ABN 29 125 811 083
2018
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
Interests in Mining Tenements
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2
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
3
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Chairman’s Letter
Dear Shareholder,
In the 2018 financial year, a number of significant results and milestones were achieved by your Company. Mineral
sands market conditions continued to improve, and Sheffield was able to secure a number of financial and offtake
agreements which will underpin the development of the Thunderbird Mineral Sands Project.
The primary focus during the year was to secure binding offtake agreements for our key products including premium
zircon, zircon concentrate and low temperature roast (LTR) ilmenite. Importantly, we delivered upon this strategy
whereby by the end of the financial year, 100% of Stage 1 forecast premium zircon and zircon concentrate products
and 50% of Stage 1 LTR ilmenite was secured under binding offtake agreement. This represents a total of more than
75% of forecast Stage 1 revenue under binding offtake agreement. The market demand demonstrated for the range of
Thunderbird products has been strong and we expect this to continue in future.
In addition to our offtake agreements, we successfully negotiated a US$200m debt facility mandate with Taurus
Mining Finance, required for the development of Thunderbird. We have been proactively working with Taurus on due
diligence processes during 2018, with the intention of finalizing a debt facility agreement in the near future.
Our permitting activities continue to progress well, with Thunderbird recently receiving State environmental approval.
Our expectation is that full Federal environmental approval will be granted during Q3 2018. Our native title permitting
arrangements have progressed well, and we are confident of reaching a mutually acceptable agreement with the
Traditional Owners following the agreement of non-binding key terms during August 2018, consistent with our pledge
to the Kimberley community. We also welcome the recent positive determination by the National Native Title Tribunal,
finding that Sheffield acted in good faith during the Native Title negotiation process.
We also undertook a strategic equity raising to progress the early development activities for Thunderbird, placing the
Company in a sound financial position. The $32.0m raised in October 2017 introduced new institutional shareholders
to Sheffield, and we welcomed the continued support from our existing shareholders during this process.
To support the construction of the Thunderbird Project, in Q4 2017 Sheffield appointed GR Engineering Services
Limited (GRES) as preferred EPC tenderer, following the conclusion of a competitive tender process. To date, GRES
has commenced a number of front end engineering and design activities and both parties are working toward the
execution of an EPC contract in 2018.
Sheffield successfully concluded the demerger of its portfolio of gold and base metal assets, held by its 100% owned
subsidiary Carawine Resources Limited in December 2017, by way of distributing the 20 million shares it holds in
Carawine in specie to eligible Sheffield shareholders on a pro rata basis. Following a successful Initial Public Offer that
raised $7 million, Carawine listed and commenced trading on the ASX on 14 December 2017. Moving into 2018,
Sheffield is now a fully focussed mineral sands enterprise.
I would like to personally thank each of my fellow Directors, our management team and our growing team of
employees, consultants and stakeholders for their dedication and effort in what we have achieved over this
transformational 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
4
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
OVERVIEW
During the reporting period, Sheffield Resources Limited (‘Company’ or ‘Sheffield’) continued the progression of its world class
Thunderbird Mineral Sands Project (‘Thunderbird’), located near Derby in the Canning Basin region of Western Australia,
culminating with the decision to commence development activities at Thunderbird.
KEY HIGHLIGHTS FOR THE FINANCIAL YEAR
•
•
•
Binding offtake agreements secured for 100% of Stage 1 forecast premium zircon and zircon concentrate products;
Binding offtake agreement secured for 50% of Stage 1 forecast low temperature roast (‘LTR’) ilmenite;
Appointment of Taurus Mining Finance Fund (‘Taurus’) as mandated lead arranger and underwriter for the US$200m
debt facility required for the development of Thunderbird;
• National Native Title Tribunal (‘NNTT’) determination in August 2018, finding that Sheffield acted in good faith during
the Native Title negotiation process;
•
•
•
•
•
State environmental permitting approval granted in August 2018, with Federal approval expected in Q3 2018;
Appointment of GR Engineering Services Limited as preferred EPC tenderer;
Commencement of early works activities at the Thunderbird Mineral Sands Project;
Successful demerger of Carawine Resources Limited; and
Completion of an equity placement and share purchase plan, raising $32 million (before costs).
THUNDERBIRD MINERAL SANDS PROJECT
During the year, the Company continued progression of its world class Thunderbird Mineral Sands Project, located in the
Canning Basin in northern Western Australia. Several key milestones pertaining to offtake, financing and construction readiness
were delivered, as described below.
The Company welcomed several major new offtake partners, with multiple binding offtake agreements signed with the following
parties:
Ruby Ceramics Pvt Ltd - minimum annual supply of 6,000 tonnes of premium zircon;
Sukaso Ceracolors Ceramics Pvt Ltd - minimum annual supply of 12,000 tonnes of premium zircon;
CFM Minerales s.a – minimum annual supply of 4,000 tonnes of premium zircon;
•
•
•
• Hainan Wensheng High-Tech Materials Company Limited - minimum annual supply of 27,000 tonnes of zircon
concentrate;
• Nanjing Rzisources International Trading Co Ltd - minimum annual supply of 15,000 tonnes of premium zircon and
23,000 tonnes of zircon concentrate;
Qingyuan Jinsheng ZR & TI Resources Co. Ltd – minimum annual supply of 9,000 tonnes of premium zircon; and
Bengbu Zhongheng New Materials S&T Co., Ltd – minimum annual supply of 150,000 tonnes of LTR ilmenite.
•
•
With the conclusion of the above agreements, 100% of premium zircon and zircon concentrate for Stage 1 of Thunderbird has
been secured under binding agreements. Thunderbird product demand remains strong as Sheffield’s negotiations toward
agreement on the remaining LTR ilmenite products remain on track.
Financing arrangements to support the development of Thunderbird advanced during the year with Sheffield executing a
US$200M debt financing mandate with Taurus Mining Finance Fund. Due diligence processes are well advanced with the
Company affirming a significant and cost-effective solution to advance the development of Thunderbird.
Construction readiness activities continued during the year, with Sheffield announcing the appointment of GR Engineering
Services Limited (‘GRES’) as preferred engineering, procurement and construction (‘EPC’) contractor. Sheffield has entered into
an Early Works Agreement and Key Term Sheet with GRES. Early engineering and design works for Thunderbird progressed well
during 2018. Additionally, Sheffield was successful in sourcing a modern 328 room accommodation village and associated
infrastructure for Thunderbird during the December quarter.
5
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
Initial earthworks and site access arrangements for Thunderbird are underway, in accordance with the State Government
approved Minor or Preliminary Works (‘MoPW’) Licence. In conjunction with the early works program, Sheffield has committed
further funding to advance Aboriginal training in readiness for construction activities at Thunderbird.
Project Construction Readiness
During the year, following conclusion of a detailed tender process targeting the selection of an engineering, procurement and
construction (EPC) contractor, Sheffield appointed GR Engineering Services Limited as preferred EPC tenderer. An Early Works
Agreement and Key Term Sheet is in place and GRES have completed a number of engineering and design activities in
preparation for construction of Stage 1 of Thunderbird.
Front End Engineering and Design (‘FEED’) activities complete include:
• Mechanical arrangements and site layouts for Thunderbird;
• Definitive mechanical list of process plant items;
•
Process Flow Diagrams (PFD’s) and Process and Instrument Diagrams (P&ID’s); and
• Mass and Energy balances for Stage 1 Thunderbird.
In addition to the above activities, Roundhill Engineering has concluded the front-end engineering design work to support the
LTR process with all PFD’s and P&ID’s received by the Company.
Negotiations continue on a number of other contracting activities which are well advanced, including electricity and gas supply
arrangements and mining services arrangements. Electricity and gas supply, together with mining services, represent more than
50% of Thunderbird’s annual operating costs.
Early Works Program
Initial earthworks and site access to support Thunderbird commenced in the December 2017 quarter. The early works program
is being undertaken in accordance with the State Government approved MoPW program, with activity focused on upgrading site
access roads and clearing areas in preparation for accommodation village and ancillary building installation. A number of
Kimberley based contractors and businesses have been engaged to carry out the work program, and further supported by
Aboriginal trainees from Sheffield’s Group Training Program.
Accommodation Village
During the December 2017 quarter, Sheffield acquired a modern 328-room accommodation village and associated
infrastructure for Thunderbird. The quality and modern amenities include an industrial scale kitchen, dining areas and laundry
facilities, providing Sheffield with a significant opportunity to realise a cost-effective solution for Thunderbird accommodation.
The village installation commenced during the March 2018 quarter as part of the Minor or Preliminary Works and in readiness
for the proposed EPC schedule.
Work Ready Program
The construction Work Ready Program (‘WRP’), launched in mid-2017, was completed with fourteen participants successfully
graduating from the program. The program was delivered in partnership with local employment and training organisations
Winun Ngari Aboriginal Corporation, based in Derby, and Nirrumbuk Aboriginal Corporation, based in Broome.
Following the successful completion of the WRP, Sheffield affirmed its ongoing commitment to Aboriginal employment and
training, with the establishment of a Group Training Program and a further investment of $750,000. The Group Training
Program employed eight graduates from the WRP as trainees with Broome-based Nirrumbuk Group Training. The trainees have
been rotated through a variety of activities including Early Works at the Thunderbird Project and placements with other
Kimberley based construction business. At the completion of the program, trainees will have gained a Certificate 3 in Civil
Construction and the opportunity to secure construction roles on the Thunderbird Project.
Sustainability
A favourable environmental determination was provided by the Western Australia Minister for Environment, after considering
appeals to the Environmental Protection Authority recommendations published in October 2017. The Minister dismissed all
appeals on the Works Approval and majority of the appeals on the EPA Report. The Company is expecting to conclude
environmental permitting with Federal approval expected in Q3 2018.
6
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
During the 2017 financial year, the NNTT found in favour of Sheffield with a positive good faith decision, followed by the
substantive Native Title determination, enabling the grant of the mining lease. In December 2017, a decision of the Full Federal
Court set aside a previous order made by Justice Barker, in finding that good faith procedural obligations continue to apply after
a future act determination application (‘FADA’) has been made. Subsequently, the court ordered that the matter be remitted to
the National Native Title Tribunal (NNTT) to reconsider the previous good faith finding to include the negotiation period post
FADA.
Following the end of the financial year, the NNTT reconsidered the test of good faith, as directed by the Full Federal Court (refer
to ASX announcement dated 20 December 2017) and determined that Sheffield acted in good faith in its negotiations with the
Traditional Owners. Independent of, and in parallel to the NNTT process, Sheffield also announced agreement of non- binding
and indicative key terms with the Traditional Owners, as a basis for a future Native Title Agreement in relation to the Thunderbird
Mineral Sands Project (refer to ASX announcement dated 16 August 2018). Following the NNTT determination, Sheffield
remains committed to concluding a Native Title Agreement in collaboration with Traditional Owners by mid Q4 2018.
In parallel to the above Native Title process, Sheffield successfully negotiated a co-existence agreement over miscellaneous
licenses that secure road access to Thunderbird with the Walalakoo Aboriginal Corporation (the prescribed body corporate for
the Nyikina Mangala native title holders).
Marketing and Offtake
Significant offtake milestones were achieved during the year, with Sheffield securing binding offtake agreements for the future
sales of 100% of its estimated production of Stage 1 premium zircon and zircon concentrate products, representing 60% of
Stage 1 forecast revenue. In addition, 50% of estimated production from Stage 1 LTR ilmenite is also subject to a binding
offtake agreement. This brings total forecast Stage 1 sales revenue under binding offtake agreement to 75%.
Market conditions for TiO2 products have remained steady during the year with prices and demand remaining strong. This
situation is expected to continue for the foreseeable future.
Supply shortages have continued to positively impact pricing for zircon products throughout the year. Continued supply
constraints and limited surplus stock is expected to place further upward price pressure on zircon material.
