SIX SIGMA METALS LIMITED
AND ITS CONTROLLED ENTITY (FORMERLY BOTSWANA
METALS LIMITED)
ACN 122 995 073
ANNUAL REPORT
30 JUNE 2018
ANNUAL REPORT
FOR THE PERIOD ENDED 30 JUNE 2018
CORPORATE DIRECTORY
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
STATEMENT OF FINANCIAL POSITION
STATEMENT OF CHANGES IN EQUITY
STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
CORPORATE GOVERNANCE STATEMENT
ASX ADDITIONAL INFORMATION
CONTENTS
2
3
16
17
18
19
20
21
50
51
56
56
1
CORPORATE DIRECTORY
CORPORATE DIRECTORY
Directors:
Mr Eddie King
Mr Steven Russell Groves
Mr Joshua Alan Letcher
Company Secretary:
Mr Mauro Piccini
Registered Office:
Suite 2, Level 1
1 Altona Street
West Perth WA 6005
Share Registry:
Advanced Share Registry Services Limited
110 Stirling Highway
NEDLANDS WA 6009
Telephone (08) 9389 8033
Facsimile (08) 9262 3723
Banker:
Westpac Banking Corporation
Level 13, 109 St Georges Terrace
Perth WA 6000
Auditor:
Securities Exchange:
William Buck
Level 20
181 William Street
MELBOURNE VIC 3000
ASX Limited
Level 45
Rialto South Tower
525 Collins Street
MELBOURNE VIC 3000
2
DIRECTORS’ REPORT
DIRECTORS’ REPORT
The Directors present their report on the consolidated entity consisting of Six Sigma Metals Limited and its controlled entity
(“the Group”) for the year ended 30 June 2018.
DIRECTORS
The following persons were Directors of the Company during the whole of the financial year and up to the date of this Report:
Mr Eddie King (Executive Chairman, appointed 12 June 2018)
Mr Steven Russell Groves
Mr Joshua Alan Letcher (appointed 21 August 2017)
Mr Edwin Edward Bulseco (appointed 21 August 2017, resigned 31 July 2018)
Mr Patrick John Volpe (Executive Chairman, resigned 11 December 2017)
Mr Matthew John Hudson (resigned 21 August 2017)
COMPANY SECRETARY
Mr Mauro Piccini
Mr Piccini is a Chartered Accountant (CA) and a member of the Governance Institute of Australia (GIA). He specialises in
corporate advisory, company secretarial and financial management services. Mauro spent 7 years at the ASX and possesses
core competencies in publicly listed and unlisted company secretarial, administration and governance disciplines.
Mr Ramon Jimenez resigned as Company Secretary 22 December 2017 and on the same day Mr Mauro Piccini was appointed.
PRINCIPAL ACTIVITIES
The Group’s principal activities during the year have been the continuing exploration in Botswana. The main business activities
in recent years have been focused on the exploration development for base metals and in particular for nickel and copper and
PGEs within the Group’s tenement portfolio located over the Limpopo belt on the eastern side of Botswana.
The Company entered into an option agreement with Mirroplex Pty Ltd to acquire up to 80% interest in the Chuatsa Vanadium‐
Titanium and Shamva Lithium projects in Zimbabwe as announced 17 May 2018, the Company is currently undertaking due
diligence.
3
OPERATING RESULTS
The consolidated loss for the year attributable to the members of the Company was:
Operating loss after income tax
Net consolidated loss attributable to members of the Company
DIVIDENDS
DIRECTORS’ REPORT
2018
$
2017
$
(1,469,576)
(1,772,286)
(1,469,576)
(1,772,286)
As the Group’s principal activities are minerals exploration it has not as yet paid any dividends and does not see any short–
term return to shareholders via dividend payments.
REVIEW OF OPERATIONS
OPTION AGREEMENT ON SHAMVA LITHIUM AND CHUATSA VANADIUM PROJECTS
The Group entered Option Agreement to acquire an 80% interest in Shamva Lithium and Chuatsa Vanadium‐Titanium Projects
in Zimbabwe.
The proposed acquisition is planned as a three‐phase staged option agreement whereby the Company can acquire up to an
80% interest in the Projects by acquiring an interest in the share capital of Mirrorplex. The key terms of the Option Earn in
Agreement are outlined in ASX Announcement on 17 May 2018 and include an initial 60 Due Diligence period followed by 3
Earn‐in phases. A reduction in the consideration shares for the option agreement for phase 1 were subsequently announced
on 4 July 2018.
Due Diligence Period was extended to accommodate drilling and de‐risk project;
Due diligence drilling of 5 holes undertaken in July at Shamva revealed;
All holes intersected pegmatite dykes;
Down‐hole pegmatite drill intersections of up to 9m, 14m and 36m (down dip intersection); and
Lithium minerals including Spodumene and Lepidolite identified in all pegmatite drill intersections;
Pegmatite dykes intersected down to 60m vertically below surface outcrops.
BOTSWANA ASSETS
The Group is the holder of exploration licences covering approximately 1,500km2 of terrain prospective for Ni‐Cu‐Co‐PGE‐Au‐
Ag and lithium and tantalum in eastern Botswana.
LITHIUM AND TANTALUM EXPLORATION
The Group continues to assess the Lithium and Tantalum exploration potential of the Company’s portfolio in Botswana. A
number of reconnaissance soil samples were collected in the first half of 2018 and are currently being processed.
BCL JOINT VENTURE
Three of the Group’s licences Licences (PL 110/94, PL 111/94 and PL 54/98), covering 185km2, have been in Joint Venture with
BCL Limited (a major Ni‐Cu miner in Botswana) since 2014. In October 2016, BCL was placed into Liquidation and all work on
the JV assets ceased. The Ministry of Minerals Resources, Green Technology and Energy Security has subsequently suspended
(put on hold) the renewal date of the three Prospecting Licences (see ASX Announcement 25 September 2017). This suspension
means that the current renewal date of 31 March 2018 has been frozen for an indefinite period pending completion of the
Liquidation process.
4
This decision does not affect SI6’s right to continue exploring these licences. SI6, via its African subsidiary AML, will apply for
renewals for all three licences as stipulated in the Mines and Minerals Act when advised by the Ministry of the new renewal
dates for the licenses.
The liquidation process is ongoing as of the date of this report.
DIRECTORS’ REPORT
CORPORATE ACTIVITY
Financial Position
During the financial year ended 30 June 2018 the following changes in financial position ocurred:
Net assets increased by $2,533,100 to $9,102,154.
Total assets increased by $2,292,124 to $9,327,224.
Total liabilities decreased by $240,976 to $225,070.
The Directors believe the Group is in a stable financial position and able to expand and grow its current operations.
Significant Changes in the State of Affairs
Significant changes in the state of affairs of the Group during the financial year were as follows:
Board Changes
On 21 August 2017 Mr Matthew John Hudson resigned as Non‐Executive Director of the Company.
On 11 December 2017 Mr Patrick John Volpe resigned as Chairman of the Company.
On 12 June 2018 Mr Eddie King was appointed as Non‐Executive Director of the Company.
On 31 July 2018 Mr Edwin Bulseco resigned as Chairman, Non‐Executive Director of the Company and Mr Eddie King was
appointed to chairman in his place.
Share Placements
On 18 August 2017 the Group issued 362,000,000 pre consolidation fully paid ordinary shares at an issue price of $0.1 cent per
share, the placement raised $362,000 (before costs).
On 8 September 2017, the Group announced a capital raising of $1,325,000 (before costs) via a placement of 1,615,853,617
pre‐consolidation shares at $0.082 cents per share (“Issue Price”). This was completed on 6 December 2017.
On 21 December 2017 the Group announced that $1,600,000 had been raised in a placement following strong interest from a
number of sophisticated and professional investors. The company issued 75,333,333 shares at $0.015 per share (“Issue Price”)
subsequent to 31 December 2017 on 3 January 2018.
On 23 March 2018, the Group issued 31,333,333 fully paid ordinary shares at $0.015 cents per share as a part of the second
tranche raising $470,000 (before costs).
After Balance Date Events
Other than the matters discussed above, there has not arisen in the interval between the end of the financial year and the
date of this report, any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the
Company to affect the operations of the Group, the results of these operations or the state of affairs of the Group in
subsequent years.
5
DIRECTORS’ REPORT
Future Developments
The Group is continuing the due diligence on the potential 80% acquisition of Shamva Lithium and Chuatsa Vanadium‐Titanium
Projects in Zimbabwe. The Group’s geologists undertook a reconnaissance visit to the Chuatsa Vanadium project to locate old
exploration sites and to take a limited collection of soil and rock samples of available material to verify the mineralisation levels
reported by Anglo American in the 1960s. A total of 70 samples were collected and will be submitted to an independent
laboratory in South Africa for analysis.
Assay results are pending and are expected during the September 2018 Quarter.
The Group will be focused on continuing to develop value from exploration across its tenement package in Botswana.
Environmental Issues
The Group holds a 100% interest in a number of exploration licences and has participating interests in others. The various
authorities granting such licences require the licence holder to comply with directions given to it under the terms of the grant
of licence. There have been no known breaches of the Group’s licence conditions.
INFORMATION ON DIRECTORS
Steven Groves – Non‐ Executive Director
Mr Groves has a Bachelor of Applied Geology (Honours) and completed a Master’s of Economic Geology from CODES‐SRC at
the University of Tasmania.
Mr Groves is currently a non‐executive director of Six Sigma Metals Ltd (ASX: SI6) and brings 25 years of geological experience
in the mining industry including exploration and management roles with BHP Billiton (ASX: BHP), Newmont Mining, Newcrest
Mining (ASX: NCM), A‐Cap Resources (ASX: ACB) and Botswana Metals.
During the past three years, Mr Groves held the following directorship in another ASX listed company:
Managing Director of Sultan Resources Ltd (current)
Eddie King– Non‐Executive Director
Mr King is a qualified Mining Engineer. He holds a Bachelor of Commerce and Bachelor of Engineering from the University of
Western Australia. His past experience includes being a manager for an investment banking firm, where he specialised in the
analysis of technical and financial requirements of bulk commodity and other resources projects.
During the past three years, Mr King held the following directorships in other ASX listed companies:
Non‐Executive Chairman of Bowen Coking Coal Limited (current);
Non‐Executive Director of Pure Minerals Limited (current);
Non‐Executive Director of Axxis Technology Limited (current);
Non‐Executive Director of Sultan Resources Limited (current);
Non‐Executive Director of European Cobalt Limited (current);
Non‐Executive Director and Chairman of Eastern Iron Limited (current);
Non‐Executive Director of Drake Resources Limited (current); and
Non‐Executive Chairman of Lindian Resources Limited (resigned January 2018).
6
DIRECTORS’ REPORT
Edwin Bulseco – Non‐Executive Chairman
Mr Bulseco has a wealth of experience in capital markets and corporate strategic planning. From 2010 to 2015, Mr Bulseco
has served as a senior equity research analyst at two of Australia’s oldest stockbrokers.
Edwin has more recently worked in corporate finance for numerous boutique East Coast based corporate advisories. During
this period, Mr Bulseco has gained considerable capital markets and corporate experience, and
During the past three years, Mr Bulseco held the following directorships in other ASX listed companies:
Non‐executive Director of Greenpower Energy Ltd (current);
Non‐Executive Director of Transcendence Technologies Ltd (current);
Chairman and Non‐Executive Director of Sultan Resources Ltd (Resigned May 18); and
Non‐executive Director of Red Gum Resources Ltd now known as MCS Services Ltd (2 March 2014 to 18 December
2015).
Mr Joshua Alan Letcher – Non‐ Executive director
Mr Letcher has experience working in various operational and technical roles within the African and Australian mining industry.
