn, 1.5% Pb,
0.5% Cu, 7.4g/t Au and 113g/t Ag from 223m
Re-sampling of core within this interval, from 223.5 to 224.5m by Jamieson Minerals returned assay values of 20.3% Zn, 1.5%
Pb, 0.7% Cu, 178g/t Ag and 10.3g/t Au.
Zinc mineralisation was identified as being related to low-iron sphalerite and the footwall to this high-grade zone was reported as
being strongly altered intermediate volcanics, with significantly elevated zinc values over 52m downhole.
Figure 8: Hill 800 Long section, Main, Upper Footwall and Lower Footwall trends depicted. Most holes have been drilled oblique
to mineralisation, therefore the downhole widths stated may not represent true widths.
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Review of Operations
Goldsearch interpreted the mineralisation intersected in RCD001 to be the result of a structurally controlled hydrothermal
system (rather than VHMS mineralisation) and drilled a further four broadly spaced holes, with holes RCD002 and RCD004
testing within 200m and 150m of the original intercept. RCD002 intersected a diorite dyke at the target position and RCD004
intersected a broad zone of elevated zinc mineralisation with a 70m zone averaging 0.37% Zn from 233.6m.
Goldsearch concluded that drilling had defined a large zinc-gold-silver-copper mineralised system, which remained open in most
directions, and suggested further work was warranted to identify and target high-grade mineralisation, which remained untested.
(Goldsearch Quarterly Report, 29 April 2010 and open file reports).
Tenement EL5523 is located on unrestricted crown land within a geological province known as the Mt Useful Slate Belt (Figure
10). The region was founded on gold mining in the 1850’s and a number of gold mines have operated in the region, including
the A1 Mine near Gaffney’s Creek south of Kevington, currently operated by Centennial Mining Ltd. The tenement covers a
“window” of Cambrian-aged volcanic rocks of similar age to the Mt Read Volcanics in western Tasmania, a world-class VHMS
district. The discovery to date of two VHMS-style systems on the tenement confirms the outstanding potential of the project.
Typically, deposits of this style occur in clusters often defining significant mining camps. Gold-rich VHMS deposits are particularly
attractive given their high-grade and polymetallic nature. The project area is considered to be under-explored, with limited
systematic exploration for VHMS deposits completed to date9.
Figure 9: Rhyolite Creek cross-section through RCD001 and 002
9 Sheffield ASX announcement dated 28 June 2017
16
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
Figure 10: Jamieson Project regional geology (after Geol. Survey Victoria) showing windows of Cambrian Volcanics and EL5523
Oakover and Paterson Copper-Gold Projects
Carawine’s Oakover and Paterson Projects, located in the highly prospective Eastern Hamersley Basin and Paterson Province,
comprise eight granted exploration licences and five exploration licence applications totalling over 3,360 km2 (Figure 11). The
tenements cover three parallel geological provinces, which are highly prospective for large Proterozoic Cu-Au systems with
significant long-life mines operating in each region (e.g. Telfer Au-(Cu), Nifty Cu-(Co) and Woodie Woodie Mn).
17
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
Figure 11: Oakover Project tenements
Geological reconnaissance, prospect-scale geological mapping and rock chip sampling was undertaken during 2017 along with
historical exploration data review, aimed at assessing the exploration potential of the tenements and identifying targets for
further work.
At the Western Star copper prospect, detailed geological mapping and surface sampling has identified zones of high-grade
copper mineralisation up to 44.5% Cu, hosted by breccia and vein stockworks within Proterozoic dolomites.
18
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
Figure 12: Western Star prospect geological map and rock chip sample locations.
Fraser Range Joint Venture (Carawine 49%; Independence Group NL 51%, Earning to 70%)
In November 2016, Sheffield formed a Joint Venture with Independence Group NL (“IGO”) (ASX: IGO) to explore five Fraser
Range Nickel tenements. IGO are the Manager of the Joint Venture, and currently hold a 51% interest in the tenements. IGO can
earn an additional 19% interest by spending $5 million on the tenements within the next 5 years10. The Joint Venture provides
Sheffield with significant exposure to exploration success in the Fraser Range, as it focuses on developing the Thunderbird
Project.
Since commencement of the joint venture, IGO has completed a gravity survey on the Red Bull tenements E69/3052 and
E69/3033 and a detailed aircore drilling program of 89 holes on the Big Bullocks tenement E39/1733. Results are expected
during Q3 2017.
10 Sheffield ASX announcement dated 16 November, 2016
19
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Ore Reserves and Mineral Resources
Ore Reserves and Mineral Resources
Sheffield announced an updated Ore Reserve totalling 680.5 million tonnes @ 11.3% HM for the Thunderbird heavy mineral
sands deposit, in the Kimberley Region of Western Australia, on 16 March 2017, and has since completed 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 current July, 2016 Thunderbird deposit Measured and Indicated Mineral Resources
within scheduled mine designs 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
235.8
444.8
680.6
Deposit
Ore Reserve
Category
Ore Tonnes
(millions)
Proved
Thunderbird
Probable
Total
235.8
444.8
680.6
In-situ HM
Tonnes
(millions)
31.4
45.4
76.8
In-situ HM
Tonnes
(millions)
31.4
45.4
76.8
HM
Grade
(%)
13.3
10.2
11.3
HM
Grade
(%)
13.3
10.2
11.3
Valuable HM Grade (In-situ)2
Zircon
%
1.00
0.80
0.87
Zircon
(%)
7.5
7.8
7.7
HiTi
Leuc
%
0.29
0.26
0.27
Leuc
%
0.28
0.26
0.26
Ilmenite
%
3.55
2.85
3.10
Slimes
(%)
Osize
(%)
16.5
15.2
15.7
13.7
11.0
12.0
Mineral Assemblage3
HiTi
Leuc
(%)
2.2
2.5
2.4
Leuc
(%)
Ilmenite
(%)
Slimes
(%)
Osize
(%)
1.9
2.6
2.3
26.7
28.0
27.4
16.5
15.2
15.7
13.7
11.0
12.0
1) Ore Reserves are presented both in terms of in-situ VHM grade, and HM assemblage. 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. Ore Reserve is reported to a design overburden surface 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
20
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)
Measured
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
Eneabba Project Mineral Resources 2,4,6
Thunderbird
(>7.5% HM)
510
2,120
600
3,230
220
640
180
1,040
Mineral Resources
In-situ
HM
Tonnes
(millions)
HM
Grade
(%)
Zircon
(%)
45
140
38
223
32
76
20
128
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
42
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.
21
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 listed below and are available 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.
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
Thunderbird Ore Reserve Update
16 March 2017
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
T. Strickland
M. Teakle
T. Strickland
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
22
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Ore Reserves and Mineral Resources
COMPLIANCE STATEMENTS
PREVIOUSLY REPORTED INFORMATION
This report includes information that relates to Exploration Results, Mineral Resources and Ore Reserves prepared and first
disclosed under the JORC Code (2012) and a Bankable Feasibility Study and Technical Studies. The information was extracted
from the Company’s previous ASX announcements as follows:
June 2017 Quarterly Report: “QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 30 JUNE 2017” 27 July, 2017
Jamieson Gold Project Farm-In: “SHEFFIELD FARMS IN TO HIGH GRADE JAMIESON GOLD EXPLORATION PROJECT” 28
June, 2017
Maiden LTR ilmenite MOU: “SHEFFIELD SIGNS CORNERSTON ILMENITE MOU” 29 May, 2017
Zircon MOU: “SHEFFIELD SECURES FURTHER ZIRCON OFFTAKE” MOUs 26 April, 2017
Further Thunderbird MOU signed: “ADDITIONAL ZIRCON OFFTAKE MOU SIGNED” 10 April, 2017
Thunderbird MOUs for future sales of Zircon: “SHEFFIELD SIGNS OFFTAKE MOUs” 4 April, 2017
Thunderbird BFS: “THUNDERBIRD BFS DELIVERS OUTSTANDING RESULTS” 24 March, 2017
Thunderbird Ore Reserve: “THUNDERBIRD ORE RESERVE UPDATE” 16 March, 2017
LTR Ilmenite Test Results: “THUNDERBIRD ILMENITE EXCEEDS PREMIUM SPECIFICATION” 13 March, 2017
December 2016 Quarterly Report: “QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 DECEMBER 2016”
24 January, 2017
Fraser Range Joint Venture: “SHEFFIELD FORMS JOINT VENTURE WITH INDEPENDENCE GROUP IN FRASER RANGE”
16 November, 2016
McCalls Mineral Resource: “QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 30 JUNE 2016” 25 July, 2016
Thunderbird Mineral Resource: “SHEFFIELD DOUBLES MEASURED MINERAL RESOURCE AT THUNDERBIRD” 5 July,
2016
Robbs Cross and Thomsons Discovery: “NEXT GENERATION OF MINERAL SANDS DISCOVERIES AT ENEABBA” 23 July,
2015
This report also includes information that relates to 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.