Project Financing
In October 2017, Sheffield concluded a debt financing process, culminating in the appointment of Taurus Mining Finance Fund
as mandated lead arranger and underwriter of a US$200M debt finance facility package to support the development of
Thunderbird. Due diligence activities are well advanced ahead of concluding a full form debt facility agreement.
In conjunction with mandated debt facility arrangements, Sheffield is considering a number of third-party partnering
arrangements with a view to participation in the development of the Thunderbird project, in conjunction with equity capital
market considerations.
The Company is consulting with the Northern Australia Infrastructure Fund (‘NAIF’) to assess options and availability for a
subordinated, long term infrastructure debt finance arrangement to support Thunderbird and adjacent local communities. NAIF
is a federally funded program supporting infrastructure development projects for northern Australia. NAIF provides the Company
with a cost-effective opportunity to in source Thunderbird energy supply infrastructure, in addition to providing improved public
transportation and logistics infrastructure.
EXPLORATION ACTIVITIES
During the year, Sheffield generated two new zircon rich projects located in the Canning Basin of Western Australia and the
Eucla Basin of South Australia. Sheffield’s current portfolio of heavy mineral sands exploration projects comprise the Dampier
and Central Canning projects located in the Canning Basin of Western Australia, the Eneabba and McCalls projects located in
the North Perth Basin of Western Australia and the Barton project located in the Eucla Basin of South Australia. Sheffield’s
exploration strategy is to target additional large, high value, zircon rich deposits suitable for downstream processing at the
Thunderbird Dry Mineral Separation Plant (‘MSP’). Sheffield will continue to actively pursue and evaluate new mineral sands
opportunities in Australia and overseas, with a focus on zircon rich deposits.
Dampier Regional Mineral Sands
Planning and permitting for regional exploration on the Dampier project have continued, with programs expected to commence
during the September 2018 quarter.
7
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Review of Operations
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. Work to date has been encouraging, with further drilling required to better define
the potential quantities of these sands, along with additional test work designed to assess suitability for specific end-use
requirements. Sheffield will continue to evaluate the opportunity presented by this deposit.
Canning Central Project
The Canning Central Project comprises one Exploration Licence Application E45/5214 (lodged in April 2018). The project is
located central to the Canning Basin, 350km south of Thunderbird in the Kidson Sub-basin. Sheffield is targeting shallow zircon
rich, Thunderbird style mineralisation in a shallow marine geological setting. A review of historic exploration and regional geology
will be completed throughout the remaining calendar year.
Barton Project
Exploration Licence Application (ELA) 2018/00046 (lodged in March 2018) covers an area of 983.8 km² in the north-eastern
Eucla Basin of central South Australia. The tenement application covers parts of the Eocene to Miocene sequence in the north-
eastern Eucla Basin. Within this sequence the sand units of the Ooldea and Hampton Formations have the potential to host
significant concentrations of heavy minerals within shallow marine or shore face sand units. The Exploration Licence Application
is located 130 kilometres north of Iluka Resources Limited’s (ASX:ILU) Jacinth-Ambrosia deposit.
Rio Tinto Exploration Pty Ltd (ASX:RTX) explored the area between 2004 and 2009, and a preliminary review of open file reports
has shown the identification by RTX of heavy mineral sand mineralisation below the Paling and Barton Ranges, including the
identification a significant zone of heavy mineral concentration (Sherrin prospect) from drill holes in the Paling Range. The
mineralisation is described as approximately 8km long north-south, 6km wide east-west, and 4.5m to 12m metres thick. A
thorough review of historic exploration data and regional geology will be completed calendar year 2018.
Eneabba Mineral Sands
Maiden Mineral Resource estimates incorporating results from recent exploration drilling were completed at the Robbs Cross
and Thomsons HMS deposits, within Sheffield’s 100% owned Eneabba Project located about 110km north of Perth in Western
Australia’s Midwest region.
The addition of Robbs Cross and Thomsons brings total Mineral Resources for Sheffield’s Eneabba HMS Project to over 7.6
million tonnes contained HM (Measured, Indicated and Inferred) in seven deposits, including 897kt of zircon, 540kt of rutile,
323kt of leucoxene and 4,703kt of ilmenite.
McCall’s Project
During the March 2018 quarter, work commenced on an update of the McCalls Mineral Resource to include additional historic
drilling data from the recently granted Exploration Licence E70/4922, which adjoins the current Mineral Resource area.
Completion of this work is expected during the September 2018 quarter.
CORPORATE ACTIVITIES
As at 30 June 2018, Sheffield held cash reserves of approximately $23.1 million.
Carawine Resources Limited Demerger
During the December 2017 quarter, Sheffield concluded the demerger of its portfolio of gold and base metal assets, held by its
100% owned subsidiary Carawine Resources Limited (“Carawine”) by way of distributing the 20 million shares it holds in
Carawine in specie to eligible Sheffield shareholders on a pro rata basis. Following a successful Initial Public Offer that raised $7
million, Carawine listed and commenced trading on the ASX on 14 December 2017.
8
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
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
9
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)
Robbs Cross
(>1.4% HM(
Thomsons (>1.4%
HM)
West Mine North
(>0.9% HM)
All Eneabba
(various)
Measured
Indicated
Inferred
Total
Indicated
Inferred
Total
Indicated
Inferred
Total
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
14
4
18
26
26
6
36
42
9
239
97
345
0.1
2.1
0.03
2.2
1.0
0.2
1.2
1.0
0.05
1.1
1.0
1.0
0.3
0.1
0.4
0.5
0.5
0.4
0.8
1.2
0.5
5.2
1.9
7.6
4.1
2.3
1.2
2.3
2.0
1.2
1.8
2.1
1.5
2.1
2.2
2.2
1.9
2.0
1.9
2.0
2.0
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
15
14
15
19
19
4
7
6
5.9
12
12
12
1.9
3.7
3.9
3.6
2.8
2.4
2.8
10
9.9
10
8.7
8.7
13
11
12
14
14
9.6
9.6
9.6
7.7
6.1
9.5
7.1
2.2
3.7
4.6
3.7
4.6
6.7
4.9
3.6
2.8
3.6
1.9
1.9
5
4.1
4.8
5.4
5.4
9.5
5.4
6.6
7.7
4.2
3.5
4.2
72
69
68
69
70
67
70
53
55
53
64
64
47
50
48
42
42
54
60
58
59
64
57
62
15
16
18
16
15
14
15
16
16
16
16
16
6.0
6.3
6.0
18
18
15
13
13
15
15
16
15
14
15
21
15
21
17
20
9
8
9
2
2
6.2
8.1
6.6
6.9
6.9
1
3
3
5
13
7
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.
10
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
Robbs Cross Mineral Resource Quarterly Activities Report For The Period
25 January 2017 C. Standing
Thomsons Mineral Resource
Ended 31 December 2017
Quarterly Activities Report For The Period
Ended 31 December 2017
25 January 2017 C. Standing
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
11
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.
12
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 2018. 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.
DIRECTORS
The names and particulars of the Directors and Company Secretary in office during or since the end of the financial year are:
Mr Will Burbury
Non-Executive Chairman
Qualifications:
Experience:
Interest in Shares and Options at
the date of this report:
Directorships held in other listed
entities in the last three years:
Mr Bruce McFadzean
Managing Director
Qualifications:
Experience:
Mr Burbury was a Non-Executive Director for the whole of the financial year. Mr Burbury
was appointed as a Non-Executive Director on 6 June 2007 and Non-Executive Chairman
on 26 October 2015.
B.Comm, LLB
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
overseas and has held the senior management positions and served on boards of several
private and publicly listed companies.
8,182,407 Ordinary Shares
Non-Executive Chairman, Carawine Resources Limited (since September 2017)
Mr McFadzean was an Executive Director for the whole of the financial year. Mr
McFadzean was appointed as Managing Director on 2 November 2015.
Dip. Mining, FAusIMM
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.
Interest in Shares and Options at
the date of this report:
1,512,960 Ordinary Shares
2,500,000 Performance Options
130,409 Remuneration Options
Directorships held in other listed
entities in the last three years:
Mr McFadzean is currently a Non-Executive Director of Indiana Resources Limited
(formerly IMX Resources Limited, since April 2015). Mr McFadzean had previously held
the position of Non-Executive Director with Blackstone Minerals Limited (October 2016 to
May 2017), Venture Minerals Limited (June 2008 to October 2016) and Gryphon
Minerals Limited (June 2014 to October 2016). Mr McFadzean was formerly Managing
Director of Mawson West Limited (October 2012 to January 2015).
13
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
Mr Bruce McQuitty
Non-Executive Director
Qualifications:
Experience:
Interest in Shares and Options at
the date of this report:
Directorships held in other listed
entities in the last three years:
Mr David Archer
Technical Director
Qualifications:
Experience:
Mr McQuitty was a Non-Executive Director for the whole of the financial year. Mr McQuitty
was appointed as a Non-Executive Director on 14 December 2009.
B.Sc, MEconGeol
Mr McQuitty has more than 30 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.
8,046,507 Ordinary Shares
Non-Executive Director, Carawine Resources Limited (since September 2017)
Mr Archer was an Executive Director for the whole of the financial year. Mr Archer was
appointed as an Executive Director on 14 December 2009.
BSc (Hons)
Mr Archer is a geologist with 28 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.
Interest in Shares and Options at
the date of this report:
8,269,151 Ordinary Shares
550,000 Performance Options
55,890 Remuneration Options
Directorships held in other listed
entities in the last three years:
Non-Executive Director, Carawine Resources Limited (since September 2017)
Mr Mark Di Silvio
Company Secretary
Qualifications:
Experience:
Mr Di Silvio was Company Secretary for the whole of the financial year. Mr Di Silvio was
appointed Company Secretary on 16 February 2016.
B.Bus, CPA, MBA
Mr. Di Silvio is a CPA qualified accountant with over 27 years’ 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.
14
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
DIRECTOR’S 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.
Director
Held
Attended
Mr W Burbury
Mr B McFadzean
Mr B McQuitty
Mr D Archer
6
6
6
6
5
6
6
6
PRINCIPAL ACTIVITIES AND SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
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. There have been no significant changes in the state of
affairs of the Group to the date of this report.
DIVIDENDS
No dividends have been paid or declared during the financial year ended 30 June 2018 and the Directors do not recommend
the payment of a dividend in respect of the financial year.
REVIEW OF OPERATIONS
Refer to pages 5-8 for the Review of Operations and pages 9-12 for Ore Reserves and Mineral Resources.
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’
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.
NON-AUDIT SERVICES
During the year, the Company used its auditors, HLB Mann Judd, to complete tax compliance work in relation to the Carawine
demerger. The value of this work was $15,000 (2017: nil).
15
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
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.
ROUNDING
The amounts contained in the financial report have been rounded to the nearest $1,000 (unless otherwise stated) pursuant to
the option available to the Company under ASIC Class Order 2016/191. The Company is an entity to which the class order
applies.
SECURITIES GRANTED OVER UNISSUED SHARES
At the date of this report, 13,382,599 fully paid ordinary shares which are subject to options, were unissued. The terms of these
options are as follows:
Exercisable at $0.66 each on or before 26 September 2018
Exercisable at $0.87 each on or before 19 March 2019
Exercisable at $1.16 each on or before 19 March 2021
Exercisable at $0.001 each on or before 8 February 2020
Exercisable at $0.676 each on or before 31 August 2019
Exercisable at $0.001 each on or before 24 November 2020
Exercisable at $0.001 each on or before 24 November 2020
Exercisable at $0.84 each on or before 24 November 2020
Exercisable at $0.001 each on or before 30 November 2021
Series
2
3
4
5
7
6,8,9
10
11
12
Number
500,000
1,400,000
1,600,000
3,000,000
4,000,000
1,575,000
700,000
235,000
372,599
13,382,599
As at the date of this report, 2,012,500 fully paid ordinary shares which are the subject of performance rights, were unissued.