He was the founder of Allotropes Diamonds Pty Ltd and was responsible for its acquisition by Newfield Resources Ltd (ASX:
NWF) which provided the company with A$4M in working capital. As CEO of Allotropes, Mr Letcher was responsible for the
development of the project from exploration to trial mining. The roles in that capacity included project management, plant
construction and commissioning, exploration management and asset acquisition. Mr Letcher served in the Royal Australian
Navy and trained as a Mechanical Engineer.
During the past three years, Mr Letcher held the following directorships in other ASX listed companies:
Non‐executive Director of Aldoro Resources Limited (current); and
Executive Director of Newfield Resources Ltd (from 31 March 2014 to 16 November 2015).
Mr Patrick John Volpe‐Executive chairman
10 years Background in mining, media, transport, manufacturing, banking and stockbroking with a particular emphasis on
corporate restructuring, business acquisitions, investment advising and capital raisings.
During the past three years, Mr Volpe held the following directorships in other ASX listed companies:
He was formerly:
Chairman of Bisan Limited (from 18 December 2013 to 7 September 2015);
Director of Bisan Limited (from 18 December 2013 to 1 February 2016);
Deputy Chairman of Cohiba Minerals Limited (from 27 November 2013 to 5 August 2015); and
Director of Cohiba Minerals Limited (from 24 July 2013 to 5 August 2015).
Mr Matthew John Hudson – Non‐Executive Director
Mr Hudson completed a Bachelor of Commerce at the University of Melbourne. Following this he worked with Credit Suisse
and Arthur Andersen as an analyst up until 2002. He has since operated through his own corporate advisory businesses which
have consulted to both listed and unlisted public companies in Australia, Europe and the United States. Mr Hudson is actively
involved in the oil and gas sector and is now focusing on mining and exploration projects as both an advisor and founding
shareholder. He is also a non‐executive Director of two unlisted public companies in the financial technology sector where his
task is to assist with the achievement of an ASX listing for these companies.
During the past three years, Mr Hudson has not held directorships in other ASX listed companies.
7
Interests in Shares and Options of the Group and Related Bodies Corporate
The following table sets out each current Director’s relevant interest in shares, options and performance rights of the Group
or a related body corporate as at the date of this report.
DIRECTORS’ REPORT
Director
Steven Groves
Eddie King
Joshua Letcher
Total
Directors' Meetings
Ordinary
Shares
Unlisted Share
Options
1,105,159
750,000
666,667
2,521,826
6,000,000
‐
6,000,000
12,000,000
The number of meetings of the Group’s Board of Directors held during the year ended 30 June 2018, and the numbers of
meetings attended by each director were:
Name
E King
S Groves
E Bulseco
J Letcher
P Volpe
M Hudson
Board of Directors
Number eligible to
attend
‐
3
3
3
‐
‐
Number attended
‐
3
3
3
‐
‐
In addition to the scheduled Board meetings, Directors regularly communicate by telephone, email or other electronic means,
and where necessary, circular resolutions are executed to effect decisions.
Due to the size and scale of the Group, there is no Remuneration and Nomination Committee or Audit Committee at present.
Matters typically dealt with by these Committees are, for the time being, managed by the Board. For details of the function of
the Board, refer to the Corporate Governance Statement.
REMUNERATION REPORT (AUDITED)
Remuneration Policy
KMP have authority and responsibility for planning, directing and controlling the activities of the Group. KMP of the Group
comprise of the Board of Directors.
The Group’s broad remuneration policy is to ensure the remuneration package properly reflects the person’s duties and
responsibilities and that remuneration is competitive in attracting, retaining and motivating people of the highest quality.
No remuneration consultants were employed during the financial year.
Remuneration Governance, Structure and Approvals
Remuneration of Directors is currently set by the Board of Directors. The Board has not established a separate Remuneration
Committee at this point in the Group’s development, nor has the Board engaged the services of an external remuneration
consultant. It is considered that the size of the Board along with the level of activity of the Group renders this impractical. The
Board is primarily responsible for:
The over‐arching executive remuneration framework;
8
DIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
Operation of the incentive plans which apply to executive directors and senior executives, including key performance
indicators and performance hurdles;
Remuneration levels of executives; and
Non‐Executive Director fees.
Their objective is to ensure that remuneration policies and structures are fair and competitive and aligned with the long‐term
interests of the Company.
Non‐Executive Remuneration Structure
The remuneration of Non‐Executive Directors consists of Directors’ fees, payable in arrears. The total aggregate fixed sum per
annum to be paid to Non‐Executive Directors in accordance with the Company’s Constitution shall be no more than A$250,000
and may be varied by ordinary resolution of the Shareholders in a General Meeting.
Remuneration of Non‐Executive Directors is based on fees approved by the Board of Directors and is set at levels to reflect
market conditions and encourage the continued services of the Directors. The chair’s fees are determined independently to
the fees of the Non‐Executive Director’s based on comparative roles in the external market. In accordance with the Company’s
Constitution, the Directors may at any time, subject to the Listing Rules, adopt any scheme or plan which they consider to be
in the interests of the Company and which is designed to provide superannuation benefits for both present and future Non‐
Executive Directors, and they may from time to time vary this scheme or plan.
The remuneration of Non‐Executive is detailed in Table 1 and their contractual arrangements are disclosed in “Section E –
Service Agreements”.
Remuneration may also include an invitation to participate in share‐based incentive programmes in accordance with Company
policy.
The nature and amount of remuneration is collectively considered by the Board of Directors with reference to relevant
employment conditions and fees commensurate to a company of similar size and level of activity, with the overall objective of
ensuring maximum stakeholder benefit from the retention of high performing Directors.
C
Remuneration and Performance
The following table shows the gross revenue, losses, earnings per share (“EPS”) of the Company as at 30 June 2018.
Revenue ($)
Net profit/(loss) after tax ($)
EPS ($)
30‐Jun‐18
5,896
(1,469,576)
(0.19)
Relationship between Remuneration and Company Performance
Given the recent re‐compliance of the Company and the current phase of the Company’s development, the Board does not
consider earnings during the current and previous financial year when determining, and in relation to, the nature and amount
of remuneration of KMP.
The pay and reward framework for key management personnel may consist of the following areas:
a) Fixed Remuneration – base salary
b) Variable Short‐Term Incentives
c) Variable Long‐Term Incentives
The combination of these would comprise the key management personnel’s total remuneration.
9
DIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
a)
b)
c)
Fixed Remuneration – Base Salary
The fixed remuneration for each senior executive is influenced by the nature and responsibilities of each role and
knowledge, skills and experience required for each position. Fixed remuneration provides a base level of remuneration
which is market competitive and comprises a base salary inclusive of statutory superannuation. It is structured as a total
employment cost package.
Key management personnel are offered a competitive base salary that comprises the fixed component of pay and
rewards. External remuneration consultants may provide analysis and advice to ensure base pay is set to reflect the
market for a comparable role. No external advice was taken this year. Base salary for key management personnel is
reviewed annually to ensure the executives’ pay is competitive with the market. The pay of key management personnel
is also reviewed on promotion. There is no guaranteed pay increase included in any key management personnel’s
contract.
Variable Remuneration – Short ‐Term Incentives (STI)
Discretionary cash bonuses may be paid to senior executives annually, subject to the requisite Board and shareholder
approvals where applicable. No bonus payments were made during the financial year.
Variable Remuneration – Long‐Term Incentives (LTI)
Options are issued at the Board’s discretion. Other than options disclosed in section D of the Remuneration Report
there have been no options issued to employees at the date of this financial report.
KMP Remuneration for the year ended 30 June 2018
Details of the nature and amount of each major element of the remuneration of each KMP of Six Sigma Metals Limited for the
year ended 30 June 2018 are:
Name
Mr S R Groves
Mr E King
Mr J Letcher
Mr E Bulseco
Mr R Jimenez (Co. Secretary)
(resigned 22 Dec 2017)
Mr P J Volpe (resigned 11 Dec 2017)
Mr M J Hudson (resigned 21 Aug 2017)
Total
Short‐term
Benefits
Post‐employment
Benefits
Share‐Based
Payments
Cash Salary &
Fees
$
84,888
3,500
37,000
41,000
25,000
300,636
2,500
494,524
Superannuation
$
$
Total
$
‐
‐
‐
‐
‐
‐
‐
‐
42,000
126,888
‐
42,000
42,000
‐
230,162
‐
356,162
3,500
79,000
83,000
25,000
530,798
2,500
850,686
Directors fees were accrued and unpaid of $8,000 as at 30 June 2018 to Kalcon Investments Pty Ltd (a company of which Mr
Ed Bulseco is a Director) $3,500 was accrued and unpaid to King Corporate Pty Ltd (a company of which Mr Eddie King is a
Director) these liabilities have been disclosed at note 13 in the financial report.
10
DIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
KMP Remuneration for the year ended 30 June 2017
Details of the nature and amount of each major element of the remuneration of each KMP of Six Sigma Metals Limited for the
year ended 30 June 2017 are:
Short‐term
Benefits
Post‐employment
Benefits
Share‐Based
Payments
Name
Cash Salary &
Fees
$
Superannuation
$
Mr P J Volpe (Executive Chairman)
Mr M L Cellante (resigned 22 Feb 2017)
Dr P Woolrich (resigned 31 Jan 2017)
Mr S R Groves
Mr M J Hudson
Mr R Jimenez (Co. Secretary)
Total
180,000
27,350
10,000
10,000
13,065
50,000
290,415
Directors’
Fee Plan
$
107,900
‐
‐
‐
‐
‐
Total
$
287,900
29,948
10,000
10,000
13,065
50,000
‐
2,598
‐
‐
‐
‐
2,598
107,900
400,913
In April 2017 Trayburn Pty Ltd (a company of which Mr P J Volpe is a Director and substantial shareholder) was issued
53,950,000 fully paid ordinary shares pursuant to the Directors’ Fee Plan (approved by the shareholders of the Company at
the Annual General Meeting held on 30 November 2016) in satisfaction of accrued fees of $107,900 due to Trayburn Pty Ltd
for director, management and consulting services.
Salary and fees were accrued and unpaid as at 30 June 2017 to Directors (or their related entity) as follows: Mr P J Volpe
($312,100), Dr P Woolrich ($34,700) and Mr M L Cellante ($17,350).
Service Companies
The services of certain current and former key management personnel are obtained through arrangements with their related
companies as follows:
Trayburn Pty Ltd provides the services of Mr P J Volpe;
Kalcon Investments Pty Ltd provided the services of Mr Edwin Bulseco;
Bohr Industries Pty Ltd provided the services of Mr Joshua Letcher;
Corporate advisory agreement – Xcel Capital Pty Ltd (a company associated with Mr Edwin Bulseco); and
Corporate advisory agreement – Foxfire Capital Pty Ltd (a company associated with Mr P J Volpe)
Where a company provides the services then the fees disclosed above are paid to, or accrued in favour of, the relevant
company. All amounts disclosed are shown exclusive of any GST
11
DIRECTORS’ REPORT
REMUNERATION REPORT (CONTINUED)
Number of Options Held directly or indirectly by Key Management Personnel
2018
Mr S R
Groves
Mr E King
Mr J
Letcher
Mr E
Bulseco
Mr R
Jimenez
(Co.