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.
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 and Ore Reserves, the Bankable Feasibility
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.
23
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 2017. 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 activities of the Group during the course of the financial year were mineral sands development and exploration for
mineral sands and base metals within the state of Western Australia.
REVIEW OF OPERATIONS
Refer to pages 5-19 for the Review of Operations and pages 20-23 for Ore Reserves and Mineral Resources.
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
Director since 2 November 2015
Director since 14 December 2009
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 40 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, iron ore and mineral sands.
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 to create Evolution Mining Limited. He has raised in
excess of A$400 million in debt and equity from Australian and overseas markets.
24
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
During the last three years, Mr. McFadzean has served on the boards of the following public listed companies:
Blackstone Minerals Limited (since October 2016)
Venture Minerals Limited (June 2008 to October 2016)
Gryphon Minerals Limited (June 2014 to October 2016)
Mawson West Limited (October 2012 to January 2015)
Indiana Resources Limited (formerly IMX Resources Limited, since April 2015)
Mr Bruce McQuitty (B.Sc, MEconGeol)
Non-Executive Director
Bruce McQuitty has 34 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, Gympie Gold Limited
and Renison Goldfields Consolidated 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 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.
25
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
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 McFadzean
Mr B McQuitty
Mr D Archer
5
5
5
5
5
5
5
5
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 2016
Granted as
remuneration
Received on
exercise of
options
Other
changes
Balance
Report date
8,170,000
116,000
7,964,091
7,785,000
-
-
-
-
-
511,184
-
122,180
-
8,170,000
80,220
70,009
62,000
707,404
8,034,100
7,969,180
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 2016
Issued
Exercised
Other
changes
Balance
Report date
Vested &
Exercisable
Unvested
B McFadzean
3,368,444
285,481
(511,184)
D Archer
-
883,355
(122,180)
-
-
3,142,741
761,175
-
-
3,142,741
761,175
SHARE OPTIONS
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
2,100,000
877,672
0.001
0.001
0.001
Expiry date
8 February 2020
24 November 2020
24 November 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.
26
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
Options lapsed during the financial year
A total of 1,200,000 unlisted options lapsed during the financial year to 30 June 2017. The details of these options are as
follows:
Number of ordinary shares
under option
1,200,000
Exercise price
$
0.65
Expiry date
1 April 2017
Options on issue at the date of this report
Number of ordinary shares
under option1
500,000
1,400,000
1,600,000
3,700,000
4,000,000
2,100,000
346,657
700,000
235,000
Grant date
26 September 2013
19 March 2014
19 March 2014
8 February 2016
31 August 2016
24 November 2016
24 November 2016
24 November 2016
24 November 2016
Exercise price
$
0.66
0.87
1.16
0.001
0.676
0.001
0.001
0.001
0.84
Expiry date
26 September 2018
19 March 2019
19 March 2021
8 February 2020
31 August 2019
24 November 2020
24 November 2020
24 November 2020
24 November 2020
Weighted average closing price of Sheffield Resources Limited shares
The market weighted average closing price of Sheffield Resources Limited shares during the 2017 financial year was $0.58
(2016: $0.44).
DIVIDENDS
No dividends have been paid or declared during the financial year ended 30 June 2017 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.
CORPORATE GOVERNANCE STATEMENT
The Board of Sheffield Resources has adopted the spirit and intent of the 3rd Edition of the Corporate Governance Principles and
Recommendations of the ASX Corporate Governance Council.
The Company’s Corporate Governance Statement may be accessed from the Governance section of the Company’s website,
www.sheffieldresources.com.au. This document is regularly reviewed to address any changes in governance practices and the
law.
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’
27
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
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.
SUBSEQUENT EVENTS AFTER BALANCE DATE
There have been no additional matters or circumstances that have arisen after balance date that have significantly affected, or
may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future
financial periods.
28
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 2017.
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 2017 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 2017, 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 Managing Director 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 Managing Director.
29
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:
Revenue
30 June
2017
$’000
272
Net (loss)/profit before tax
(10,429)
Net (loss)/profit after tax
(9,214)
Share price at start of year
Share price at end of year
Dividends
$0.43
$0.53
-
Basic loss per share (cents)
(5.25)
Diluted loss per share
(cents)
(5.25)
30 June
2016
$’000
180
(4,541)
(1,754)
$0.48
$0.41
-
(1.24)
(1.24)
30 June
2015
$’000
265
(887)
636
$0.86
$0.48
-
0.47
0.46
30 June
2014
$’000
171
(3,754)
(2,554)
$0.36
$0.86
-
(2.12)
(2.12)
30 June
2013
$’000
290
(563)
121
$0.34
$0.36
-
0.12
0.12
30 June
2012
$’000
271
(1,145)
(1,145)
$0.27
$0.34
-
(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)
Mr Bruce McFadzean (Managing Director)
Mr Bruce McQuitty (Non-Executive Director)
Mr David Archer (Technical Director)
Mr Mark Di Silvio (Company Secretary & Chief Financial Officer)
Mr Stuart Pether (Chief Operating Officer), appointed 1 April 2017
Mr Jim Netterfield (BFS Study Manager)
Mr Neil Patten-Williams (Marketing Manager)
REMUNERATION OF KEY MANAGEMENT PERSONNEL
The table below shows the fixed and variable remuneration for key management personnel.
Short-term benefits
Post-employment
benefits
Share-based
payment
Relative proportion of
remuneration linked to
performance
Salary &
fees
$
Bonus
$5
Other
fees
$2
Super-
annuation
$
Options &
rights
$1
Total
$
Fixed
%4
Performance
based
%
75,000
175,000
50,000
175,000
175,000
200,000
194,444
56,250
1,100,694
-
-
-
-
-
-
-
-
-
3,754
4,566
5,000
5,596
4,946
2,763
-
513
7,125
16,625
30,251
16,625
16,625
35,000
18,472
5,344
-
85,879
887,869
1,084,060
-
85,251
496,531
693,752
401,591
598,162
194,499
432,262
558,202
771,118
109,586
171,693
100%
19%
100%
29%
33%
56%
28%
37%
0%
81%
0%
71%
67%
44%
72%
63%
27,138
146,067
2,648,278
3,922,177
2017
Directors
W Burbury
B McFadzean
B McQuitty
D Archer
Executives
M Di Silvio
J Netterfield
N Patten-Williams
S Pether3
Total
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 Pether remain subject to shareholder approval, the share based payment disclosure is based upon his contractual start date of employment which is commensurate
with the assumed date of grant.
30
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
Note 2: Other fees include, where applicable, the cost to the Company of providing fringe benefits and the fringe benefits tax on those benefits and the attributable non-cash benefit applied by
virtue of the Company’s Directors and Officers Liability policy.
Note 3: Mr Pether commenced employment on 1 April 2017.