The terms of these performance rights are as follows:
Exercisable at $0.00 each on or before 30 November 2021
Exercisable at $0.00 each on or before 1 March 2022
Number
1,700,000
312,500
2,012,500
REMUNERATION REPORT (AUDITED)
This report sets out the remuneration arrangements in place for Directors and senior management of the Company and the
Group in accordance with the requirements of the Corporations Act 2001 and its regulations. For the purposes of this report
Key Management Personnel (‘KMP’) of the Group are defined as those persons having authority and responsibility for planning,
directing and controlling the major activities of the Company and the Group, directly or indirectly, including any Director (whether
Executive or otherwise) of the Company.
KEY MANAGEMENT PERSONNEL
Mr Bruce McFadzean (Managing Director)
Mr Will Burbury (Non-Executive Chairman)
Mr Bruce McQuitty (Non-Executive Director)
The names and positions of the KMP of the Company and the Group during the financial year were:
•
•
•
•
•
•
•
•
Mr Mark Di Silvio (Company Secretary & Chief Financial Officer)
Mr Neil Patten-Williams (Marketing Manager)
Mr Stuart Pether (Chief Operating Officer)
Mr Jim Netterfield (BFS Study Manager)
Mr David Archer (Technical Director)
16
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
REMUNERATION POLICY AND LINK TO PERFORMANCE
The Board is responsible for the nomination and appointment of Directors and the remuneration of its Directors, Managing
Director and Senior Executives. To assist the Board in meeting its obligations and to address all matters pertaining to Board
nomination and Board and Executive remuneration, the Board has adopted a Nomination and Remuneration Committee
Charter.
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 2018 financial year are set out in this Remuneration Report.
The philosophy of the Company in determining remuneration levels is to:
•
•
•
establish appropriate, demanding performance hurdles for variable KMP remuneration.
set competitive remuneration packages to attract and retain high calibre employees;
link executive rewards to shareholder value creation; and
a fixed base salary payable in cash;
other benefits such as superannuation and car parking.
long-term incentives through eligibility to participate in shareholder approved equity plans; 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. Shareholders approve the aggregate or total fees payable to Non-Executive Directors, with the current
approved limit being $250,000 (excluding share-based payments). 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.
Shareholders approve the issue of options to Non-Executive Directors.
Remuneration of Key Management Personnel
The structure of remuneration packages for KMP comprises:
•
•
•
Remuneration outcomes are linked to a series of performance conditions.
There are no remuneration outcomes for KMP directly linked to share price performance, performance options and performance
rights are linked to meeting individual and corporate performance objectives rather than share price performance.
Fixed Remuneration
KMP receive fixed remuneration as cash with non-monetary benefits such as parking and superannuation.
Fixed remuneration is reviewed annually, on promotion or on significant change to role responsibilities. It is benchmarked
against market data for comparable roles in the resources industry, market capitalisation and business model. Remuneration
policy aims to position executives competitively in the market, with flexibility to take into account capability, experience, value to
the organisation and performance of the individual. The Company policy is set at the market median. Fixed remuneration is
reviewed annually. No increases to fixed remuneration were made in either the current or prior year.
Equity Plans
At the Board’s discretion, KMP are able to participate in equity plans through the issue of either unlisted options or performance
rights.
Performance objectives 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.
In awarding performance-based share options or performance rights to KMP’s, performance criteria includes, but is not limited
to, the following factors:
•
•
•
•
•
•
Other Performance Based Remuneration
The award of discretionary performance bonuses is 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 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. No performance bonuses were issued in either the current or prior year.
Time and cost bound delivery of the Thunderbird Bankable Feasibility Study (concluded in the prior year);
Successful construction of the Thunderbird Project on time and within budget; and
Securing offtake agreements in relation to the Thunderbird Mineral Sands Project;
Delivery of commercial products from the Thunderbird Mineral Sands Project;
Achievement of commercial production on time and within budget.
Financing of the Thunderbird Mineral Sands Project;
17
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
REMUNERATION OF KEY MANAGEMENT PERSONNEL
The table below shows the fixed and variable remuneration for key management personnel.
2018
Short-term benefits
Salary &
fees
Other fees 2
Post-
employment
benefit
Super-
annuation
Share-
based
payments
Options &
rights 1
Relative proportion of
remuneration liked to
performance 3
Total
Fixed
Performance
based
$
$
$
$
$
%
%
Directors
W Burbury
75,000
4,583
7,125
-
86,708
B McFadzean
175,000
10,549
16,625
350,910
553,084
B McQuitty
D Archer
Executives
M Di Silvio
J Netterfield
N Patten-Williams
S Pether
Total
50,000
175,000
175,000
200,000
200,000
225,000
4,583
4,583
4,583
4,583
4,583
4,583
24,994
-
79,577
16,625
115,459
311,667
16,625
106,484
302,692
19,000
19,000
79,469
303,052
73,813
297,396
21,375
531,854
782,812
1,275,000
42,630
141,369
1,257,989
2,716,988
100%
70%
100%
87%
89%
90%
92%
47%
-
-
30%
-
13%
11%
10%
8%
53%
-
2017
Short-term benefits
Salary &
fees
Other fees 2
Post-
employment
benefit
Super-
annuation
Share-
based
payments
Options &
rights 1
Relative proportion of
remuneration liked to
performance 3
Total
Fixed
Performance
based
$
$
$
$
$
%
%
Directors
W Burbury
B McFadzean
B McQuitty
D Archer
M Di Silvio
J Netterfield
N Patten-Williams
S Pether
Total
75,000
175,000
50,000
175,000
175,000
200,000
194,444
56,250
3,754
4,566
5,000
5,596
4,946
2,763
7,125
-
85,879
16,625
887,869
1,084,060
30,251
-
85,251
16,625
496,531
693,752
16,625
401,591
598,162
35,000
194,499
432,262
-
18,472
558,202
771,118
513
5,344
109,586
171,693
1,100,694
27,138
146,067
2,648,278
3,922,177
100%
19%
100%
29%
33%
56%
28%
37%
-
-
81%
-
71%
67%
44%
72%
63%
-
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.
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: KMP’s holding executive positions sacrifice a portion of salary (20% - 50%) in lieu of a share-based payment, incentivising performance.
18
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
KEY MANAGEMENT PERSONNEL SHAREHOLDINGS
The relevant interest of each of the key management personnel in the share capital (held directly or indirectly) of the Company
as at 30 June 2018 were:
Balance at 1 July
2017
Granted
remuneration
as
Received
on
exercise of options
Other changes
Balance at 30
June 2018
Director
W Burbury
B McFadzean
B McQuitty
D Archer
M Di Silvio
J Netterfield
S Pether
N Patten-Williams
Director
W Burbury
B McFadzean
B McQuitty
D Archer
M Di Silvio
J Netterfield
S Pether
N Patten-Williams
SHARE-BASED PAYMENTS
8,170,000
676,684
8,034,100
7,939,180
198,327
146,052
75,000
76,985
-
-
-
-
-
-
-
-
-
748,149
-
259,564
239,564
223,042
121,119
325,542
Balance at 1 July
2016
Granted
remuneration
as
Received
on
exercise of options
Other changes
8,170,000
116,000
7,964,091
7,785,000
50,000
-
25,000
-
-
-
-
-
-
-
-
-
-
511,184
-
122,180
148,327
146,052
-
50,000
76,985
-
12,407
88,127
12,407
70,407
-
12,407
50,000
-
-
49,500
70,009
32,000
-
-
8,182,407
1,512,960
8,046,507
8,269,151
437,891
381,501
246,119
402,527
Balance at 30
June 2017
8,170,000
676,684
8,034,100
7,939,180
198,327
146,052
75,000
76,985
Directors’, key employees and consultants may be eligible to participate in equity-based compensation schemes.
The primary purpose of the schemes is to increase motivation, promote retention and align the interests of Directors, employees
and consultants with those of the Company and its shareholders and to reward contribution to the growth of the Company.
Employee Share Option Plan & Other Options Issued
Under the terms and conditions of the options issued to employees, each option gives the holder the right to subscribe to one
fully paid ordinary share. Any option not exercised before the expiry date will lapse on the expiry date.
Options have been valued using the Black-Scholes option valuation method. The following table lists the inputs to the model for
options outstanding relating to KMP during the period:
Series 5
Series 6
Series 8
Series 9
Series 12
Dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
Expected life of options (years)
Exercise price ($)
Grant date share price ($)
Fair value at grant date ($)
Grant date
Expiry date
Number
-
40
2.00
4.27
0.001
0.56
0.559
2 Nov 15
2 Feb 20
3,000,000
-
40
2.00
4.23
0.001
0.51
0.509
-
75
2.10
4.00
0.001
0.53
0.529
-
87
2.00
4.02
0.001
0.53
0.529
-
63
2.10
4.02
0.001
0.74
0.739
16 Nov 15
17 Nov 16
17 Nov 16
22 Nov 17
2 Feb 20
700,000
24 Nov 20
24 Nov 20
30 Nov 21
877,672
2,100,000
810,422
19
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
There are no participating rights or entitlements inherent in the options and the holders will not be entitled to participate in new
issues of capital offered to shareholders during the currency of the options. All shares allotted upon the exercise of options will
rank pari passu in all respect with other shares.
Performance options on issue during the year have certain non-market-based performance conditions. As at 30 June 2018,
these performance options have not yet vested.
The non-market-based performance conditions include:
•
•
2,650,000 performance options on the delivery of the first shipment to market of mineral sands product from the
Thunderbird project;
1,650,000 performance options on the completion of financing for the construction of the Thunderbird project;
•
•
275,000 performance options on completion of off-take agreements for more than 50% of a minimum of the first 2 years
forecast annual volumes of ilmenite product from the Thunderbird project; and
275,000 performance options on completion of off-take agreements for more than 50% of a minimum of the first 2 years
forecast annual volumes of ilmenite product from the Thunderbird project.
During the year ending 30 June 2018, the Group revised the target vesting date relating to options with performance measures.
The following table describes the change in vesting date:
Measure
Original
vesting date
Revised
vesting date
Series
Condition vesting date related to
1
2
3
4
5
Vested
-
5,6,9
Completion of feasibility study
30 Jun 17
31 Dec 18
5,6,9,10
Financing complete
30 Jun 17
30 Jun 18
30 Jun 17
30 Jun 18
9
9
Offtake agreements ilmenite
Offtake agreements zircon
31 Mar 19
31 Mar 20
5,6,9,10
First product shipped
Company Performance Rights Plan
The Company Performance Rights Plan was approved by shareholder at its Annual General Meeting held on 22 November 2017.
Under the terms and conditions of the Plan, each performance right gives the holder the right to one fully paid ordinary share for
nil consideration provided the relevant incentive plan criteria has been met. Any performance right not exercised before the
nominated expiry date will lapse on the expiry date. Performance rights have been valued using the prevailing market price at
the date of issue less the present value of any expected dividends that will not be received on the performance rights over the
vesting period.
There are no participating rights or entitlements inherent in the options and the holders will not be entitled to participate in new
issues of capital offered to shareholders during the currency of the performance rights. All shares allotted upon the exercise of
the performance rights will rank pari passu in all respect with other shares.
Performance rights issued during the year have certain non-market-based performance conditions. As at 30 June 2018, these
performance rights have not yet vested.
The non-market-based performance conditions include:
•
•
850,000 performance rights on the successful transition from construction to operations of the Thunderbird project.