Secretary)
(i)
Mr P J
Volpe(i)
Mr M J
Hudson(ii)
Total
Balance
1.7.2017 or
date of
appointment
Granted as
Compensation
Exercised Expired
Net Change
Other*
Balance
30.6.2018
or date of
resignation
Vested and
exercisable
Vested and
Unexercisable
‐
‐
‐
‐
‐
‐
‐
‐
6,666,667
‐
6,666,667
6,666,667
‐
14,531,845
‐
34,531,848
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
6,666,667
‐
6,666,667
‐
6,666,667
6,666,667
3,027,102
9,693,769
9,693,769
‐
(14,531,845)
‐
‐
‐
‐
‐
(11,504,743)
‐
23,027,103
‐
23,027,103
‐
‐
‐
‐
‐
‐
‐
‐
*During the period Mr P Volpe resigned. Mr E Bulseco was issued options indirectly, for advisory services, to Xcel Capital Pty
Ltd, ESE Capital Pty Ltd and Kalcon Investments Pty Ltd which are Company’s that he is a Director.
(i) Mr R Jimenez resigned 22 Dec 2017, Mr P Volpe resigned 11 Dec 2017 ,Mr M Hudson resigned 21 Aug 2017.
The option terms and conditions of each grant of options over ordinary shares affecting remuneration of Directors in the year
end or future reporting years are as follows:
OPTIONS ISSUED
Director Options
Grant date
Expiry date
Exercise price
$
Fair value per
option
$
Vested
$
27/11/2017
16/03/2018
1/7/2021
16/04/2021
0.0013
0.022
0.07
0.01
100%
100%
Number of Shares held directly or indirectly by Key Management Personnel
2018
Mr S R Groves
Mr E King
Mr J Letcher
Mr E Bulseco
Mr R Jimenez
(Co. Secretary)
Mr P J Volpe
Mr M L
Cellante
Dr P Woolrich
Mr M JHudson
Total
Balance
1.7.2017 or date
of appointment
Received as
Compensation
5,261,904
750,000
‐
‐
10,222,223
241,777,897
73,941,742
3,902,777
27,680,606
363,537,149
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
Issued on
Exercise of
Options /
Performance
Rights
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
Consolidation of
shares
1 for 12
(4,823,412)
‐
‐
‐
(9,370,371)
(221,629,738)
(67,779,930)
(3,577,546)
(23,373,889)
(330,554,886)
Net Change
Other*
‐
‐
‐
8,414,635
(851,852)
(20,148,159)
(6,161,812)
(325,231)
(2,306,717)
(21,379,136)
Balance
30.6.2018
or date of
resignation
438,492
750,000
‐
8,414,635
‐
‐
‐
‐
‐
9,603,127
*Mr M Cellante, Dr P Woolrich and Mr M Hudson resigned during the period. Mr E Bulseco was issued shares in the
placement approved by shareholders at the General Meeting held on 16 March 2018 through participation.
12
REMUNERATION REPORT (CONTINUED)
Employment Contracts of Directors and Senior Executives
Eddie King – Chairman, Non‐Executive Director
DIRECTORS’ REPORT
Contract: Commenced on 12 June 2018
‐
‐ Director’s Fee: $60,000 per annum
‐
Term: No fixed term.
Joshua Letcher – Non‐Executive Director
Contract: Commenced on 21 August 2017
‐
‐ Director’s Fee: $48,000 per annum
‐
Term: No fixed term
Steven Groves – Non‐Executive Director
Contract: Commenced on 1 August 2017
‐
‐ Director’s Fee: $36,000 per annum
‐
Term: No fixed term
Edwin Bulseco – Chairman, Non‐Executive Director
Contract: Commenced on 1 August 2017
‐
‐ Director’s Fee: $60,000 per annum
‐
Term: No fixed term.
Other transactions with Directors and related parties
Transactions between related parties are on normal commercial terms and conditions no
more favourable than those available to other parties unless otherwise stated.
2018
2017
Key Management Personnel
Kalcon Investments Pty Ltd, of which Edwin Bulseco is a Director and shareholder, was paid
Director fees of $41,000.
Xcel Capital Pty Ltd, of which Edwin Bulseco is a Director was paid $413,183, in relation to
Corporate advisory work undertaken in relation to the placement and share purchase plan.
Xcel was issued 13,750,000 listed options to the value of $110,057 and issued 12,500,000
unquoted options to the value of $100,000 for Corporate advisory services.
Bohr Industries Pty Ltd, of which Joshua Alan Letcher is a Director was paid $37,000 in
relation to Director fees for the period.
Consulting fees paid to Woolrich & Associates Pty Ltd, a company of which Dr P Woolrich is
a Director and substantial shareholder.
Capital
Mr P J Volpe is a consultant and substantial shareholder.
to Foxfire Capital Pty Ltd, a company of which
fees paid
raising
$
41,000
623,240
37,000
Foxfire Capital, of which Mr P J Volpe is a director was issued 6,250,000 listed options, fully
vested to the value of $50,026 for Corporate advisory services.
Trayburn Pty Ltd, of which Mr P J Volpe is a Director, payment of unpaid fees for the years
ended 30 June 2015, 2016 & 2017 amounting to $190,691. Shares to the value of $174,800
and 666,667 listed options fully vested at $5,336.
King Corporate Pty Ltd, of which Mr Eddie King is a Director, has unpaid Director ($3,500)
and rental fees ($1,350) as at 30 June 2018.
50,026
370,827
4,850
13
$
‐
‐
‐
9,375)
25,000)
‐
‐
‐
REMUNERATION REPORT (CONTINUED)
Other transactions with Directors and related parties continued
DIRECTORS’ REPORT
2018
2017
Transactions with CAP Holdings Pty Ltd (“CAP”), a company of which close family members
of Mr P J Volpe are Directors and shareholders:
$
$
printing and posting the Annual Report of the Company and the notices and proxy
forms for the Company’s Annual General Meeting; and
administration and clerical costs.
‐
9,600
8,000)
20,800)
Transactions with Cam Bow Holdings (Pty) Ltd (“CBH”), a wholly‐owned subsidiary of Cam
Bow Limited (“CBL”). Mr P J Volpe is a Director of CBH and CBL and a substantial shareholder
of CBL:
contracting fees charged by CBH to African Metals (Pty) Ltd.
‐
1,136,543
10,470)
73,645)
All amounts above are exclusive of GST. Expenses paid by, or for, Directors and related entity were, or will be, reimbursed at
cost.
This concludes the Remuneration Report, which has been audited.
OPTIONS
At the date of this report, the unissued ordinary shares of the Company under option are as follows:
Grant / Exercise Date
Expiry Date
Exercise Price
No. Options)
Issued in prior years:
30‐10‐2013
30‐05‐2014
10‐06‐2014
10‐06‐2014
Exercised in prior years:
09‐07‐2014
03‐09‐2014
Balance as at 1 July 2016
Issued in current year:
Nil
Exercised in current year:
31‐12‐2016
Expired in current year:
31‐12‐2016
Balance as at 30 June 2017
Issued in current year:
27‐11‐2017
16‐03‐2018
16‐03‐2018
Balance as at 30 June 2018
31‐12‐2016
31‐12‐2016
31‐12‐2016
31‐12‐2016
31‐12‐2016
31‐12‐2016
$0.015
$0.015
$0.015
$0.015
$0.015
$0.015
282,235,323)
62,500,000)
35,714,285)
30,000,000)
(200,000)
(15,675)
410,233,933)
31‐12‐2016
$0.015
(20,011)
31‐12‐2016
$0.015
(410,213,922)
‐
89,769,699
42,666,667
30,500,000
162,936,366
1‐07‐2021
16‐04‐2021
16‐04‐2021
$0.0013
$0.015
$0.022
14
DIRECTORS’ REPORT
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has agreed to indemnify all the current Directors and Officers of the Company and of its controlled entity against
all liabilities incurred as an officer except where the liability arises out of conduct involving a lack of good faith. The Indemnity
includes costs and expenses in successfully defending any legal proceedings, and applied, from 9 January 2008 when SI6 ceased
to be a controlled entity of A‐Cap Resources Ltd. The Company has paid a premium to insure the Directors and Officers against
liabilities incurred in their respective capacities.
INDEMNIFICATION AND INSURANCE OF AUDITORS
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.
DIVIDENDS
No dividends have been paid during the financial year.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to
which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those
proceedings. The Company was not a party to any such proceedings during the year.
NON‐AUDIT SERVICES
There were no fees for non‐audit services paid to the external auditors during the year ended 30 June 2018.
AUDITOR'S INDEPENDENCE DECLARATION
The lead Auditor's Independence Declaration for the year ended 30 June 2018 has been received and can be found on page
16 of this Report.
This report is made in accordance with a resolution of the Directors.
Mr Eddie King
Director
Dated 28 September 2018
15
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C
OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF SIX
SIGMA METALS LIMITED AND CONTROLLED ENTITIES
I declare that, to the best of my knowledge and belief during the year ended 30 June 2018
there have been:
— no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
— no contraventions of any applicable code of professional conduct in relation to the
audit.
William Buck Audit (Vic) Pty Ltd
ABN: 59 116 151 136
J.C. Luckins
Director
Dated 28 September 2018
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2018
Other Income
Expenses
Administration
Corporate
Employment and consultancy
Impairment of bad and doubtful debts
Impairment of capitalised exploration expenditure
Loss before Income Tax Expense
Income Tax Expense
Loss for the year attributable to owners of Six Sigma Metals Limited
Other Comprehensive Income for the year that may be subsequently
reclassified to the profit or loss
Exchange differences on translating foreign controlled operation
Total Comprehensive Loss attributable to owners of Six Sigma Metals
Limited
Notes
Consolidated Group
2017
2018
$
$
2
3
4
5,896
47,468
(240,568)
(219,528)
(1,015,376)
‐
‐
(1,469,576)
‐
(1,469,576)
(228,632)
(52,737)
(490,126)
(104,462)
(943,797)
(1,772,286)
‐)
(1,772,286)
88,551
269,992)
(1,381,025)
(1,502,294)
Basic Loss per Share (cents per share) & Diluted Loss per Share (cents
per share)
7
(0.19)
(1.69)
The accompanying notes form part of these financial statements.
17
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2018
Current Assets
Cash and cash equivalents
Trade and other receivables
Total Current Assets
Non‐Current Assets
Other assets
Plant and equipment
Capitalised exploration and evaluation
Total Non‐Current Assets
TOTAL ASSETS
Current Liabilities
Trade and other payables
Provisions
Total Current Liabilities
TOTAL LIABILITIES
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Notes
Consolidated Group
2017
$
2018
$
8
9
11
12
13
14
15
1,772,169
92,719
1,864,888
228,014
36,812
7,197,510
7,462,336
9,327,224
182,211
42,859
225,070
225,070
9,102,154
147,039)
62,374)
209,413)
‐
29,785)
6,795,902)
6,825,687)
7,035,100)
428,489)
37,557
466,046)
466,046)
6,569,054)
21,035,871
(1,818,554)
(10,115,163)
9,102,154
17,535,843)
(2,321,202)
(8,645,587)
6,569,054)
The accompanying notes form part of these financial statements.
18
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For year ended 30 June 2018
Consolidated Group
Issued
Share
Capital
Share
Based
Payments
Reserve
Foreign
Currency
Translation
Reserve
Accumulated
Losses
Total
Equity
$
$
$
$
$
Balance at 1 July 2017
17,535,843
Loss after income tax for the year
Other Comprehensive Loss
Transactions with owners in their
capacity as owners
Shares issued during the period
Share issue costs
Options issued during the period
Balance at 30 June 2018
Balance at 1 July 2016
Loss after income tax for the year
Other Comprehensive Loss
Expiry of Options
Transactions with owners in their
capacity as owners
Shares issued during the period
Share issue costs
Balance at 30 June 2017
‐)
‐)
3,918,282
(418,254)
‐
21,035,871
‐
‐)
‐)
‐
‐
414,097
414,097
(2,321,202)
(8,645,587)
6,569,054
‐)
(1,469,576)
(1,469,576)
88,551
‐)
88,551
‐
‐
‐
‐
‐
‐
3,918,282
(418,254)
414,097
(2,232,651)
(10,115,163)
9,102,154
16,958,181)
60,000)
(2,591,194)
(6,933,301)
7,493,686)
‐)
‐)
‐)
‐)
‐)
(60,000)
608,200)
(30,538)
17,535,843)
‐)
‐)
‐)
‐)
(1,772,286)
(1,772,286)
269,992)
‐)
269,992)
‐)
‐)
‐)
60,000)
‐)
‐)
‐)
608,200)
(30,538)
(2,321,202)
(8,645,587)
6,569,054)
The accompanying notes form part of these financial statements.