Note 4: KMP’s holding executive positions sacrifice a portion of salary (20% - 50%) in lieu of a share based payment, incentivising performance.
Note 5: No cash bonuses were granted during 2017.
Short-term benefits
Post-employment
benefits
Share-based
payment
Relative proportion of
remuneration linked to
performance
2016
Salary &
fees
Bonus
Other fees
Superannuation
$
$1
$2
$
Options &
rights
$1
Total
$
Fixed
$
Performance
linked
$
Directors
W Burbury
B McFadzean
B McQuitty
D Archer
Executives
M Di Silvio
J Netterfield
98,596
116,666
243,315
194,166
65,972
125,000
N Patten-Williams
21,505
Total
865,220
-
-
-
-
-
-
-
-
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
100%
16%
100%
80%
40%
50%
41%
104,657
1,048,198
2,027,686
0%
84%
0%
20%
60%
50%
59%
Note 1: No cash bonuses were granted during 2016.
Note 2: Other fees include the attributable non-cash benefit applied by virtue of the Company’s Directors and Officers Liability policy.
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
exclude 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 2017 were:
Director
W Burbury1
B McFadzean2
B McQuitty
D Archer3
M DiSilvio
J Netterfield
S Pether
N Patten-Williams
Balance
1 July 2016
Granted as
remuneration
Received on
exercise of
options
Other
changes
Balance
30 June 2017
-
8,170,000
8,170,000
116,000
7,964,091
7,785,000
50,000
-
25,000
-
-
-
-
-
-
-
-
-
-
511,184
-
122,180
148,327
146,052
49,500
70,009
32,000
-
-
-
50,000
76,985
-
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.
676,684
8,034,100
7,939,180
198,327
146,052
75,000
76,985
31
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
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 2017 are:
Director
Balance
1 July 2016
Granted
Exercised
Other
changes
B McFadzean
3,368,444
285,481
(511,184)
D Archer
M Di Silvio
-
-
883,355
(122,180)
909,502
(148,327)
J Netterfield
805,269
81,566
(146,052)
N Patten-Williams
-
817,768
(76,985)
EXECUTIVE EMPLOYMENT AGREEMENTS
Balance
30 June
2017
3,142,741
761,175
761,175
740,783
740,783
-
-
-
-
-
Vested &
Exercisable
Unvested
-
-
-
-
-
3,142,741
761,175
761,175
740,783
740,783
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 15
$191,625
$175,000
3 months’ notice
D Archer
Technical Director
1 April 10
$191,625
$75,000
4 months’ notice
M Di Silvio
CFO & Company
Secretary
15 February 16
$191,625
$75,000
4 months’ notice
J Netterfield
Project Manager
16 November 15
$219,000
$50,000
4 months’ notice
N Patten-Williams
Marketing Manager
23 May 16
$219,000
$50,000
4 months’ notice
S Pether
Chief Operating
Officer
1 April 17
$246,375
$75,000
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 Pether remain subject to shareholder approval.
SHARES ISSUED
There were no shares issued to key management personnel during the financial year ended 30 June 2017.
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.
32
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
The following options remained on issue as at balance date and 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 15
3,000,000
B McFadzean2
Remuneration
24 November 16
142,741
D Archer1
D Archer3
M Di Silvio1
M Di Silvio4
Performance
1 May 16
700,000
Remuneration
16 November 16
61,175
Performance
15 February 16
700,000
Remuneration
17 November 16
61,175
J Netterfield1
Performance
16 November 15
700,000
J Netterfield5
Remuneration
17 November 16
40,783
N Patten-Williams1
Performance
23 May 16
700,000
N Patten-Williams6
Remuneration
24 November 16
40,783
0.559
0.529
0.529
0.529
0.529
0.529
0.509
0.529
0.529
0.599
0.001
0.001
0.001
0.001
0.001
0.001
0.001
0.001
0.001
0.001
Expiry date
8 February 20
24 November 20
24 November 20
24 November 20
15 February 20
24 November 20
8 February 20
24 November 20
24 November 20
24 November 20
Note 1: As at the date of this report, none of the performance based options had vested.
Note 2: Mr McFadzean was granted 285,481 remuneration options on 24 November 2016. As at the date of this report, 50% of the options had vested and Mr
McFadzean has exercised all of the options that have vested (namely 142,740 options).
Note 3: Mr Archer was granted 61,006 remuneration options on 16 November 2016. As at the date of this report, 100% of the options had vested and Mr Archer
has exercised all of the options. Mr Archer was further granted 122,349 remuneration options on 16 November 2016. As at the date of this report, 50% of the
options had vested and Mr Archer has exercised all of the options that have vested (namely 61,174 options).
Note 4: Mr Di Silvio was granted 87,153 remuneration options on 17 November 2016. As at the date of this report, 100% of the options had vested and Mr Di Silvio
has exercised all of the options. Mr Di Silvio was further granted 122,349 remuneration options on 17 November 2016. As at the date of this report, 50% of the
options had vested and Mr Di Silvio has exercised all of the options that have vested (namely 61,174 options).
Note 5: Mr Netterfield was granted 81,566 remuneration options on 17 November 2016. As at the date of this report, 50% of the options had vested and Mr
Netterfield has exercised all of the options that have vested (namely 40,783 options).
Note 6: Mr Patten-Williams was granted 36,202 remuneration options on 24 November 2016. As at the date of this report, 100% of the options had vested and Mr
Patten-Williams has exercised all of the options. Mr Patten-Williams was further granted 81,566 remuneration options on 24 November 2016. As at the date of this
report, 50% of the options had vested and Mr Patten-Williams has exercised all of the options that have vested (namely 40,783 options).
OPTIONS ISSUED DURING THE FINANCIAL YEAR TO KEY MANAGEMENT PERSONNEL
Name
B McFadzean
Mr Archer
Mr Archer
Mr Di Silvio
Mr Di Silvio
Mr Netterfield
Mr Patten-Williams
Mr Patten-Williams
Number of
options issued
Year granted
Vested %
Forfeited %
285,481
61,006
122,349
87,153
122,349
81,566
81,566
36,202
2016
2016
2016
2016
2016
2016
2016
2016
50%
100%
50%
100%
50%
50%
50%
50%
0%
0%
0%
0%
0%
0%
0%
0%
OPTIONS EXERCISED DURING THE FINANCIAL YEAR
1,004,728 unlisted options were exercised during the financial year to 30 June 2017. The details of these options are as
follows:
Number of ordinary shares
under option
Exercise price
$
473,713
531,015
0.001
0.001
Expiry date
8 February 20
24 November 20
33
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
The issuing entity was Sheffield Resources Limited. No amount was unpaid on these shares. There were no other shares issued
by Sheffield Resources Limited as a result of exercise of options during the year and to the date of this report.
OPTIONS GRANTED
The following options had been granted to key management personnel as at balance date and the date of this report:
Name
Option Type
Grant date
No. of
unquoted
options
Fair value at
grant date per
option
$
Fair value at
grant date
$
Exercise
price
$
Expiry date
B McFadzean1
Performance
2 November 15
3,000,000
B McFadzean2
Remuneration
24 November 16
142,741
D Archer1
D Archer3
Performance
1 May 16
700,000
Remuneration
16 November 16
61,175
M Di Silvio1
Performance
15 February 16
700,000
M Di Silvio4
Remuneration
17 November 16
61,175
J Netterfield1
Performance
16 November 15
700,000
J Netterfield5
Remuneration
17 November 16
40,783
N Patten-Williams1
Performance
23 May 16
700,000
N Patten-Williams6
Remuneration
24 November 16
40,783
Mr S Pether7
Performance
1 April 17
1,700,000
Mr S Pether7
Remuneration
1 April 17
135,678
0.559
0.529
0.529
0.529
0.529
0.529
0.509
0.529
0.529
0.599
0.499
0.499
1,677,000
0.001
8 February 20
75,510
370,300
32,362
370,300
32,362
356,300
21,574
370,300
24,429
848,300
67,703
0.001
0.001
0.001
0.001
0.001
0.001
0.001
0.001
0.001
0.001
0.001
24 November 20
1 May 20
24 November 20
15 February 20
24 November 20
8 February 20
24 November 20
23 May 20
24 November 20
1 April 21
1 April 21
Note 1: As at the date of this report, none of the performance based options had vested.