850,000 performance rights on the completion of project construction of the Thunderbird project; and
20
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
The below table shows a reconciliation of options held by each KMP during the year:
2018
Grant Date
Opening
balance
vested and
exercisable
Opening
balance
unvested
Granted as
compensation
Vested
Vested %
Exercised
Forfeited
Closing
balance
vested and
exercisable
Closing
balance
unvested
B McFadzean
Performance 1
Remuneration 4
n/a
22/11/17
D Archer
Performance 3
Remuneration 4
n/a
22/11/17
M Di Silvio
Performance 3
Remuneration 4
n/a
22/11/17
J Netterfield
Performance 2
Remuneration 4
n/a
22/11/17
S Pether
Performance
Remuneration 4
n/a
22/11/17
N Patten-Williams
Performance 3
Remuneration 4
n/a
22/11/17
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
142,741
-
260,817
500,000
573,149
700,000
61,175
700,000
61,175
700,000
40,783
-
111,779
150,000
117,064
-
111,779
125,000
117,064
-
74,519
200,000
78,042
-
-
-
177,009
-
121,119
700,000
40,783
-
74,519
250,000
78,042
17%
68%
21%
68%
18%
68%
29%
68%
-
68%
36%
68%
475,000
273,149
142,500
117,064
122,500
117,064
145,000
78,042
-
121,119
247,500
78,042
25,000
-
7,500
-
2,500
-
55,000
-
-
-
2,500
-
-
-
-
-
-
-
-
-
-
-
-
-
2,500,000
130,409
550,000
55,890
575,000
55,890
500,000
37,260
-
55,890
450,000
37,260
1 Inputs to the valuation of the performance options vested during the year under the Black Scholes option valuation method are included under Series 5 in the Share-Based Payments section of the
Remuneration report.
2 Inputs to the valuation of the performance options vested during the year under the Black Scholes option valuation method are included under Series 6 in the Share-Based Payments section of the
Remuneration report.
3 Inputs to the valuation of the performance options vested during the year under the Black Scholes option valuation method are included under Series 9 in the Share-Based Payments section of the
Remuneration report.
4 Inputs to the valuation of the remuneration options granted during the year under the Black Scholes option valuation method are included under Series 12 in the Share-Based Payments section of the
Remuneration report.
There are no amounts unpaid in relation to options exercised during the year. An option converts to one fully paid ordinary share.
21
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
2017
Grant Date
B McFadzean
Performance 1
Remuneration 4
02/11/15
24/11/16
D Archer
Performance 3
Remuneration 4
01/05/16
16/11/16
M Di Silvio
Performance 3
Remuneration 4
15/02/16
17/11/16
J Netterfield
Performance 2
Remuneration 4
16/11/15
17/11/16
N Patten-Williams
Performance 3
Remuneration 4
23/05/16
24/11/16
Opening
balance
vested and
exercisable
Opening
balance
unvested
Granted as
compensation
Vested
Vested %
Exercised
Forfeited
Closing
balance
vested and
exercisable
Closing
balance
unvested
-
-
-
-
-
-
-
-
-
-
3,000,000
368,444
-
285,481
-
511,185
-
-
-
-
700,000
183,355
-
122,181
700,000
209,502
-
148,328
700,000
105,269
-
81,566
-
146,052
-
-
700,000
117,768
-
76,985
-
78%
-
67%
-
71%
-
78%
-
65%
-
142,741
-
122,181
-
148,328
-
146,052
-
76,985
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
142,741
700,000
61,175
700,000
61,175
700,000
40,783
700,000
40,783
1 Inputs to the valuation of the performance options opening balance during the year under the Black Scholes option valuation method are included under Series 5 in the Share-Based Payments section of the
Remuneration report.
2 Inputs to the valuation of the performance options opening balance during the year under the Black Scholes option valuation method are included under Series 6 in the Share-Based Payments section of the
Remuneration report.
3 Inputs to the valuation of the performance options granted during the year under the Black Scholes option valuation method are included under Series 9 in the Share-Based Payments section of the
Remuneration report.
4 Inputs to the valuation of the remuneration options granted during the year under the Black Scholes option valuation method are included under Series 8 in the Share-Based Payments section of the
Remuneration report.
There are no amounts unpaid in relation to options exercised during the year. An option converts to one fully paid ordinary share.
The below table shows a reconciliation of performance rights held by each KMP during the year:
2018
Grant Date
Opening
balance
unvested
Granted
Issue price $
Vested
Vested %
Exercised
Forfeited
Fair value $
Closing
balance
unvested
S Pether
2018
22/11/17
-
1,700,000
$0.74
-
-
-
-
1,700,000
$1,258,000
22
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Directors’ Report
EXECUTIVE EMPLOYMENT AGREEMENTS
Remuneration and other terms of employment for the following key management personnel are formalised in employment
agreements. All contracts with executives may be terminated early by either party with notice, per individual agreement, and
subject to the termination payments as detailed below:
Name
Position
Commencement
Start Date
Base Salary
(including
superannuation)
Termination Benefit
B McFadzean
Managing Director
2 November 15
$191,625
3 months’ notice
D Archer
Technical Director
1 April 10
$191,625
4 months’ notice
M Di Silvio
CFO & Company
Secretary
15 February 16
$191,625
4 months’ notice
J Netterfield
Project Manager
16 November 15
$219,000
4 months’ notice
N Patten-Williams
Marketing Manager
23 May 16
$219,000
4 months’ notice
S Pether
Chief Operating
Officer
1 April 17
$246,375
4 months’ notice
OTHER TRANSACTIONS WITH KMP AND THEIR RELATED PARTIES
There were no other transactions with KMP or their related parties.
USE OF REMUNERATION CONSULTANTS
During the financial year ended 30 June 2018, the Company engaged Chris Ryan to review and benchmark executive
remuneration and the Company’s incentive plans. The total fees paid to Chris Ryan for services during the year were $11,200.
The advice considered the following key aspects of executive remuneration and referenced practices amongst a comparator
group selected by Chris Ryan:
Ratio of fixed and at-risk remuneration; and
Market practice in relation to levels of incentive programs.
Remuneration consultants are engaged by and report directly to the Board of Directors and are required to confirm in writing
their independence from the Company’s senior management and other executives. As a consequence, the Board of Directors is
satisfied that the recommendations were made free from undue influence from any members of the Key Management
Personnel.
END OF AUDITED REMUNERATION REPORT
EVENTS OCCURRING 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.
AUDITOR INDEPENDENCE
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 24 and forms part of this Directors’ report for the year ended 30 June 2018.
Signed in accordance with a resolution of the Directors.
Mr Bruce McFadzean
Managing Director
Perth, 5 September 2018
23
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 2018, I declare that, to the best of my knowledge and belief, there have been no
contraventions of:
(a)
the auditor independence requirements as set out in 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
5 September 2018
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
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2018
Continuing operations
Other income
Employee benefits expense
Corporate expenses
Other expenses
Gain on demerger
Results from operating activities
Net financing income
Net loss before income tax
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 and diluted loss per share
Notes
5
5
5
5
5
5
6
7
2018
$’000
71
(3,560)
(2,504)
(208)
1,325
(4,876)
360
(4,516)
2,789
(1,727)
-
(1,727)
2017
$’000
12
(4,968)
(2,422)
(3,311)
-
(10,689)
260
(10,429)
1,215
(9,214)
-
(9,214)
(0.81)
(5.25)
The Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes
25
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Consolidated Statement of Financial Position
As at 30 June 2018
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total current assets
Non-current assets
Plant and equipment
Leased asset
Exploration and evaluation expenditure
Mine development
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Interest bearing liabilities
Provisions
Total current liabilities
Non-current liabilities
Interest bearing liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Notes
10
11
12
13
14
15
16
17
8
17
18
2018
$’000
23,142
610
18
23,770
228
282
7,256
46,268
54,034
2017
$’000
8,335
289
-
8,624
107
-
38,525
-
38,632
77,804
47,256
6,110
153
278
6,541
148
148
1,279
-
270
1,549
-
-
6,689
1,549
71,115
45,707
80,602
7,325
(16,812)
71,115
54,722
6,070
(15,085)
45,707
The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes
26
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Consolidated Statement of Changes in Equity
As at 30 June 2018
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 30 June 2017
Loss for the year
Total comprehensive loss for the year
Shares issued during the year
Return of capital for demerger
Share issue costs
Recognition of share-based payments
Balance as at 30 June 2018
Issued Capital
Accumulated
losses
$’000
38,644
-
-
17,130
(1,052)
-
54,722
-
-
32,002
(4,000)
(2,122)
-
80,602
$’000
(5,871)
(9,214)
(9,214)
-
-
-
(15,085)
(1,727)
(1,727)
-
-
-
-
(16,812)
Share-based
payment
reserve
$’000
2,497
-
-
-
-
3,573
6,070
-
-
-
-
-
1,255
7,325
Total
$’000
35,270
(9,214)
(9,214)
17,130
(1,052)
3,573
45,707
(1,727)
(1,727)
32,002
(4,000)
(2,122)
1,255
71,115
The Consolidated Statement of Changes in Equity should be read in conjunction with accompanying notes
27
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2018
Cash flows from operating activities
Research and development tax refund
Payments to supplier and employees
Interest received
Return of bond payments
Notes
2018
$’000
2,728
(5,311)
364
-
2017
$’000
1,215
(4,754)
259
45
Net cash (used in) operating activities
10
(2,219)
(3,235)
Cash flows from investing activities
Proceeds from sale of tenements
Payments for exploration and evaluation expenditure
Payments for plant and equipment
Proceeds from disposal of financial assets
Payments for development expenditure
Net cash (used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payments for share issue costs
Payments for lease liability
Net cash provided by financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
10
The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes
-
500
(2,044)
(10,022)
(184)
30
(10,534)
(12,732)
32,002
(2,122)
(122)
29,758
14,807
8,335
23,142
(55)
62
-
(9,515)
17,130
(1,052)
-
16,078
3,328
5,007
8,335
28
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
BASIS OF PREPARATION
Note 1: Corporate information
Note 2: Reporting entity
Note 3: Basis of preparation
PERFORMANCE FOR THE YEAR
Note 4: Segment reporting
Note 5: Revenue and expenses
Note 6: Income tax
Note 7: Loss per share
EMPLOYEE BENEFITS
Note 8: Employee benefits
Note 9: Share-based payments
ASSETS
Note 10: Cash and cash equivalents
Note 11: Trade and other receivables
Note 12: Plant and equipment
Note 13: Leased assets
Note 14: Exploration and evaluation expenditure
Note 15: Mine development
EQUITY AND LIABILITIES
Note 16: Trade and other payables
Note 17: Interest bearing liabilities
Note 18: Capital and capital management
FINANCIAL INSTRUMENTS
Note 19: Financial instruments – fair value and risk management
GROUP COMPOSITION
Note 20: List of subsidiaries
Note 21: Parent entity information
OTHER INFORMATION
Note 22: Contingent liabilities
Note 23: Remuneration of auditors
Note 24: Commitments
Note 25: Related party transactions
Note 26: Key management personnel disclosures
Note 27: Events occurring after the reporting period
ACCOUNTING POLICIES
Note 28: Critical accounting estimates and assumptions
Note 29: Changes in accounting policies
Note 30: New accounting standards and Interpretations
29
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
BASIS OF PREPARATION
This Section of the financial report sets out the Group’s (being Sheffield Resources Limited and its controlled entities)
accounting policies that relate to the Financial Statements as a whole. Where an accounting policy is specific to one Note,
the policy is described in the Note to which it relates.
The Notes include information which is required to understand the Financial Statements and is material and relevant to
the operations and the financial position and performance of the Group. Information is considered relevant and material
if:
•
•
•
•
it relates to an aspect of the Group’s operations that is important to its future performance
it helps to explain the impact of significant changes in the Group’s business
the amount is important in understanding the results of the Group
the amount is significant due to its size or nature
NOTE 1: CORPORATE INFORMATION
The consolidated financial report of Sheffield Resources Limited for the year ended 30 June 2018 was authorised for issue
in accordance with a resolution of the Directors on 5 September 2018. The Board of Directors has the power to amend the
Consolidated Financial Statements after issue.