19
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2018
Notes
Consolidated Group
2017
$
2018
$
‐
(1,564,099)
4,505
(1,559,594)
19b
4,485)
(564,050)
1,523)
(558,042)
(271,010)
(31,876)
44,848)
(258,038)
500,300)
(30,538)
469,762)
(346,318))
488,249)
5,108)
147,039)
(297,077)
(18,226)
‐
(315,303)
3,918,282
(418,254)
3,500,028
1,625,131
147,039
‐
1,772,170
Cash Flows from Operating Activities
Cost recoveries
Payments to suppliers and employees
Interest received
Net Cash Used in Operating Activities
Cash Flows from Investing Activities
Exploration expenditure
Purchase of plant and equipment
Sale of plant and equipment
Net Cash Used in Investing Activities
Cash Flows from Financing Activities
Issue of share capital
Payments of share capital issue costs
Net Cash Received From (Used in) Financing Activities
Net Increase/(Decrease) in Cash and cash equivalents held
Cash and cash equivalents at the Beginning of the Financial Year
Foreign currency effect on cash held
Cash and cash equivalents at the End of the Financial Year
19a
The accompanying notes form part of these financial statements.
20
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements include the consolidated financial statements and notes of Six Sigma Metals Limited and controlled
entity (‘Group’).
Basis of Preparation
The financial statements are general purpose financial statements that have been prepared in accordance with Australian
Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the Australian
Accounting Standards Board (‘AASB’) and the Corporations Act 2001 as appropriate for for‐profit oriented entity.
Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with
International Financial Reporting Standards. Material accounting policies adopted in the preparation of these financial
statements are presented below. They have been consistently applied unless otherwise stated.
The financial statements have been prepared on an accruals basis and are based on historical costs modified, where
applicable, by the impairment (where required) of selected non‐current assets, financial assets and financial liabilities.
Accounting Policies
Basis of Consolidation
(a)
The consolidated financial statements comprise the financial statements of the Group and its subsidiary as at 30 June 2018.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses
control of the subsidiary.
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and
has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and
only if the Group has:
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the
investee)
Exposure, or rights, to variable returns from its involvement with the investee, and
The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts
and circumstances in assessing whether it has power over an investee, including:
The contractual arrangement with the other vote holders of the investee;
Rights arising from other contractual arrangements; and
The Group’s voting rights and potential voting rights.
The Group re‐assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to
one or more of the three elements of control. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of
during the year are included in the statement of
21
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
comprehensive income from the date the Group gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of
the Group and to the non‐controlling interests, even if this results in the non‐ controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line
with the Group’s accounting policies. All intra‐group assets and liabilities, equity, income, expenses and cash flows relating
to transactions between members of the Group are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the
Group loses control over a subsidiary, it:
(a)
Basis of Consolidation
de‐recognises the assets (including goodwill) and liabilities of the subsidiary;
de‐recognises the carrying amount of any non‐controlling interests;
de‐recognises the cumulative translation differences recorded in equity;
recognises the fair value of the consideration received;
recognises the fair value of any investment retained;
recognises any surplus or deficit in profit or loss; and
reclassifies the parent’s share of components previously recognised in OCI to profit or loss or retained
earnings, as appropriate, as would be required if the Group had directly disposed of the related assets or
liabilities.
A list of controlled entity is contained in Note 10 to the financial statements.
(b)
Income Tax
The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense
(income).
Current income tax expense charged to profit or loss is the tax payable on taxable income calculated using applicable income tax
rates enacted, or substantially enacted, as at the end of the reporting period. Current tax liabilities (assets) are therefore measured
at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well
unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when tax
relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully
expensed but future tax deductions are available. No deferred income tax will be recognised from initial recognition of an asset
or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised
or the liability is settled, based on tax rates enacted of substantially enacted at the end of the reporting period. Their measurement
also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable
that future taxable profits will be available against which the benefits of deferred tax assets can be utilised.
When temporary differences exist in relation to investments in subsidiaries or joint ventures, deferred tax assets and liabilities are
not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the
reversal will occur in the foreseeable future.
22
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(c)
Farm Out Arrangements
A farm out arrangement is when the owner of a working interest (the farmor) undertakes to transfer all or a portion of its
working interest to another party (the farmee) in return for the farmee’s performance of agreed upon actions.
When the farmee agrees to undertake exploration works, upon the farmee meeting the required performance hurdles, the
farmor transfers a portion of the working interest in the property to the farmee.
The farmor will not record any expenditure (whether this would otherwise have been capitalised or expensed immediately)
that is settled by the farmee, and the farmor does not recognise a gain or loss on the basis of the partial disposal of any
exploration asset that has already been capitalised.
(d)
Plant and Equipment
Plant and equipment is carried at cost as indicated less, where applicable, any accumulated depreciation and impairment
losses.
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. All other repairs and maintenance are charged to the Statement of Comprehensive Income during the
financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets is depreciated on a straight‐line basis over their useful lives to the Group
commencing from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Plant and equipment
Class of Fixed Asset
Depreciation Rate
15% ‐ 25%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
Gains or losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are
included in the Statement of Comprehensive Income.
23
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e)
Exploration and Development Expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest.
These costs are only carried forward to the extent that they are expected to be recouped through the successful development
of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence
of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to
abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area
according to the rate of depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs
in relation to that area of interest.
Costs of site restoration are provided over the life of the facility from when exploration commences and are included in the
costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building
structures, waste removal, and rehabilitation of the site in accordance with clauses of the mining permits. Such costs have
been determined using estimates of future costs, current legal requirements and technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site restoration,
there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation.
Accordingly the costs have been determined on the basis that the restoration will be completed within one year of abandoning
the site.
(f)
Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the
instrument. For financial assets, this is equivalent to the date that the Company commits itself to either the purchase or sale
of the asset (i.e. trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs.
Classification and subsequent measurement
Financial instruments are subsequently measured at either of fair value, amortised cost using the effective interest rate
method, or cost.
Loans and receivables
Loans and receivables are non‐derivative financial assets with fixed or determinable payments that are not quoted in an active
market and are stated at amortised cost using the effective interest rate method.
Financial Liabilities
Non‐derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the
effective interest rate method.
Impairment
At the end of each reporting period, the group assess whether there is objective evidence that a financial instrument has been
impaired.
24
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Derecognition
Financial assets are derecognised where the contractual rights to the receipt of cash flows expires or the asset is transferred
to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated
with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expired.
The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair
value of consideration paid, including transfer of non‐cash assets or liabilities assumed, is recognised in profit or loss.
(g)
Impairment of Non‐Financial Assets
At the end of each reporting period, the group assesses whether there is any indication that an asset may be impaired.
The assessment will include the consideration of external and internal sources of information including dividends received
from subsidiaries or jointly controlled entity deemed to be out of pre‐acquisition profits. If such an indication exists, an
impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s
fair value less costs to sell and value in use, to the asset’s carrying value. Any excess of the asset’s carrying value over its
recoverable amount is expensed to the Statement of Comprehensive Income.
Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount
of the cash‐generating unit to which the asset belongs.
(h)
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the group’s entity is measured using the currency of the primary economic environment in
which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent
entity’s functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the
transaction. Foreign currency monetary items are translated at the year‐end exchange rate. Non‐monetary items measured at
historical cost continue to be carried at the exchange rate at the date of the transaction. Non‐monetary items measured at fair
value are reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the Statement of Comprehensive Income.
Exchange difference arising on the translation of non‐monetary items are recognised directly in equity to the extent that the
gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the Statement of Comprehensive
Income.
Group companies
The financial results and position of foreign operations whose functional currency is different from the group’s presentation
currency are translated as follows:
25
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Assets and liabilities are translated at year‐end exchange rates prevailing at the end of the reporting period.
Income and expenses are translated at average exchange rates for the period where this approximates the rate at the
date of the transaction.
Retained profits are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the group’s foreign currency
translation reserve in the Statement of Changes in Equity. These differences are recognised in the Statement of Comprehensive
Income in the period in which the operation is disposed.
(i)
Employee Benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to the end of the
reporting period. Employee benefits that are expected to be wholly settled within one year have been measured at the
amounts expected to be paid when the liability is settled. Employee benefits expected to be wholly settled after one year have
been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the
liability, consideration is given to employee wage increases and the probability that the employee may satisfy vesting
requirements. Those benefits are discounted using market yields on national corporate bonds with terms to maturity that
match the expected timing of cash flows.
(j)
Equity‐settled compensation
The group operates equity‐settled share‐based payment employee share and option schemes. The fair value of the options
granted is recognised as an expense over the vesting period, with a corresponding increase to an equity account. The fair value
of shares is ascertained as the market bid price. The fair value of options is ascertained using a Black‐Scholes pricing model
which incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and adjusted
at the end of each reporting period such that the amount recognised for services received as consideration for the equity
instruments granted shall be based on the number of equity instruments that eventually vest.
(k)
Provisions
Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which it is
probable that an outflow of economic benefits will results and that outflow can be reliably measured.
(l)
Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks and other short‐term highly liquid
investments with original maturities of three months or less.
26
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(m)
Revenue and Other Income
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.
Revenue from the rendering of a service is recognised upon the delivery of the service to the customers. Revenue from cost
recoveries is recognised either when the right to receive the recoveries has accrued. All revenue is stated net of the amount
of goods and services tax (GST) or valued added tax (VAT).
(n)
Goods and Services Tax (GST) and Value‐Added Tax (VAT)
Revenues, expenses and assets are recognised net of the amount of GST / VAT, except where the amount of GST / VAT incurred
is not recoverable from the relevant taxation authority. In these circumstances the GST / VAT is recognised as part of the cost
of acquisition of the asset or as part of an item of the expense. Receivables and payables in the Statement of Financial Position
are shown inclusive of GST / VAT. Cash flows are presented in the Statement of Cash Flows on a gross basis, except for the
GST / VAT component of investing and financing activities, which are disclosed as operating cash flows.
(o)
Loss per Share
Basic loss per share is calculated as net loss attributable to members of the parent, adjusted to exclude any cost of servicing
equity (other than dividends), divided by the weighted average number of ordinary shares.
Diluted loss per share is calculated as net profit attributable to members of the parent, adjusted for:
Cost of servicing equity other than dividends and preference share dividends;
The after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses; and
Other non‐discretionary changes in revenue or expenses during the period that would result from the dilution of
potential ordinary shares, divided by the weighted average number of ordinary shares and dilutive potential
ordinary shares, adjusted for any bonus element.
(q)
Critical Accounting Estimates and Judgements
The Directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge
and best available current information. Estimates assume a reasonable expectation of future events and are based on current
trends and economic data, obtained both externally and within the group.
Key Estimate – Impairment
The Group assess impairment at the end of each reporting period by evaluating conditions specific to the group that may lead
to impairment of assets. Where an impairment indicator exists, the recoverable amount of the assets is determined. Value‐in‐
use calculations performed in assessing recoverable amounts incorporate a number of key estimates. Directors may impair
capitalised expenditure in respect of licences which have, or will shortly expire, or which have been deemed to be a low priority
for exploration.
The Group’s right to tenure is subject to ongoing renewal of its Prospecting Licences.