Note 2: Mr McFadzean was granted 285,481 remuneration options on 24 November 2016. As at the date of this report, 50% of the options had vested and Mr
McFadzean has exercised all of the options that have vested (namely 142,740 options).
Note 3: Mr Archer was granted 61,006 remuneration options on 16 November 2016. As at the date of this report, 100% of the options had vested and Mr Archer
has exercised all of the options. Mr Archer was further granted 122,349 remuneration options on 16 November 2016. As at the date of this report, 50% of the
options had vested and Mr Archer has exercised all of the options that have vested (namely 61,174 options).
Note 4: Mr Di Silvio was granted 87,153 remuneration options on 17 November 2016. As at the date of this report, 100% of the options had vested and Mr Di Silvio
has exercised all of the options. Mr Di Silvio was further granted 122,349 remuneration options on 17 November 2016. As at the date of this report, 50% of the
options had vested and Mr Di Silvio has exercised all of the options that have vested (namely 61,174 options).
Note 5: Mr Netterfield was granted 81,566 remuneration options on 17 November 2016. As at the date of this report, 50% of the options had vested and Mr
Netterfield has exercised all of the options that have vested (namely 40,783 options).
Note 6: Mr Patten-Williams was granted 36,202 remuneration options on 24 November 2016. As at the date of this report, 100% of the options had vested and Mr
Patten-Williams has exercised all of the options. Mr Patten-Williams was further granted 81,566 remuneration options on 24 November 2016. As at the date of this
report, 50% of the options had vested and Mr Patten-Williams has exercised all of the options that have vested (namely 40,783 options).
Note 7: Options granted to Mr Pether 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 2016 ANNUAL GENERAL MEETING
Sheffield Resources Limited received 97% of yes votes on its remuneration report for the 2016 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
34
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
June 2017
$
40,700
June 2016
$
38,500
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 36 and forms part of this Directors’ report for the year ended 30 June 2017.
Signed in accordance with a resolution of the Directors.
Mr Bruce McFadzean
Managing Director
Perth, 12 September 2017
35
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 2017, 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
12 September 2017
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 WA 6849 | Telephone +61 (08) 9227 7500 | Fax +61 (08) 9227 7533
Email: mailbox@hlbwa.com.au | Website: 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 world-wide organisation of accounting firms and business advisers
36
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Consolidated Statement of Comprehensive Income
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2017
Revenue and other income
Employee benefits expense
Depreciation expense
Other expenses
Share based payments
Write off exploration costs
Revaluation of financial assets
Loss from sale of interest in permits
Loss before income tax benefit
Income tax benefit
Loss for the year
Other comprehensive income
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year
Basic loss per share (cents per share)
Dilutive loss per share (cents per share)
Consolidated
Consolidated
2017
$
2016
$
271,866
180,214
(1,394,409)
(651,155)
(49,402)
(51,187)
(2,373,404)
(1,273,756)
(3,572,590)
(1,048,198)
(1,792,204)
(1,023,083)
-
(100,055)
(1,518,951)
(573,354)
(10,429,094)
(4,540,574)
1,214,716
2,786,673
(9,214,378)
(1,753,901)
-
-
(9,214,378)
(1,753,901)
(5.25)
(5.25)
(1.24)
(1.24)
Notes
2
2
9
3
4
5
5
The Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes
37
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
Current Assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Total Current Assets
Non-Current Assets
Plant and equipment
Deferred exploration and evaluation 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
2017
$
2016
$
6
7
8
9
10
11
12
13
13
8,334,797
5,007,475
289,265
-
344,192
49,944
8,624,062
5,401,611
107,289
101,174
38,524,480
32,313,985
38,631,769
32,415,159
47,255,831
37,816,770
1,279,017
2,408,969
270,491
137,866
1,549,508
2,546,835
1,549,508
2,546,835
45,706,321
35,269,935
54,721,957
38,643,783
6,069,893
2,497,303
(15,085,529)
(5,871,151)
45,706,321
35,269,935
The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes
38
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Consolidated Statement of Changes in Equity
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2017
Balance as at 1 July 2016
Loss for the year
Total comprehensive loss for the year
Shares issued during the year
Share issue costs
Recognition of share-based payments
Balance as at 1 July 2015
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 2016
Consolidated
Issued capital
Accumulated
losses
$
$
Reserves
$
Total
$
38,643,783
(5,871,151)
2,497,303
35,269,935
-
-
(9,214,378)
(9,214,378)
17,129,802
(1,051,628)
-
-
-
-
-
-
-
-
(9,214,378)
(9,214,378)
17,129,802
(1,051,628)
3,572,590
3,572,590
54,721,957
(15,085,529)
6,069,893
45,706,321
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)
-
-
-
-
-
-
-
-
(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
The Consolidated Statement of Changes in Equity should be read in conjunction with accompanying notes
39
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Consolidated Statement of Cash Flows
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2017
Cash flows from operating activities
Research and development tax offset
Payments to suppliers and employees
Interest received
Return of bond payments
Consolidated
Consolidated
Notes
2017
$
2016
$
1,214,716
2,786,673
(4,754,223)
(1,923,022)
259,286
44,516
170,806
-
Net cash (used in) operating activities
6
(3,235,705)
1,034,457
Cash flows from investing / interest in activities
Proceeds from sale of interest in permits
Payments for exploration and evaluation expenditure
Proceeds from disposal of other financial assets
Purchase of plant and equipment
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 increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
500,000
-
(10,021,650)
(6,409,094)
62,020
(55,517)
-
(46,939)
(9,515,147)
(6,456,033)
17,129,802
5,618,499
(1,051,628)
(312,421)
16,078,174
5,306,078
3,327,322
(115,498)
5,007,475
5,122,973
Cash and cash equivalents at end of year
6
8,334,797
5,007,475
The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes
40
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
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 2017, 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 12 September 2017.
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 2017
In the year ended 30 June 2017, 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 Standards and Interpretations in issue but are not yet adopted for the year
ended 30 June 2017. As a result of this review the Directors have determined that the following Standards and
Interpretations will have a material effect on Group accounting policies in future financial periods, namely:
AASB 9 Financial Instruments
AASB 16 Leases
The Company has elected not to early adopt these Standards and Interpretations and have not quantified the
material effect on application on future periods.
AASB 15 Revenue from Contracts with Customers
AASB 15 Revenue from Contracts with Customers is a new Standard introduced by AASB to replace AASB 118.
The new Standard is aimed at improving financial reporting of revenue and comparability to provide better clarity
on revenue recognition on areas where existing requirements unintentionally created diversity in practice. AASB
15 deals with revenue recognition and establishes principles for reporting useful information to users of financial
statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s
contracts with customers. It also introduces new cost guidance which requires certain costs of obtaining and
fulfilling contracts to be recognised as separate assets when specified criteria are met.
41
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
(C)
ADOPTION OF NEW AND REVISED STANDARDS (CONTINUED)
When applying AASB 15 for the first time, an entity shall apply the Standard in full for the current period. In
respect of prior periods, the transition guidance grants entities an option to either apply AASB 15 in full to prior
periods or to retain prior period figures as reported under the previous standards, recognising the cumulative
effect of applying AASB 15 to all contracts that had not yet been completed at the beginning of the reporting
period as an adjustment to the opening balance of equity at the date of first-time adoption.