Sheffield Resources Limited (the “Company” or “Sheffield”) is a for-profit company limited by shares whose shares are
publicly traded on the Australian Securities Exchange. The Company and its subsidiaries were incorporated and domiciled
in Australia. The registered office and principal place of business of the Company is Level 2, 41-47 Colin Street, West
Perth, WA 6005.
The nature of the operations and principal activities of the Company are disclosed in the Directors’ Report.
The amounts contained in the financial report have been rounded to the nearest $1,000 (unless otherwise stated)
pursuant to the option available to the Company under ASIC Class Order 2016/191. The Company is an entity to which this
class order applies.
NOTE 2: REPORTING ENTITY
The Financial Statements are for the Group consisting of Sheffield Resources Limited and its subsidiaries. A list of the
Group's subsidiaries is provided in Note 20.
NOTE 3: BASIS OF PREPARATION
Basis of consolidation
These general purpose Financial Statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The
consolidated Financial Statements of Sheffield Resources Limited also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
These Financial Statements have been prepared under the historical cost convention except for certain financial assets
and liabilities which are required to be measured at fair value.
a)
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred
to the Group. They are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by
the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of
profit or loss, statement of comprehensive income, statement of changes in equity and balance sheet respectively.
b)
Foreign currency translation
Functional and Presentation Currency
Both the functional and presentation currency of Sheffield is Australian Dollars. Each entity in the Group determines its
own functional currency and items included in the Financial Statements of each entity are measured using that currency.
Foreign Currency Translation
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at
the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate
of exchange at balance date.
All translation differences relating to transactions and balances denominated in foreign currency are taken to the
Consolidated Statement of Comprehensive Income.
30
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
NOTE 3: BASIS OF PREPARATION (Continued)
Goods and services tax (‘GST’)
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange
rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated
using the exchange rate at the date when the fair value was determined.
c)
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
Comparatives
Early adoption of Australian Accounting Standards
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.
d)
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation
for the current financial year.
e)
The Group has early adopted AASB 16 Leases with a date of initial application of 1 July 2016. As a result, the Group’s
policies were amended to comply with AASB 16 as issued in this Financial Report. AASB 16 replaces AASB 117 Leases and
results in almost all leases being recognised on the balance sheet, as the distinction between operating and finance
leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay
rentals are recognised. The lease liability is measured at the present value of the lease payments that are not paid at the
balance date and is unwound over time using the interest rate implicit in the lease repayments. The right-of-use asset
comprises the initial lease liability amount, initial direct costs incurred when entering into the lease less any lease
incentives received. The asset is depreciated over the term of the lease. The new standard replaces the Group’s operating
lease expense with an interest and depreciation expense. The weighted average incremental borrowing rate at the date of
initial application was 7.62%. This has been applied to the liabilities recognised at transition date. The Group has elected
to apply the “Modified Retrospective Approach” when transitioning to the new standard. Under this approach, the Group
will not be required to restate the comparative information for its operating leases and the cumulative effect of the initial
application is adjusted against opening retained earnings. The Group has elected to measure the carrying amounts of the
right of use assets as though the standard had applied from the commencement date of the leases. Due to the
commencement date of the lease being May 2017, the opening balance adjustment to retained earnings was nil. The
Group leases office premises in Perth.
As outlined above, no restatement of the prior period has occurred. The overall earnings impact on adoption of AASB 16 at
30 June 2018 is increase in depreciation and amortisation of $0.141m and finance expense of $0.026m.
The Group has also early adopted AASB 15 Revenue from Contracts with Customers. The adoption has not had an impact
on the results.
PERFORMANCE FOR THE YEAR
This section provides additional information about those individual line items in the Statement of Comprehensive Income
that the Directors consider most relevant in the context on the operations of the entity.
NOTE 4: 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.
This project consists of mineral sand tenements located in the Canning Basin that form part of the potential Thunderbird
mineral sand mining operation.
Sheffield Project
Thunderbird Project
ii.
This project consists of mineral sand exploration tenements located in Western Australia.
iii.
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:
•
•
share-based payment expense
corporate expenses; and
31
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
NOTE 4: SEGMENT REPORTING (Continued)
2018
Sheffield
project
$’000
Thunderbird
project
$’000
Other income
Employees benefit expense
Corporate expenses
Other income/(expenses)
Impairment of deferred exploration and evaluation
Share-based payments
Gain on demerger
Net financing income
Segment results
-
-
-
-
(238)
-
-
-
(238)
-
-
-
-
-
-
-
-
-
Other
Total
$’000
71
(2,305)
(2,504)
30
-
(1,255)
1,325
360
(4,278)
$’000
71
(2,305)
(2,504)
30
(238)
(1,255)
1,325
360
2,789
(1,727)
Tax benefit
Net loss after tax
Segment assets
Segment liabilities
Capital expenditure
2017
Other income
Employees benefit expense
Corporate expenses
Other income/(expenses)
Impairment of deferred exploration and
evaluation
Share-based payments
Net financing income
Segment results
Tax benefit
Net loss after tax
Segment assets
Segment liabilities
6,021
47,859
23,924
77,804
-
5,560
1,129
6,689
485
17,109
925
18,519
Sheffield
project
$’000
Thunderbird
project
$’000
Carawine
project
$’000
-
-
-
(1,519)
(1,306)
-
-
(2.825)
-
-
-
-
(415)
-
-
(415)
-
-
-
-
(71)
-
-
(71)
Other
Total
$’000
12
(1,395)
(2,422)
-
-
(3,573)
260
(7,118)
$’000
12
(1,395)
(2,422)
(1,519)
(1,792)
(3,573)
260
1,215
(9,214)
5,779
30,393
2,353
8,731
47,256
1,549
1,549
Capital expenditure
818
8,683
521
-
10,022
32
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
NOTE 5: REVENUE AND EXPENSES
Other income
Other
2018
$’000
71
71
2017
$’000
12
12
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.
Employee benefits expense
Wages and salary
Superannuation
Share-based payments – employee benefits
Other
Corporate expenses
Investor and publics relations expense
Accounting fees
Legal fees
Conferences and seminars
Operating lease variable outgoings
Consultancy fees
Depreciation – non-mine site assets
Other
Other expenses
Impairment of deferred exploration and evaluation expenditure
Loss on sale of interest in permits
Profit on disposal of asset
2018
$’000
1,835
275
1,255
195
3,560
2018
$’000
-
54
1
44
160
1,194
204
847
2,504
2018
$’000
238
-
(30)
208
2017
$’000
912
235
3,573
248
4,968
2017
$’000
57
59
63
105
242
820
49
1,027
2,422
2017
$’000
1,792
1,519
-
3,311
33
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
NOTE 5: REVENUE AND EXPENSES (Continued)
Gain on demerger of subsidiary
Exploration and evaluation at disposal date
Share capital reduction
Gain on demerger of Carawine Resources Ltd
2018
$’000
(2,675)
4,000
1,325
2017
$’000
-
-
-
Derecognition of the carrying amount of deferred exploration expenditure on the in-specie distribution of Carawine shares
(return of capital) to Sheffield shareholders. The resulting transaction had no net cash impact on the Group. The
20,000,000 shares held by Sheffield Resources Limited were distributed to Sheffield shareholders via the in-specie
distribution of Carawine shares.
Net financing income
Interest income
Interest expense on lease liability
2018
$’000
386
(26)
360
2017
$’000
260
-
260
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial
asset.
NOTE 6: INCOME TAX
The prima facie income tax expense on pre-tax accounting loss from operations reconciles to the income tax expense in
the financial statements as follow:
Accounting loss before income tax
Income tax benefit calculated at 27.5%
Tax effect of amounts which are not deductible/(taxable) in calculating taxable
income:
Share-based payments
Accruals
Other non-deductible expenses
Share issue costs
Immediate deduction for exploration costs
Unrecognised tax losses
Capital gain on Carawine demerger
Accounting gain on Carawine demerger
Research and development tax offset
2018
$’000
(4,516)
(1,242)
345
(13)
57
(279)
(563)
983
1,076
(364)
2,789
2,789
2017
$’000
(10,429)
(2,868)
982
28
1,053
(115)
(2,756)
3,676
-
-
1,215
1,215
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.
34
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
NOTE 6: INCOME TAX (Continued)
The Company has tax losses arising in Australia. The tax benefit of these losses of $13.587m (2017: $15.048m) 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.
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.
Unrecognised deferred tax assets and liabilities
Deferred tax assets have not been recognised in respect of the following items:
Deductible temporary differences
Tax losses 1
Adjustment in tax losses disclosure
Exploration and evaluation
Development expenditure
2018
$’000
1,039
13,588
-
(1,995)
(8,360)
4,272
2017
$’000
391
13,830
1,217
(10,594)
-
4,844
1 The prior year tax losses were incorrect and as such an amount of $2,443,037 has been adjusted through current year
tax losses.
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.
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
• 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.
35
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
NOTE 6: INCOME TAX (Continued)
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.
NOTE 7: LOSS PER SHARE
Loss used in calculating basic and diluted loss per share
Loss used in calculating basic and diluted loss per share from continuing
operations
Weighted average number of ordinary shares used in the calculation of basic
and diluted loss per share
2018
$’000
(1,727)
(1,727)
2017
$’000
(9,214)
(9,214)
Number
Number
212,611,162
175,396,837
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.
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.
EMPLOYEE BENEFITS
This section of the Notes includes information that must be disclosed to comply with accounting standards and other
pronouncements relating to the remuneration of employees and consultants of the Group, but that is not immediately
related to individual line items in the Financial Statements.
NOTE 8: EMPLOYEE BENEFITS
Employee benefits
2018
$’000
278
2017
$’000
270
The provision for employee benefits represents annual leave and long service leave payable.
Provisions for legal claims are recognised when the Group has a legal or constructive obligation as a result of past events.
It is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably
estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined
by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect
to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management best estimate of the expenditure required to settle the
present obligation at the reporting date. The discount rate used to determine the present value reflects current market
assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the
passage of time is recognised as interest expense.
36
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
NOTE 8: EMPLOYEE BENEFITS (Continued)
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.
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.
NOTE 9: SHARE-BASED PAYMENTS
The Company provides benefits to employees (including Directors) in the form of shar-based payments whereby employees
render services in exchange for shares or rights over shares (‘share-based payments’).
The cost of these share-based payments with employees is measured be reference to the fair value at the date they are
granted. The value is determined using an appropriate valuation model. In valuing share-based payments, no account is
taken of any performance conditions, other than conditions linked to the price of the shares of Sheffield (‘market
conditions’) if applicable.
The cumulative expense is recognised for share-based payments at each reporting date until vesting date and reflects the
extent to which the vesting period has expired and the number of awards, that will ultimately vest.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a
market condition.
Where the terms of a share-based payment are modified, as a minimum an expense is recognised as if the terms had not
been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the
modification as measured at the date of modification.
Where a share-based payment is cancelled (other than cancellation when a vesting condition has not been satisfied), it is
treated as if it had vested on the date of cancellation and any expense not yet recognised for the award is recognised
immediately. However, if a new award is submitted for the cancelled award and designated as a replacement award on
the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award,
as described in the previous paragraph.
The dilutive effect, if any, of the outstanding options is reflected as additional share dilution in the computation of earnings
per share.
Employee Share Option Plan
Employees of the Group (including Directors) may be issued with options over ordinary shares of Sheffield. Options are
issued for nil consideration and are subject to performance criteria established by the Directors of Sheffield.
Employees do not possess any rights to participate in the Employee Share Option Plan as participation is determined by
the Directors of Sheffield. Options may be exercised at any time from the date of vesting to the date of expiry. The
exercise price for employee options granted under the Employee Share Option Plan will be fixed by the Directors prior to
the grant of the option. Each employee share option converts to one fully paid ordinary share of Sheffield. The options do
not provide any dividend or voting rights. The options are not quoted on the ASX.