Key Judgements ‐ Exploration and Evaluation Expenditure
The group capitalises expenditure relating to exploration and evaluation where it is considered likely to be recoverable or
where the activities have not reached a stage which permits a reasonable assessment of the existence of reserves. While there
are certain areas of interest from which no reserves have been extracted, the Directors are of the continued belief that such
expenditure should not be written off since feasibility studies in such areas have not yet concluded. Such capitalised
expenditure is carried at the end of the reporting period at $7,197,510 (2017: $6,795,902).
27
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(q)
Critical Accounting Estimates and Judgements continued
Key Judgements – Share Based Payments
The consolidated entity measures the cost of equity‐settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by using an appropriate valuation model
taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and
assumptions relating to equity‐settled share‐based payments would have no impact on the carrying amounts of assets and
liabilities within the next annual reporting period but may impact profit or loss and equity.
Key Judgements – Non‐Recognition of Deferred Tax assets
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of
investments in foreign operations where the Company is able to control the timing of the reversal of the temporary differences
and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where
the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle
the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly
in equity, respectively.
New Accounting Standards and Interpretations not yet mandatory or early adopted
(r)
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have
ending
Group
30 June 2018. The Group’s assessment of the impact of these new or amended Accounting Standards and Interpretations,
most relevant to the Group, are set out below.
reporting
adopted
annual
period
been
early
not
the
the
for
by
AASB 9 Financial Instruments
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces all previous
versions of AASB 9 and completes the project to replace IAS 39 'Financial Instruments: Recognition and Measurement'. AASB
9 introduces new classification and measurement models for financial assets. A financial asset shall be measured at amortised
cost, if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows, which arise
on specified dates and solely principal and interest. All other financial instrument assets are to be classified and measured at
fair value through profit or loss unless the entity makes an irrevocable election on initial recognition to present gains and losses
on equity instruments (that are not held‐for‐trading) in other comprehensive income ('OCI'). For financial liabilities, the
standard requires the portion of the change in fair value that relates to the entity's own credit risk to be presented in OCI
(unless it would create an accounting mismatch). New simpler hedge accounting requirements are intended to more closely
align the accounting treatment with the risk management activities of the entity. New impairment requirements will use an
'expected credit loss' ('ECL') model to recognise an allowance. Impairment will be measured under a 12‐month ECL method
unless the credit risk on a financial instrument has increased significantly since initial recognition in which case the lifetime ECL
method is adopted. The standard introduces additional new disclosures.
28
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New Accounting Standards and Interpretations not yet mandatory or early adopted (continued)
The Group will adopt this standard from 1 July 2019. Due to the basic nature of the entity’s financial instruments, the Standard
is not expected to have a material impact on the transactions and balances recognised in the financial statements when it is
first adopted for the year ending 30 June 2019.
Under AASB 9, the Group anticipates that its financial assets (being cash and trade and other receivables) and its financial
liabilities (being trade and other payables) will initially be recognised at fair value plus transaction costs and be subsequently
measured at amortised cost. The Group’s receivables are all of a short term nature and accordingly new impairment rules will
apply requiring recognition of potential credit losses based on forward looking estimates that reflect current and forecast
credit conditions. With the exception of the receivables due from the BCL Group, the Group has had no recent history of credit
losses and does not expect that significant potential credit losses will be recognised.
AASB 15 Revenue from Contracts with Customers
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard provides a single
standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue to depict the
transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services. The standard will require: contracts (either written, verbal or implied)
to be identified, together with the separate performance obligations within the contract; determine the transaction price,
adjusted for the time value of money excluding credit risk; allocation of the transaction price to the separate performance
obligations on a basis of relative stand‐alone selling price of each distinct good or service, or estimation approach if no distinct
observable prices exist; and recognition of revenue when each performance obligation is satisfied. Credit risk will be presented
separately as an expense rather than adjusted to revenue. For goods, the performance obligation would be satisfied when the
customer obtains control of the goods. For services, the performance obligation is satisfied when the service has been
provided, typically for promises to transfer services to customers. For performance obligations satisfied over time, an entity
would select an appropriate measure of progress to determine how much revenue should be recognised as the performance
obligation is satisfied.
Contracts with customers will be presented in an entity's statement of financial position as a contract liability, a contract asset,
or a receivable, depending on the relationship between the entity's performance and the customer's payment. Sufficient
quantitative and qualitative disclosure is required to enable users to understand the contracts with customers; the significant
judgments made in applying the guidance to those contracts; and any assets recognised from the costs to obtain or fulfil a
contract with a customer.
The Group will adopt this standard from 1 July 2019. As the Group does not currently generate any revenue (other than for
cost recoveries and interest) the Standard is not expected to have a material impact on the transactions and balances
recognised in the financial statements when it is first adopted for the year ending 30 June 2019.
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces AASB 117
'Leases' and for lessees will eliminate the classifications of operating leases and finance leases. Subject to exceptions, a 'right‐
of‐use' asset will be capitalised in the statement of financial position, measured as the present value of the unavoidable future
lease payments to be made over the lease term. The exceptions relate to short‐term leases of 12 months or less and leases of
low‐value assets (such as personal computers and small office furniture) where an accounting policy choice exists whereby
either a 'right‐of‐use' asset is recognised or lease payments are expensed to profit or loss as incurred. A liability corresponding
to the capitalised lease will also be recognised, adjusted for lease prepayments, lease incentives received, initial direct costs
incurred and an estimate of any future restoration, removal or dismantling costs. Straight‐line operating lease expense
recognition will be replaced with a depreciation charge for the leased asset (included in operating costs) and an interest
expense on the recognised lease liability (included in finance costs). In the earlier periods of the lease, the expenses associated
with the lease under AASB 16 will be higher when compared to lease expenses under AASB 117. However EBITDA (Earnings
Before Interest, Tax, Depreciation and Amortisation) results will be improved as the operating expense is replaced by interest
expense and depreciation in profit or loss under AASB 16. For classification within the statement of cash flows, the lease
29
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New Accounting Standards and Interpretations not yet mandatory or early adopted (continued)
payments will be separated into both a principal (financing activities) and interest (either operating or financing activities)
component. For lessor accounting, the standard does not substantially change how a lessor accounts for leases.
The Group will adopt this standard from 1 July 2019. The Group does not currently have in place any continuing lease
agreements. Therefore the Standard is not expected to have a material impact on the transactions and balances recognised
in the financial statements when it is first adopted for the year ending 30 June 2020.
(s)
New, revised or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board (AASB) that are mandatory for the current reporting period.
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial
performance or position of the Group.
The financial statements were authorised for issue on the date of the signing of the Directors’ Declaration by the Board of
Directors.
NOTE 2 INCOME
Income from Ordinary Activities
Other income
Gain on disposal of fixed assets
Interest
Sundry
Proceeds of insurance claim
Recoveries
NOTE 3 EXPENDITURE
Administration
Office expenses
Depreciation expense
Rental expense
Travel expenses
Other expenses
Consolidated Group
2018
$
2017
$
‐
4,505
1,391
‐
‐
5,896
35,881
1,523
‐
8,966
1,098
47,468
Consolidated Group
2018
$
54,390
11,199
41,553
72,684
60,740
240,566
2017
$
65,320
6,070
49,220
5,994
102,028
228,632
30
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 4 INCOME TAX EXPENSE
The prima facie tax on loss from ordinary activities before income tax is reconciled
to income tax as follows:
(Loss) before income tax expense
(1,469,576)
(1,772,286)
Prima facie (tax benefit) on (loss) from ordinary activities before income tax at
27.5% (2017: 27.5%)
(404,134)
(487,379)
Consolidated Group
2018
$
2017
$
Add:
Tax effect of:
‐ Accrued expenses
‐ Accrued remuneration to directors and management
‐ Non‐deductible expenses
‐Foreign tax rate differential
Less
Tax effect of:
‐ Accrued remuneration paid during the year
‐ Other deductible items
‐ Prepayments
Tax losses for the period
Prior year tax losses not previously brought to account
The Directors estimate that the potential deferred income tax assets at 30 June in
respect of tax losses not brought to account is:
Tax benefits not recognised during the year
Income Tax Expense for the year
2,022
3,121
119,199
8,476
(46,063)
(32,421)
(3,850)
4,716)
46,063)
2,129)
‐
(34,444)
(18,997)
‐
(353,650)
(487,912)
(1,866,094)
(2,663,084)
(2,219,744)
(3,150,996)
2,219,744
3,150,996)
‐)
‐)
Tax benefits are not brought to account for the year ended 30 June 2018 (2017: nil) as the certainty of recovery cannot yet
be reliably determined at this stage of the Group’s development.
NOTE 5 KEY MANAGEMENT PERSONNEL
(a) Names and positions held of economic and parent entity key management in office at any time during the financial
year are:
Key Management Person
Mr E King
Mr E Bulseco
Mr S R Groves
Mr J Letcher
Position
Non‐executive Director
Chairman, Non‐executive Director
Non‐executive Director
Non‐executive Director
Mr P J Volpe (resigned 11 December 2017)
Mr S R Groves
Mr M J Hudson (resigned 21 August 2017)
Executive Chairman
Non‐executive Director
Non‐executive Director
31
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 5 KEY MANAGEMENT PERSONNEL (CONTINUED)
(b) Remuneration paid to Key Management Personnel
Short‐term employee benefits
Post‐employment benefits
Share based payments
Total
Consolidated Group
2018
$
494,524
‐
356,162
850,686
2017
$
290,415)
2,598)
107,900)
400,913)
Remuneration of $11,500 for Key Management Personnel was accrued and unpaid at 30 June 2018 (2017: $364,150). Refer
to the Remuneration Report and Note 13 for further information.
(c) Share based payments to Key Management Personnel
The Company issued fully paid ordinary shares to Trayburn Pty Ltd to the value of $174,800 and 666,667 listed options (of
which Mr P J Volpe is a Director and substantial shareholder) in satisfaction for fees.
The Company issued 6,250,000 listed options, fully vested to the value of $50,026 to Foxfire Capital Pty Ltd (of which Mr P J
Volpe is a Director and substantial shareholder) in satisfaction of corporate advisory services.
The Company issued 13,750,000 listed options to the value of $110,057 and 12,500,000 unquoted options to Xcel Capital Pty
Ltd (of which Mr E Bulseco) is a Director for Corporate advisory fees.
Refer to the Remuneration Report and Note 20 for further information.
NOTE 6 REMUNERATION OF AUDITORS
Remuneration of the auditor of the entity for:
‐ Audit or review of the financial statements
Consolidated Group
2018
$
2017
$
25,000
24,250
32
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 7 LOSS PER SHARE (“LPS”)
a) Reconciliation of losses to profit or loss
Loss used to calculate basic and diluted LPS
Consolidated Group
2018
$
2017
$
(1,470,388)
(1,772,286)
No.
b) Weighted average number of ordinary shares used in the calculation of basic
and diluted loss per share
760,589,146
104,890,326)
c) Anti‐dilutive options not used in dilutive LPS calculation
,
NOTE 8 CASH AND CASH EQUIVALENTS
Cash at bank and in hand
NOTE 9 TRADE AND OTHER RECEIVABLES
Current
Trade and other receivables
162,936,366,
410,233,933)
Consolidated Group
2017
$
2018
$
1,772,169
147,039
Consolidated Group
2017
$
2018
$
92,719
62,374
During the prior year, as a result of BCL Limited and BCL Investments (Pty) Ltd being placed in provisional liquidation on 9
October 2016, the Group fully impaired an amount of $104,462 owed by BCL to African Metals (Pty) Ltd. BCL Limited was
placed in final liquidation on 15 June 2017. BCL Investments (Pty) Ltd remains in provisional liquidation.