The Directors have elected to apply the transition method applicable to AASB 15 Revenue from Contracts with
Customers from 1 July 2018. At this stage, the implications of AASB 15 have been determined as immaterial.
Other than the above, the Directors have determined that there is no material impact of the Standards and
Interpretations in issue not yet adopted on the Company and, therefore, no material 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 2017. 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.
(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
2017 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.
(F)
GOING CONCERN
The Group recorded a consolidated loss of $9,214,378 for the financial year ended 30 June 2017 (2016:
$1,753,901) and cash outflows from operating and investing activities of $12,750,852 (2016: $5,421,576). At
30 June 2017, the Group has $8,334,797 in cash and cash equivalents (2016: $5,007,475).
The Board continually monitor the cash requirements of the Group and anticipate that further funding will be
required during the 2017/2018 financial year to advance project development.
On this basis the financial report has been prepared on a going concern basis.
42
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
(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.
Description of Projects
i.
Thunderbird Project
This project consists of mineral sand tenements located in the Canning Basin that form part of the
potential Thunderbird mineral sand mining operation.
ii.
Carawine Projects
Holds the substantial non mineral sands exploration projects including gold, copper and base metals in
Western Australia and Victoria.
iii.
Sheffield Project
This project consists of mineral sand exploration tenements located in Western Australia.
iv.
Unallocated items
Part of the following items and associated assets and liabilities are not allocated to operating segments
as they are not considered part of the core operations of any segment:
corporate expenses; and
share-based payment expense
(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.
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
43
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
(I)
INCOME TAX (CONTINUED)
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.
(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.
44
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
(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.
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.
(O)
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.
(P)
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 as current liabilities 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 liabilities 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.
45
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
(P)
LEAVE BENEFITS (CONTINUED)
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.
(Q)
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 exploitation 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.
(R)
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.
(S)
LEASES
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers
substantially all the risks and rewards incidental to ownership to the Group is classified as a finance lease.
Finance leases are capitalised at the commencement of the lease inception date fair value of the leased property
or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between
finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are recognised in the finance costs in the statement of profit or loss.
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.
(T)
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.
46
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
(T)
PROVISIONS (CONTINUED)
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.
(U)
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.
(V)
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.
For plant and equipment, impairment losses are recognised in the statement of comprehensive income in the cost
of sales line item.
47
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
(V)
PLANT AND EQUIPMENT (CONTINUED)
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.
48
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
NOTE 2: REVENUE AND EXPENSES
(a) Revenue and other income
Interest received
Other income
(b) Expenses
Interest expense
Investor and public relations expense
Accounting fees
Legal fees
Conferences and seminars
Operating lease rental expense
Consultancy fees
Other expenses
NOTE 3: LOSS FROM SALE OF INTEREST IN PERMITS
Proceeds from sale of interest in permits
Expenditure incurred on interest in permits sold
Net loss
Consolidated
2017
$
259,792
12,074
271,866
379
57,148
59,490
62,942
104,640
242,326
820,205
1,026,274
2016
$
180,214
-
180,214
768
38,622
52,850
25,094
37,510
163,678
446,027
509,207
2,373,404
1,273,756
2017
$
500,000
(2,018,951)
(1,518,951)
2016
$
150,000
(723,354)
(573,354)
49
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
NOTE 4: INCOME TAX
2017
$
2016
$
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 loss before income tax
Income tax benefit calculated at 27.5% (30% in 2016)
(10,429,094)
(4,540,574)
(2,868,000)
(1,362,172)
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
Immediate deduction for exploration costs
Unrecognised tax losses
Research & development tax offset
982,462
28,186
1,053,097
314,459
(17,973)
479,769
(115,457)
(101,950)
-
30,017
(2,755,954)
-
3,675,666
657,850
1,214,716
2,786,673
Income tax benefit reported in the statement of comprehensive income
1,214,716
2,786,673
The tax rate used in the above reconciliation is the corporate tax rate of 27.5% payable by Australian corporate entities on
taxable profits under Australian tax law. The tax rate used in the previous reporting period was 30%.
The Company has tax losses arising in Australia. The tax benefit of these losses of $15,047,548 (2016: $10,154,398) 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 and liabilities
Deferred tax assets have not been recognised in respect of the following items:
Deductible temporary differences
Tax losses
Adjustment in tax losses disclosures
Exploration and evaluation expenditure
Consolidated
2017
$
2016
$
390,894
236,163
13,830,064
3,080,697
1,217,485
7,073,701
(10,594,232)
(9,694,195)
4,844,210
696,366
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.
50
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
NOTE 5: EARNINGS/LOSS PER SHARE
Basic loss per share:
Continuing operations
Total basic loss per share
Consolidated
2017
Cents per
share
(5.25)
(5.25)
2016
Cents per
share
(1.24)
(1.24)
The loss and weighted average number of ordinary shares used in the calculation
of basic loss per share is as follows:
Loss from continuing operations
(9,214,378)
(1,753,901)
Weighted average number of ordinary shares for the purposes of basic earnings per
share
175,396,837
141,620,398
Number
Number
Dilutive loss per share:
Continuing operations
Total dilutive loss per share
(5.25)
(5.25)
(1.24)
(1.24)
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.
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short-term deposits
Consolidated
2017
$
2016
$
1,331,797
2,007,475
7,003,000
3,000,000
8,334,797
5,007,475
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.
51
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
NOTE 6: CASH AND CASH EQUIVALENTS (CONTINUED)
(i) Reconciliation of loss after tax for the year to net cash flows from operating
activities
Loss after tax for the year
Equity settled share based payment
Depreciation
Write off of exploration expenditure
Loss on sale of permits
Profit on sale of investments
Financial asset revaluation
(Increase)/decrease in assets:
Current receivables
Increase/(decrease) in liabilities:
Current trade and other payables
Provision for employee benefits
Net cash (used in) /from operating activities
NOTE 7: TRADE AND OTHER RECEIVABLES
Trade receivables
GST recoverable
Prepaid expenses
Bank guarantees (i)
Accrued interest
Other receivables
Consolidated
2017
$
2016
$
(9,214,378)
(1,753,901)
3,572,590
1,048,198
49,402
51,187
1,792,204
1,023,083
1,518,951
573,354
(12,074)
-
-
100,055
54,926
(26,008)
(1,129,952)
132,626
75,988
(57,499)
(3,235,705)
1,034,457
-
131,894
30,786
92,445
5,519
28,621
978
146,392
54,847
134,362
7,613
-
289,265
344,192
(i) Bank guarantees are made up of the following:
-
-
$62,445 is held as security for the office lease and bears 2.5% interest.
$30,000 is held as security for the credit card facility and bears 2.4% 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.
52
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
NOTE 8: PLANT AND EQUIPMENT
Non-Current Assets
At 1 July 2016, net of accumulated depreciation and impairment
Additions
Depreciation charge for the year
At 30 June 2017, net of accumulated depreciation and impairment
Non-Current Assets
Cost or fair value
Accumulated depreciation and impairment
Net carrying amount
Consolidated
2017
$
2016
$
101,174
55,517
(49,402)
107,289
105,423
46,938
(51,187)
101,174
628,107
572,590
(520,818)
(471,416)
107,289
101,174
The carrying value of plant and equipment held under finance leases and hire purchase contracts at 30 June 2017 is nil.
(2016: 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 interest in tenements
Expenditure impaired / written off1
Total exploration and evaluation expenditure
Consolidated
2017
$
2016
$
32,313,985
26,186,268
10,021,650
(2,018,951)
7,874,154
(723,354)
(1,792,204)
(1,023,083)
38,524,480
32,313,985
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.
1Capitalised exploration expenditure relating to the surrender of exploration licences or where rights to tenure is not
current, have been written off in full during the year.