The objective of the grant of options to employees is to assist in the recruitment, retention, reward and motivation of the
employees of the Group.
A total of 9,382,599 options over ordinary shares under the Employee Share Option Plan were in place during the year. As
at 30 June 2018, 2,352,500 have vested and 7,030,099 remain unvested. During the year ended 30 June 2018,
1,916,980 (2017: 1,004,728) options over ordinary shares were exercised over the period at a weighted average share
price on the date of exercise of 0.7438 (2017: 0.6069).
These options over ordinary share were in place during the year and as at 30 June 2018.
Certain performance options on issue during the year have non-market-based performance conditions. As at 30 June
2018, these performance options have not yet vested.
The non-market-based performance conditions include:
•
•
2,000,000 performance options on the completion of financing for the construction of the Thunderbird project;
3,000,000 performance options on the delivery of the first shipment to market of mineral sands product from the
Thunderbird project;
37
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
NOTE 9: SHARE-BASED PAYMENTS (Continued)
•
•
275,000 performance options on completion of off-take agreements for more than 50% of a minimum of the first 2
years forecast annual volumes of ilmenite product from the Thunderbird project; and
275,000 performance options on completion of off-take agreements for more than 50% of a minimum of the first 2
years forecast annual volumes of ilmenite product from the Thunderbird project.
Options issued in consideration for services
On 31 August 2016, the Company granted 4,000,000 options to consultants in consideration for ongoing market advisory
services (Series 7). The options have a 3-year term and an exercise price of $0.676. The options may be exercised at time
on or before 31 August 2019.
The fair value of these options has been disclosed as consultant costs in a prior year.
These options were in place during the year and as at 30 June 2018.
Options on issue – amendment to estimated amortisation period
During the year ending 30 June 2018, the Group revised the estimated amortisation period relating to options with
performance measures.
The following table describes the change in vesting date:
Measure
Original
amortisation
end date
Revised
amortisation
end date
Series
Applicable Vesting Condition
1
2
3
4
5
Vested
-
5,6,9
Completion of feasibility study
30 Jun 17
31 Dec 18
5,6,9,10
Financing complete
30 Jun 17
30 Jun 18
30 Jun 17
30 Jun 18
9
9
Offtake agreements ilmenite
Offtake agreements zircon
31 Mar 19
31 Mar 20
5,6,9,10
First product shipped
The change in accounting estimate has resulted in a reduction to the share-based payments expense of $0.0915m.
Movement in options
The table illustrates the number and weighted average exercise prices of and movements in unlisted options issued during
the year:
2018
2017
Options
Number
Weighted
average
exercise price
Options
Number
Weighted
average
exercise price
Outstanding at the beginning of the year
14,581,657
0.43
8,873,713
Granted during the year
Exercised during the year
Expired during the year
810,422
0.001
7,912,672
(1,916,980)
0.001
(1,004,728)
(92,500)
0.001
(1,200,000)
Outstanding at the end of the year
13,382,599
0.47
14,581,657
Exercisable at the end of the year
2,352,500
0.84
2,009,480
0.16
0.37
0.001
0.001
0.43
0.97
The weighted average contractual remaining life of the share options outstanding as at 30 June 2018 is 1.74 years (2017:
2.66 years).
The range of exercise prices for options outstanding as at 30 June 2018 is $0.001 - $1.16 (2017: $0.001 - $1.16).
The fair value of the options is measured at grant date using the Black-Scholes option valuation method taking into
account the terms and conditions upon which the instrument was granted. The services received and liabilities to pay for
those services are recognised over the vesting period.
38
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
NOTE 9: SHARE-BASED PAYMENTS (Continued)
The following tables lists the weighted average inputs to the model for options outstanding during the financial year.
Series 2
Series 3
Series 4
Dividend yield
Expected volatility
0%
50%
0%
75%
Risk-free interest rate
4.75%
2.82%
0%
55%
3.4%
Series 5, 6,
9, 10 & 12
(Weighted
Average)
0%
59%
0%
74%
0%
71%
2.1%
2.02%
1.46%
Series 7
Series 11
Expected life of options
5.00 years
5.00 Years
5.00 years
4.14 years
3.00 years
4.00 years
Exercise price
Grant date share price
$0.66
$0.29
$0.87
$0.48
$1.16
$0.68
$0.001
$0.676
$0.57
$0.65
$0.84
$0.60
Number
500,000
1,400,000
1,600,000
7,310,422
4,000,000
235,000
Fair value at grant date
$0.189
$0.213
$0.224
$0.57
$0.296
$0.274
Grant date
26 Sep 13
20 Mar 13
20 Mar 13
Expiry date
26 Sep 18
19 Mar 19
19 Mar 21
See table
below
See table
below
31 Aug 16
24 Nov 16
31 Aug 19
24 Nov 20
Series 5
Series 6
Series 9
Series 10
Series 12
Grant date
Expiry date
2 Nov 15
16 Nov 15
17 Nov 16
24 Nov 16
22 Nov 17
2 Feb 20
2 Feb 20
24 Nov 20
24 Nov 20
30 Nov 21
The expected life of an option is based on historical data and is not necessarily indicative of exercise payments that may
occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may
also no necessarily be the actual outcome. No other features of the options granted were incorporated into the
measurement of fair value.
Performance rights issued under the Employee Incentive Plan
The Employee Incentive Plan was established to enable employees of the Group to be issued with performance rights
entitling each participant to a fully paid ordinary share. The performance rights, issued for nil consideration are issued in
accordance with the terms and conditions approved at a General Meeting by shareholders and in accordance with
performance criteria established by the Directors.
Employees do not possess any rights to participate in the Employee Incentive Plan as participation is solely determined by
the Directors. Performance rights convert to one fully paid ordinary share in Sheffield at an exercise price of nil upon
meeting certain non-market-based performance conditions. The performance rights do not provide any dividend or voting
rights. The performance rights are not quote on the ASX. If an employee ceases to be employed by the Group within the
period, the unvested performance rights will be forfeited.
The objective of the Employee Incentive Plan is to assist in the recruitment, reward, retention and motivation of the KMP of
the Group.
During the year ended 30 June 2018, 2,012,500 performance rights were issued with certain non-market-based
performance conditions. As at 30 June 2018, these performance rights have not yet vested.
The non-market based performance conditions include:
•
•
•
•
•
850,000 performance rights on the successful transition from construction to operations of the Thunderbird project;
62,500 performance rights on the approval of the final investment decision in relation to the Thunderbird project;
850,000 performance rights on the completion of project construction of the Thunderbird project;
125,000 performance rights on the delivery of the first shipment to market of mineral sands product from the
Thunderbird project.
125,000 performance rights on the Thunderbird project coming in on time and in budget; and
39
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
NOTE 9: SHARE-BASED PAYMENTS (Continued)
Movement in performance rights
Outstanding at the beginning of the year
Granted during the year
Vested during the year
Expired during the year
Outstanding at the end of the year
Exercisable at the end of the year
2018
2017
Options
Number
Weighted
average
exercise price
Options
Number
Weighted
average
exercise price
-
2,012,500
-
-
2,012,500
-
-
0.74
-
-
0.74
-
-
-
-
-
-
-
-
-
-
-
-
-
The fair value of the performance rights is measured at grant date was estimated by taking the market price of the
Company’s shares on that date less the present value of expected dividends that will not be received on the performance
rights during the vesting period.
The weighted average remaining contractual life of the performance rights as at 30 June 2018 is 4.02 years (2017: not
applicable)
ASSETS
This section provides additional information about those individual line items in the Statement of Financial Position that
the Directors consider most relevant in the context of the operations of the entity.
NOTE 10: CASH AND CASH EQUIVALENT
Cash at bank and on hand
Short-term deposits
2018
$’000
139
23,003
23,142
2017
$’000
1,332
7,003
8,335
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.
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.
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.
Reconciliation of loss after tax for the year to net cash flows from operations is as follows:
40
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
NOTE 10: CASH AND CASH EQUIVALENT (Continued)
Loss after tax for the year
Share-based payments
Depreciation
Impairment of exploration and evaluation expenditure
Loss on sale of interest in permits
Profit on sale of assets
Gain on demerger
Other
Movements in operating assets and liabilities
(Increase)/decrease in receivables
(Decrease) in trade and other payables
(Decrease)/increase in provisions
Net cash used in operating activities
NOTE 11: TRADE AND OTHER RECEIVABLES
Other receivables
Bank guarantees 1
2018
$’000
(1,727)
1,255
204
238
-
(30)
(1,325)
25
(58)
(715)
(86)
(2,219)
2018
$’000
516
94
610
2017
$’000
(9,214)
3,573
49
1,792
1,519
(12)
-
-
55
(1,130)
133
(3,235)
2017
$’000
197
92
289
1 Bank guarantees include $0.0624m (2017: $0.0624m) held as security for the office lease and bears 2.2% per annum
interest and $0.030m (2017: $0.030m) held as security for the credit card facility and bears 2.1% per annum interest.
No receivables are past due nor impaired.
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.
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.
41
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
NOTE 12: PLANT AND EQUIPMENT
Plant and equipment
Cost or fair value
Accumulated depreciation
Balance as at 1 July
Additions
Depreciation
Balance as at 30 June
2018
$’000
606
(378)
228
107
184
(63)
228
2017
$’000
628
(521)
107
101
55
(49)
107
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
4 years
2-10 years
Impairment
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.
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.
42
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
NOTE 12: PLANT AND EQUIPMENT (Continued)
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.
NOTE 13: LEASED ASSETS
Right of use assets
Cost or fair value
Accumulated depreciation
Balance as at 1 July
Additions
Depreciation
Balance as at 30 June
Right of use leased assets
2018
$’000
423
(141)
282
-
423
(141)
282
2017
$’000
-
-
-
-
-
-
-
Leased assets are capitalised at the commencement date of the lease and comprise of the initial lease liability amount,
initial direct costs incurred when entering into the lease less any lease incentives received. On initial adoption of AASB 16
the Group has adjusted the right-of-use assets at the date of initial application by the amount of any provision for onerous
leases recognised immediately before the date of initial application. Following initial application, an impairment review is
undertaken for any right of use lease asset that shows indicators of impairment and an impairment loss is recognised
against any right of use lease assets that is impaired.
NOTE 14: EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation phase – at cost
Balance as at 1 July
Expenditure incurred
Transfer to mine development 1
Demerger of subsidiary 2
Sale of interest in tenements
Impairment of exploration expenditure 3
Balance as at 30 June
2018
$’000
38,525
2,044
(30,400)
(2,675)
-
(238)
7,256
2017
$’000
32,314
10,022
-
-
(2,019)
(1,792)
38,525
1 During the year ended 30 June 2018, the decision to commence development at the Thunderbird Mineral Sands
Project was made. Costs associated with the Thunderbird Project, previously capitalised to exploration and evaluation
have been transferred to mine development.
2 On 7 December 2017, the subsidiary Carawine Resources Limited was demerged from the Group via an in-specie
distribution. Assets held by the subsidiary were transferred at cost to the demerged entity.
3 The majority of the impairment loss relates to the relinquishment of the Mt Adams, Perth Basin area of interest. This
tenement was relinquished as a result of the demerger of Carawine Resources Limited.
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.
43
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
NOTE 14: EXPLORATION AND EVALUATION EXPENDITURE (Continued)
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:
a)
b)
-
the rights to tenure of the area of interest are current; and
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.
NOTE 15: MINE DEVELOPMENT
Exploration and evaluation phase – at cost
Balance as at 1 July
Expenditure incurred
Transfer from exploration and evaluation
Balance as at 30 June
2018
$’000
-
15,868
30,400
46,268
2017
$’000
-
-
-
-
Mine development costs are derived from expenditure associated with developing and progressing the Thunderbird
project.