33
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 10 CONTROLLED ENTITY
Country of
Incorporation
Principal Activity
Class of
Share
African Metals (Pty) Ltd
Botswana
Mineral Exploration
Ordinary
NOTE 11 PLANT AND EQUIPMENT
Plant and equipment
At cost
Accumulated Depreciation
Movements in Carrying Amounts
Balance at beginning of year
Additions
Disposals
Depreciation charged
Foreign currency translation
Balance at end of year
Equity Holding
2018
%
100
2017
%
100
Consolidated Group
2018
$
2017
$
273,772
(236,960)
36,812
309,136)
(279,351)
29,785)
Consolidated Group
2018
$
2017
$
29,785
20,775
‐
(11,199)
(2,549)
36,812
4,138)
31,586)
‐)
(6,070)
131)
29,785)
No depreciation was capitalised as exploration expenditure during the year (2017: Nil).
34
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 12 CAPITALISED EXPLORATION AND EVALUATION
The exploration and evaluation expenditure relates to the Group’s projects in Botswana.
Consolidated Group
2018
$
2017
$
Capitalised exploration and evaluation (at cost)
7,197,510
6,795,902)
Movements in carrying values
Balance at beginning of year
Expenditure during the year
Expenditure impaired during the year
Foreign currency translation
Balance at year end
6,795,902
249,642
‐
151,966
7,197,510
7,209,174)
260,979)
(943,797)
269,546)
6,795,902)
Recoverability of the carrying amount of exploration assets is dependent on the successful exploration and sale of base and
precious metals.
There was no capitalised depreciation included in exploration expenditure this year (2017: Nil).
BCL Limited is now in final liquidation and BCL Investments (Pty) Ltd remains in provisional liquidation.
Notwithstanding the liquidation of BCL, the Group considers that the exploration expenditure in respect of the three PLs is not
impaired as the Group has defined a JORC (2012) inferred resource of 2.3Mt of mineralised rock containing 0.72% Nickel and
0.21% Copper which is open at depth and at length.
NOTE 13 TRADE AND OTHER PAYABLES
Current
Trade payables
Accrued remuneration owing to Directors
Other
Consolidated Group
2018
$
170,711
11,500
‐
182,211
2017
$
61,839
364,150
2,500
428,489
35
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 14 ISSUED CAPITAL
457,503,153 (2017: 1,462,315,814) fully paid ordinary shares
(a)
Ordinary Shares
Consolidated Group
2018
$
2017
$
21,035,871
17,535,843
Date
Number of Shares
2018
2017
Issue Price ($)
2018
2017
$
2018
2017
1,462,315,814
1,158,345,803
17,535,843
16,958,181
At the beginning of
the reporting
period
Shares issued
during the year
‐ Exercise of options
09/01/17
‐ Placement
22/02/17
‐ Directors’ Fee Plan
11/04/17
20,011
250,000,000
53,950,000
0.0150
0.0020
0.0020
Costs associated
with capital raising
‐ Placement
‐ SPP
‐ Placement
‐Share
consolidation 1 for
12
‐ Tranche 1
Placement
‐ SPP
Costs associated
with capital raisings
At reporting date
18/08/17
4/12/17
5/12/17
6/12/17
3/01/18
23/3/18
362,000,000
547,294,744
1,838,414,592
(3,859,188,663)
75,333,333
31,333,333
0.001
0.0008
0.0008
0.015
0.015
457,503,153
1,462,315,814
300
500,000
107,900
(30,538)
17,535,843)
362,000
448,782
1,507,500
1,130,000
470,000
(418,254)
21,035,871
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. At shareholders’ meetings each ordinary share is entitled to one vote
when a poll is called, otherwise each shareholder has one vote on a show of hands. The Company’s ordinary shares have no
par value, and the Company does not have a limited amount of authorised capital.
36
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 14 ISSUED CAPITAL CONTINUED
(b)
Capital Management
Management controls the capital of the group in order to maintain a good debt to equity ratio and ensure that the group can
fund its operations and continue as a going concern.
The group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.
There are no externally imposed capital requirements.
Management effectively manages the group’s capital by assessing the group’s financial risks and adjusting its capital structure
in response to changes in these risks and in the market. These responses include the management of debt levels and share
issues.
There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year.
The strategy is to ensure that the group’s gearing ratio has minimal debt. The gearing ratios for the year ended 30 June 2018
and 30 June 2017 are as follows:
Total creditors and other payables
Less cash and cash equivalents
Net Assets/(debt)
Total equity
Total capital
Gearing ratio
Note
13
8
Consolidated Group
2018
$
225,070
1,772,169
1,547,099
9,102,154
10,649,253
2017
$
(466,046)
147,039)
(319,007)
6,569,054)
6,250,047)
15%
(5.1)%)
37
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 15 RESERVES
Share‐based payments reserve (i)
Foreign currency translation reserve (ii)
Movement reconciliation
Share‐based payments reserve (i)
Balance at the beginning of the year
Equity settled share‐based payment transactions (Note 20) (1)
Options issued to Directors (1)
Expiry of options
Balance at the end of the year
Movement reconciliation
Foreign currency translation reserve (ii)
Balance at the beginning of the year
Other comprehensive income
Balance at the end of the year
(1) Equity settled share‐based payment transactions
2018
$
2017
$
414,097
(2,232,651)
(1,818,554)
‐
(2,321,202)
(2,321,202)
‐
272,089
142,008
‐
414,097
‐
60,000
‐
‐
(60,000)
‐
(2,321,202)
88,551
(2,232,651)
(2,591,194)
269,992
(2,321,202)
26,250,000 options were issued to Xcel Capital as part consideration for lead manager services provided to the
Company in relation to the SPP, Placement and advisory services;
6,250,000 options were issued to Foxfire Capital in consideration for services provided to the company in relation to
the placement;
833,335 options were issued to a contractor for services provided to the Company; and
666,667 options were issued to Trayburn Pty Ltd, as part consideration for services provided to the Company.
(2) Options issued to Directors
20,000,000 options were issued to Directors in consideration for services provided to the Company.
Share‐based payment reserve
The share‐based payment reserve is used to record the value of share‐based payments provided to outside parties, and
share‐based remuneration provided to employees and directors.
Foreign Currency Translation reserve
The foreign currency translation reserve records exchange differences arising on translation of a foreign controlled subsidiary
as described in Note 1(h).
38
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 16 CAPITAL AND LEASING COMMITMENTS
Planned Exploration Expenditure
Payable
- not later than 12 months
- between 12 months and 5 years
-
greater than 5 years
Consolidated Group
2018
$
2017
$
29,250
2,022,480
‐
‐
763,200
‐
29,250
2,785,680
The figures above are extracted from the Prospecting Licences issued to African Metals (Pty) Ltd by the Department of Mines
in Botswana. Expenditures are required to maintain the right of tenure to exploration until the expiry of the licences. These
obligations are subject to renegotiation upon expiry of the leases and are not provided for in the financial statements.
The Group anticipates future expenditure on its current rights of tenure to exploration and mining tenements up until the
expiry of its current Prospecting Licences and on tenement renewals and extensions that have been applied for but not yet
granted, which are included in the above table. In the event the Group does not meet the minimum exploration expenditure
the licences may be cancelled or not renewed.
NOTE 17 CONTINGENT LIABILITIES
Magogaphate Tenement
Although the Group acquired a 100% interest in the Magogaphate group of tenements in Botswana from A‐Cap Resources
Limited in 2007, Mineral Holdings Botswana (Pty) Ltd (“MHB”) has retained a right to a 5% net profits share. The Group
therefore, has a contingent liability to MHB should it establish a profitable mining operation on those tenements. The 5% net
profits share interest is limited to the three tenements subject to joint venture with BCL, namely PL 110/94, PL 111/94 and PL
54/98. A profitable mining operation has not yet been established and accordingly there have been no payments to MHB.
NOTE 18 SEGMENT INFORMATION
The Group operates in one reportable segment, being the exploration and evaluation of mineral resources in Botswana.
39
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 19 CASH FLOW INFORMATION
(a) Reconciliation of cash
For the purposes of the statement of cash flows, cash includes cash on hand and at
bank and short term deposits at call, net of outstanding bank overdrafts. Cash as at
the end of the financial year as shown in the statement of cash flows is reconciled to
the related items in the statement of financial position.
Cash at bank and on hand
(b) Reconciliation of cash
Operating Loss after income tax
Non–cash flows in loss:
- Depreciation
- Non cash variance in capitalised expenditure
-
-
-
Impairment of capitalised exploration expenditure
Impairment of bad and doubtful debts
Share‐based payments
Investing cash flows in loss:
-
Sale of plant and equipment and insurance proceeds
Working capital:
-
(Increase)/decrease in trade and other receivables
-
-
-
(Increase)/decrease in other assets
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions
Consolidated Group
2018
$
2017
$
1,772,169
147,039))
(1,469,576)
(1,772,286)
11,119
(21,201)
‐
‐
414,097
6,070)
‐
943,797)
104,462)
‐
‐
(35,882)
(30,345)
(228,014)
(240,976)
5,302
141,148)
‐
54,649)
‐
Net cash (outflow) from operating activities
(1,559,594)
(558,042)
40
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 20 SHARE‐BASED PAYMENTS
Opening balance
Recognised share‐based payment transactions
(a)
Options issued to Directors (i)
Quoted options Issued to consultants (i)
Unlisted options issued to Directors in consideration for services provided
Unlisted options issued to Xcel Capital Pty Ltd in consideration for
corporate advisory services provided
Expiry of options
2018
$
2017
$
‐
60,000
16,008
172,090
126,000
100,000
‐
414,098
‐
‐
‐
‐
(60,000)
‐
(i) Options were issued to creditors being current or past Directors and their related companies that accepted
shares in part satisfaction of accrued remuneration.
(b)
Summary of options granted during the year
Options
Issue Date
Date of
Expiry
Exercise
Price
Balance at
the start
of the
year
Granted
during the
year
Exercised
during the
year
Expired
during the
year
Balance at
the end of
the year
to
Free
attaching
options
Free
attaching
options
issued
creditor
Quoted
options
Issued
consultants
Options
placement
Director
options
Options
issued to Xcel
Capital
Pty
Ltd
to
27/11/17
1/07/21
0.013
27/11/17
1/07/21
0.013
27/11/17
1/07/21
0.013
16/03/18
16/04/21
0.015
16/03/18
16/04/21
0.022
16/03/18
16/04/21
0.022
‐
‐
‐
‐
‐
‐
‐
‐
60,087,446
‐
‐
‐
‐
‐
‐
6,182,251
23,500,002
42,666,667
18,000,000
12,500,000
162,936,366
‐
‐
‐
‐
‐
‐
‐
60,087,446
6,182,251
23,500,002
42,666,667
18,000,000
12,500,000
162,936,366
41
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 20 SHARE‐BASED PAYMENTS
The Company has used an independent expert to measure the fair value of the quoted options granted by the Company to
Directors and consultants:
Underlying asset price
Exercise price
Expected volatility
Time to Maturity of underlying option (Years)
Dividend yield
Interest rate
Value per option
Total value of options
$0.01
$0.025
106.49%
3.62
0.00%
1.89%
$0.07
$188,098
The unlisted options issued to the Directors of the Company, have been valued using the Black‐Scholes model. The model
and assumptions are shown in the table below:
Black‐Scholes Option Pricing Model
Grant Date
Vesting Date
Strike (Exercise) Price
Underlying Share Price (at date of issue)
Risk‐free Rate (at date of issue)
Volatility
Number of Options Issued
Dividend Yield
Probability
Black‐Scholes Valuation
Total Fair Value of Options
16/03/18
23/03/21
0.022
0.013
2.06%
100%
18,000,000
0%
100%
$0.007
$126,000
The unlisted options issued to Xcel Capital Pty Ltd for corporate advisory services, have been valued using the Black‐Scholes
model. The model and assumptions are shown in the table below:
Black‐Scholes Option Pricing Model
Grant Date
Vesting Date
Strike (Exercise) Price
Underlying Share Price (at date of issue)
Risk‐free Rate (at date of issue)
Volatility
Number of Options Issued
Dividend Yield
Probability
Black‐Scholes Valuation
Total Fair Value of Options
42
16/03/18
23/03/21
0.022
0.013
2.06%
100%
18,000,000
0%
100%
$0.008
$100,000
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 21 EVENTS AFTER THE END OF THE REPORTING PERIOD
After Balance Date Events
Other than the matters discussed below, there has not arisen in the interval between the end of the financial year and the
date of this report, any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the
Company to affect the operations of the Group, the results of these operations or the state of affairs of the Group in
subsequent years.