53
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
NOTE 10: TRADE AND OTHER PAYABLES
Trade creditors
Accruals
Other creditors
Consolidated
2017
$
2016
$
1,114,965
1,484,120
75,830
88,222
907,503
17,346
1,279,017
2,408,969
Trade payables are non-interest bearing and are normally settled on 30-day terms. Information regarding the interest rate
and liquidity risk exposure is set out in Note 15.
NOTE 11: PROVISIONS
Employee benefits
270,491
137,866
The provision for employee benefits represents annual leave and long service leave payable.
NOTE 12: ISSUED CAPITAL
181,358,784 (2016: 147,414,062) Ordinary shares issued and fully paid
54,721,957
38,643,783
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
2017
2016
No.
$
No.
$
Movement in ordinary shares on issue
Balance at beginning of financial year
147,414,062
38,643,783
134,430,747
33,337,705
Issue of fully paid ordinary shares at $0.52 each
32,939,994
17,128,798
-
-
Issue of fully paid ordinary shares at $0.44 each
-
-
12,310,815
5,416,749
Issued for cash on exercise of share options
1,004,728
1,004
672,500
201,750
Share issue costs
-
(1,051,628)
-
(312,421)
Balance at end of financial year
181,358,784
54,721,957
147,414,062
38,643,783
54
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
NOTE 12: ISSUED CAPITAL (continued)
Movements in options over ordinary shares on issue
Number at beginning of financial year
Issue of unlisted options exercisable at $0.001 each on or before 8 February
2020
Issue of unlisted options exercisable at $0.676 each on or before 31 August
2019
Issue of unlisted options exercisable at $0.001 each on or before 31 August
2019
Issue of unlisted options exercisable at $0.84 each on or before 24 November
2020
Exercise of unlisted options exercisable at $0.30 each on or before 13
December 2015
Exercise of unlisted options exercisable at $0.001 each on or before 8
February 2020
Exercise of unlisted options exercisable at $0.001 each on or before 24
November 2020
Lapsing of unlisted options
Number at end of financial year
2017
No.
2016
No.
8,873,713
7,425,000
-
4,173,713
4,000,000
3,677,672
235,000
-
-
-
(672,500)
(473,713)
(531,015)
-
-
(1,200,000)
(2,052,500)
14,581,657
8,873,713
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
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
2017
$
2016
$
(5,871,151)
(4,117,250)
(9,214,378)
(1,753,901)
(15,085,529)
(5,871,151)
2,497,303
1,449,105
3,572,590
1,048,198
6,069,893
2,497,303
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.
55
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
NOTE 14 : SHARE BASED PAYMENT PLANS
The following share-based arrangements were in place during the current period, issued in accordance with the
Employee Share Option Plan of the Company:
Number
Grant date
Expiry date
Exercise
Price
Fair value at
grant date
SERIES 10
SERIES 11
700,000
24/11/2016
24/11/2020
235,000
24/11/2016
24/11/2020
0.001
0.84
419,355
64,337
The following share-based payment arrangements were in place in the current and prior period and were not subject to an
Employee Share Option plan:
Number
Grant date
Expiry date
Exercise price
SERIES 2
SERIES 3
SERIES 4
SERIES 5
SERIES 6
SERIES 71
SERIES 82
SERIES 93
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
3,000,000
02/11/2015
02/02/2020
700,000
16/11/2015
02/02/2020
4,000,000
31/08/2016
31/08/2019
877,672
17/11/2016
24/11/2020
2,100,000
17/11/2016
24/11/2020
SERIES 124
1,835,679
01/04/2017
01/04/2021
0.66
0.87
1.16
0.001
0.001
0.676
0.001
0.001
0.001
Fair value at
grant date
94,466
297,928
358.671
1,883,226
409,945
1,184,494
464,357
1,111,065
916,141
1On 31 August 2016 the Company granted 4,000,000 options to consultants in consideration for ongoing markets
advisory services. The options have a 3 year term and an exercise price of $0.676. The options may be exercised at any
time on or before 31 August 2019.
2On 17 November 2016 following approval at a General Meeting, the Company granted 877,672 options to key
management personnel who accept a portion of their salary package as equity in lieu of cash. 265,927 options vested
immediately with the remainder vesting pro rata each quarter during a period of one year from grant date. At 30 June
2017, 346,657 options remain unvested. The options have a 4 year term and an exercise price of $0.001.
3On 17 November 2016 following approval at a General Meeting, the Company granted 2,100,000 options to key
management personnel subject to specific performance conditions. The vesting period for these options occurs over 3
years with an exercise price of $0.001.
4Series 12 have been granted, subject to shareholder approval. Shareholder approval shall be sought at the Company’s
2017 annual general meeting of shareholders.
The following share options were exercised during the year:
Number exercised
Exercise date
SERIES 6
SERIES 6
SERIES 6
SERIES 6
SERIES 8
SERIES 8
184,222
92,111
78,952
118,428
184,361
346,654
04/07/2016
15/08/2016
17/08/2016
08/12/2016
08/12/2016
15/05/2017
Share price at exercise date
$
0.43
0.76
0.70
0.62
0.62
0.57
56
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
NOTE 14 : SHARE BASED PAYMENT PLANS (continued)
The following table illustrates the number (No.) and weighted average exercise prices of and movements in share options
in existence during the year:
2017
No.
2016
No.
2017
Weighted
average
exercise
price
Outstanding at the beginning of the year
11,430,755
0.37
7,425,000
Granted during the year
Exercised during the year
Lapsed during period
Outstanding at the end of the year
Exercisable at the end of the year
7,191,308
(1,004,728)
(1,200,000)
16,417,335
14,581,657
0.40
6,730,755
0.001
(672,500)
0.65
(2,052,500)
0.39
11,430,755
0.43
8,873,713
2016
Weighted
average
exercise
price
0.71
0.001
(0.30)
(0.43
0.37
0.16
The outstanding balance as at 30 June 2017 is represented by 16,417,335 options over ordinary shares with a
weighted average exercise price of $0.39 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 2017 is 2.66 years
(2016: 3.34 years).
The weighted average share price at the date of options exercised during the year ended 30 June 2017 was $0.001
(2016: $0.30).
The range of exercise prices for options outstanding at the end of the year is $0.001 - $1.16 (2016: $0.001 - $1.16).
The fair value of the equity-settled share options granted 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 7
SERIES 8
SERIES 9
SERIES 10
SERIES 11
SERIES 12
Dividend yield (%)
Expected volatility (%)
-
74
-
75
-
75
-
75
Risk-free interest rate (%)
1.46
2.10
2.10
2.10
Expected life of option
(years)
3
4
4
4
-
71
2.1
4
Exercise price
0.676
0.001
0.001
0.001
0.84
Grant date share price
(cents)
65
53
53
60
60
-
55
3.4
5
1.16
68
57
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
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 2016.
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
Trade and other receivables
Cash and cash equivalents
Available-for-sale financial assets
Financial liabilities
Trade and other payables
(c) Financial risk management objectives
Consolidated
2017
$
2016
$
289,265
344,192
8,334,797
5,007,475
-
49,944
1,279,017
2,408,969
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.
58
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
NOTE 15: FINANCIAL INSTRUMENTS (continued)
2017
2016
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
1.49
1,290,281
2.11
7,136,961
Non-interest bearing
-
196,820
Total Financial
Assets
Financial liabilities
8,624,062
Non-interest bearing
-
1,279,017
Total Financial
Liabilities
1,279,017
-
-
-
-
-
-
-
-
-
-
-
-
1,290,281
1.96
2,007,475
7,136,961
2.37
3,134,363
196,820
-
259,773
8,624,062
5,401,611
1,279,017
-
2,408,969
1,279,017
2,408,969
-
-
-
-
-
-
-
-
-
-
-
-
2,007,475
3,134,363
259,773
5,401,611
2,408,969
2,408,969
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 immaterial.
(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.