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.
EQUITY AND LIABILITIES
This section provides additional information about those individual line items in the Statement of Financial Position that
the Directors consider most relevant in the context of the operations of the entity.
44
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
NOTE 16: TRADE AND OTHER PAYABLES
Trade payables
Other payables
2018
$’000
4,166
1,944
6,110
2017
$’000
1,115
164
1,279
Trade payables are non-interest bearing and are normally settled on 30-day terms.
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.
NOTE 17: INTEREST BEARING LIABILITIES
Current
Lease liability
Non-current
Lease liability
2018
$’000
153
148
2017
$’000
-
-
The Group has entered into a commercial lease to rent office space. The lease has a fixed term of 1 year with an option to
renew for the next 2 years.
Leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are
capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the
minimum lease payments. The corresponding rental obligations, net of finance charges, are included in short-term and
long-term payables. Lease payments are apportioned between the finance charges and reduction of the lease liability to
achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against
Statement of Comprehensive Income.
Leased assets are depreciated on a straight-line basis over the estimated useful life of the asset.
Reconciliation of movements in interest bearing liabilities to cash flows arising from financing activities:
Balance as at 1 July
Lease inception
Payments for lease liability
Balance as at 30 June
NOTE 18: CAPITAL AND CAPITAL MANAGEMENT
228,990,124 (2017: 181,358,784) fully paid ordinary shares
2018
$’000
-
423
(122)
301
2018
$’000
80,602
2017
$’000
54,722
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.
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.
45
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
NOTE 18: CAPITAL AND CAPITAL MANAGEMENT (Continued)
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.
2018
2017
Number
$’000
Number
Balance as at 1 July
181,358,784
54,722
147,414,062
Issue of fully paid ordinary shares 1
45,714,360
32,000
32,939,994
Issued on exercise of share options 2
1,916,980
2
1,004,728
Return on capital for demerger
Share issue costs
Balance as at 30 June
-
-
(4,000)
(2,122)
-
-
228,990,124
80,602
181,358,784
$’000
38,644
17,129
1
-
(1,052)
54,722
1 On 30 October 2017, the Company issued 42,857,143 fully paid ordinary shares for $0.70 to sophisticated and
professional investors.
On 23 November 2017, the Company issued 2,857,217 fully paid ordinary shares for $0.70 under a share purchase plan.
2 On 6 October 2017, the Company issued 857,500 fully paid ordinary shares for $0.001 on the exercise of share options.
On 7 November 2017, the Company issued 346,657 fully paid ordinary shares for $0.001 on the exercise of share
options.
On 1 March 2018, the Company issued 275,000 fully paid ordinary shares for $0.001 on the exercise of share options
On 10 May 2018, the Company issued 437,823 fully paid ordinary shares for $0.001 on the exercise share options.
Capital 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 2017.
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.
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.
FINANCIAL INSTRUMENTS
This section of the Notes discusses the Group’s exposure to various risks and shows how these could affect the Group’s
financial position and performance.
NOTE 19: FINANCIAL INSTRUMENTS – FAIR VALUE AND RISK MANAGEMENT
The Group’s principal financial instruments comprise cash, receivables and payables.
The Group monitors and manages its exposure to key financial risks in accordance with the Group’s financial management
policy. The objective of the policy is to support the delivery of the Group’s financial targets whilst protecting future financial
security.
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.
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.
46
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
NOTE 19: FINANCIAL INSTRUMENTS – FAIR VALUE AND RISK MANAGEMENT (Continued)
2018
Floating
interest
rate
< 1 year
1 to 5
years
> 5
years
Non-
interest
bearing
Total Weighted average
interest rate
$’000
$’000
$’000
$’000
$’000
$’000 Fixed
%
Floating
%
Financial assets
Cash and cash equivalents
12
23,003
Trade and other receivables
-
94
Total financial assets
12
23,097
Financial liabilities
Trade and other payables
Interest bearing liabilities
Total financial liabilities
-
-
-
-
153
148
153
148
-
-
-
-
-
-
-
-
-
-
127
23,142
1.80
1.70
516
610
2.20
643
23,752
6,110
6,110
-
-
301
7.62
6,110
6,411
-
-
-
2017
Floating
interest
rate
< 1 year
1 to 5
years
> 5
years
Non-
interest
bearing
Total Weighted average
interest rate
$’000
$’000
$’000
$’000
$’000
$’000 Fixed
%
Floating
%
Financial assets
Cash and cash equivalents
1,290
7,045
Trade and other receivables
-
92
Total financial assets
1,290
7,137
Financial liabilities
Trade and other payables
-
-
-
-
-
-
-
-
-
-
-
8,335
2.11
1.49
197
289
2.11
197
8,624
1,279
1,279
-
-
-
Total financial liabilities
1,279
1,279
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.
47
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
NOTE 19: FINANCIAL INSTRUMENTS – FAIR VALUE AND RISK MANAGEMENT (Continued)
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.
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.
The contractual outflows and maturities of financial liabilities, including estimated interest payments and excluding the
impact of netting agreements within 1 year is $6.263m (2017: $1.279m within 6 months) and within 1 to 5 years
$0.148m (2017: nil).
Fair values
The fair values of financial assets and liabilities approximate the carrying amounts shown in the Balance Sheet.
GROUP COMPOSITION
This section of the Notes includes information that must be disclosed to comply with accounting standards and other
pronouncements relating to the structure of the Group, but that is not immediately related to individual line items in the
Financial Statements.
NOTE 20: LIST OF SUBSIDIARIES
Subsidiary Entities
The consolidated financial statements include the financial statements of Sheffield Resources Limited and the subsidiaries
listed in the following table.
Name
Moora Talc Pty Ltd
Ironbridge Resources Pty Ltd
Thunderbird Operations Pty Ltd
Carawine Resources Pty Ltd 1
Country of
Incorporation
Australia
Australia
Australia
Australia
Equity Interest %
Investment %
2018
2017
2018
2017
100
100
100
-
100
100
100
100
100
100
100
-
100
100
100
100
1 On 7 December 2017, the subsidiary Carawine Resources Limited was demerged from the Group via an in-specie
distribution. Assets held by the subsidiary were transferred at cost to the demerged entity.
48
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
NOTE 21: PARENT ENTITY INFORMATION
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Financial performance
Loss for the year
Other comprehensive income
Total comprehensive income
2018
$’000
23,430
46,496
69,926
982
148
1,130
80,602
7,325
(19,131)
68,796
2017
$’000
8,624
38,632
47,256
1,550
-
1,550
54,722
6,070
(15,086)
45,706
(4,045)
(9,214)
-
-
(4,045)
(9,214)
The Company had no contingent liabilities or contractual commitments as at 30 June 2018 (2017: nil). The Company has
bank guarantees as noted in Note 11.
OTHER INFORMATION
This section of the Notes includes other information that must be disclosed to comply with accounting standards and other
pronouncements, but that is not immediately related to individual line items in the Financial Statements.
NOTE 22: CONTINGENT LIABILITIES
The Group has no contingent liabilities as at 30 June 2018 (2017: nil).
NOTE 23: REMUNERATION OF AUDITORS
The auditor of Sheffield Resources Limited is HLB Mann Judd.
Amounts received or due and receivable by HLB Mann Judd for the audit or
review of the financial report of the entity
2018
$
52,500
2017
$
40,700
49
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
NOTE 24: COMMITMENTS
Exploration commitments
To maintain current rights of tenure to exploration tenements, the Group is required to meet the minimum expenditure
requirements specified by various State and Territory Governments. These obligations are subject to renegotiation when
application for a mining lease is made and at other times. These obligations are not provided for in this financial report.
The minimum amounts required to retain tenure in 2019 is $1.767m (2018: $2.641m). These obligations are expected to
be fulfilled in the normal course of operations. Commitments beyond 2018 are dependent upon whether existing rights of
tenure are renewed or new rights of tenure are acquired.
Capital commitments
The Group has $3.663m in capital commitments due within one year as at 30 June 2018 (2017: nil) in relation to early
works being undertaken at the Thunderbird mineral sands project.
NOTE 25: RELATED PARTIES TRANSACTIONS
Loans to subsidiaries
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 financial year.
NOTE 26: KEY MANAGEMENT PERSONNEL DISCLOSURES
Mr David Archer (Technical Director)
Mr Bruce McFadzean (Managing Director)
Mr Will Burbury (Non-Executive Chairman)
Mr Bruce McQuitty (Non-Executive Director)
The following persons acted as Directors of the Company during the financial year:
•
•
•
•
The following persons are the key management personnel of the Company during the financial year:
•
•
•
•
The aggregate compensation made to directors and other key management personnel of the Group is set out below:
Mr Mark Di Silvio (Company Secretary & Chief Financial Officer)
Mr Neil Patten-Williams (Marketing Manager)
Mr Stuart Pether (Chief Operating Officer)
Mr Jim Netterfield (BFS Study Manager)
Short-term employee benefits
Post-employment benefits
Share-based payments
2018
$
2017
$
1,317,630
1,127,832
141,369
1,257,989
2,716,988
146,067
2,648,278
3,922,177
NOTE 27: EVENTS OCCURRING 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.
ACCOUNTING POLICIES
This section of the Notes includes information that must be disclosed to comply with accounting standards and other
pronouncements, but that is not immediately related to individual line items in the Financial Statements.
50
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
NOTE 28: 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 9.
As a performance incentive, senior employees were granted options and performance rights during the financial year
ended 30 June 2018 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.
During the year ended 30 June 2018, as a result of the changes in the timeline for the development of the Thunderbird
mineral sands project, the Group has revised vesting target dates relating to its share-based payments. This revision in
timeline has resulted in a material change to share-based payments expense and corresponding reserve. The change in
vesting conditions is described in Note 9.
Impairment of Exploration and Evaluation Expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors,
including whether the Group decides to exploit the related area of interest itself or, if not, whether it successfully recovers
the related exploration and evaluation asset through sale.
Factors which could impact the future recoverability include the level of reserves and resources, future technological
changes which could impact the cost of mining, future legal changes (including changes to environmental obligations) and
changes to commodity prices. To the extent that capitalised exploration and evaluation expenditure is determined not to be
recoverable in the future, this will reduce profits and net assets in the period in which this determination is made.
In addition, exploration and evaluation expenditure is capitalised if rights to tenure of the area of interest are current and
activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or
otherwise of economically recoverable reserves.
Impairment of Mine Development Expenditure
The future recoverability of capitalised mine development expenditure is dependent on a number of factors, including the
level of proved and probable reserves and measured, indicated and inferred mineral resources, future technological
changes which could impact the cost of mining, future legal changes (including changes to environmental obligations) and
changes to commodity prices.
To the extent that capitalised mine development expenditure is determined not to be recoverable in the future, this will
reduce profits and net assets in the period in which this determination is made.
Determination of Mineral Resources and Ore Reserves
The determination of reserves impacts the accounting for asset carrying values, depreciation and amortisation rates, and
provision for decommissioning and restoration. The information in this report as it relates to ore reserves, mineral
resources or mineralisation is reported in accordance with the AusIMM “Australian Code for Reporting of Identified Mineral
Resources and Ore Reserves 2012”. The information has been prepared by or under supervision of competent persons as
identified by the Code.
There are numerous uncertainties inherent in estimating mineral resources and ore reserves and assumptions that are
valid at the time of estimation may change significantly when new information becomes available. Changes in the forecast
prices of commodities, exchange rates, production costs or recovery rates may change the economic status of reserves and
may ultimately result in the reserves being restated.
NOTE 29: CHANGES IN ACCOUNTING POLICIES
In the year ended 30 June 2018, 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.
Except as noted in Note 3, 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.
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective
and have not been adopted by the Group for the year ended 30 June 2018 are outlined below.