Board Changes
On 31 July 2018 Mr Edwin Bulseco resigned as Chairman, Non‐Executive Director of the Company and Mr Eddie King was
appointed to chairman in his place.
43
NOTE 22 RELATED PARTY INFORMATION
Transactions between related parties are on normal commercial terms and conditions no
more favourable than those available to other parties unless otherwise stated.
Key Management Personnel
Kalcon Investments Pty Ltd, of which Edwin Bulseco is a Director and shareholder, was paid
Director fees of $41,000.
Xcel Capital Pty Ltd, of which Edwin Bulseco is a Director was paid $413,183, in relation to
Corporate advisory work undertaken in relation to the placement and share purchase plan.
Xcel was issued 13,750,000 listed options to the value of $110,057 and issued 12,500,000
unquoted options to the value of $100,000 for Corporate advisory services.
Bohr Industries Pty Ltd, of which Joshua Alan Letcher is a Director was paid $37,000 in
relation to Director fees for the period.
Consulting fees paid to Woolrich & Associates Pty Ltd, a company of which Dr P Woolrich is
a Director and substantial shareholder.
Capital
Mr P J Volpe is a consultant and substantial shareholder.
to Foxfire Capital Pty Ltd, a company of which
fees paid
raising
2018
2017
$
$
41,000
623,240
37,000
‐
‐
‐
‐
‐
9,375)
25,000)
Foxfire Capital, of which Mr P J Volpe is a director was issued 6,250,000 listed options, fully
vested to the value of $50,026 for Corporate advisory services.
Trayburn Pty Ltd, of which Mr P J Volpe is a Director, payment of unpaid fees for the years
ended 30 June 2015, 2016 & 2017 amounting to $190,691. Shares to the value of $174,800
and 666,667 listed options fully vested at $5,336.
King Corporate Pty Ltd, of which Mr Eddie King is a Director, has unpaid Director and rental
fees as at 30 June 2018.
50,026
370,827
4,850
‐
‐
‐
Other transactions with Directors and related parties continued
Transactions with CAP Holdings Pty Ltd (“CAP”), a company of which close family members
of Mr P J Volpe are Directors and shareholders:
printing and posting the Annual Report of the Company and the notices and proxy
forms for the Company’s Annual General Meeting; and
administration and clerical costs.
‐
9,600
8,000)
20,800)
Transactions with Cam Bow Holdings (Pty) Ltd (“CBH”), a wholly‐owned subsidiary of Cam
Bow Limited (“CBL”). Mr P J Volpe is a Director of CBH and CBL and a substantial shareholder
of CBL:
contracting fees charged by CBH to African Metals (Pty) Ltd.
‐
1,136,543
10,470)
73,645)
44
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 22 RELATED PARTY INFORMATION (CONTINUED)
As at 30 June 2018 $4,850 was owed to King Corporate Pty Ltd, of which Eddie King is a director for Director ($3,500)
and office rental fees ($1,350). $8,000 was owed to Kalcon Investments Pty Ltd, of which Edwin Bulseco is a director
for Director fees.
(2017: A net amount of $2,655 was owed by CBL/CBH to the Group at year end. This amount is unsecured and
interest free).
All amounts above are exclusive of GST.
Expenses paid by, or for, Directors and related entity were, or will be, reimbursed at cost.
The Company has provided at call interest free unsecured loans to its wholly owned subsidiary African Metals (Pty)
Ltd to pay operational and exploration costs.
Remuneration and shares and options
Information on remuneration of Directors and other KMP is disclosed in the Remuneration Report and Note 5 to
the financial statements. Remuneration is paid or accrued to the Director/Executive or to a related company for
the provision of the services of the person.
Information on the shares and options held by Directors and other KMP, and the movements in their holdings, is
disclosed in the Remuneration Report.
Details of the shares issued under the Directors’ Fee Plan are set out in Note 20.
Other Transactions with Directors and Director‐Related Entity
There were no other transactions with Directors and Director‐Related Entity in the year to 30 June 2018.
45
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 23 FINANCIAL RISK MANAGEMENT
(a)
Financial Risk Management Policies
The Group’s financial instruments consist mainly of deposits with banks and accounts receivable and
payable.
(i)
Treasury Risk Management
The Board of Directors meets on a regular basis to analyse financial risk exposure and to evaluate
treasury management strategies in the context of the most recent economic conditions and
forecasts. The Board’s overall risk management strategy seeks to assist the Group in meeting its
financial targets, whilst minimising potential adverse effects on financial performance.
(ii)
Financial Risk Exposures and Management
The main risk the group is exposed to through its financial instruments is liquidity risk.
Liquidity Risk
Liquidity risk arises from the possibility that the group might encounter difficulty in settling its debts
or otherwise meeting its obligations related to financial liabilities. The group manages liquidity risk
by monitoring forecast cash flows and only investing surplus cash with major financial institutions.
For further commentary on the Group’s liquidity risk profile please refer to the Going Concern note
contained in Note 1.
Maturity analysis:
Consolidated
2018
<6 months
$
6‐12 months
$
1‐5 years
$
>5 years
$
Total
$
Financial liabilities
Trade and other payables
225,070
‐
‐)
‐)
225,070
Consolidated
2017
<6 months
$
6‐12 months
$
1‐5 years
$
>5 years
$
Total
$
Financial liabilities
Trade and other payables
466,046)
‐
‐)
‐)
466,046
46
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 23
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT.)
Interest rate risk
(i)
The Group is exposed to interest rate risk, which is the risk that a financial instrument’s value will fluctuate
as a result of changes in the market interest rates on interest bearing financial instruments. The Group’s
exposure to this risk relates primarily to the Group’s cash and any cash on deposit. The Group does not use
derivatives to mitigate these exposures. The Group manages its exposure to interest rate risk by holding
certain amounts of cash in fixed and floating interest rate facilities. At the reporting date, the interest rate
profile of the Group’s interest‐bearing financial instruments was:
Cash and cash equivalents
2018
2017
Weighted
average
interest rate (i)
1.28%
Balance
$
1,772,169
Weighted
average interest
rate (i)
‐
Balance
$
488,249
(i) This interest rate represents the average interest rate for the period.
Sensitivity
Within the analysis, consideration is given to potential renewals of existing positions and the mix of fixed and
variable interest rates. The following sensitivity analysis is based on the interest rate risk exposures in
existence at the reporting date. The 1% increase and 1% decrease in rates is based on reasonably expected
possible changes over a financial year, using the observed range of historical rates for the preceding five‐year
period.
At 30 June 2018, if interest rates had moved, as illustrated in the table below, with all other variables held
constant, post‐tax losses and equity would have been affected as follows:
Judgements of reasonably possible
movements:
+ 1.0% (100 basis points)
‐ 1.0% (100 basis points)
Foreign Currency Risk
Profit higher/(lower)
2017
2018
$
$
17,722
(17,722)
4,882
(4,882)
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign
currency risk through foreign exchange rate fluctuations. The Group also has exposure to foreign exchange
risk due to the currency cash reserves and other balances denominated in foreign currencies. The Group
does not actively manage foreign currency risk and does not make use of derivative financial instruments.
47
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 23 FINANCIAL RISK MANAGEMENT (CONTINUED)
(a)
Financial Risk Management Policies (continued)
The following sensitivity is based on the foreign currency risk exposures in existence at the reporting date.
At 30 June 2018, had the Australian Dollar/Botswana Pula exchange rate moved, as illustrated in the table
below with all other variables held constant, post‐tax profit would have been affected as shown.
(ii)
Financial Risk Exposures and Management (continued)
Judgments of
reasonable
possible
movements
AUD/BWP +5%
Other Comprehensive
Income
Higher/(Lower)
Post‐tax Loss
Higher/(Lower)
Equity
Higher/(Lower)
2018
$
73,478
2017
$
58,322
2018
$
69,051
2017
$
13,500)
2018
$
455,108
2017
$
341,911)
AUD/BWP ‐5%
(73,478)
(58,322)))
(69,051)
(13,500)
(455,108)
(341,911)
Management believes the reporting date risk exposures are representative of the risk exposure
inherent in the financial instruments.
(b)
Net Fair Values
The net fair values of financial assets and liabilities approximate their carrying values due to their short‐
term nature.
NOTE 24 PARENT ENTITY DISCLOSURES
Financial Position
Assets
Current assets
Non‐current assets
Total assets
Liabilities
Current liabilities
Non‐current liabilities
Total liabilities
2018
$
2017
$
2,045,619
165,909)
13,038,615
12,579,866)
15,084,234
12,745,775)
132,160
392,351)
‐
‐))
132,160
392,351)
48
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTE 24 PARENT ENTITY DISCLOSURES (CONTINUED)
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Financial Performance
Loss for the year
Other comprehensive income
Total comprehensive loss
2018
$
2017
$
(21,035,871)
17,535,843)
(414,098)
‐)
6,497,896
(5,182,419)
(14,952,074)
12,353,424)
(1,315,476)
(672,122)
‐
‐)
(1,315,476)
(672,122)
Guarantees, contingent liabilities and contractual commitments
The subsidiary company has expenditure commitments to maintain its current rights of tenure to exploration and
mining tenements up until the expiry of the leases including its joint venture commitments. These obligations are
subject to renegotiation upon expiry of the leases and are not provided for in the financial statements. The parent
entity may provide funds to ensure the subsidiary company can fulfil these commitments as well as any other
operating commitments.
NOTE 25 COMPANY DETAILS
The principal place of business and registered office is:
Suite 2, Level 1, 1 Altona Street West Perth WA 6005
49
DIRECTORS’ DECLARATION
1. The Directors declare that the financial statements and notes set out on pages 17 to 49 are in accordance with
the Corporations Act 2001 and:
a) comply with International Financial Reporting Standards, as stated in Note 1 to the financial statements;
b) comply with Australian Accounting Standards and the Corporations Regulations 2001; and
c) give a true and fair view of the financial position as at 30 June 2018 and of the performance for the year
ended on that date of the Group.
2. The Executive Chairman and Company Secretary have each declared that:
a) the financial records of the Company for the financial year have been properly maintained in accordance
with section 286 of the Corporations Act 2001;
b) the financial statements and notes for the financial year comply with Australian Accounting Standards; and
c) the financial statements and notes for the financial year give a true and fair view.
3. In the Directors' opinion there are reasonable grounds to believe that the Company will be able to pay its debts
as and when they become due and payable.
This declaration is made in accordance with a resolution of the Directors.
Mr Eddie King
Director
Dated 28 September 2018
50
Six Sigma Metals Limited
(Formerly Botswana Metals Limited)
Independent auditor’s report to members
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Six Sigma Metals Limited (the Company and its
subsidiaries (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 other explanatory information, and the directors’
declaration.
In our opinion, the accompanying financial report of the Group, is in accordance with the
Corporations Act 2001, including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2018 and of
its financial performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations
2001.
(ii)
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.