59
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
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:
2017
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
1,279,017
1,279,017
1,279,017
1,279,017
1,279,017
1,279,017
-
-
-
-
-
-
-
-
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
-
-
-
-
-
-
-
-
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
2017
$
2016
$
2,640,800
2,532,683
Other commitments
Sheffield Resources Limited has bank guarantees totalling $92,445 (see details per Note 7) at 30 June 2017.
60
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
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
2017
%
2016
%
2017
$
2016
$
Moora Talc Pty Ltd
Ironbridge Resources Pty Ltd
Thunderbird Operations Pty Ltd
Carawine Resources Pty Ltd
Australia
Australia
Australia
Australia
100
100
100
100
100
100
-
-
100
100
100
100
100
100
-
-
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 2017 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)
Mr Mark Di Silvio (Company Secretary & Chief Financial Officer)
Mr Neil Patten-Williams (Marketing Manager)
Mr Stuart Pether (Chief Operating Officer), appointed 1 April 2017
(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
Options & rights
Total
Detailed remuneration disclosures are provided in the Remuneration Report.
Consolidated
2017
$
1,127,832
146,067
2,648,278
3,922,177
2016
$
874,831
104,657
1,048,198
2,027,686
61
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
NOTE 18: DIRECTORS AND EXECUTIVES DISCLOSURES (continued)
(B)
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.
NOTE 19: PARENT ENTITY DISCLOSURES
ASSETS
Current assets
Non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
TOTAL LIABILITIES
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Financial performance
Loss for the year
Other comprehensive income
Total comprehensive income
2017
$
2016
$
8,624,063
5,351,667
38,631,766
32,465,103
47,255,829
37,816,770
1,549,508
2,546,835
1,549,508
2,546,835
54,721,957
38,643,783
6,069,893
2,497,303
(15,085,529)
(5,871,151)
45,706,321
35,269,935
(9,214,378)
(1,753,901)
-
-
(9,214,378)
(1,753,901)
Contingent liabilities
As at 30 June 2017 and 2016, the Company had no contingent liabilities.
Contractual commitments
As at 30 June 2017 and 2016, the Company had no contractual commitments other than those commitments disclosed in
Note 16.
Guarantees entered into by parent entity
As at 30 June 2017, the Group has the following financial guarantees:
$62,445 is held as security for the office lease and bears 2.5% interest (2016: $101,099).
$30,000 is held as security for the credit card facility and bears 2.4% interest (2016: $33,263).
NOTE 20: AUDITOR’S REMUNERATION
The auditor of Sheffield Resources Limited is HLB Mann Judd.
Amounts received or due and receivable by HLB Mann Judd for:
An audit or review of the financial report of the entity
40,700
38,500
2017
$
2016
$
62
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2017
NOTE 21: EVENTS AFTER THE REPORTING PERIOD
There have been no additional matters or circumstances that have arisen after balance date that have significantly
affected, or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of
the Group in future financial periods.
63
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 2017 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.
c.
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
the 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 2017.
This declaration is signed in accordance with a resolution of the Board of Directors.
Mr Bruce McFadzean
Managing Director
12 September 2017
64
INDEPENDENT AUDITOR’S REPORT
To the members of Sheffield Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Sheffield Resources Limited (“the Company”) and its
controlled entities (“the Group”), which comprises the consolidated statement of financial position as
at 30 June 2017, 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 to the
financial statements, including a summary of significant accounting policies, and the directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a)
giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its
financial performance for the year then ended; and
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (“the Code”) that are relevant to our audit of the financial report in Australia. We have
also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4 130 Stirling Street Perth WA 6000 | PO Box 8124 Perth BC WA 6849 | Telephone +61 (08) 9227 7500 | Fax +61 (08) 9227 7533
Email: mailbox@hlbwa.com.au | Website: 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 world-wide organisation of accounting firms and business advisers
65
Key Audit Matter
How our audit addressed the key audit matter
Carrying amount of exploration and evaluation expenditure
Note 9 of the financial report
The carrying amount of exploration and
evaluation expenditure as at 30 June 2017 was
$38,524,480.
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources, the Group
capitalises all exploration and evaluation
including acquisition costs and
expenditure,
subsequently applies
the cost model after
recognition.
the carrying amount of
Our audit focussed on the Group’s assessment
of
the capitalised
exploration and evaluation asset, as this is one
of the most significant assets of the Group. We
planned our work to address the audit risk that
the capitalised expenditure may no longer meet
the recognition criteria of
In
addition, we considered it necessary to assess
whether facts and circumstances existed to
suggest
the carrying amount of an
exploration and evaluation asset may exceed its
recoverable amount.
the standard.
that
Going concern
Note 1(F) of the financial report
The Group recorded a consolidated loss of
$9,214,378 and had cash outflows
from
operating and investing activities of $12,750,852.
As at 30 June 2017 the Group had cash and
cash equivalents of $8,334,797.
If the going concern basis of preparation of the
financial statements was
the
carrying amount of certain assets and liabilities
may have significantly differed.
inappropriate,
The going concern basis of accounting was a
key audit matter due to the significance to users
the significant
of
judgement involved with forecasting cash flows.
report and
financial
the
Our procedures included but were not limited to
the following:
We obtained an understanding of the key
processes associated with management’s
review of the carrying values of each area
of interest;
We considered the Directors’ assessment
of potential indicators of impairment;
We obtained evidence that the Group has
current rights to tenure of its areas of
interest;
We examined the exploration budget for the
year ending 30 June 2018 and discussed
with management the nature of planned
ongoing activities;
We enquired with management, reviewed
ASX announcements and reviewed minutes
of Directors’ meetings to ensure that the
Group had not resolved to discontinue
exploration and evaluation at any of its
areas of interest;
We substantiated a sample of expenditure
by agreeing to supporting documentation;
and
We examined the disclosures made in the
financial report.
Our procedures included but were not limited to
the following:
We considered the appropriateness of the
going concern basis of accounting by
evaluating the underlying assumptions in
cash flow projections prepared by the
Group including sensitivity analysis.
Our responsibilities in respect of the going
concern basis of accounting are included
below under Auditor’s responsibilities for
the audit of the financial report; and
We examined the disclosures made in the
financial report.
66
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2017, but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors 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 preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
67
attention in our auditor’s report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the remuneration report
We have audited the remuneration report included in the directors’ report for the year ended 30 June
2017.
In our opinion, the remuneration report of Sheffield Resources Limited for the year ended 30 June
2017 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
HLB Mann Judd
Chartered Accountants
D I Buckley
Partner
Perth, Western Australia
12 September 2017
68
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 11 September 2017.
Ordinary Share Capital
At 11 September 2017, 181,358,784 fully paid ordinary shares are held by 1,575 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
89
272
234
745
235
39,941
921,931
1,954,713
28,473,362
149,968,837
Number of Holders/Shares
1,545
181,358,784
Unmarketable parcels at 11 September 2017 amount to 39,941 shares held by 89 shareholders.
Substantial Shareholders
Ordinary Shareholders
Fully Paid Ordinary Shares
Number
Percentage
BlackRock Group1
16,877,756
Mr Walter Mick George Yovich & Mrs Jeanette Julia Yovich
11,892,601
9.30
6.55
1 As at 31 July 2017, BlackRock Group had control over a total of 16,877,756 shares representing 9.30% of the issued
fully paid shares in the Company via the following entitles:
Entity
BlackRock Investment Management Limited
BlackRock Investment Management (UK) Limited
Number
9,477,756
7,400,000
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 181,358,784 fully paid shares. All fully paid shares are free of escrow conditions.
All 14,581,657 options are not quoted on the ASX. All options are free of escrow conditions.