51
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Notes to the Financial Statements for the Year Ended 30 June 2018
NOTE 30: NEW ACCOUNTING STANDARDS AND INTERPRETATIONS
AASB 9 Financial instruments (effective from 1 July 2018)
AASB 9 Financial Instruments addresses the classification, measurement and de-recognition of financial assets and
financial liabilities and introduces new rules for hedge accounting. All financial assets that are within the scope of AASB 9
are required to be measured at either amortised cost or fair value, while financial liabilities measured at fair value through
profit and loss will require consideration as to the portion change in fair value that is attributable to changes in the credit
risk of that liability. Such changes in value with a connection to change in credit risk will be presented in other
comprehensive income rather than profit or loss.
The requirements for hedge accounting under AASB 9 retain similar accounting treatments to those currently available
under AASB 139. The new standard introduces greater flexibility to types of transactions eligible for hedge accounting
while the previous requirement for hedge effectiveness testing has been replaced with the principle of an ‘economic
relationship’ and the requirement for retrospective assessment of hedge effectiveness has been removed. The standard
has however introduced enhanced disclosure requirements regarding risk management activities.
The Group has considered the impact on its consolidated Financial Statements and assessed that the effect of the new
standard will be minimal.
AASB 2016-5 Amendments to Australian Accounting Standards – Classification and Measurement of Share-based
Payment transactions (effective from 1 July 2018)
This standard amends AASB 2 Share-Based Payments clarifying how to account for certain types of share-based payment
transactions. The amendments provide requirements on the accounting for:
•
•
•
The effects of vesting and non-vesting conditions on the measurement of cash-settled share-based payments;
A modification to the terms and conditions of a share-based payment that changes the classification of the
transaction from cash-settled to equity-settled.
Share-based payment transactions with a net settlement feature for withholding tax obligations;
The Group has considered the impact on its consolidated Financial Statements and assessed that the effect of the new
standard will be minimal.
AASB Interpretation 23 Uncertainty over Income Tax Treatments (effective from 1 July 2019)
This Interpretation clarifies the application of the recognition and measurement criteria in AASB 112 Income Taxes when
there is uncertainty over income tax treatments. The Interpretation specifically addresses the following:
•
•
•
•
The Group has considered the impact on its consolidated Financial Statements and assessed that the effect of the new
standard will be minimal.
How an entity determines taxable profit, tax bases, unused tax losses, unused tax credits and tax rates;
The assumptions an entity makes about the examination of tax treatments by taxation authorities;
Whether an entity considers uncertain tax treatments separately;
How an entity considers changes in facts and circumstances.
52
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 2018 and of its performance
for the year then ended; and
complying with Australian Accounting Standards, the Corporations Regulations 2001, professional
reporting requirements and other mandatory requirements.
b.
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
c. the financial statements and notes thereto are in accordance with International Financial Reporting Standards
issued by the International Accounting Standards Board.
2.
This declaration has been made after receiving the declarations required to be made to the directors in accordance
with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2018.
This declaration is signed in accordance with a resolution of the Board of Directors.
Mr Bruce McFadzean
Managing Director
5 September 2018
53
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
2018, 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, and 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 2018 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. We have determined the matters described below to be the key
audit matters to be communicated in our report.
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
Key Audit Matter
How our audit addressed the key audit matter
Carrying amount of exploration and evaluation expenditure
Note 14 of the financial report
The carrying amount of exploration and
evaluation expenditure as at 30 June 2018
was $7.256 million.
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources, the Group
capitalises all exploration and evaluation
expenditure, including acquisition costs and
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 the standard. 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.
that
Our procedures included but were not limited to the
following:
•
•
•
•
•
•
•
Obtained an understanding of the key
processes associated with management’s
review of the carrying values of each area
of interest;
Considered the Directors’ assessment of
potential indicators of impairment;
Obtained evidence that the Group has
current rights to tenure of its areas of
interest;
Examined the exploration budget for the
year ending 30 June 2018 and discussed
with management the nature of planned
ongoing activities;
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;
Substantiated a sample of expenditure by
agreeing to supporting documentation; and
Examined the disclosures made in the
financial report.
Carrying amount of mine development
Note 14 and 15 of the financial statements
During the year the Group transferred $30.4
million
from exploration and evaluation
expenditure to mine development following the
decision to commence development at the
Thunderbird Mineral Sands Project.
Subsequent to transfer an additional $15.8
million mine development was incurred and
capitalised. The carrying amount of mine
development as at 30 June 2018 was $46.3
million.
transfer
The impairment assessment conducted under
AASB 136 Impairment of Assets as at the date
of
the
recoverable amount of the Thunderbird Mineral
their carrying
Sands Project assets with
amounts in the financial statements.
involved a comparison of
•
•
•
•
The evaluation of the recoverable amount of
these assets at transfer is considered a key
audit matter as it was based upon a model which
required significant judgement in verifying the
the expected
key assumptions supporting
•
•
Our audit procedures included but were not limited
to:
evaluated
Evaluated the amount which management
proposed to transfer;
Obtained an understanding of the process
associated with the preparation of the
model to assess the recoverable amount of
the Thunderbird Mineral Sands Project at
transfer;
Critically
management’s
methodology in the model and the basis for
key assumptions;
Performed sensitivity analysis around the
key
that either
individually or collectively would be required
for assets to be impaired and considered
the likelihood of such movement in those
key assumptions;
Considered whether the assets comprising
the cash-generating unit had been correctly
allocated;
Compared forecast cash flows in the model
to the latest approved forecasts;
the model
inputs
in
discounted future cash flows of the Thunderbird
Mineral Sands Project.
In addition, our audit focussed on the Group’s
assessment of the carrying amount of the
capitalised mine development, as this is one of
the most significant assets of the Group.
Demerger of Carawine Resources Limited
Note 5, 14 and 18 of the financial statements
During the year, the Group disposed of its
subsidiary Carawine Resources Limited via an
in-specie distribution to the shareholders of
Sheffield Resources Limited.
It is due to its size that this is considered a key
audit matter.
•
•
•
Considered the appropriateness of the
discount rate used in the model; and
Substantiated a sample of expenditure
subsequent to date of transfer by agreeing
to supporting documentation; and
Examined the disclosures made in the
financial report.
Our audit procedures included but were not limited
to:
•
•
•
•
•
to Owners
Read and considered the terms of the
demerger;
Consideration of
requirements of
the
Interpretation 17 Distribution of Non-cash
Assets
regarding non-cash
distributions;
Verified the quantum and separation of the
asset from the continuing business;
Verified the quantum of the distribution with
reference to the number and value of shares
issued; and
Examined the disclosures made in the
financial report.
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 2018, 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 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.
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
2018.
In our opinion, the Remuneration Report of Sheffield Resources Limited for the year ended 30 June
2018 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
Perth, Western Australia
5 September 2018
Danny Buckley
Partner
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
ASX Additional Information
As at 31 August 2018
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 31 August 2018.
Ordinary Share Capital
•
At the date of this report, 228,990,124 fully paid ordinary shares are held by 2,000 individual shareholders.
Spread of Holdings
Total Holders
Ordinary Shares
1
1,001
5,001
10,001
100,001
- 1,000
- 5,000
- 10,000
- 100,000
- and over
Number of Holders/Shares
132
395
312
893
268
2,000
63,341
1,218,180
2,504,734
33,297,916
191,905,953
228,990,124
Unmarketable parcels at the date of this report amount to 3,470 shares held by 62 shareholders.
Substantial Shareholders
Ordinary Shareholders
Fully Paid Ordinary Shares
Number
Percentage
BlackRock Group1
13,937,311
Mr Walter Mick George Yovich & Mrs Jeanette Julia Yovich
12,418,248
6.09
5.42
1 As at 31 July 2018, BlackRock Group had control over a total of 13,937,311 shares representing 6.09% of the issued
fully paid shares in the Company via the following entities:
Entity
BlackRock Investment Management (UK) Limited
BlackRock Investment Management Limited
Voting rights
Number
9,252,283
4,685,028
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 22,8990,124 fully paid shares. All fully paid shares are free of escrow conditions.
• All 13,382,599 options are not quoted on the ASX. All options are free of escrow conditions.
Unlisted Options
Exercisable at $0.66 each on or before 26 September 2018
Exercisable at $0.87 each on or before 10 March 2019
Exercisable at $1.16 each on or before 19 March 2021
Exercisable at $0.001 each on or before 8 February 2020
Exercisable at $0.676 each on or before 31 August 2019
Exercisable at $0.001 each on or before 24 November 2020
Exercisable at $0.001 each on or before 24 November 2020
Exercisable at $0.84 each on or before 24 November 2020
Number
500,000
1,400,000
1,600,000
3,000,000
4,000,000
1,575,000
700,000
235.000
59
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
ASX Additional Information
As at 31 August 2018
Exercisable at $0.001 each on or before 30 November 2021
Unlisted Performance Rights
Exercisable at $0.00 each on or before 30 November 2021
Exercisable at $0.00 each on or before 1 March 2022
372,599
13,382,599
Number
1,700,000
312,500
2,012,500
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
CITICORP NOMINEES PTY 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
MR REES HOLLIER JOHN JONES & MRS MOIRA MARGUERITE JONES & MR WALTER MICK
GEORGE YOVICH
ARCHER ENTERPRISES (WA) PTY LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
CRESCENT NOMINEES LIMITED
UBS NOMINEES PTY LTD
BRISPOT NOMINEES PTY LTD
CS FOURTH NOMINEES PTY LIMITED
ARCHER ENTERPRISES (WA) PTY LTD
PENMAEN LIMITED
BNP PARIBAS NOMS PTY LTD
NATIONAL NOMINEES LIMITED
MR DAVID LINDSAY ARCHER & MRS SIMONE ELIZABETH ARCHER
Fully Paid Ordinary Shares
Number
Percentage %
18,190,096
17,259,150
12,418,248
11,216,887
8,046,507
7,548,500
7,351,736
4,472,813
3,736,612
3,680,000
3,591,274
3,237,085
2,662,500
2,378,066
2,173,347
2,171,744
2,112,407
2,098,454
1,667,639
1,640,000
7.94
7.54
5.42
4.90
3.51
3.30
3.21
1.95
1.63
1.61
1.57
1.41
1.16
1.04
0.95
0.95
0.92
0.92
0.73
0.72
TOTAL
117,653,065
51.38
60
Tenement
Holder2
Interest
Location
SHEFFIELD RESOURCES LIMITED
ACN 125 811 083
Interests in Mining Tenements
As at 31 August 2018
Project
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
E04/2455
E04/2456
E04/20812
E04/20832
E04/20842
E04/21592
E04/21712
E04/21922
E04/21932
E04/21942
E04/23482
E04/23492
E04/23502
E04/23902
E04/23992
E04/24002
L04/842
L04/852
L04/862
L04/922
L04/932
E04/2478
L04/822
L04/832
E04/24942
M04/4592
E70/3762
E70/3813
E70/3814
E70/3929
E70/3967
E70/4190
E70/4584
E70/4292
E70/4719
E70/4747
L70/150
M70/8721
Sheffield Resources Ltd
Sheffield Resources Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Sheffield Resources Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Mineral Sands
M70/9651
Sheffield Resources Ltd
Mineral Sands
M70/11531
Sheffield Resources Ltd
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Notes:
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
R70/351
E70/4922
E70/3859
E04/25092
E04/25102
ELA 2018-00046 Moora Talc Pty Ltd
E45/52142
E04/25402
E04/25542
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
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%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
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
Eucla Basin (SA)
Canning Basin
Canning Basin
Canning Basin
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.
2Thunderbird Operations Pty Ltd is a 100% owned subsidiary of Sheffield Resources Ltd.
Status
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Pending
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Pending
Granted
Pending
Pending
Pending
Pending
Pending
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