51
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.
CARRYING VALUE OF EXPLORATION AND EVALUATION ASSETS
Area of focus
Refer also to notes 1 and 12
The Group have incurred exploration and
evaluation costs for the Nickel and Copper
projects they have in Botswana over a number
of years.
There is a risk that accounting criteria
associated with the capitalisation of exploration
and evaluation costs may no longer be
appropriate.
An impairment review is only required if an
impairment trigger is identified.
Due to the nature of the mining industry,
inclusive of Nickel and Copper, indicators of
impairment applying the value in use model
could include:
— Changes to exploration plans;
— Loss of rights to tenements;
— License renewals not confirmed;
— Changes to reserve estimates;
— Costs of extraction and production;
— Exchange rate factors;
— Changing political environment of
Botswana; and
— Market views to the use of Nickel or Copper
How our audit addressed it
Our audit procedures included:
— Understanding and vouching the underlying
contractual entitlement to explore and
evaluate each area of interest, including an
evaluation of the requirement to renew that
tenement at its expiry;
— Examining project spend per each area of
interest and comparing this spend to the
minimum expenditure requirements set out
in the underlying tenement expenditure
plan;
— A review of the directors’ assessment of the
criteria for the capitalisation of exploration
expenditure and evaluation of whether there
are any indicators of impairment to
capitalised costs of the remaining
tenements; and
— Performing an assessment for each area of
interest of whether any indicators of
impairment existed in line with requirements
of AASB6 - Exploration for and Evaluation
of Mineral Resources.
— Compared the current market capitalisation
of the Company against the current net
assets value of the Group at 30 June 2018
and assessed whether any further indicators
of impairment existed.
We assessed the adequacy of the Group’s
disclosures in respect of the carrying value of
exploration and evaluation assets
52
RELATED PARTY TRANSACTIONS
Area of focus
Refer also to notes 1 and 22
There have been numerous related party
transactions with companies where the group or
key management personnel of the group have
interests and/or are Directors.
As, such, there is a risk that not all related party
transactions are disclosed in the financial report
or that related party transactions have been
made on non-arm’s length basis.
This could result in insufficient information being
provided in order to enable the reader to
understand the nature and effect of the various
related party relationships and transactions.
How our audit addressed it
Our audit procedures included:
— Assessment of the group’s controls to
identify and disclose related party
transactions and transactions in accordance
with the relevant accounting standards and
the Corporations Act 2001;
— Comparing the list of related parties
provided by the Directors with internal
sources;
— Conducting an ASIC search for external
directorships held by the Board members to
evaluate whether all related party
relationships and transactions had been
appropriately identified and disclosed; and
— Assessing whether related party
transactions were conducted at arms-length
by comparing the basis of the transactions
to external sources.
— For each class of related party transaction
we compared the financial statement
disclosures against the underlying
transactions and the accounting and
Corporations Act 2001 requirements.
Other Information
The directors are responsible for the other information. The other information comprises the information in
the Group’s annual report for the year ended 30 June 2018, but does not include the financial report and
the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and 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.
53
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 has 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 the 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.
A further description of our responsibilities for the audit of these financial statements is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our independent auditor’s report.
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 Six Sigma Metals Limited for the year ended 30 June 2018,
complies with section 300A of the Corporations Act 2001.
54
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.
William Buck Audit (Vic) Pty Ltd
ABN: 59 116 151 136
J.C. Luckins
Director
Melbourne, 28 September 2018
55
ASX ADDITIONAL INFORMATION
CORPORATE GOVERNANCE STATEMENT
The Company has elected to publish its Corporate Governance Statement on its website in accordance with ASX Listing Rule
4.10.3.
A copy of the Corporate Governance Statement can be found at:
http://botswanametals.com.au/wp‐content/uploads/2016/02/corporate_governance_statement‐1.pdf
ASX ADDITIONAL INFORMATION
Additional information required by the Australian Securities Exchange and not shown elsewhere in this Annual Report is as
follows. The information is current as of 19 September 2018.
DISTRIBUTION OF EQUITY SECURITIES
Ordinary share capital
457,503,153 fully paid shares held by 2,439 individual shareholders. All issued ordinary shares carry one vote per
share and carry the rights to dividends.
The number of shareholders, by size of holding, is:
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
The number of Option holders, by size of holding, is:
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Units
222,157
979,295
1,348,839
24,868,281
430,084,581
457,503,153
Percentage
0.05%
0.21%
0.30%
5.44%
94.01%
100%
Units
104
0
0
1,304,522
131,131,740
132,436,366
Percentage
0.00%
0.00%
0.00%
0.99%
99.02%
100%
Holders
914
394
177
580
374
2,439
Holders
4
0
0
40
92
136
56
TWENTY LARGEST SHAREHOLDERS
VERMAR PTY LIMITED
VERMAR PTY LTD
VERMAR PTY LTD
TRAYBURN PTY LTD
SACCO DEVELOPMENTS AUSTRALIA PTY LIMITED
SANGREAL INVESTMENTS PTY LTD
PAPILLON HOLDINGS PTY LTD
V7 INVESTMENT & DEVELOPMENT
LIGHTSTORM PTY LTD
POLARITY B PTY LTD
POLARITY B PTY LTD
MALCORA PTY LTD
NIGHTFALL PTY LTD
FINNIAN GROUP PTY LTD
BELL IXL INVESTMENTS PTY LTD
SJ CAPITAL PTY LTD
BUSHWOOD NOMINEES PTY LTD
MR ARTHUR IOANNOU + MS OLIVIA KEENE
MS ANGELA MARIA GIUSTI
QUID CAPITAL PTY LTD
MR OKTAY TASDEMIR
FIRST INVESTMENT PARTNERS PTY LTD
RIMOYNE PTY LTD
T T NICHOLLS PTY LTD
Total
TWENTY LARGEST OPTION HOLDERS
MR PATRICK JOHN VOLPE
VERMAR PTY LTD
TRAYBURN PTY LTD
VERMAR PTY LTD
XCEL CAPITAL PTY LTD
SACCO DEVELOPMENTS AUSTRALIA PTY LIMITED
MR STEPHEN JULIAN KOUKOULAS
MR ASHWANI KUMAR
LIGHTSTORM PTY LTD
FIRST INVESTMENT PARTNERS PTY LTD
MRS VANESSA RUBEN
MR MATTHEW DEAN QUINN
MR ASHWANI KUMAR
FINNIAN GROUP PTY LTD
BUSHWOOD NOMINEES PTY LTD
MR VINCENZO BRIZZI + MRS RITA LUCIA BRIZZI
MS ANGELA MARIA GIUSTI
57
ASX ADDITIONAL INFORMATION
Ordinary Shares
Number
5,258
4,740,818
4,846,291
32,085,061
25,267,187
18,000,000
13,000,000
12,000,000
10,731,707
150,033
10,387,653
10,000,000
9,247,968
6,890,244
6,521,840
6,465,070
6,260,651
6,056,911
5,995,935
5,723,581
5,500,375
5,000,000
4,441,057
4,382,114
213,699,754
Percentage
0
1.04
1.06
7.01
5.52
3.93
2.84
2.62
2.35
0.03
2.27
2.19
2.02
1.51
1.43
1.41
1.37
1.32
1.31
1.25
1.2
1.09
0.97
0.96
46.71
Ordinary Shares
Number
666,667
1,355,014
5,821,410
6,250,000
13,750,000
8,124,125
7,600,000
5,000,000
4,021,680
4,000,000
3,778,754
3,375,000
3,216,437
2,518,970
2,046,884
2,000,000
1,998,645
Percentage
0.5
1.02
4.4
4.72
10.38
6.13
5.74
3.78
3.04
3.02
2.85
2.55
2.43
1.9
1.55
1.51
1.51
ASX ADDITIONAL INFORMATION
MR JEREMY DAVID RUBEN + MRS VANESSA RUBEN
BARROSEVEN PTY LIMITED
QUID CAPITAL PTY LTD
POLARITY B PTY LTD
MR EDWIN EDWARD BULSECO + MRS ALLISON BULSECO
T T NICHOLLS PTY LTD
Total
1,984,146
1,761,030
1,718,970
1,693,767
1,682,928
1,549,594
85,914,021
1.5
1.33
1.3
1.28
1.27
1.17
64.87
Unlisted Options
18,000,000 unquoted options with an exercise price of $0.022 and an expiry date of 23/03/21.
12,500,000 unquoted options with an exercise price of $0.022 and an expiry date of 16/04/21.
SUBSTANTIAL SHAREHOLDERS
Substantial shareholders in the Company are:
Vermar Pty Ltd / Trayburn Pty Ltd / Mr Patrick John Volpe
XCEL CAPITAL PTY LTD
SACCO DEVELOPMENTS AUSTRALIA PTY LIMITED
MR STEPHEN JULIAN KOUKOULAS
Voting Rights
The voting rights attaching to each class of equity security are set out below:
Ordinary Shares
Number
Percentage
14,093,091
13,750,000
8,124,125
7,600,000
10.64%
10.38%
6.13%
5.74%
Ordinary Shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share
shall have one vote.
Options
Options carry no voting rights.
UNMARKETABLE PARCELS
There were 1,900 holders of less than a marketable parcel of ordinary shares, which as at 19 September was 14,226,251.
RESTRICTED / UNQUOTED SECURITIES
There are no restricted or unquoted securities on issue.
ON‐MARKET BUY‐BACK
There is currently no on‐market buyback program for any of ‘SI6 Metals’ listed securities.
SECURITIES EXCHANGE
The Company is listed on the Australian Securities Exchange under the code SI6.
ACQUISITION OF VOTING SHARES
No issues of securities have been approved for the purposes of Item 7 of Section 611 of the Corporations Act 2001.
TAX STATUS
The Company is treated as a public company for taxation purposes.
FRANKING CREDITS
The Company has no franking credits.
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ASX ADDITIONAL INFORMATION
SCHEDULE OF INTERESTS IN MINING TENEMENTS
Exploration areas held in Botswana
The Company holds the following prospecting licences in Botswana:
Tenement
Magogaphate
PL 110/94
Mokoswane
PL 111/94
Takane
PL 54/98
Shashe South
PL 059/2008
PL 193/2016
Renewal /
Expiry Date
Percentage
Holding
Title Holder
Comment
31/03/2018
100
African Metals (Pty) Ltd
31/03/2018
100
African Metals (Pty) Ltd
31/03/2018
100
African Metals (Pty) Ltd
30/09/2016
100
African Metals (Pty) Ltd
Farm‐in agreement
with BCL Ltd
Farm‐in agreement
with BCL Ltd.
Farm‐in agreement
with BCL Ltd
Renewal application
submitted 30/06/16
30/09/2019
PL 194/2016
30/09/2019
PL 195/2016
30/09/2019
100
100
100
African Metals (Pty) Ltd
African Metals (Pty) Ltd
African Metals (Pty) Ltd
The mining tenement interests relinquished during the quarter and their location
Nil.
The mining tenement interests acquired during the quarter and their location
Nil
Beneficial percentage interests held in farm‐in or farm‐out agreements at the end of the quarter
SI6, via it’s wholly‐owned subsidiary African Metals Limited, holds a 100% interest in Prospecting Licences PL110/94,
PL111/94 and PL54/2008. These licences have been suspended (put on hold) until the liquidation process is complete but are
confirmed in Good Standing by the Department of Mines in Botswana.
Beneficial percentage interests in farm‐in or farm‐out agreements acquired or disposed of during the quarter
Not applicable.
Additional Tenement Information:
African Metals (Pty) Ltd is a wholly owned subsidiary of the Company.
Minerals Holdings (Botswana) Pty Ltd holds a 5% net profit share interest in PL 110/94,
PL 111/94 and PL 54/98.
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