69
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
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR WALTER MICK GEORGE YOVICH & MRS JEANETTE JULIA YOVICH
MR WALTER MICK GEORGE YOVICH
MR BRUCE MORRISON MCQUITTY
MR WILLIAM BURBURY
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD DRP
SATORI INTERNATIONAL PTY LTD
ARCHER ENTERPRISES (WA) PTY LTD
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LTD
CRESCENT NOMINEES LIMITED
MR REES HOLLIER JOHN JONES & MRS MOIRA MARGUERITE JONES & MR WALTER
MICK GEORGE YOVICH
LIDO TRADING LTD
ARCHER ENTERPRISES (WA) PTY LTD
PENMAEN LIMITED
BNP PARIBAS NOMS PTY LTD
MR BRIAN HENRY MCCUBBING & MRS ADRIANA MARIA MCCUBBING
MR DAVID LINDSAY ARCHER & MRS SIMONE ELIZABETH ARCHER
NORONEKE MASTER FUND LTD
TATTERSFIELD SECURITIES LIMITED
DUBRAVA PROPERTIES LIMITED
TOTAL
Fully Paid Ordinary Shares
Number
Percentage %
12,763,528
11,892,601
9,552,280
8,034,100
7,548,500
5,854,841
4,335,000
3,680,000
3,392,697
3,237,085
3,061,764
2,272,728
1,912,180
1,900,000
1,750,000
1,700,000
1,612,000
1,585,000
1,442,307
1,404,664
7.04
6.56
5.27
4.43
4.16
3.23
2.39
2.03
1.87
1.78
1.69
1.25
1.05
1.05
0.96
0.94
0.89
0.87
0.80
0.77
88,931,275
49.04
Options
Outstanding as at the date of this report were 14,581,657 unquoted options. Details are set out below:
-
-
-
-
-
-
-
-
-
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.
3,700,000 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.
2,100,000 options over ordinary shares with exercise price $0.001 each, expiring on 24 November 2020.
346,657 options over ordinary shares with exercise price of $0.001 each, expiring on 24 November 2020.
700,000 options over ordinary shares with exercise price of $0.001 each, expiring on 24 November 2020.
235,000 options over ordinary shares with exercise price of $0.84 each, expiring on 24 November 2020.
70
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
ASX Additional Information
Interests in Mining Tenements
Project
Tenement
Holder
Interest
Location
Mineral Sands
E04/2455
Sheffield Resources Ltd
Mineral Sands
E04/2456
Sheffield Resources Ltd
Mineral Sands
E04/2478
Sheffield Resources Ltd
Mineral Sands
Mineral Sands
L04/82
L04/83
Sheffield Resources Ltd
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
E70/3859
Sheffield Resources Ltd
Mineral Sands
E70/3929
Sheffield Resources Ltd
Mineral Sands
E70/3967
Sheffield Resources Ltd
Mineral Sands
E70/4190
Sheffield Resources Ltd
Mineral Sands
E70/4292
Sheffield Resources Ltd
Mineral Sands
E70/4313
Sheffield Resources Ltd
Mineral Sands
E70/4584
Sheffield Resources Ltd
Mineral Sands
E70/4719
Sheffield Resources Ltd
Mineral Sands
E70/4747
Sheffield Resources Ltd
Mineral Sands
E70/4922
Sheffield Resources Ltd
Mineral Sands
L70/150
Sheffield Resources Ltd
Mineral Sands
M70/8721
Sheffield Resources Ltd
Mineral Sands
M70/9651
Sheffield Resources Ltd
Mineral Sands
M70/11531
Sheffield Resources Ltd
Mineral Sands
R70/351
Sheffield Resources Ltd
Mineral Sands
E04/20815
Thunderbird Operations Pty Ltd
Mineral Sands
E04/20835
Thunderbird Operations Pty Ltd
Mineral Sands
E04/20845
Thunderbird Operations Pty Ltd
Mineral Sands
E04/21595
Thunderbird Operations Pty Ltd
Mineral Sands
E04/21715
Thunderbird Operations Pty Ltd
Mineral Sands
E04/21925
Thunderbird Operations Pty Ltd
Mineral Sands
E04/21935
Thunderbird Operations Pty Ltd
Mineral Sands
E04/21945
Thunderbird Operations Pty Ltd
Mineral Sands
E04/23485
Thunderbird Operations Pty 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%
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
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Status
Granted
Granted
Pending
Pending
Pending
Granted
Granted
Granted
Pending
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
71
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
ASX Additional Information
Interests in Mining Tenements
Project
Tenement
Holder
Interest
Location
Mineral Sands
E04/23495
Thunderbird Operations Pty Ltd
100%
Canning Basin
Mineral Sands
E04/23505
Thunderbird Operations Pty Ltd
100%
Canning Basin
Mineral Sands
E04/23865
Thunderbird Operations Pty Ltd
100%
Canning Basin
Mineral Sands
E04/23905
Thunderbird Operations Pty Ltd
100%
Canning Basin
Mineral Sands
E04/23995
Thunderbird Operations Pty Ltd
100%
Canning Basin
Mineral Sands
E04/24005
Thunderbird Operations Pty Ltd
100%
Canning Basin
Mineral Sands
E04/24945
Thunderbird Operations Pty Ltd
100%
Canning Basin
Mineral Sands
L04/845
Thunderbird Operations Pty Ltd
100%
Canning Basin
Mineral Sands
L04/855
Thunderbird Operations Pty Ltd
100%
Canning Basin
Mineral Sands
L04/865
Thunderbird Operations Pty Ltd
100%
Canning Basin
Mineral Sands
L04/925
Thunderbird Operations Pty Ltd
100%
Canning Basin
Mineral Sands
L04/935
Thunderbird Operations Pty Ltd
100%
Canning Basin
Mineral Sands
M04/4595
Thunderbird Operations Pty Ltd
100%
Canning Basin
Nickel
E28/2563
Carawine Resources Pty Ltd2
Copper/Manganese
E46/1042-I
Carawine Resources Pty Ltd2
Nickel
Nickel
Nickel
Nickel
E69/30334
Carawine Resources Pty Ltd2
E69/30524
Carawine Resources Pty Ltd2
E39/17334
Carawine Resources Pty Ltd2
E28/2374-I4
Carawine Resources Pty Ltd2
Copper/Manganese
E46/10414
Carawine Resources Pty Ltd
Copper/Manganese
E46/10444
Carawine Resources Pty Ltd
Copper/Manganese
E46/1069-I4
Carawine Resources Pty Ltd
Copper/Manganese
E46/10994
Carawine Resources Pty Ltd
Copper/Manganese
E46/1116-I4
Carawine Resources Pty Ltd
Copper/Manganese
E46/1119-I4
Carawine Resources Pty Ltd
Copper/Zinc
E45/48714
Carawine Resources Pty Ltd
Copper/Zinc
E45/48814
Carawine Resources Pty Ltd
Copper/Gold
E45/48454
Carawine Resources Pty Ltd
Copper/Gold
E45/48474
Carawine Resources Pty Ltd
Copper/Gold
E45/49554
Carawine Resources Pty Ltd
Copper/Manganese
E45/49584
Carawine Resources Pty Ltd
Copper/Manganese
E45/49594
Carawine Resources Pty Ltd
Nickel
Notes:
E69/35214
Carawine Resources Pty Ltd
49%
100%
49%
49%
49%
49%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Fraser Range
Pilbara
Fraser Range
Fraser Range
Fraser Range
Fraser Range
Pilbara
Pilbara
Pilbara
Pilbara
Pilbara
Pilbara
Patterson
Patterson
Patterson
Patterson
Patterson
Pilbara
Pilbara
Fraser Range
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.
2Carawine Resources Pty Ltd holds a 49% interest, with JV partner Independence Group NL (IGO) holding a 51% interest and earning in.
3All tenements are located in the state of Western Australia.
4Carawine Resources Pty Ltd is a 100% owned subsidiary of Sheffield Resources Ltd.
5Thunderbird Operations Pty Ltd is a 100% owned subsidiary of Sheffield Resources Ltd.
Status
Granted
Granted
Granted
Granted
Granted
Granted
Pending
Granted
Granted
Granted
Granted
Granted
Pending
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
72